4) Princess Rachel Development Corporation v.

Hillview Marketing

FACTS: 
PRDC registered owner of land, when relocation survey conducted, discovered Hillview built
condo units, encroaching area of about 3sq.m of PRDC’s land, without PRDC’s knowledge;
PRDC sent a demand letter to respondents but respondents ignored it; PRDC filed complaint for
accion publiciana

WON Hillview was a builder in good faith

HELD: 
Hillview is a Builder in BAD FAITH.
(1) The encroachment is about 3sq.m which is substantial, visible to naked eye, and not merely
negligible; Hillview could not feign ignorance thereof.
(2) Hillview was also informed about the intrusion, but nevertheless proceeded with the
development.
(3) Hillview also took advantage of the fact that PRDC's adjoining property was vacant, thus, it
proceeded with the construction which remained unhampered as PRDC knew nothing thereof.
(4) As a large property developer, Hillview ought to have, and which it could have easily
dispensed, verified the definite boundaries of the property it sought to improve.

PRDC is a landowner in GOOD FAITH. The fact of encroachment was known to PRDC only
3yrs after, when it decided to conduct relocation survey; and it lost no time in asserting its right
by sending notices to vacate

Applicable provisions are Art. 449, 450, 451, 452, and 546: landowner has right to appropriate
without indemnity; but necessary expenses should be refunded to builder; but here PRDC’s
properties not preserved, btu damaged; PRDC has alternative option of demanding removal of
condo unit or compel Hillview to pay price of portions encroached, whether value of land is
more than value of improvements

To be deemed a builder in good faith, it is essential that a person asserts title to the land on which
he builds, i.e., that he be a possessor in the concept of owner, and that he be unaware that there
exists in his title or mode of acquisition any flaw which invalidates it.