PLEASANTVILLE DEVELOPMENT CORPORATION, petitioner, vs. COURT OF APPEALS, WILSON KEE, C.T.

TORRES ENTERPRISES, INC. and ELDRED JARDINICO, respondents

G.R. No. 79688, February 1, 1996

Ponente: J. Panganiban

FACTS: Edith Robillo purchased a land from Pleasantville Development Corporation, designated as Lot 9.
In 1975, respondent Eldred Jardinico brought the rights of the lot from Robillo. During the purchase, the
lot was empty. On March 26, 1974, Wilson Kee brought Lot No. 8 of the same subdivision from CT Torres
Enterprises (CTTEI). One of CTTEI’s employees, Zenaida Octaviano, accompanied Kee and his wife to the
site and mistakenly pointed to Lot 9 instead of Lot 8. Afterwards, Kee made improvements on Lot 9,
constructing a residence, a store, etc. When Jardinico secured from the Register of Deeds of Bacolod
City on December 19, 1978, Transfer Certificate of Title No. 106367 in his name, it was then that he
discovered that improvements had been introduced on Lot 9 by Kee, who had taken possession thereof.

ISSUES: Whether Kee acted in good faith. Whether petitioner and its agent are liable for the damage
incurred by Kee and Jardinico.

RULING: The Supreme Court declared Wilson Kee as a builder in good faith while petitioner Pleasantville
Development Corporation and respondent C.T. Torres Enterprises, Inc. are declared solidarily liable for
damages due to negligence. Good faith consists in the belief of the builder that the land he is building
on is his and his ignorance of any defect or flaw in his title. It is highly improbable that a purchaser of a
lot would knowingly and willingly build his residence on a lot owned by another, deliberately exposing
himself and his family to the risk of being ejected from the land and losing all improvements thereon,
not to mention the social humiliation that would follow.

The rule is that the principal is responsible for the acts of the agent, done within the scope of his
authority, and should bear the damage caused to third persons. On the other hand, the agent who
exceeds his authority is personally liable for the damage.