TECHNOGAS PHILIPPINES vs.

CA
G.R. No. 108894 February 10, 199
PANGANI!AN, J.:
FACTS"
The parties in this case are owners of adjoining lots in Paraaque,
Metro Manila. It was discovered in a survey, that a portion of a
building of Technogas, which was presumably constructed by its
predecessorininterest, encroached on a portion of the lot owned
by private respondent !dward "y.
"pon learning of the encroachment or occupation by its buildings
and wall of a portion of private respondent#s land, the petitioner
offered to buy from defendant that particular portion of "y#s land
occupied by portions of its buildings and wall with an area of $$%
square meters, more or less, but the latter, however, refused the
offer
The parties entered into a private agreement before a certain &ol.
'osales in Malacaang, wherein petitioner agreed to demolish the
wall at the bac( portion of its land thus giving to the private
respondent possession of a portion of his land previously enclosed
by petitioner)s wall.
"y later filed a complaint before the office of Municipal !ngineer of
Paraaque, Metro Manila as well as before the *ffice of the
Provincial +iscal of 'i,al against Technogas in connection with the
encroachment or occupation by plaintiff)s buildings and walls of a
portion of its land but said complaint did not prosper- so "y dug
or caused to be dug a canal along Technogas# wall, a portion of
which collapsed in .une, /01%, and led to the filing by the
petitioner of the supplemental complaint in the aboveentitled
case and a separate criminal complaint for malicious mischief
against "y and his wife which ultimately resulted into the
conviction in court "y)s wife for the crime of malicious mischief-
ISS#E" 2*3 the petitioner is builder in good faith.
HEL$" %ES.
2e disagree with 'espondent &ourt#s reliance on the cases of J.M.
Tuason & Co., Inc. vs. Vda. de Lumanlan and J.M. Tuason & Co.,
Inc. vs. Macalindong, in ruling that the petitioner 4cannot be
considered in good faith4 because as a land owner, it is 4presumed
to (now the metes and bounds of his own property, specially if the
same are reflected in a properly issued certificate of title. *ne who
erroneously builds on the adjoining lot should be considered a
builder in (b)ad (f)aith, there being presumptive (nowledge of the
Torrens title, the area, and the e5tent of the boundaries.4 There is
nothing in those cases which would suggest that bad faith is
imputable to a registered owner of land when a part of his building
encroaches upon a neighbor)s land, simply because he is
supposedly presumed to (now the boundaries of his land as
described in his certificate of title,
6rticle 78$ of the &ivil &ode presumes good faith, and since no
proof e5ists to show that the encroachment over a narrow,
needleshaped portion of private respondent)s land was done in
bad faith by the builder of the encroaching structures, the latter
should be presumed to have built them in good faith. It is
presumed that possession continues to be enjoyed in the same
character in which it was acquired, until the contrary is proved.
9ood 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. :ence, such good faith, by law, passed on to Pari,)s
successor, petitioner in this case. The good faith ceases from the
moment defects in the title are made (nown to the possessor, by
e5traneous evidence or by suit for recovery of the property by the
true owner.
&onsequently, the builder, if sued by the aggrieved landowner for
recovery of possession, could have invo(ed the provisions of 6rt.
;;1 of the &ivil &ode, which reads<
The owner of the land on which anything has been built
sown or !lanted in good faith shall have the right to
a!!ro!riate as his own the wor"s sowing or !lanting
after !ayment of the indemnity !rovided for in articles
#$% and #$& or to oblige the one who built or !lanted to
!ay the !rice of the land and the one who sowed the
!ro!er rent' (owever the builder or !lanter cannot be
obliged to buy the land if its value is considerably more
than that of the building or trees' In such case he shall
!ay reasonable rent if the owner of the land does not
choose to a!!ro!riate the building or trees after !ro!er
Zenaida Resuma Razon
Property
Builder in Good Faith
indemnity' The !arties shall agree u!on the terms of the
lease and in case of disagreement the court shall fi) the
terms thereof'
The obvious benefit to the builder under this article is that,
instead of being outrightly ejected from the land, he can compel
the landowner to ma(e a choice between the two options< =/> to
appropriate the building by paying the indemnity required by law,
or =8> sell the land to the builder. The landowner cannot refuse to
e5ercise either option and compel instead the owner of the
building to remove it from the land
In view of the good faith of both petitioner and private
respondent, their rights and obligations are to be governed by 6rt.
;;1. :ence, his options are limited to< =/> appropriating the
encroaching portion of petitioner)s building after payment of
proper indemnity, or =8> obliging the latter to buy the lot occupied
by the structure. :e cannot e5ercise a remedy of his own li(ing
Zenaida Resuma Razon
Property
Builder in Good Faith