PHILIPPINE NATIONAL BANK, vs.

GENEROSO DE JESUS, represented by his

Attrney!in!"#$t, %HRISTIAN DE JESUS,
Petitioner Philippine National Bank disputes the decision handed down by the Court of
Appeals promulgated on 23 March 200 in CA!"#$# C% No# &'00( entitled "eneroso )e
*esus( represented by his Attorney!in!+act( Christian )e *esus( ,ersus Philippine National
Bank# -he assailed decision has affirmed the .udgment rendered by the $egional -rial Court(
Branch //( of Mamburao( 0ccidental Mindoro( declaring respondent "eneroso de *esus as
being the true and lawful owner of the 2/!s1uare!meter portion of the land co,ered by
-ransfer Certificate of -itle 2-C-3 No# -!454 and ordering petitioner bank to ,acate the
premises( to deli,er possession thereof to respondent( and to remo,e the impro,ement
thereon#
It &'(d #ppe#r th#t n )* J'ne )++,, respndent -i(ed # $.p(#int #/#inst petitiner
be-re the Re/in#( Tri#( %'rt - O$$ident#( 0indr -r re$1ery - &nership #nd
pssessin, &ith d#.#/es, 1er the 2'estined prperty# In his $.p(#int,
respndent st#ted th#t he h#d #$2'ired # p#r$e( - (#nd sit'#ted in 0#.b'r#,
O$$ident#( 0indr( with an area of (// s1uare meters co,ered by -C- No# -!454(
#nd th#t n 34 0#r$h )++5, he h#d $#'sed # 1eri-i$#tin s'r1ey - the prperty #nd
dis$1ered th#t the nrthern prtin - the (t &#s bein/ en$r#$hed 'pn by #
b'i(din/ - petitiner t the e6tent - )37 s2'#re .eters. Despite t& (etters -
de.#nd sent by respndent, petitiner -#i(ed #nd re-'sed t 1#$#te the #re#.
Petitiner, in its #ns&er( asserted that when it ac1uired the lot and the building sometime
in 56 from then Mayor Bien,enido 7gnacio( the encroachment already was in e8istence
and to remedy the situation( Mayor 7gnacio offered to sell the area in 1uestion 2which then
also belonged to 7gnacio3 to petitioner at P00#00 per s1uare meter which offer the latter
claimed to ha,e accepted# -he sale( howe,er( did not materiali9e when( without the
knowledge and consent of petitioner( Mayor 7gnacio later mortgaged the lot to the
)e,elopment Bank of the Philippines#
The tri#( $'rt de$ided the $#se in -#1r - respndent de$(#rin/ hi. t be the ri/ht-'(
&ner - the disp'ted )37!s2'#re!.eter prtin - the (t #nd rderin/ petitiner t
s'rrender pssessin - the prperty t respndent #nd t $#'se, #t its e6pense, the
re.1#( - #ny i.pr1e.ent theren#
The %'rt - Appe#(s, n #ppe#(, s'st#ined the tri#( $'rt but it ordered to be deleted
the award to respondent of attorneys fees( as well as moral and e8emplary damages( and
litigation e8penses#
Petitioner went to this Court( via a petition for re,iew( after the appellate court had denied the
banks motion for reconsideration( here now contending that
). THE %OURT O" APPEALS GRA8EL9 ERRED IN LA: IN ADJUDGING PNB A
BUILDER IN BAD "AITH O8ER THE EN%ROA%HED PROPERT9 IN ;UESTION<
3. THE %OURT O" APPEALS GRA8EL9 ERRED IN LA: IN NOT APPL9ING IN "A8OR
O" PNB THE PRO8ISION O" ARTI%LE 77= O" THE %I8IL %ODE AN) -:; $<=7N" 7N
-;CN0"A> P:7=7PP7N;> MAN<+AC-<$7N" C0$P# %># C0<$- 0+ APP;A=>( "#$# No#
0665/( +ebruary 0( 554( 2'6 >C$A 4#
The Re/in#( Tri#( %'rt #nd the %'rt - Appe#(s h#1e bth re>e$ted the ide# th#t
petitiner $#n be $nsidered # b'i(der in /d -#ith# 7n the conte8t that such term is used
in particular reference to Article //6( et se1#( of the Ci,il Code( a builder in good faith is one
who( not being the owner of the land( builds on that land belie,ing himself to be its owner
and unaware of any defect in his title or mode of ac1uisition#
-he ,arious pro,isions of the Ci,il Code( pertinent to the sub.ect( read?
Arti$(e 77=# -he owner of the land on which anything has been built( sown( or planted in
good faith( shall ha,e the right to appropriate as his own the works( sowing or planting( after
payment of the indemnity pro,ided for in Articles &/' and &/6( or to oblige the one who built
or planted to pay the price of the land( and the one who sowed( the proper rent# :owe,er(
the builder or planter cannot be obliged to buy the land if its ,alue is considerably more than
that of the building or trees# 7n such a case( he shall pay reasonable rent( if the owner of the
land does not choose to appropriate the building or trees after proper indemnity# -he parties
shall agree upon the terms of the lease and in case of disagreement( the court shall fi8 the
terms thereof#
Arti$(e 77+# :e who builds( plants( or sows in bad faith on the land of another( loses what is
built( planted or sown without right to indemnity#
Arti$(e 7,*# -he owner of the land on which anything has been built( planted or sown in bad
faith may demand the demolition of the work( or that the planting or sowing be remo,ed( in
order to replace things in their former condition at the e8pense of the person who built(
planted or sowed@ or he may compel the builder or planter to pay the price of the land( and
the sower the proper rent#
A b'i(der in /d -#ith $#n, 'nder the -re/in/ pr1isins, $.pe( the (#nd&ner t
.#?e # $hi$e bet&een #pprpri#tin/ the b'i(din/ by p#yin/ the prper inde.nity r
b(i/in/ the b'i(der t p#y the pri$e - the (#nd. The $hi$e be(n/s t the &ner -
the (#nd, # r'(e th#t #$$rds &ith the prin$ip(e - #$$essin, i.e., th#t the #$$essry
-((&s the prin$ip#( #nd nt the ther &#y #r'nd.@3A E1en #s the ptin (ies &ith the
(#nd&ner, the /r#nt t hi., ne1erthe(ess, is pre$('si1e. He .'st $hse ne. He
$#nnt, -r inst#n$e, $.pe( the &ner - the b'i(din/ t inste#d re.1e it -r. the
(#nd.@5A In rder, h&e1er, th#t the b'i(der $#n in1?e th#t #$$r'in/ bene-it #nd en>y
his $rrespndin/ ri/ht t de.#nd th#t # $hi$e be .#de by the (#nd&ner, he
sh'(d be #b(e t pr1e /d -#ith n his p#rt.
Gd -#ith, here 'nderstd, is #n int#n/ib(e #nd #bstr#$t 2'#(ity &ith n te$hni$#(
.e#nin/ r st#t'try de-initin, #nd it en$.p#sses, #.n/ ther thin/s, #n hnest
be(ie-, the #bsen$e - .#(i$e #nd the #bsen$e - desi/n t de-r#'d r t see? #n
'n$ns$in#b(e #d1#nt#/e. An indi,idualAs personal good faith is a concept of his own
mind and( therefore( may not conclusi,ely be determined by his protestations alone# 7t
implies honesty of intention( and freedom from knowledge of circumstances which ought to
put the holder upon in1uiry#B/C The essen$e - /d -#ith (ies in #n hnest be(ie- in the
1#(idity - nes ri/ht, i/nr#n$e - # s'perir $(#i., #nd #bsen$e - intentin t
1erre#$h #nther.@,A App(ied t pssessin, ne is $nsidered in /d -#ith i- he is
nt #&#re th#t there e6ists in his tit(e r .de - #$2'isitin #ny -(#& &hi$h
in1#(id#tes it#B'C
Gi1en the -indin/s - bth the tri#( $'rt #nd the #ppe((#te $'rt, it sh'(d be e1ident
en'/h th#t petitiner &'(d -#(( .'$h t shrt -r. its $(#i. - /d
-#ith. E1ident(y, petitiner &#s 2'ite #&#re, #nd indeed #d1ised, prir t its
#$2'isitin - the (#nd #nd b'i(din/ -r. I/n#$i th#t # p#rt - the b'i(din/ s(d t it
std n the (#nd nt $1ered by the (#nd $n1eyed t it.
;1ually significant is the fact that the building( constructed on the land by 7gnacio( has in
actuality been part of the property transferred to petitioner# Article //6( of the Ci,il Code
refers to a piece of land whose ownership is claimed by two or more parties( one of whom
has built some works 2or sown or planted something3 and not t # $#se &here the &ner -
the (#nd is the b'i(der, s&er, r p(#nter &h then (#ter (ses &nership - the (#nd by
s#(e r ther&ise -r, e(se&ise st#ted, &here the tr'e &ner hi.se(- is the b'i(der -
&r?s n his &n (#nd, the iss'e - /d -#ith r b#d -#ith is entire(y irre(e1#nt. B4C
In -ine, petitiner is nt in # 1#(id psitin t in1?e the pr1isins - Arti$(e 77= -
the %i1i( %de. -he Court commiserates with petitioner in its present predicament@ upon the
other hand( respondent( too( is entitled to his rights under the law( particularly after ha,ing
long been depri,ed of the en.oyment of his property# Ne,ertheless( the Court e8presses
hope that the parties will still be able to come up with an arrangement that can be mutually
suitable and acceptable to them#
:HERE"ORE, the decision of the Court of Appeals in CA!"#$# C% No# &'00 is
A++7$M;)# No costs#
SO ORDERED#