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Davao Sawmill Co. vs Castillo GR No. L-40411

A tenant placed machines for use in a sawmill on the landlord's
land.
Facts: Davao Sawmill Co., operated a sawmill. The land upon
which the business was conducted was leased from another
person. On the land, Davao Sawmill erected a building which
housed the machinery it used. Some of the machines were
mounted and placed on foundations of cement. In the contract
of lease, Davo Sawmill agreed to turn over free of charge all
improvements and buildings erected by it on the premises with
the exception of machineries, which shall remain with the Davao
Sawmill. In an action brought by the Davao Light and Power Co.,
judgment was rendered against Davao Sawmill. A writ of
execution was issued and the machineries placed on the sawmill
were levied upon as personalty by the sheriff. Davao Light and
Power Co., proceeded to purchase the machinery and other
properties auctioned by the sheriff.

Issue: Are the machineries real or personal property?

Held: Art.415 of the New Civil Code provides that Real Property
consists of:
(1) Lands, buildings, roads and constructions of all kinds adhered
to the soil; xxx
(5) Machinery, receptacles, instruments or implements intended
by the owner pf the tenement for an industry ot works which
may be carried on in a building or on a piece of land, and which
tend directly to meet the needs of the said industry or works;
Appellant should have registered its protest before or at the time
of the sale of the property. While not conclusive, the appellant's
characterization of the property as chattels is indicative of
intention and impresses upon the property the character
determined by the parties.
Machinery is naturally movable. However, machinery may be
immobilized by destination or purpose under the following
conditions:
General Rule: The machinery only becomes immobilized if placed
in a plant by the owner of the property or plant.
Immobilization cannot be made by a tenant, a usufructuary, or
any person having only a temporary right.
Exception: The tenant, usufructuary, or temporary possessor
acted as agent of the owner of the premises; or he intended to
permanently give away the property in favor of the owner.
As a rule, therefore, the machinery should be considered as
Personal Property, since it was not placed on the land by the
owner of the said land.

Lopez vs. Orosa, Jr. and Plaza Theatre, Inc.
G.R. Nos. L-10817-18. February 28, 1958.
Doctrine: In the absence of any specific provision of law to the
contrary, a building is an immovable property, irrespective of
whether or not said structure and the land on which it is adhered
to belong to the same owner.

Facts: Sometime in May, 1946, Vicente Orosa, Jr., invited Lopez
to make an investment in the theatre business. Although Lopez
expressed his unwillingness to invest of the same, he agreed to
supply the lumber necessary for the construction of the proposed
theatre, and at Orosas request and assurance that the latter
would be personally liable for any account that the said
construction might incur, Lopez further agreed that payment
therefore would be on demand and not cash on delivery basis.
With this, Lopez delivered the lumber which was used for the
construction of the Plaza Theatre on May 17, 1946, up to
December 4 of the same year. The total cost of materials
amounted to P62,255.85 but Lopez was only paid P20,848.50,
thus leaving a balance of P41,771.35. Orosa and Rustia,
corporation president, promised Lopez to obtain a bank loan to
satisfy the balance, to which assurance Lopez had to accede.
Unknown to Lopez, Orosa and Rustia already secured a loan for
P30,000 from the PNB with the Luzon Surety Company as surety,
and the corporation in turn executed a mortgage on the land and
building in favor of said company as counter-security. As the
land at that time was not yet brought under the operation of the
Torrens System, the mortgage on the same was registered on 16
November 1946, under Act 3344. Subsequently, when the
corporation applied for the registration of the land under Act
496, such mortgage was not revealed and thus OCT O-391 was
correspondingly issued on October 25, 1947, without any
encumbrance appearing thereon.
Persistent demand from Lopez caused Vicente Orosa, Jr. to
execute, on 17 March 1947, an alleged deed of assignment of
his 420 shares of stock of the Plaza Theater, Inc., at P100 per
share or with a total value of P42,000 in favor of the creditor,
and as the obligation still remained unsettled, Lopez filed on 12
November 1947, a complaint with the CFI Batangas against
Vicente Orosa Jr. and Plaza Theatre, Inc., praying that
defendants be sentenced to pay him jointly and severally the
sum of P41,771.35 with legal interest from the filing of the
action; that in case defendants fail to pay the same, that the
building and the land owned by the corporation be sold at public
auction and the proceeds thereof be applied to said
indebtedness. Plaintiff also caused the annotation of a notice of
lis pendens on said properties with the Register of Deeds.
The surety company upon discovery that the land was already
registered under the Torrens System and that there was a notice
of lis pendens thereon, filed a petition for review of the decree of
the land registration court in order to annotate the lights and
interests of the surety company over said properties. Lopez
opposed by asserting that the amount demanded by him
constituted a preferred lien over the properties of the obligors;
that the surety company was guilty of negligence when it failed
to present an opposition to the application for registration of the
property; and that if any annotation of the rights and interest of
said surety would ever be made, same must be subject to the
lien in his favor. The court ruled that Orosa and the Plaza
Theatre, Inc., were jointly liable for the unpaid balance of the
cost of lumber used in the construction of the building and the
plaintiff thus acquired the materialmans lien over the same; the
lien being merely confined to the building and did not extend to
the land on which the construction was made.

Issue: Whether materialmans lien for the value of the materials
used in the construction of a building attaches to the building
alone and does not extend to the land on which the building is
adhered to.

Held: No. While it is true that generally, real estate connotes the
land and the building constructed thereon, it is obvious that the
inclusion of the building, separate and distinct from the land, in
the enumeration of what may constitute real properties could
mean only one thing that a building is by itself an immovable
property (Leung Yee v. Strong Machinery). In the absence of any
specific provision of law to the contrary, a building is an
immovable property, irrespective of whether or not said structure
and the land on which it is adhered to belong to the same
owner.

Fels Energy vs. Batangas
G.R. No. 168557. February 16, 2007.
Doctrine: In Consolidated Edison Company of New York, Inc.,
et al. v. The City of New York, et al., a power company brought
an action to review property tax assessment. On the citys
motion to dismiss, the Supreme Court of New York held that the
barges on which were mounted gas turbine power plants
designated to generate electrical power, the fuel oil barges which
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supplied fuel oil to the power plant barges, and the accessory
equipment mounted on the barges were subject to real property
taxation.
Moreover, Article 415 (9) of the New Civil Code provides that
docks and structures which, though floating, are intended by
their nature and object to remain at a fixed place on a river,
lake, or coast are considered immovable property. Thus, power
barges are categorized as immovable property by destination,
being in the nature of machinery and other implements intended
by the owner for an industry or work which may be carried on in
a building or on a piece of land and which tend directly to meet
the needs of said industry or work.

Facts: On January 18, 1993, NPC entered into a lease contract
with Polar Energy, Inc. over 330 MW diesel engine power
barges moored at Balayan Bay in Calaca, Batangas. The contract,
denominated as an Energy Conversion Agreement, was for a
period of five years. Article 10 states that NPC shall be
responsible for the payment of taxes. (other than (i) taxes
imposed or calculated on the basis of the net income of POLAR
and Personal Income Taxes of its employees and (ii) construction
permit fees, environmental permit fees and other similar fees
and charges. Polar Energy then assigned its rights under the
Agreement to Fels despite NPCs initial opposition.
FELS received an assessment of real property taxes on the power
barges from Provincial Assessor Lauro C. Andaya of Batangas
City. FELS referred the matter to NPC, reminding it of its
obligation under the Agreement to pay all real estate taxes. It
then gave NPC the full power and authority to represent it in any
conference regarding the real property assessment of the
Provincial Assessor. NPC filed a petition with the LBAA. The LBAA
ordered Fels to pay the real estate taxes. The LBAA ruled that
the power plant facilities, while they may be classified as
movable or personal property, are nevertheless considered real
property for taxation purposes because they are installed at a
specific location with a character of permanency. The LBAA also
pointed out that the owner of the bargesFELS, a private
corporationis the one being taxed, not NPC. A mere agreement
making NPC responsible for the payment of all real estate taxes
and assessments will not justify the exemption of FELS; such a
privilege can only be granted to NPC and cannot be extended to
FELS. Finally, the LBAA also ruled that the petition was filed out
of time. Fels appealed to the CBAA. The CBAA reversed and
ruled that the power barges belong to NPC; since they are
actually, directly and exclusively used by it, the power barges are
covered by the exemptions under Section 234(c) of R.A. No.
7160. As to the other jurisdictional issue, the CBAA ruled that
prescription did not preclude the NPC from pursuing its claim for
tax exemption in accordance with Section 206 of R.A. No. 7160.
Upon MR, the CBAA reversed itself.

Issue: Whether or not the petitioner may be assessed of real
property taxes.

Held: YES. The CBAA and LBAA power barges are real property
and are thus subject to real property tax. This is also the
inevitable conclusion, considering that G.R. No. 165113 was
dismissed for failure to sufficiently show any reversible error. Tax
assessments by tax examiners are presumed correct and made
in good faith, with the taxpayer having the burden of proving
otherwise. Besides, factual findings of administrative bodies,
which have acquired expertise in their field, are generally binding
and conclusive upon the Court; we will not assume to interfere
with the sensible exercise of the judgment of men especially
trained in appraising property. Where the judicial mind is left in
doubt, it is a sound policy to leave the assessment undisturbed.
We find no reason to depart from this rule in this case.
In Consolidated Edison Company of New York, Inc., et al. v. The
City of New York, et al., a power company brought an action to
review property tax assessment. On the citys motion to dismiss,
the Supreme Court of New York held that the barges on which
were mounted gas turbine power plants designated to generate
electrical power, the fuel oil barges which supplied fuel oil to the
power plant barges, and the accessory equipment mounted on
the barges were subject to real property taxation.
Moreover, Article 415 (9) of the New Civil Code provides that
docks and structures which, though floating, are intended by
their nature and object to remain at a fixed place on a river,
lake, or coast are considered immovable property. Thus, power
barges are categorized as immovable property by destination,
being in the nature of machinery and other implements intended
by the owner for an industry or work which may be carried on in
a building or on a piece of land and which tend directly to meet
the needs of said industry or work.
Petitioners maintain nevertheless that the power barges are
exempt from real estate tax under Section 234 (c) of R.A. No.
7160 because they are actually, directly and exclusively used by
petitioner NPC, a government- owned and controlled corporation
engaged in the supply, generation, and transmission of electric
power.
We affirm the findings of the LBAA and CBAA that the owner of
the taxable properties is petitioner FELS, which in fine, is the
entity being taxed by the local government. As stipulated under
Section 2.11, Article 2 of the Agreement:
OWNERSHIP OF POWER BARGES. POLAR shall own the Power
Barges and all the fixtures, fittings, machinery and equipment on
the Site used in connection with the Power Barges which have
been supplied by it at its own cost. POLAR shall operate, manage
and maintain the Power Barges for the purpose of converting
Fuel of NAPOCOR into electricity.
It follows then that FELS cannot escape liability from the
payment of realty taxes by invoking its exemption in Section 234
(c) of R.A. No. 7160. Indeed, the law states that the machinery
must be actually, directly and exclusively used by the
government owned or controlled corporation; nevertheless,
petitioner FELS still cannot find solace in this provision because
Section 5.5, Article 5 of the Agreement provides:
OPERATION. POLAR undertakes that until the end of the Lease
Period, subject to the supply of the necessary Fuel pursuant to
Article 6 and to the other provisions hereof, it will operate the
Power Barges to convert such Fuel into electricity in accordance
with Part A of Article 7.
It is a basic rule that obligations arising from a contract have the
force of law between the parties. Not being contrary to law,
morals, good customs, public order or public policy, the parties
to the contract are bound by its terms and conditions.
Time and again, the Supreme Court has stated that taxation is
the rule and exemption is the exception. The law does not look
with favor on tax exemptions and the entity that would seek to
be thus privileged must justify it by words too plain to be
mistaken and too categorical to be misinterpreted. Thus,
applying the rule of strict construction of laws granting tax
exemptions, and the rule that doubts should be resolved in favor
of provincial corporations, we hold that FELS is considered a
taxable entity.
The mere undertaking of petitioner NPC under Section 10.1 of
the Agreement, that it shall be responsible for the payment of all
real estate taxes and assessments, does not justify the
exemption. The privilege granted to petitioner NPC cannot be
extended to FELS. The covenant is between FELS and NPC and
does not bind a third person not privy thereto, in this case, the
Province of Batangas.
It must be pointed out that the protracted and circuitous
litigation has seriously resulted in the local governments
deprivation of revenues. The power to tax is an incident of
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sovereignty and is unlimited in its magnitude, acknowledging in
its very nature no perimeter so that security against its abuse is
to be found only in the responsibility of the legislature which
imposes the tax on the constituency who are to pay for it. The
right of local government units to collect taxes due must always
be upheld to avoid severe tax erosion. This consideration is
consistent with the State policy to guarantee the autonomy of
local governments and the objective of the Local Government
Code that they enjoy genuine and meaningful local autonomy to
empower them to achieve their fullest development as self-
reliant communities and make them effective partners in the
attainment of national goals.
In conclusion, we reiterate that the power to tax is the most
potent instrument to raise the needed revenues to finance and
support myriad activities of the local government units for the
delivery of basic services essential to the promotion of the
general welfare and the enhancement of peace, progress, and
prosperity of the people.

Benitez vs CA
Facts: Both pairs of spouses, Sps. Benitez and Macapagal
bought parcels of land wherein the latter found that the Sps.
Benitez encroached on a portion of their land. The Sps.
Macapagal filed an action to recover possession of said portion
and after which a compromise was reached wherein the Sps.
Macapagal would sell the encroached portion to the Benitez. The
Sps. Macapagal bought another lot adjacent to that of the Sps.
Benitez and found that the Sps. Benitezs house encroached a
portion of their lot [again]. After refusing to vacate despite
verbal and written demands, the Sps. Macapagal filed an action
for ejectment against the Sps. Benitez [within 1 year from the
last demand]. The Metropolitan Trial Court (MeTC) decided in
favor of Sps. Macapagal. On appeal the RTC and the CA affirmed
in toto said decision. Thus the case at bar.
Issues:
(1) Whether or not an action for ejectment is the proper
remedy to recover possession of the encroached
portion
(2) Whether or not Sps. Benitez can be made to pay rent
(3) Whether or not the option to sell exclusively belongs to
the owner
Held:
(1) YES, Sec. 1 Rule 70 of the Revised Rules of Court allows any
person unlawfully deprived of possession by FISTS or after
expiration of right to hold possession within 1 year from unlawful
deprivation to bring an action to recover possession. Forcible
entry requires prior physical possession but unlawful detainer
does not require prior physical possession. Actual or physical
possession is not always necessary. And possession is not only
acquired through material occupation but also when a thing is
subject to the action of ones will or by the proper acts and legal
formalities established for acquiring such right, through
execution of deed of sale. [since it is a proper remedy, the MeTC
has jurisdiction to hear the matter]
(2) YES, The rent to be paid arises from the loss of the use and
occupation of the property and is technically damages. Therefore
since petitioners benefited from the occupation of the property it
is only just that they be made to pay damages in the form of
rent.
(3) YES, Art. 448 of the CC mandates that the option to sell the
land on which another in good faith builds, plants or sown on,
belongs to the owner. The reason for this is because the owners
right is older and by principle of accession, he is entitled to the
ownership of the accessory thing.

PEDRO P. PECSON V. COURT OF APPEALS, SPS. NUGUID
Facts: Pedro Pecson was the owner of a commercial lot on
which he built a 4-door-2-storey apartment building. He failed to
pay realty taxes amounting to P12k so the lot was sold at public
auction to Mamerto Nepomuceno who later on sold it to the Sps.
Nuguid.
Pecson challenged the validity of the auction before the RTC but
was dismissed but the RTC held that the apartment bldg was not
subject of the litigation. On appeal, the CA appealed in toto the
decision of the RTC that the apartment bldg was not included in
the auction sale.
After an entry of judgment was made, the Sps. Nuguid filed a
motion with the RTC for a motion for delivery of possession of
the lot and the apartment bldg citing Art. 546 of the CC. The
RTC issued an order declaring that the owner of the lot and
apartment bldg were the Sps. Nuguid and to pay the
construction cost of the apartment before a writ of possession
would be issued and to pay rent to the spouses. Pecson moved
for reconsideration but the Trial court did not act on it, instead it
issued a writ of possession. The CA affirmed in part the decision
declaring the cost of construction can be offset from the amount
of rents to be collected and that since Sps. Nuguid opted to
appropriate the improvement, Pecson is entitled to be
reimbursed the cost of construction at the time it was built in
1965 which is at P53k and the right the retain the improvement
until full indemnity is paid.
Thus the case at bar.

Issue: Whether or not Art. 448 and 546 applies in the case at
bar

Held: YES
> With regard to Art. 448, the provision on indemnity may be
applied in analogy. Whoever is the owner of the land may
appropriate whatever has been built, planted or sown after
paying indemnity. However, it does not apply when the owner of
the land is also the builder of the works on his own land who
later on loses ownership by sale or donation.

> Art. 546 refers to the necessary and useful expenses which
shall be refunded to the possessor in good faith with right of
retention. However, it does not state how to determine the value
of the useful improvement. The respondents [court and private
respondents alike] espouses as sufficient reimbursement the cost
of construction in 1965, however, this is contrary to previous
rulings which declares that the value to the reimbursed should
be the present market value of said improvements so as not to
unjustly enrich either of the parties. [the trial court erred in
ordering Pecson to pay rent since the Sps. Nuguid has yet to pay
the indemnity therefore Pecson has the right to retain the
improvements and the income thereof. The case was remanded
to the trial court for determination of the current market value of
the apartment bldg and ordered the Sps to pay Pecson otherwise
it shall be restored to Pecson until payment of indemnity

Sps. Nuguid vs CA
G.R. No. 151815. February 23, 2005

Facts: Pedro P. Pecson owned a commercial lot on
which he built a four-door two-storey apartment building. For
failure to pay realty taxes, the lot
wassold at public auction by the City Treasurer toMamerto Nepo
muceno, who in turn sold it for P103, 000 to the spouses Juan
and Erlinda Nuguid. Pecson challenged the validity of the auction
sale before the RTC of Quezon City, the RTC upheld the spouses
title but declared that the four-door two-storey apartment
building was not included in the auction sale. This was affirmed
by the CA and by
theSC.The Nuguids became the uncontestedowners of commerci
al lot. The Nuguid spousesmoved for delivery of possession of
the lot and the apartment building.
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Issue: WON the Nuguids should reimburse Pecson for the
benefits derived from the apartment building.

Held: YES. Since petitioners opted to appropriate the
improvement for themselves as early as June 1993,
when they applied for a writ of execution despite knowledge that
the auction sale did not include the apartment building, they
could not benefit from the lots improvement, until they
reimbursed the improver in full, based on the current
market value of the property. Under Article 448, the landowner is
given the option, either to appropriate the improvement as
his own upon payment of the proper amount of indemnity or to
sell the land to the possessor in good faith. Relatedly, Article 546
provides that a builder in good faith is entitled to full
reimbursement for all the necessary and useful expenses
incurred; it also gives
him right of retention until full reimbursement is made. The right
of retention is considered as one of the measures devised by the
law for the protection of builders in good faith. Its object is
to guarantee full and prompt reimbursement as it permits the
actual possessor to remain in possession while he has not been
reimbursed (by the person who defeated him in the case for
possession of the property) for those necessary expenses and
useful improvements made by him on the thing possessed. Given
the circumstances of the instant case where the
builder in good faith has been clearly denied his right of
retention for almost half a decade, we find that the increased
award of rentals by the RTC was reasonable and equitable. The
petitioners had reaped all the benefits from the improvement
introduced by the respondent during said period,
without paying any amount to the latter asreimbursement for his
construction costs andexpenses. They should account and pay
for such benefits.

Technogas Phil vs CA
Facts: Petitioner bought a lot together with the building and
improvements including the wall which encroached that of the
defendant. Upon learning of such encroachment, petitioner
offered to buy the land but defendant refused.
After 2 years, through an agreement, petitioner agreed to
demolish the wall (but the case did not state what happened to
this agreement, my assumption is that it did not happen due to
conflicts that arose after)
Defendant dug a canal along the wall which caused a portion of
it to collapse. Petitioner filed a supplemental complaint re the
action and a separate criminal action of malicious mischief
(which the wife was convicted of)
RTC decided for the petitioners and the CA reversed. Note that
respondent wants to have the wall demolished.

Issues:
A. Whether or not petitioner is a builder in bad faith
because it is 'presumed to know the metes and bounds
of his property.'
B. Whether or not amicable settlement was a proper
remedy
C. Whether or not respondent can opt to demolish the
structure without exercising the option to sell the land
to the petitioner and the latter cannot do buy the same

Held: Petition was granted.
Good faith or Bad Faith No such doctrinal statement that
supports that the knowledge of metes and bounds of a land due
to the Torrens system would amount to bad faith if there was
encroachment on the land of another.
A. When the petitioner purchased the lot, the wall was already
built. Even the respondent did not knew about the encroachment
until he has hired a surveyor.
B. Where one derives title to the property from another, the act,
declaration, or omission of the latter, while holding the title, in
relation to the property, is evidence against the former. And
possession in good faith does not lose this character except
when the possessor is aware of this impropriety.
C. The encroachment was very narrow which can be considered
as a mere error. Remedy the petitioner, despite being a
purchaser of the original builder, can compel the landowner to
either buy the property or sell the piece of land because:
1. He was really unaware of the encroachment basing on
the fact presented by both sides.
2. When the petitioner bought the land, he has stepped
into the rights of the original owner (hence, the right
to compel the LO to buy or sell is also transferred)
Estoppel Petitioner is not considered in estoppel only because
it has previously agreed to demolish a part of the wall. Rather, it
was to be negotiated by the parties concern. In the meantime,
petitioner has to pay the rent for the property occupied by its
building only up to the date when respondent serves notice of
their option. Case remanded back to the trial court for
determination of the value of the land and the number of days to
allot for the respondent to choose an option.

Rosales vs Castellfort
G.R. No. 157044. October 5, 2005
Facts: Spouses-petitioners Rodolfo V. Rosales and Lily
Rosqueta-Rosales (petitioners) are the registered
owners of a parcel of land with an area of approximately 315 squ
are meters, covered byTransfer Certificate of Title (TCT) No.
36856[4] and designated as Lot 17, Block 1 of Subdivision Plan
LRCPsd-55244 situated in Los Baos, Laguna. On August 16,
1995, petitioners discovered
that a house was being constructed on their lot, without their
knowledge and consent, by respondent Miguel Castelltort
(Castelltort). It turned out that respondents Castelltort and his
wife Judith had purchased a lot, Lot 16 of the same Subdivision
Plan, from respondent Lina Lopez-
Villegas (Lina) through her son-attorney-in-fact ReneVillegas
(Villegas) but that after a survey thereof by geodetic engineer
Augusto Rivera, he pointed to Lot17 as the Lot 16 the
Castelltorts purchased. Negotiations for the settlement of the
case thus began, with Villegas offering a larger lot near
petitioners lot in the same subdivision as a replacement thereof.
In the alternative, Villegas proposed to pay
the purchaseprice of petitioners lot with legal interest. Bothprop
osals were, however, rejected by petitionerswhose counsel, by
letter of August 24, 1995, directed Castelltort to stop the
construction of and demolish his house and any other structure
he may have built thereon, and desist from entering the lot.
Petitioners subsequently filed on September 1, 1995 a complaint
for recovery of possession and damages with prayer for the
issuance of a
restrainingorder and preliminary injunction against spouses-
respondents Miguel and Judith Castelltort before the RTC of
Calamba, Laguna, docketed as Civil Case No.2229-95-C.

Issue: Under Art 448, who has the right of option?

Held: Under the foregoing provision (Art 448), the
landowner can choose between appropriating the building by
paying the proper indemnity or obliging the builder to pay the
price of the land, unless its value is considerably more than that
of the structures, in which case the builder in good faith shall
pay reasonable rent. If the parties cannot come to terms over
the conditions of the lease, the court must fix the terms thereof.
The choice belongs to the owner of the land, a rule that accords
with the principle of accession, i.e., that the accessory follows
the principal and not the other way around. Even as the option
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lies with the landowner, the grant to him, nevertheless, is
preclusive. The landowner cannot refuse to exercise either
option and compel instead the owner of the building to remove it
from the land. The raison detre for this provision has be
enunciated thus: Where the builder, planter or sower has acted
in good faith, a conflict of rights arises
between the owners, and it becomes
necessary to protect the owner of the
improvements without causing injustice tothe owner of the land.
In view of theimpracticability of creating a state of forced co-
ownership, the law has provided a just solution by giving the
owner of the land the
option to acquire the improvements after payment of the proper
indemnity, or to oblige the builder or planter to pay for the land
and the sower the proper rent. He cannot refuse to exercise
either option. It is the owner of the land who is authorized to
exercise the option, because his right is older, and because, by
the principle of accession, he is entitled to the ownership of the
accessory thing.

Alviola vs CA
Facts: Alviola occupied Tinagans land and built a copra dryer
and put up a store where they engaged in copra trade; this was
done in bad faith but with the tolerance of Tinagan. Several
years later, the heirs of Tinagan filed a complaint for recovery of
possession against Alviola. Alviola claims that the copra dryer
and store are permanent structures and that 448 should apply.

Issue: Whether 448 should apply

Held: 448 should apply. Since both parties were in bad faith,
they will be treated as if they were in good faith for purposes of
indemnity and Article 448 will apply: the builder of the structures
will pay rent until the structures are dismantled.
However, the dryer and store are temporary structures. They do
not have a permanent character and were not attached to the
soil with an idea of perpetuity.
Since the structures are merely temporary, the landowner does
not have to choose between buying the structures and selling
the property.
*** When the structures built in good faith on the land of
another are of temporary character, Article 448 applies, but only
as to indemnity. The landowner is not compelled to choose
between appropriating the property and selling the land.

Del Campo vs Abesia
Facts: This case involves a parcel of land, situated at the corner
of F. Flores and Cavan Streets, Cebu City. An action for partition
was filed by plaintiffs in the CFI of Cebu. Plaintiffs and
defendants are co-owners pro indiviso of this lot in the
proportion of and 1/3 share each, respectively. The trial court
appointed a commissioner in accordance with the agreement of
the parties. ,the Id commissioner conducted a survey, prepared a
sketch plan and submitted a report to the trial court on May 29,
1976, recommending that the property be divided into two lots:
Lot 1161-A with an area of 30 square meters for plaintiffs and
Lot No. 1161-B with an area of 15 square meters for the
defendants. The houses of plaintiffs and defendants were
surveyed and shown on the sketch plan. The house of
defendants occupied the portion with an area of 5 square meters
of Lot 1161-A of plaintiffs. The parties manifested their
conformity to the report and asked the trial court to finally settle
and adjudicate who among the parties should take possession of
the 5 square meters of the land in question.

Issue: Whether or Not Article 448 of the Civil Code is applicable
to a builder in good faith when the property involved is owned in
common.
Held: When the co-ownership is terminated by the partition and
it appears that the house of defendants overlaps or occupies a
portion of 5 square meters of the land pertaining to plaintiffs
which the defendants obviously built in good faith, then the
provisions of Article 448 of the new Civil Code should apply.
Manresa and Navarro Amandi agree that the said provision of the
Civil Code may apply even when there was co-ownership if good
faith has been established.
Applying the aforesaid provision of the Civil Code, the plaintiffs
have the right to appropriate said portion of the house of
defendants upon payment of indemnity to defendants as
provided for in Article 546 of the Civil Code. Otherwise, the
plaintiffs may oblige the defendants to pay the price of the land
occupied by their house. However, if the price asked for is
considerably much more than the value of the portion of the
house of defendants built thereon, then the latter cannot be
obliged to buy the land. The defendants shall then pay the
reasonable rent to the plaintiff upon such terms and conditions
that they may agree. In case of disagreement, the trial court
shall fix the terms thereof. Of course, defendants may demolish
or remove the said portion of their house, at their own expense,
if they so decide.
Article 448 of the New Civil Code provides as follows:
Art. 448. The owner of the land on which anything has been
built, sown, or planted in good faith, shall have the right to
appropriate as his own the works, sowing or planting, after
payment of the indemnity provided for in articles 546 and 548, or
to oblige the one who built or planted to pay the price of the
land, and the one who sowed, the proper rent. However, the
builder or planter 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 pay reasonable rent, if the owner of the land does
not choose to appropriate the building or trees after proper
indemnity. The parties shall agree upon the terms of the lease
and in case of disagreement, the court shall fix the terms
thereof.

Arangote vs Maglunob
G.R. No. 178906 February 18, 2009
Facts:
Elvira Arangote acquired the subject parcel of land from Esperan
za Maglunob, who is grand aunt of respondents Martin Maglunob
and Romeo Salido. In June 1986, Esperenza executed
an affidavit in which she renounced her rights, share
and participation in the land in favor of Elvira and her husband.
It appears that the lot was not exclusive property of Esperanza
but also
of the other heirs of Martin I whom sherepresented in the partiti
on agreement. Elvira and her husband, Ray constructed a house
on the land in 1989 and
in 1993, OCT was issued in her name bythe DAR. However, resp
ondents with the help of hired persons entered the property and
built a
wall behind and in front of Elviras house. Elvira and Ray suedres
pondents for quieting of title and declaration of ownership.
Respondents averred that they were co-owners of the land with
Esperanza who allegedly inherited the land from Martin 1
together with Tomas and Inocencia (Martin 2s and Romeos
predecessor in interest). They argued that Esperanza could not
have validly waived her rights in favour of Elvira and Ray. MCTC
ruled for Elvira. RTC
reversed MCTC and declared respondents lawful owners of the la
nd together withthe other heirs of Martin I. Elvira went to the CA
but the CA affirmed the RTC decision. Before SC, Elvira argued
that both RTC and CA erred in declaring
the affidavit of Esperanza void because it is a valid and binding
proof of transfer of ownership of the subject property as it was
coupled with actual delivery.
6

Issue: Whether or not the donation to Elvira and her husband is
valid.

Held: Supreme Court affirmed the decision of CA. SC ruled
that the affidavit executed by Esperanza wherein she
renounced, relinquished and waived all her rights, share, interest
and participation in the subject property in favor of Elvira and
Ray is in fact a donation. Thus, it should have complied with the
requirements of Article 749 of the Civil Code.
A simple donation of real property to be valid
1) Must be made in a public instrument;
2) It must be accepted, which must be in the same deed of
donation or in a separate public instrument;
3) If the acceptance is made in a separate instrument, the donor
must be notified inauthentic form and the same must be noted
in both instruments.
The affidavit executed by Esperanza relinquishing her rights,
share and participation over the property in favor of Elvira
suffered from legal infirmities. In Sumipat vs. Banga, the Court
ruled that title to immovable does not pass from the donor to the
done by virtue of a Deed of Donation until and unless it has been
accepted in a public instrument and the donor duly notified
thereof. In this case, the acceptance of the donation was not
made by Elvira either in the same affidavit or in a separate public
instrument. Neither was there notice of acceptance given to the
donor, therefore the donation is void.

Meneses vs CA
G.R. No. 82220
Facts: On March 1, 1977, Darum, then the District Land
Officer of Los Baos, Laguna, issued to Pablito Meneses 2 Free
Patent and 2 OCT covering lots located in Los Baos, Laguna.
Pablito acquired said property from Bautista through a Deed of
Waiver and Transfer of Rights executed in 1975 in consideration
of Bautistas love and affection for and some monetary
obligations in favor of Meneses. After the execution of said
document, Meneses took possession of the land, introduced
improvements thereon, declared the land as his own for tax
purposes and paid the corresponding realty taxes. In turn,
Bautista acquired the land from his aunt. He had been occupying
the land since 1956.
On the other hand, the Quisumbing family traces ownership of
their land as far back as 1919 when their matriarch was issued
an OCT covering a lot, with the Laguna de Bay as its
northwestern boundary. The same parcel of land was registered
on 1973 under a TCT in the names of her heirs, all surnamed
Quisumbing. The Quisumbings applied for registration and
confirmation of title over an additional area which had gradually
accrued to their property by the natural action of the waters of
Laguna de Bay. The CFI of Bian confirmed the Quisumbings
title thereto.
In 1979, the Quisumbings filed a case before the CFI of Calamba
against Lorenzo and Pablito Meneses, Darum and Almendral for
nullification of the free patents and titles issued to Pablito
Meneses. They alleged that Lorenzo Menesis, then the Mayor of
Los Baos, using his brother Pablito as a tool and dummy,
illegally occupied their private accretion land and confederating
with District Land Officer Darum and Land Inspector Almendral,
obtained free patents and OCTs to the land.
In 1984, the trial court rendered the decision finding that the
lands registered by the Meneses brothers are accretion lands to
which the Quisumbings have a valid right as owners of the
riparian land to which nature had gradually deposited the
disputed lots. (The lots occupied by Meneses, as found by the
court, are to be accretion lands forming parts of the bigger
accretion land owned by the Quisumbings. )
Meanwhile, the Meneses brothers and Darum appealed the to
the CA, which affirmed in toto the lower
courts decision.The defendants-appellants filed two MRs of the
CA decision but it was denied, hence this petition for review on
certiorari.

Issue: WON
1. The lands in question were not accretion lands but lands of
the public domain
2. Conspiracy to commit fraud, deceit and bad faith attended the
issuance of the free patent and titles to Pablito Meneses; and

Held: WHEREFORE, the petition is DENIED. The Decision CA is
AFFIRMED
While the lots occupied by Villamor and Lanuzo may not be the
very same lots petitioners are claiming here, the two cases refer
to the same accretion lands northwest of the original land owned
by the Quisumbings.
1. The submersion in water of a portion of the land in
question is due to the rains falling directly on or
flowing into Laguna de Bay from different sources.
Since the inundation of a portion of the land is not due
to flux and reflux of tides it cannot be considered a
foreshore land. The land sought to be registered not
being part of the bed or basin of Laguna de Bay, nor a
foreshore land as claimed by the Director of Lands, it
is not a public land and therefore capable of
registration as private property provided that the
applicant proves that he has a registerable title.
Additionally, the provision of the law on waters will govern in
determining the natural bed or basin of the lake. And
accordingly, to Art. 84 of the Law of Waters of August 3, 1866:
Accretions deposited gradually upon land contiguous to creeks,
streams, rivers and lakes by accessions or sediments from the
waters thereof, belong to the owners of such lands.
As pointed out by the lower court, no act of appropriation is
necessary in order to acquire ownership of the alluvial formation
as the law does not require the same.
2. As found by the CA, petitioners conspired in the approval and
grant of the free patents heirs Quisumbing. Such fraud was
confirmed by this Court in Meneses v. People, which held the
petitioners therein liable for violation of the Anti-Graft and
Corrupt Practices Act in the issuance of the same free patents
and titles. In due course, the Sandiganbayan rendered a decision
finding the defendants guilty as charged. The judgment of
conviction was affirmed.
NOTES:
1. Accretion as a mode of acquiring property under Article 457 of
the Civil Code requires the concurrence of these requisites:
(1) that the deposition of soil or sediment be gradual and
imperceptible;
(2) that it be the result of the action of the waters of the river
(or sea); and
(3) that the land where accretion takes place is adjacent to the
banks of rivers (or the sea coast).
2. The task of fixing the amount of damages is primarily with
the trial court. While it is the appellate courts duty to review the
same, a reduction of the award of damages must pass the test of
reasonableness. The CA can only modify or change the amount
awarded as damages when they are palpably or scandalously
and reasonably excessive.
3. A public official is by law not immune from damages in his
personal capacity for acts done in bad faith which, being outside
the scope of his authority, are no longer protected by the mantle
of immunity for official actions.

Vda. De Nazareno vs Court of Appeals
Facts: A parcel of land situated in Telegrapo, Puntod, Cagayan
de Oro City is said to have been formed as a result of sawdust
dumped into the dried-up Balacanas Creek and along the banks
7

of the Cagayan river. Sometime in 1979, Jose Salasalan and Leo
Rabaya leased the subject lots on which their houses stood from
one Antonio Nazareno, petitioners predecessor-in-interest. In
the latter part of 1982, Salasalan and Rabaya allegedly stopped
paying rentals. As a result, Antonio Nazareno and petitioners
filed a case for ejectment with the MTC Cagayan de Oro City,
Branch 4. A decision was rendered against Salasalan and
Rabaya, which decision was affirmed by the RTC Misamis
Oriental, Branch 20. The case was remanded to the Municipal
trial court for execution of judgment after the same became final
and executory. Private respondents filed a case for annulment of
judgment before the RTC Misamis Oriental, Branch 24 and
subsequently, a case for certiorari for restraining order and/or
writ of preliminary injunction with the RTC of Misamis Oriental,
Branch 25; both of which were dismissed. The decision of the
lower court was finally enforced with the private respondents
being ejected from portions of the subject lots they occupied.
Before he died, Antonio Nazareno caused the approval by the
Bureau of Lands of the survey plan designated as Plan Csd-106-
00571 with a view to perfecting his title over the accretion area
being claimed by him. Before the approved survey plan could be
released to the applicant, it was protested by private
respondents before the Bureau of Lands. The report of the Land
Investigator, made in compliance with the order of the District
Land Officer, recommended the Survey Plan MSI-10-06-000571-
D (Lot 36302, Cad. 237) in the name of Antonio Nazareno be
cancelled and that private respondents be directed to file
appropriate public application. Based on the report, the Regional
Director of the Bureau of Lands rendered a decision ordering an
amendment to the survey plain of Nazareno by segregating
therefrom the areas occupied by the private respondents.
Antonio Nazareno filed a motion for reconsideration with the
Undersecretary of Natural Resources and OIC of the Bureau of
Lands; which was denied.The petitioners, Desamparada vda. De
Nazareno and Leticia Tapia Nazero filed a case before the RTC,
for the annulment of the verification, report and
recommendation, decision and order of the Bureau of Lands
regarding the parcel of land. The RTC dismissed the complaint
for failure to exhaust administrative remedies, resulting to the
finality of the administrative decision of the Bureau of Lands. On
appeal, the Court of Appeals affirmed the decision of the RTC
dismissing the complaint. Hence, the petition.

Issue: Whether or not the subject land is public land.

Held: Petitioners claim that the subject land is private land being
an accretion to his titled property, applying Article 457 of the
Civil Code which provides: To the owners of lands adjoining the
banks of rivers belong the accretion which they gradually receive
from the effects of the current of the waters.
In the case of Meneses v. CA, this Court held that accretion, as a
mode of acquiring property under Art. 457 of the Civil Code,
requires the concurrence of these requisites: (1) that the
deposition of soil or sediment be gradual and imperceptible; (2)
that it be the result of the action of the waters of the river (or
sea); and (3) that the land where accretion takes place is
adjacent to the banks or rivers (or the sea coast). These are
called the rules on alluvion which if present in a case, give to the
owners of lands adjoining the banks of rivers or streams any
accretion gradually received from the effects of the current of
waters.
The application of the rules on alluvion cannot be made in the
present case as the first and second requirements of the rules
were not met. Thus, the Nazarenos cannot claim the rights of a
riparian owner. By their own admission, the accretion was
formed by the dumping of boulders, soil and other filling
materials on portions of the Balacanas Creek and the Cagayan
River bounding their land. It cannot be claimed, therefore, that
the accumulation of such boulders, soil and other filling materials
was gradual and imperceptible, resulting from the action of the
waters or the current of the Balacanas Creek and the Cagayan
River.
In Hilario v. City of Manila, this Court held that the word
current indicates the participation of the body of water in the
ebb and flow of waters due to high and low tide. Petitioners
submission not having met the first and second requirements of
the rules on alluvion, they cannot claim the rights of a riparian
owner. Petitioners are estopped from denying the public
character of the subject land, as well as the jurisdiction of the
Bureau of Lands when the late Antonio Nazareno filed his
Miscellaneous Sales Application MSA (G-6) 571. The mere filing
of said Application constituted an admission that the land being
applied for was public land, having been the subject of Survey
Plan MSI-10-06-000571-D which was conducted as a
consequence of Antonio Nazarenos Miscellaneous Sales
Application wherein said land was described as an orchard. Said
description by Antonio Nazareno was controverted by the
findings of the ocular inspection that said land actually covers a
dry portion of Balacanas Creek and a swampy portion of
Cagayan River. In Republic v. CA, it was ruled that the
requirement that the deposit should due to the effect of the
current of the river is indispensable. This excludes from Article
457 of the Civil Code all deposits caused by human intervention.
Putting it differently, alluvion must be the exclusive work of
nature. Thus, in Tiongco v. Director of Lands, et al., where the
land was not formed solely by the natural effect of the water
current of the river bordering said land but is also the
consequence of the direct and deliberate intervention of man, it
was deemed a man-made accretion and, as such, part of the
public domain.
In the present case, the subject land was the direct result of the
dumping of sawdust by the Sun Valley Lumber Co. consequent to
its sawmill operations. As the accretion site was the result of the
late Antonio Nazarenos labor consisting in the dumping of
boulders, soil and other filling materials into the Balacanas Creek
and Cagayan River bounding his land, the same would still be
part of the public domain.

Jagualing vs CA, 194 SCRA 607
Facts: Eduave claims that she inherited a parcel of land from
her parents, which later increased in size due to erosion caused
by typhoon Ineng. In 1973 Jagualing asked her permission to
plant corn and bananas provided that they prevent squatters to
come to the area.
The land was the subject of a reconveyance case between Janita
Eduave vs. Heirs of Antonio Factura which was the subject of
judgment by compromise in view of the amicable settlement of
the parties. In the amicable settlement the heirs of Antonio
Factura (Jagualing), ceded a portion of the land with an area of
1,289 square meters more or less to Eduave.
Later, Jagualing denied the claim of ownership of Eduave, and
asserted that they are the real owners of the land in litigation
containing an area of 18,000 square meters more or less.
According to them, they acquired the land by acquisitive
prescription since they have occupied the land since 1969. They
presented tax declarations and photos of actual occupation to
prove claim of prescription.
Eduave filed an action to quiet title and/or remove a cloud over
the property in question against Jagualing. RTC dismissed the
complaint for failure of Eduave to establish by preponderance of
evidence their claim of ownership over the land in litigation and
that the land is a delta thus is part of public domain not
susceptible of appropriation.
The CA found that the island was formed by the branching off of
the river and subsequent thereto the accumulation of alluvial
deposits. Basing its ruling on Articles 463 and 465 of the Civil
8

Code the Court of Appeals reversed the decision of the trial
court, declared private respondents as the lawful and true
owners of the land subject of this case and ordered petitioners to
vacate the premises and deliver possession of the land to private
respondents.

Issue: Whether or not Jagualing acquired the island thru
prescription?

Held: No.
From the evidence thus submitted, CA had sufficient basis for the
finding that the property of Eduave actually existed and was
identified prior to the branching off or division of the river. The
CA, therefore, properly applied Article 463 of the Civil Code
which allows the ownership over a portion of land separated or
isolated by river movement to be retained by the owner thereof
prior to such separation or isolation. The parcel of land in
question is part of an island that formed in a non-navigable and
non-flotable river; from a small mass of eroded or segregated
outcrop of land, it increased to its present size due to the
gradual and successive accumulation of alluvial deposits. In this
regard the CA also did not err in applying Article 465 of the Civil
Code. Under this provision, the island belongs to the owner of
the land along the nearer margin as sole owner thereof; or more
accurately, because the island is longer than the property of
private respondents, they are deemed ipso jure to be the owners
of that portion which corresponds to the length of their property
along the margin of the river.
It is well-settled that lands formed by accretion belong to the
riparian owner. This preferential right is, under Article 465, also
granted the owners of the land located in the margin nearest the
formed island for the reason that they are in the best position to
cultivate and attend to the exploitation of the same. In fact, no
specific act of possession over the accretion is required. If,
however, the riparian owner fails to assert his claim thereof, the
same may yield to the adverse possession of third parties, as
indeed even accretion to land titled under the torrens system
must itself still be registered.
However, Jagualing failed to prove adverse possession of the
land for the required period and their possession cannot be
considered in good faith since by their admission they have
recognized Eduaves ownership over the land. Thus the land still
belongs to Eduave.
Islands formed by accretion belong to the riparian owner nearest
to its margin. However such accretion may be lost to third
parties thru prescription.

Agustin vs IAC
Facts: Private respondents, Maria Melad and Pablo Binuyag are
among those who are occupying the western bank of the
Cagayan River while on the eastern bank is owned by petitioner
Eulogio Agustin. From 1919 to 1968, the Cagayan river has
eroded the lands on the eastern bank including Agustins Lot
depositing alluvium on the land possessed by Pablo Binuyag. In
1968, after a typhoon which caused a big flood, the Cagayan
River changed its course and returned it to its 1919 bed and it
cut through the lands of respondents whose lands were
transferred on the eastern side. To cultivate the lands they had
to cross the river. When they were cultivating said lands, (they
were planting corn) Agustin accompanied by the mayor and
some policemen claimed the land and drove them away. So
Melad and Binuyag filed separate complaints for recovery of their
lots and its accretions. The Trial Court held ordered Agustin et. al
to vacate the lands and return them to respondents. On appeal,
the IAC affirmed in toto the judgment thus the case at bar.

Issue: Whether or not private respondents own the accretion
and such ownership is not affected by the sudden and abrupt
change in the course of the Cagayan River when it reverted to its
old bed

Held: YES
Art. 457 states that the owner of the lands adjoining river banks
own the accretion which they gradually receive from the effects
of the currents of the waters. Accretion benefits a riparian owner
provided that these elements are present: 1) deposit be gradual
and imperceptible 2) it resulted from the effects of the current of
the water and 3) the land is adjacent to the river bank. When the
River moved from 1919 to 1968, there was alluvium deposited
and it was gradual and imperceptible.
Accretion benefits the riparian owner because these lands are
exposed to floods and other damage due to the destructive force
of the waters, and if by virtue of law they are subject to
encumbrances and various kinds of easements, it is only just that
such risks or dangers should in some way be compensated by
the right of accretion. Also, respondents ownership over said lots
was not removed when due to the sudden and abrupt change in
the course of the river; their accretions were transferred to the
other side. Art. 459 states when the current of a river x x x
segregates from an estate on its bank a known portion of land
and transfers it to another estate, the owner of segregated
portion retains ownership provided he removes the same w/in 2
years. And Art. 463 states that whenever the current of a river
divides itself into branches, leaving a piece of land or part
thereof isolated, the owner of the land retains ownership. He
also retains it if a portion of land is separated from the estate by
the current.

Javier vs Veridiano
ACTION FOR DETERMINATION OF OWNERSHIP
A final judgment on forcible entry or unlawful detainer is NOT a
bar against to an action for determination of ownership. A
judgment rendered in a case for recovery of possession is
conclusive only as to possession, not ownership. It is not a bar
against an action for determination of ownership.
Facts: Petitioner bought a land on a subdivision by filing a
Miscellaneous Sales Application. Pending the approval of the
sale, Ben Babol entered a portion adjacent to the land being
bought by Petitioner. Petitioner claims that the occupied land by
Babol is part of his land so he filed a forcible entry case.
However, the trial court found Petitioner wrong and so sustained
the possession of Babol. Later on, Babol would sell this portion to
private Respondent. In the meantime, the application was
approved and a TCT was delivered to Petitioner. This motivated
the Petitioner to demand the land again, this time from
Respondent, and this time on the basis of ownership. He filed a
complaint for quieting of title and recovery of possession.
Respondent countered that the first case on forcible entry
constituted res judicata against the second complaint.

Issue: W/N the first case on forcible entry was res judicata
against the second case on quieting of title

Held: No! Once again, for res judicata to arise, four requisites
must concur: Final judgment, Court with competent jurisdiction,
judgment based on merits, identity of parties and cause of
action. The Court said that in the two cases, there were identity
of parties because Respondent, having acquired the contested
land by sale and tradition, is a successor in interest.
However, there was no identity of the causes of action. In
forcible entry, the only issue is prior possession and not
ownership. In accion reivindicatoria, the issue is the ownership.
The Court held that the second case was actually an accion
reivindicatoria as Petitioner set up title for herself, prayed that
Respondent to be ejected and that she be declared the owner.
9

Thus a final judgment on forcible entry or detainer is NOT a bar
against to an action for determination of ownership.

Caezo vs Bautista
Facts: Petitioners are the registered owner[s] of a parcel of land
with an area of One Hundred Eighty Six(186) square meters,
covered by Transfer Certificate of Title (TCT) No. 32911.
Respondents are the registered owners of a parcel of land,
containing an area of One Hundred Eighty One (181) square
meters, covered by Transfer Certificate of Title (TCT) No. 31727.
Both parcels of land are located at Coronado Heights, Barangka
Ibaba, Mandaluyong City and registered with the Registry of
Deeds of Mandaluyong City. Said lots are located adjacent to
each other. When petitioners started the construction of a
building on their lot, they discovered that their lot was
encroached upon by the structures built by respondents without
their consent. The three (3) surveys conducted confirmed the
fact of encroachment. However, despite oral and written
demands, respondents failed and refused to remove the disputed
structures. Petitioners filed a complaint before the RTC for the
issuance of a writ of demolition. For failure to file an Answer with
the extended period granted, petitioners presented evidence ex-
parte. The RTC issued the writ of demolition. The Court of
Appeals dismissed the complaint since the last demand was
made on 27 March 2000, or more than a year before the filing of
the complaint, the spouses Caezo should have filed a suit for
recovery of possession and not for the issuance of a writ of
demolition. Hence, this petition.

Issue: Whether the Honorable Court of Appeals gravely erred in
stating that the petitioners should have filed recovery of
possession and not writ of demolition.

Held: The Supreme Court ruled that while the case was
inaccurately captioned as an action for a "Writ of Demolition with
Damages" it was in reality an action to recover a parcel of land
or an accion reivindicatoria under Article 434 of the Civil Code.
Accion reivindicatoria seeks the recovery of ownership and
includes the jus utendi and the jus fruendi brought in the proper
regional trial court. Accion reivindicatoria is an action whereby
plaintiff alleges ownership over a parcel of land and seeks
recovery of its full possession. The petitioners were able
to establish their ownership of the encroached property. Aside
from testimonial evidence, the spouses Caezo were also able to
present documentary and object evidence which consisted of
photographs, transfer certificates of title, and a relocation survey
plan. Given these reasons, the Court ruled in favor of petitioners.
The Supreme Court reversed the decision of the Court of Appeals
and affirmed that of the trial court.

Ballatan vs CA
Facts: Petitioner constructed a house and found out that Go was
encroaching on
her land. A relocation survey was then conducted and it
was found out that her total land area was decreased while the
land of Yao increased.
Held:Where a person had no knowledge that he encroache
d on his neighbours
lot, he is deemed a builder in good faith until the time th
e latter is informed of his encroachment upon the latters
property.