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IGNACIO VS. HILARIO

76 SCRA 605
FACTS
A case was filed in the CFI between Hilario spouses & the Ignacios concerning the
ownership of a parcel of land, partly rice-land & partly residential. After the trial of the
case, Judge Felix rendered judgment holding that:
1. Hilario as the owner of the whole property
2. The Ignacios are entitled to hold the possession of the lot until they are paid
the market value of their houses & granaries erected on them.
3. If the Hilario spouses prefer to sell them the residential lot, the Ignacios shall
pay the value of the lot taking as basis the price paid for the whole land.
4. Upon the Ignacios failure to purchase the residential lot, they shall remove
their houses & granaries.

wife for them to build a house in her lots. The Yusecos accepted this & built a dwelling
house & an annex. Lim & the Yusecos then executed a contract of lease covering them
for 5 years w/ annual rental of P120.
Before Lims death, she sold the lots above to her daughter, Tayag. Tayag asked the
Yusecos to remove their house from the lots, or pay to them a monthly rental of P120.
The Yusecos refused. Tayag filed w/ the MTC an action of ejectment & recovery of a
monthly rentals at P500 per month. The court ruled in favor of Tayag. The Yusecos
appealed to the CFI.
The CFI granted to Tayag the possession of the lots w/ the right to appropriate the 2
buildings upon payment to the defendants their value assessed at P50,000. If Tayag
should fail to pay w/in 90 days, the Yusecos shall have the right to purchase the lots for
the sum of P10,000 to be paid w/in 90 days after Tayag has failed to buy the buildings.
Tayag appealed to the CA w/c affirmed the CFI decision.

In a motion filed in the CFI, Judge Natividad, Hilario prayed for an order of execution
alleging that they neither choose to pay defendants for the buildings nor to sell to
them the lot, the Ignacios must be ordered to remove the structure at their own
expense & to restore to the spouses the lot. This motion was ruled in favor of Hilario
& against the Ignacios.

Tayag appealed to the SC w/c affirmed the CA decision in their finding that the Yusecos
are possessors in good faith. It remanded the case to the CFI to give Tayag an
opportunity to exercise her choice & the court to admit evidence & make findings as the
amount of the useful expenditures & the value of the land.

ISSUE
W/N the judgment rendered by Judge Natividad should be annulled.

The CFI ordered Tayag to make her choice whether they would purchase the buildings
or to allow the Yusecos to buy the lots. However, Tayag filed a manifestation stating
that she is not willing to sell the lot but she is willing to appropriate the building.

RULING
YES. The owner of the building erected in good faith on a land owned by another, is
entitled to retain the possession of the land until he is paid the value of his building.
The owner of the land has the option either to pay for the building or to sell his land
to the owner of the building. But he cannot, as Hilario did, refuse both to pay for the
building & to sell the land & compel the owner of the building to remove it from the
land. He is entitled to such remotion only when, after having chosen to sell his land,
the other party fails to pay for the same.
Judge Natividads order compelling the Ignacios to remove the buildings from the land
only because the latter chose neither to pay for the building nor sell the land, is null &
void because it amends the judgment sought to be executed & is offensive to Articles
361 & 453 of the CC (now Arts. 448 & 546 of the NCC).
However, Judge Felixs order failed to determine the value of the buildings & the lot as
well as the periods of time w/in w/c the option may be exercised & payment should
be made. Therefore, the said judgment has never become final it having left matters
to be settled for completion in a subsequent proceeding. The instant case is remanded
to the lower court to determine the prices of the buildings & lots & the periods.
TAYAG VS. YUSECO
105 SCRA 484
FACTS
Yuseco, an attorney-in-fact, had been rendering w/o compensation professional
services to Lim. To show her appreciation of his services, Lim offered to Yuseco & his

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CERTEZA

The CFI ruled that since the Yusecos will be the sellers, they have the burden of
proving the value of the buildings. Evidence was presented by both parties. Tayag
showed that the value of the lots cannot be more than P40,000. The Yusecos on the
other hand showed that the lots have a value of P45k-P50k & the buildings cost P5k-6k.
The court fixed the reasonable value of both the buildings on the lots at P50k.
Tayag appealed again contesting that trial court erred in limiting the reception of the
evidence to the value of the buildings erected n the lots, instead of admitting evidence
on the value of both said lots and buildings & in assessing at P50k the value of the 2
buildings on the lots. Tayag contends that the trial court in limiting the reception of
evidence on the value of the buildings failed to fully implement the instructions of the
SC.
The CA did not agree w/ Tayag. It ruled that the directive made in the CFI decision is in
alternative. It is clear from the decision that the evidence as the value of the buildings
should be admitted only if Tayag chooses to appropriate the buildings & that in case
Tayag should elect to compel the Yusecos to buy the lots, then evidence concerning the
value of the lots must be admitted. Tayag chose to appropriate the building w/c means
that evidence to the value of the buildings must be admitted. However the CA reduced
the amount to P47,500. Tayag then filed a petition for certiorari w/ the SC to review the
second decision of the CA. The SC dismissed the petition.
The trial court then issued a writ of execution to collect from Tayag the said amount.
Tayag refused & filed a petition for mandamus to compel the trial court to elevate the
case to the SC on appeal. She contends that she still retains the right of option to make

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the choice of either buying the house or compelling the owners to buy the land & that
even if she made the choice, she cannot be compelled to pay the price because of her
inability to pay the price.
ISSUE
W/N Tayag still retains the choice & can be compelled to pay the price fixed by the
courts.
RULING
No. This question was already resolved by the CA w/c decided that Tayag had made
their choice not to sell their land but to buy the houses built thereon. By the SCs
refusal to review the said decision, they agreed w/ the CA that Tayag has made her
choice.
Once a party in conformity w/ the court decision has made his choice, & has duly
informed the court of the said choice, & is accordingly ordered to comply w/ the same
by buying the building erected on his land & pay the value thereof fixed by the courts,
that duty is converted into a money obligation w/c can be enforced by executing
regardless of the unwillingness or inability of the party concerned to pay the amount.
GRANA & TORALBA VS. CA
109 SCRA 260
FACTS
A cadastral survey of Agusan was made by the Bureau of Lands. In that survey, a
parcel of land was included as part of the lot belonging to Gregorio Bongato & Botcon
for w/c an OCT was issued in their favor.
This lot was purchased by the spouses Bongato & Eusebia More. Upon their death, it
was inherited by Aurora Bongato & Jardenio Sanchez.
Bongato & Sanchez sued Grana & Torralba for the recovery of the 87 sq. m of
residential land.
Grana & Torralba claim that the lands in Agusan were subsequently resurveyed due to
conflicts & overlapping boundaries. In that resurvey, Gregorio Bongatos lot was
identified as Lot 311 while their lot was identified as Lot 310. Citing that the OCT
covers 295 sq. m. while the sketch plan of the 2nd cadastral survey shows that Lot 311
only has 230 sw. m. They maintain that it is the latter area that properly belongs to
Bongato & Sanchez. They claim that the lot in question is part of Lot 310 w/c belongs
to their predecessors in interest.

RULING
(a) No. No proof was presented to show that the old survey was erroneous or that it
included a part of their land. The difference in area between land covered by the title &
Lot 311 of the resurvey plan is 65 sq. m while the area of the land in dispute is 87 sq.
m. The land in dispute is covered by the Torrens title issued in 1923 and has not been
contested up to the present & therefore has become incontrovertible evidence of
ownership of the land covered by it. A Torrens certificate of title becomes conclusive &
indefeasible after the lapse of the period w/in w/c it may be impugned. A resurvey plan
cannot be allowed to alter or modify a Torrens title so as to make the area of the land
theirein described agree w/ the given plan.
(b) NO. Since Grana & Torralba are builders of the land in GF, Bongato & Sanchez as
owners of the land, have the choice of either appropriating the portion of house w/c is
on their land upon payment of the proper indemnity to Grana & Torralba that part of
their land on w/c stands the improvement.
It would be impractical for Bongato & Sanchez to choose the first alternative for in that
event the whole building might be rendered useless. The more workable solution is for
them to sell to Grana that part of their land on w/c was constructed a portion of the
house. IF Grana & Torralba are unwilling or unable to buy the land, they must vacate
the land & pay rentals until they do so. Bongato cannot oblige them to buy the land if
its value is considerably more than that of the portion of the house. If such is the case,
then Grana & Torralba must pay the rent.
A builder in good faith cannot be compelled to pay rentals. He has the right to retain
the land on w/c he has built in good faith until he is reimbursed the expenses incurred
by him.
BACLAYON VS. CA
182 SCRA 761
FACTS
1st case: Baclayon filed a complaint for recovery of ownership and possession and
damages against spouses Bacalso. RTC ruled in favor of Bacalso but was reversed by
the CA declaring the Baclayon the owner of the property. Bacalso appealed to SC but
was denied. This case eventually became final and executory.

After trial, the court rendered judgment declaring Bongato & Sanchezas the owners of
the land & ordering Grana & Torralba to vacate & deliver it to said respondents & to
pay a monthly rental of P10 from the filing of the complaint until they actually vacate
the same. Hence the present petition.

2nd case: After the decision became final and executory, Baclayon filed a motion for
execution of judgment and possession which was opposed by the Bacalso. The
opposition was based on the pronouncement of CA in its first case finding the Bacalso
as builders or planter in good faith and under article 546 of Civil Code it is stated that
the necessary and useful expenses for the improvements must be paid to builders in
good faith with right of retention, a reception of evidence to determine the correct
value of the necessary and useful improvements must be done first before ordering the
execution.

ISSUE
(a) W/N the lot in question belongs to Grana & Torralba.
(b) W/N they can be compelled to pay the rent.

Judge Lee of RTC granted the motion for execution of judgment and POSSESSION of
the Baclayon and ordering Bacalso to vacate the property. It was also held that the said
court will not entertain any further claims by any party in connection with the said case

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because it cannot pass judgment anew on certain claims that should have been
interposed as counter-claims.
Baclayon then filed a motion for writ of possession and DEMOLITION which was also
granted by Judge LEE on the ground that the judgment of the first case has already
become final and executory and must be enforced immediately without any more
delay. CA reversed the decision of RTC and ordered the RTC to receive Bacalso
evidence to prove that they were builder in good faithof the improvement and the
value of said improvements introduced by them in the property.
ISSUE
W/N the Bacalso may present evidences to determine whether or not they are
builders in good faith and also to determine the value of the improvements after the
1st cases decision has become final and executory.
RULING
NO, because this defense of builder in good faith of the improvements was not raised
or presented in the trial court during the first case, and when the decision in the 1 st
case has already become final and executory the only jurisdiction left with the trial
court is to order its execution. To require the trial court in a hearing supplementary to
execution, to receive private respondents evidence to prove that they are builders in
good faith will disturb a final executory decision.
The SC also disagreed with the CA that any counterclaim for reimbursment of the
value of the improvements by reason of Bacalo being a builder in goof faith which
presupposes that they are not the owners of the land would run counter to the
defense of ownership and therefore could not have been set up before in the trial
court. Rule 8, section 2 of the rules of court allows a party to set forth two or more
statements of a claim of defense alternatively or hypothetically either in on cause of
action or defense or separate cause or defense. (i.e. assuming arguendo)
Although the alternative defense of being builders in good faith is only permissive, the
counterclaim for reimbursement of the value of the improvements is in the nature of a
compulsory counterclaim. Thus the failure of the by the private respondent to set it
up bars their right to raise it in a subsequent litigation. This is to avoid multiplicity of
suit.
Petition granted. Baclayon may enforce writ of execution.
Note: this is more of a procedural case on when to assert right to ask for the value of
the improvements.
CUREG VS. IAC
177 SCRA 313
FACTS
Apostol and Gerardo et al (private respondent) filed a complaint for quieting of title &
damages w/ preliminary injunction against Carniyan (Cureg is surnamed Carniyan) w/
the RTC, it was alleged in the complaint that the Gerardos are the heirs a certain
Domingo Gerardo who inherited the land from Francisco Gerardo who died before 2 nd

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CERTEZA

world war. And since time immemorial, Francisco Gerardo has been in actual, open,
peaceful, and continuous possession under a bona fide claim of ownership and adverse
to all other claimants of a parcel of land (which the Gerardos refers to as mother
land) situated in Isabela. Gerardos stated in the complaint that the said property was
bordered by the Cagayan river in the north, on the east by Domingo Guingab, on the
south by Antonio Carniyan, and on the west by Sabina Molina.
The property was also declared for tax purposes in the name of Francisco Gerardo. That
upon the death of Francisco the ownership & possession was succeeded by his only
issue, Domingo Gerardo with his 3 legal or forced heirs. The Gerardos then sold the lot
to Apostol through verbal agreement which was eventuall put into writing. The
Gerardos executed an extra-judicial partition and during that time the property already
manifested signs of accretion of about 3 hectares on the north caused by the northward
,movement of the Cagayan River, and that Domingo Apostol declared the mother land
and the accretion for tax purposes under tax Declaration on September 1982. When
Apostol and Gerardo wanted to cultivate the property along with the accretion, they
were prevented by Carniyan. In the complaint it was alleged that Antonio Carniyan was
the owner of a property which is positioned below the mother land.
Antonio Carniyan revised his tax declaration dated July 24 1961, on November 28 1968
to conform with the correct area and boundaries of his OCT issued on November 25
1968. That the area under the new tax declaration was increased from 2790 sq. m. to
4584 sq. m. and the boundary on the north became Cagayan River. By such act of
revising his tax declaration, Apostol contends that Carniyan purposely eliminating the
original property on the north which is Domingo Gerardo.
The Carniyan alleged that the motherland claimed by the Gerardos is non-existent, that
Antonio Carniyan and his predecessor in interest was the owner of a piece of land on
the north by Cagayan River and not by the land of Francisco Gerardo. Carniyan also
alleged that they have been in possession and cultivation of the accretion for many
years.
RTC ruled in favor of Apostol and Gerardo and IAC affirmed the decision of RTC.
ISSUE
Who owns the property and accretion. Apostol or Carniyan?
RULING
Carniyan. Carniyan relied on the indefeasibility and incontrovertibility of their OCT
issued in the name of Antonio Carniyan which clearly states that the boundary on the
north of the said land is Cagayan River and not Francsico Gerardoss motherland. On
the other hand Apostol and Gerardo relied on 4 tax declarations. SC held that the
declaration of ownership for purposes of the payment of assessment on the payment of
the tax is not sufficient evidence to prove ownership. SC further held that an OCT
indicated true and legal ownership by the registered owners over the disputed premises
and that OCT must be accorded greater weight as against the tax declarations.
Furthermore the tax declaration offered by Gerardo in support of their claim are all in
the name of Francisco Gerardo and appeared to have subscribed by him after the war

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when it was established during the trial that he died long before the outbreak of the
war.
The ruling of the IAC declaring Antonio Carniyan estopped, because of his tax
declaration, which provided that the boundary on the north was Domingo Gerardo, is
wrong because the SC held that said tax declaration which was issued on an earlier
date, may not defeat an OCT which is of a later date.
Carniyan has been in possession of the said property basing it from the evidences and
testimony presented during the trial that declared the Carniyan as the possessor of
the land. Said evidences are:
1. Esteban Guingab, witness of Gerardo, in his cross examination stated that
the owner of the property bordering him is owned by Antonio Carniyan.
2. Geodetic engineer said that Antonio Carniyan has been requesting him to
survey the land and the accretion but rejected because he learned that the
accretion is being applied for homestead by another person.
3. That the application of the homestead of the other person is rejected on the
ground that the accretion is being cultivated by another person named no
less than Antonio Carniyan.
The foregoing considerations shows that the alleged motherland claimed by Apostol
and Gerardo is non-existent. The property of Antonio Carniyan and the accretion is an
alluvial deposit left by the northward movement of the Cagayan River and pursuant to
Art. 457 of NCC: the owner of land adjoining the banks or rivers belong the accretion
which they gradually receive from the effects of the current of the waters. However
the area covered by the OCT is only 4584 sq. m. The accretion attached to said land
is approximately 5.5 hectares. The increase in the area of Carniyans property being
the result of an accretion does not automatically become registered land just because
the lot which receives such accretion is under the protection of the torrens system.
Note: this is a question of which is a better evidence of ownership of land, OCT or tax
declaration.
PLEASANTVILLE DEVT. CORP. VS. CA
253 SCRA 10
FACTS
Robillo purchased a parcel of land (Lot 9) from Pleasantville Development Corporation
(Pleasantville). In 1975, Jardinico bought the rights to the lot from Robillo. Lot 9 was
still vacant then. Upon completing all payments, Jaridinico was able to get a TCT in
his name. It was then he discovered that Kee had taken possession of the land &
introduced improvements thereon.
It appears that in 1974, Kee bought on installment Lot 8 of the same subdivision from
CT Torres Enterprise Inc. (CTTEI), the exclusive real estate agent of Pleasantville.
Under the Contract to Sell, Kee could possess the lot even before completion of all
installment payments. CTTEIs employee, Octaviano, accompanied Kees wife to
inspect Lot 8. Unfortunately, the parcel of land pointed by Octaviano was Lot 9. Kee
then constructed his residence, a store, an auto repair shop & other improvements on
the lot.

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After discovering that Kee occupied Lot 9, Jardinico confronted him. They tried to reach
an amicable settlement but failed. Hence, Jardinicos lawyer wrote Kee, demanding that
the he remove all improvements & vacate Lot 9. Kee refused so Jardinico filed w/ the
MTCC a complaint for ejectment w/ damages against Kee. Kee, in turn, filed a 3 rd party
complaint against Pleasantville & CTTEI.
The MTCC found that Pleasantville had already rescinded its contract w/ Kee over Lot 8
for Kees failure to pay the installments due, & that Kee no long had any rigt over the
lot subject of the contract between him & Pleasantville. Consequently, Kee must pay
reasonable rentals for the use of Lot 9, & he cannot claim reimbursements for
improvements he introduced on said lot.
The RTC found that Kee was a builder in bad faith, and that even assuming arguendo
that Kee was in good faith, he was still guilty of unlawfully usurping the possessory
right of Jardinico over Lot 9 from the time he was served notice to vacate the lot, &
thus Kee is liable for rental.
The CA ruled that Kee was a builder in good faith, as he was unaware of the mix up
when he began constructions of the improvements on Lot 8.
ISSUE
W/N Kee is a builder in good faith.
RULING
YES. Good faith consists in the belief of the builder that the land he is building on is his
& his ignorance of any defect/flaw in his title. And as good faith is presumed,
Pleasantville has the burden of proving bad faith on the part of Kee.
At the time Kee built improvements on Lot 9, he believe that said lot was what he
bought from Pleasantvill. He was not aware that the lot delivered to him was not Lot 8.
Thus, Kees good faith. Pleasantville failed to prove otherwise.
To demonstrate Kees bad faith, Pleasantville points to Kees violation of Par. 22 & 26 of
the Contract of Sale on Installment. But such violations have no bearing whatsoever on
w/n Kee was a builder in good faith. These alleged violations may give rise to
Pleasantvilles cause of action against Kee under the said contract, but may not be
bases to negate the presumption that Kee was a builder in good faith.
VDA. DE NAZARENO VS. CA
257 SCRA 589
FACTS
In 1979, Jose Salasalan & Leo Rabaya leased the subject lots on w/c their houses stood
from Antonio Nazareno, the predecessor-in-interest of Vda. De Nazareno. In 1982,
Salasalan & Rabay stopped paying rents. Hence, Nazareno filed a case for ejectment w/
the MTC. The MTC decided in favor of Nazareno & the RTC affirmed.
Before he died, Nazareno caused the approval by the Bureau of Lands (BOL) of the
survey plan w/ a view of perfecting his title over the accretion area being claimed by

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him. Before the approved survey could be released to Nazareno, it was protested by
Salasalan & Rabaya before the BOL.
Land Investigator Labis conducted an investigation & rendered a report to the
Regional Dir. Based on said report, the Regional Dir. ordered an amendment of the
survey plan in the name of Nazareno by segregating therefrom the areas occupied by
Salasalan & Rabaya who, if qualified, may file public land applications covering their
portions. The Dir. Of Lands ordered Nazareno to vacate the portions adjudicated to
Salasalan & Rabaya & remove whatever improvements they introduced thereon.
Desamparado Vda. De Nazareno & Leticia Nazareno filed a case w/ the RTC for
annulment of report & recommendation by the Land Investigator, the decision by the
Regional Dir., & order of execution by the Dir. Of Lands.
Vda. De Nazarenos contention: The land is private land being an accretion to his
titled property, applying Art. 4571 of the NCC.
ISSUE
W/N the subject land is public land.
RULING
NO. Accretion, as a mode of acquiring property, requires the concurrence of theses
requisites:
1. the deposition of soil or sediment be gradual & imperceptible
2. it be the result of action of the waters of the river (or sea)
3. the land where accretion takes place is adjacent to the bank of rivers (or the
sea coast)
These are called the rules on all alluvion, w/c if present in a case, give to the owners
of the land adjoining banks of rivers or streams any accretion gradually received from
the effects of the current of waters.
Vda. De Nazareno admit that the accretion was formed by the dumping of boulders,
soil & other filling materials on portions of the Balacanas Creek & the Cagayan River
bounding their land. it cannot be claimed, therefore, that the accumulation of such
boulders, soil & other filling materials was gradual & imperceptible, resulting from the
action of the waters or the current of the Balacanas Creek & Cagayan River.
Having not met the 1st & 2nd requisite of the rules on alluvion, Vda. De Nazareno
cannot claim the rights of a riparian owner. The accretion was man-made or artificial.
The requirement that the deposit should be due to the effect of the current of the
river is indispensable. This excludes from Art. 457 of the NCC all deposits caused by
human intervention. Alluvion must be the exclusive work of nature.
Where 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 & deliberate
intervention of man, it was deemed a man made accretion and, as such, part of public
domain.
1

To the owners of land adjoining the banks of rivers belong the accretion to w/c they gradually receive
from the effects of the current of the waters.

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In any case, Vda. De Nazareno is estopped from denying the public character of the
subject land. The mere filing of the Application by the late Nazareno constituted an
admission that the land being applied for was public land, having been the subject o
the survey plan.
TECNOGAS v. CA
GR No. 108894
FACTS
Tecnogas was the owner of a parcel of land located in Barrio San Dionisio. Such land
was bought from Pariz Industries. On the other hand, Eduardo Uy was the owner of the
adjoining lot. Such land was purchased from Enrile Antonio. In 1971, Uy purchased
another lot adjoining Tecnogas land from Miguel Rodriguez. Portions of the buildings &
wall bought by Tecnogas land were, however, occupying a portion of Uys land.
Tecnogas offered to buy that particular portion of land (area of 770 sq m), but Uy
refused the offer.
In 1973, the parties entered into a private agreement before Col. Rosales wherein
Tecnogas agreed to demolish the wall. Uy later filed a complaint before the office of
Municipal Engineer of Paranaque as well as before the Office of the Provincial Fiscal
against Tecnogas in connection w/ the encroachment or occupation by Tecnogas
buildings and walls of a portion of its land. Unfortunately, the complaint didnt prosper.
Uy then dug a canal along Tecnogas wall. In 1980, a portion of the wall collapsed and
led to the filing by Tecnogas of the supplemental complaint for malicious mischief
against Uy & his wife which ultimately resulted into the conviction in court of Uys wife
for the crime. While trial of the case was in progress, Tecnogas filed in Court a formal
proposal for settlement of the case but said proposal was ignored by Uy.
RTC ruled in favour of Tecnogas ordering Uy to sell the portion of land owned by him &
occupied by Tecnogas at the price of P 2,000/sq m. On appeal, the Court reversed and
set aside the decision of the RTC.
ISSUE
(a) W/N Tecnogas is a builder in bad faith because he is presumed to know the metes
& bounds of his property.
(b) W/N the CA erred when it used the amicable settlement between the Tecnogas and
the Uy, where both parties agreed to the demolition of the rear portion of the fence, as
estoppel amounting to recognition by Tecnogas of Uy's right over his property including
the portions of the land where the other structures and the building stand, which were
not included in the settlement.
(c) W/N the CA erred in ordering the removal of the "structures and surrounding walls
on the encroached area" and in withdrawing its earlier ruling in its August 28, 1992
decision for the Tecnogas "to pay for the value of the land occupied" by the building,
only because the Uy has "manifested its choice to demolish" it despite the absence of
compulsory sale where the builder fails to pay for the land, and which "choice" Uy
deliberately deleted from its September 1, 1980 answer to the supplemental complaint
in the RTC.
RULING

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(a) NO. There is no question that when Tecnogas purchased the land from Pariz
Industries, the buildings and other structures were already in existence. The record is
not clear as to who actually built those structures, but it may well be assumed that
Tecnogas's predecessor-in-interest, Pariz Industries, did so. Art. 527 of the CC
presumes good faith, and since no proof exists to show that the encroachment over a
narrow, needle-shaped portion of Uys 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. 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. Hence, such good faith, by law, passed on to Pariz's successor,
Tecnogas in this case. Further, "where one derives title to 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 acquired in good faith does
not lose this character except in case and from the moment facts exist which show
that the possessor is not unaware that he possesses the thing improperly or
wrongfully. The good faith ceases from the moment defects in the title are made
known to the possessor, by extraneous evidence or by suit for recovery of the
property by the true owner.
With this, Recall that the encroachment in the present case was caused by a very
slight deviation of the erected wall (as fence) which was supposed to run in a straight
line from point 9 to point 1 of Tecnogas' lot. It was an error which, in the context of
the attendant facts, was consistent with good faith. Consequently, the builder, if sued
by the aggrieved landowner for recovery of possession, could have invoked the
provisions of Art. 448 of the Civil Code. 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 make a choice between the two options: (1) to appropriate the building
by paying the indemnity required by law, or (2) sell the land to the builder. The
landowner cannot refuse to exercise either option and compel instead the owner of
the building to remove it from the land.
As to the question on whether or not Tecnogas can invoke Art. 448 even if it is not the
builder of the offending structures but possesses them as buyer. The Court stated that
in the first place, Tecnogas had no knowledge of any encroachment at the time it
acquired the property from Pariz Industries. There was no sufficient proof to show
that it is in bad faith; therefore, the presumption of good faith prevails. In the second
place, upon delivery of the property by Pariz Industries, as seller, to the Tecnogas, as
buyer, the latter acquired ownership of the property. Consequently and as earlier
discussed, Tecnogas is deemed to have stepped into the shoes of the seller in regard
to all rights of ownership over the immovable sold, including the right to compel the
Uy to exercise either of the two options provided under Article 448 of the Civil Code.
(b) It is clear that Tecnogas agreed only to the demolition of a portion of the wall
separating the adjoining properties of the parties i.e. "up to the back of the building
housing the machineries." But that portion of the fence which served as the wall
housing the electroplating machineries was not to be demolished. Rather, it was to
"be subject to negotiation by herein parties." The settlement may have recognized the
ownership of Uy but such admission cannot be equated with bad faith. Tecnogas was
only trying to avoid a litigation, one reason for entering into an amicable settlement.

PROPERTY DIGESTS | ARTS. 448-475

CERTEZA

In the context of the established facts, we hold that Tecnogas did not lose its rights
under Article 448 of the Civil Code on the basis merely of the fact that some years after
acquiring the property in good faith, it learned about and aptly recognized the right of
Uy to a portion of the land occupied by its building. The supervening awareness of the
encroachment by Tecnogas does not militate against its right to claim the status of a
builder in good faith. In fact, a judicious reading of said Article 448 will readily show
that the landowner's exercise of his option can only take place after the builder shall
have come to know of the intrusion in short, when both parties shall have become
aware of it. Only then will the occasion for exercising the option arise, for it is only then
that both parties will have been aware that a problem exists in regard to their property
rights.
(c) Uys insistence on the removal of the encroaching structures as the proper remedy,
which the CA sustained in its assailed Decisions, is thus legally flawed. This is not one
of the remedies bestowed upon him by law. It would be available only if and when he
chooses to compel the Tecnogas to buy the land at a reasonable price but the latter
fails to pay such price. This has not taken place. Hence, his options are limited to: (1)
appropriating the encroaching portion of Tecnogas building after payment of proper
indemnity, or (2) obliging the latter to buy the lot occupied by the structure. He cannot
exercise a remedy of his own liking. Thus, this case will have to be remanded to the
trial court for further proceedings to fully implement the mandate of Art. 448. It is a
rule of procedure for the Supreme Court to strive to settle the entire controversy in a
single proceeding leaving no root or branch to bear the seeds of future litigation.
Tecnogas, however, must also pay the rent for the property occupied by its building as
prescribed by Court, but only up to the date Uy serves notice of its option upon
Tecnogas and the trial court; that is, if such option is for Uy to appropriate the
encroaching structure. In such event, Tecnogas would have a right of retention which
negates the obligation to pay rent. The rent should however continue if the option
chosen is compulsory sale, but only up to the actual transfer of ownership.
The award of attorney's fees by CA against Tecnogas is unwarranted since the action
appears to have been filed in good faith. Besides, there should be no penalty on the
right to litigate.
HEIRS OF NAVARRO v. IAC
GR No. 68166
FACTS
In 1946, the late Sinforoso Parscual filed an application for foreshore lease covering a
tract of foreshore land in Sibocon, Balanga, Bataan approximately 17 hectares. This
application was denied. So was his motion for reconsideration. Then, Emiliano Navarro,
also deceased, filed a filed fishpond application w/ the Bureau of Fisheries (BOF)
covering 25 hectares of foreshore land also in Sibocon. Initially, such an application was
denied by the Dir. of Fisheries, but in 1958, it gave due course to his application but
only to the extent of 7 hectares of the property as may be certified by the BOF as
suitable for fishpond purposes.

ATTY.

-7-

The Municipal Council of Balanga, Bataan, had opposed Navarro's application.

Aggrieved by the decision of the Dir. of Fisheries, it appealed to the Sec. of Natural
Resources who, however, affirmed the grant. The Executive Secretary, acting in behalf
of the President of the Phil., similarly affirmed the grant.
On the other hand, sometime in 1960, Pascual filed an application to register &
confirm his title to a parcel of land, situated in Sibocon (around 146,611 sq. m.)
Pascual claimed that this land is an accretion to his property. It is bounded on the
eastern side by the Talisay River, on the western side by the Bulacan River, & on the
northern side by the Manila Bay. The Talisay River as well as the Bulacan River flow
downstream and meet at the Manila Bay thereby depositing sand and silt on Pascual's
property resulting in an accretion thereon. Pascual claimed the accretion as the
riparian owner.
In 1960, the Dir. of Lands, represented by the Asst. Solicitor General, filed an
opposition thereto stating that neither Pascual nor his predecessors-in-interest
possessed sufficient title to the subject property, the same being a portion of the
public domain and, therefore, it belongs to the Rep. of the Phil. The Dir. of Forestry,
through the Provincial Fiscal, similarly opposed Pascual's application for the same
reason as that advanced by the Dir. of Lands.
Navarro thereupon filed an opposition to Pascual's application. Navarro claimed that
the land sought to be registered has always been part of the public domain, it being a
part of the foreshore of Manila Bay; that he was a lessee and in possession of a part
of the subject property by virtue of a fishpond permit issued by the BOF and
confirmed by the Office of the President; and that be bad already converted the area
covered by the lease into a fishpond.
During the pendency of the land registration case, Pascual filed a complaint for
ejectment against Navarro. Pascual alleged that Navarro have unlawfully claimed and
possessed, through stealth, force and strategy, a portion of the subject property.
Navarro, in the case, was alleged to have built a provisional dike thereon: thus he,
together with the other defendants, have thereby deprived Pascual of the premises
sought to be registered. This, notwithstanding repeated demands for defendants to
vacate the property.
The case was decided adversely against Pascual. Thus, Pascual appealed to the CFI.
Because of the similarity of the parties and the subject matter, the appealed case for
ejectment was consolidated with the land registration case and was jointly tried by
the court a quo.
During the pendency of the trial of the consolidated cases, Navarro died & was
substituted by his heirs. Subsequently, Pascual died and was substituted by his heirs.
The court rendered judgment finding the subject property to be foreshore land &,
being a part of the public domain, it cannot be the subject of land registration
proceedings. On appeal, the IAC reversed the decision of the CFI and demanded that
Navarro turn over the possession of the portion of the subject land not within the strip
of land 50m wide along Manila Bay to Pascual since the strip of land belongs to the
public domain. Hence, this petition by Navarro took place.

PROPERTY DIGESTS | ARTS. 448-475

CERTEZA

ISSUE:
W/N Navarro has ownership over the land by virtue of the principle of accretion.
RULING
NO. Accretion as a mode of acquiring property under said Article 457, requires the
concurrence of the following requisites:
1. that the accumulation of soil or sediment be gradual and imperceptible;
2. that it be the result of the action of the waters of the river; and
3. that the land where the accretion takes place is adjacent to the bank of the
river.
Accretion is the process whereby the soil is deposited, while alluvium is the soil
deposited on the estate fronting the river bank; the owner of such estate is called the
riparian owner. Riparian owners are, strictly speaking, distinct from littoral owners, the
latter being owners of lands bordering the shore of the sea or lake or other tidal
waters. The alluvium, by mandate of Article 457 of the Civil Code, is automatically
owned by the riparian owner from the moment the soil deposit can be seen but is not
automatically registered property, hence, subject to acquisition through prescription by
third persons.
The disputed land, this, is an accretion not on a river bank but on a sea bank, or on
what used to be the foreshore of Manila Bay which adjoined Navarros own tract of land
on the northern side. As such, the applicable law is not Art. 457 of the Civil Code but
Art. 4 of the Spanish Law of Waters of 18862.
In the light of the aforecited vintage but still valid law, unequivocal is the public nature
of the disputed land in this controversy, the same being an accretion on a sea bank
which, for all legal purposes, the foreshore of Manila Bay is. As part of the public
domain, the land is intended for public uses, and "so long as the land in litigation
belongs to the national domain and is reserved for public uses, it is not capable of
being appropriated by any private person, except through express authorization
granted in due form by a competent authority." Only the executive and possibly the
legislative departments have the right and the power to make the declaration that the
lands so gained by action of the sea is no longer necessary for purposes of public utility
or for the cause of establishment of special industries or for coast guard services.
Navarro utterly fail to show that either the executive or legislative department has
already declared the disputed land as qualified, under Article 4 of the Spanish Law of
Waters of 1866, to be the property of Navarro as owners of the estates adjacent
thereto.
DE VERA VS CA
305 SCRA 624
FACTS
2

Lands added to the shores by accretions and alluvial deposits caused by the action of the sea, form part of
the public domain. When they are no longer washed by the waters of the sea and are not necessary for
purposes of public utility, or for the establishment of special industries, or for the coast-guard service, the
Government shall declare them to be the property of the owners of the estates adjacent thereto and as
increment thereof.

ATTY.

-8-

Ricardo Ramos is the legal and absolute owner of a parcel of land by the National
Road in Isabela which he acquired through a homestead patent.
In 1981, Ramos has demanded that the Agueda De Vera vacate a triangular portion of
the land but was ignored by the latter. De Vera argues that they have acquired the
said land through Teodoro de la Cruz (husband of De Vera) due to a pending
Miscellaneous Sales Application, which was given due course and favorably
recommended by the District Land Office.
In 1983, De Vera constructed a house of strong and permanent materials after
removing their previous building of light materials which was constructed in 1970.
In the pre-trial conference, the RTC appointed the Chief of the Survey Party of the
Bureau of Lands, to conduct a relocation survey of the subject property. The result
was that only 22 square meters of the plaintiffs lot is occupied by De Vera and that
between the National Road and Ramos property is an area of 51 square meters.
The RTC ruled in favor of Ramos, in which he only owns all the lands up to the
National Road. The RTC also ordered that De Vera remove, at their expense, all
improvements that they have constructed. The CA affirmed the RTCs decision.
ISSUE
W/N De Vera was a builder in good faith?
RULING
NO. Judgment is Affirmed.
Good faith implies freedom from knowledge and circumstances which ought to put a
person in injury. It can only be determined by outward acts and proven conduct.
In the 1981 demand letter, Ramos informed De Vera that they were occupying his
property and gave them the option to buy the property or to lease it. However, the
contending parties failed to reach a compromise.
Furthermore, De Vera did not manage to prove sufficiently their claim of ownership by
only presenting tax declarations. In contrast to the OCT presented by Ramos, is
conclusive evidence on all matters.

FACTS
Generoso de Jesus acquired a parcel of land situated in Mindoro, and caused a
verification survey of the property and discovered that the northern portion of the lot
was being encroached upon by a building of PNB. Despite the 2 demand letters sent by
de Jesus PNB refused to vacate the area.
PNB meanwhile asserts that when it acquired the lot and the building in 1981 from
Mayor Bienvenido Ignacio, the encroachment was already in existence and to remedy
the situation Mayor Ignacio offered to sell the area in question and PNB accepted the
said offer. However, de Jesus had no knowledge of the said sale.
RTC ruled in favor of De Jesus and ordered PNB to vacate the premises and remove the
improvements thereon. The CA affirmed this decision.
ISSUE
W/N PNB is a builder in good faith?
RULING
NO. Judgment is affirmed.
Under Art 449 and 450, a builder in good faith can compel the landowner to make a
choice between appropriating the building by paying the proper indemnity or obliging
the builder to pay the price of the land. The choice belongs to the landowner.
Good faith is understood as an intangible and abstract quality with no technical
meaning or statutory definition. It encompasses, among other things, an honest belief
the absence of malice and the absence of design to defraud or to seek an
unconscionable advantage. It lies in an honest belief in the validity of ones right,
ignorance of a superior claim, and absence of intention to overreach another.
PNB was quite aware and indeed advised prior to its acquisition of the land and building
from Ignacio that a part of the building sold to it stood on the land not covered by the
land conveyed to it.

According to Art 449 and 450, the landowner has 3 alternatives:

1. To appropriate which has been built w/o any obligation to pay indemnity
2. To demand the builder to remove what he has built
3. To compel the builder to pay the value of the land
Also according to Art 451, the landowner is entitled to be indemnified by the builder in
bad faith.
With the case at bar, Ramos opted for the 2nd alternative.
PNB VS DE JESUS
411 SCRA 558

PROPERTY DIGESTS | ARTS. 448-475

CERTEZA

ATTY.