1

Bachrach Motor Co., Inc. v. Talisay Silay Milling Co.

G.R. No. 35223, September 17, 1931, 56 Phil. 117
Romualdez, J.
FACTS: On December 22, 1923, the Talisay-Silay Milling Co., Inc., was indebted to the Philippine National
Bank. To secure the payment of its debt, it succeeded in inducing its planters, among whom, was Mariano
Lacson Ledesma, to mortgage their land to the creditor bank. And in order to compensate those planters for
the risk they were running with their property under the mortgage, the aforesaid central, by a resolution passed
on that same date, i.e., December 22, 1923, undertook to credit the owners of the plantation thus mortgaged
every year with a sum equal to two per centum of the debt secured according to yearly balance, the payment
of the bonus being made at once, or in part from time to time, as soon as the central became free of its
obligations to the aforesaid bank, and of those contracted by virtue of the contract of supervision, and had
funds which might be so used, or as soon as it obtained from said bank authority to make such payment.
Bachrach Motor Co., Inc. filed a complaint against the Talisay-Silay Milling Co., Inc., for the delivery of the
amount P13,850 or promissory notes or other instruments or credit for that sum payable on June 30, 1930, as
bonus in favor of Mariano Lacson Ledesma.
The Philippine National Bank filed a third party claim alleging a preferential right to receive any amount which
Mariano Lacson Ledesma might be entitled to from the Talisay-Silay Milling Co. as bonus, because that would
be civil fruits of the land mortgaged to said bank by said debtor for the benefit of the central referred to, and by
virtue of a deed of assignment, and praying that said central be ordered to delivered directly to the intervening
bank said sum on account of the latter's credit against the aforesaid Mariano Lacson Ledesma.
ISSUE: Whether or not the bonus in question is civil fruits
HELD: No. The said bonus bears no immediate, but only a remote accidental relation to the land mentioned,
having been granted as compensation for the risk of having subjected one's land to a lien in favor of the bank,
for the benefit of the entity granting said bonus. If this bonus be income or civil fruits of anything, it is income
arising from said risk, or, if one chooses, from Mariano Lacson Ledesma's generosity in facing the danger for
the protection of the central, but certainly it is not civil fruits or income from the mortgaged property. Hence, the
amount of the bonus, according to the resolution of the central granting it, is not based upon the value,
importance or any other circumstance of the mortgaged property, but upon the total value of the debt thereby
secured, according to the annual balance, which is something quite distinct from and independent of the
property referred to.

2
Ignacio v. Hilario
G.R. No. L-175, August 30, 1946, 76 Phil. 605
Moran, C. J.
FACTS: This case concerns the ownership of a parcel of land, partly rice-land and partly residential. The lower
court rendered judgment holding plaintiffs as the legal owners of the whole property but conceding to
defendants the ownership of the houses and granaries built by them on the residential portion with the rights of
a possessor in good faith, in accordance with article 361 of the Civil Code.
Subsequently, the plaintiffs prayed for an order of execution alleging that since they chose neither to pay
defendants for the buildings nor to sell to them the residential lot, said defendants should be ordered to remove
the structure at their own expense and to restore plaintiffs in the possession of said lot. Defendants objected to
this motion which, after hearing, was granted by Judge Natividad. Hence, this petition by defendants praying
for (a) a restraint and annulment of the order of execution issued by Judge Natividad; (b) an order to compel
plaintiffs to pay them the sum of P2,000 for the buildings, or sell to them the residential lot for P45; or (c), a
rehearing of the case for a determination of the rights of the parties upon failure of extra-judicial settlement.
ISSUE: Whether the respondent Court erred in its judgment.
HELD: Yes. The Civil Code provides:
ART. 361. The owner of land on which anything has been built, sown or planted in good faith, shall have the
right to appropriate as his own the work, sowing or planting, after the payment of the indemnity stated in
articles 453 and 454, or to oblige the one who built or planted to pay the price of the land, and the one who
sowed, the proper rent.
ART. 453. Necessary expenses shall be refunded to every possessor; but only the possessor in good faith may
retain the thing until such expenses are made good to him.
Useful expenses shall be refunded to the possessor in good faith with the same right of retention, the person
who has defeated him in the possession having the option of refunding the amount of the expenses or paying
the increase in value which the thing may have acquired in consequence thereof.
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, under article 453. The owner of the land, upon the other
hand, has the option, under article 361, either to pay for the building or to sell his land to the owner of the
building. But he cannot, as respondents here did, refuse both to pay for the building and to sell the land and
compel the owner of the building to remove it from the land where it is erected. He is entitled to another motion
only when, after having chosen to sell his land, the other party fails to pay for the same.

3
Ignao v. Intermediate Appellate Court
G.R. No. 72876, January 18, 1991, 193 SCRA 17
Fernan, C. J.
FACTS: Petitioner Florencio Ignao and his uncles Juan Ignao and Isidro Ignao were co-owners of a
534sqm land located in Cavite. Pursuant to an action for partition filed by petitioner, the CFI of Cavite
directed the partition of the said land. A total of 133.5 sqm was allotted to the petitioners uncles while
the remaining 266.5 was allotted to the petitioner. However, when Juan and Isidro built their houses
they encroached upon a portion of land belonging to Florencio. A geodetic engineer surveyed the land
and it was found out that Juan and Isidro occupied a total of 101sqm of Florencios lot.
The trial court which based its decision on Article 448 of the Civil Code, ruled that Florencio should
have the choice to either appropriate to himself that part of the house standing on his lot or to require
Juan and Isidro to pay the price of the land. But since the first option seems to be impractical, it
ordered to sell to Juan and Isidro those portions occupied by them because it is the workable
solution. Upon appeal petitioner contends that Article 448 cannot be applied because they are coowners of he subject property. However, the appellate court affirmed in toto the decision of the trial
court.
ISSUE: Whether or not Article 448 of the Civil Code is applicable in the case at bar.
HELD: Yes. It is true that Article 448 cannot be applied where a co-owner builds upon a land owned in
common. However, in the case at bar, the co-ownership has already been terminated by virtue of the
partition, thus, Article 448 now applies since the builder is not anymore considered as an owner of the
land where the house was built.
As to the workable solution applied by the lower court, the same cannot be upheld because Article
448 clearly states that the right of choice belongs to the land owner and not upon the builder and the
courts. Thus, whether it might seem impractical, the landowner may choose to appropriate the
improvements.

4
Filipinas Colleges, Inc. v. Garcia Timbang, et. al.,
G.R. No. L-12812, September 29, 1989, 164 SCRA 287
Barrera, J.
FACTS: After appropriate proceedings, the Court of Appeals held, among other things, that Filipinas Colleges,
Inc. are declared to have acquired the rights of the spouses Timbang in the questioned lots, they are ordered
to pay the spouses Timbang in the amount of P15,807.90 plus such other amount which said spouses might
have paid or had to pay. On the other hand, Maria Gervacio Blas was also declared to be a builder in good
faith of the school building constructed in the lot in question and was entitled to be paid the amount of
P19,000.00 for the same. Also, in case that Filipinas Colleges, Inc. failed to deposit the value of the land, which
after liquidation was fixed at P32,859.34, within the 90-day period set by the Court, Filipinas Colleges would
lose all its rights to the land and the spouses Timbang would then become the owners thereof. If that is the
case, the Timbangs are ordered to make known to the court their option under Article 448 of the Civil Code
whether they would appropriate the building in question, in which even they would have to pay Filipinas
Colleges, Inc. the sum of P19,000.00, or would compel the latter to acquire the land and pay the price thereof.
Filipinas Colleges, Inc. failed to pay the sum of P32,859.34 so the spouses Timbang made known to the court
their decision that they had chosen not to appropriate the building but to compel Filipinas Colleges, Inc., for the
payment of the sum of P32,859,34 which was granted by the Court. As a consequence of which, a writ of
execution was issued. Meanwhile, Blas filed a motion for execution of her judgment representing the unpaid
portion of the price of the house sold to Filipinas which was granted. Levy was made on the house in virtue of
the writs of execution. Then, the Sheriff of Manila sold the building in public auction in favor of the spouses
Timbang, as the highest bidders. Several motion were the subsequently filed before the lower court wherein
the court held that: a) the Sheriff's certificate of sale covering a school building sold at public auction was null
and void unless within 15 days from notice of said order spouses Timbang shall pay to Blas the sum of
P5,750.00 that the spouses Timbang had bid for the building at the Sheriff's sale; b) that Filipinas is owner of
245.00/32,859.34 undivided interest in Lot No. 2-a on which the building sold in the auction sale is situated;
and c) that the undivided interest of the Filipinas in the lot should be sold to satisfy the unpaid portion of the
judgment in favor of Blas and against Filipinas in the amount of P8,200.00 minus the sum of P5,750.00. The
spouses Timbang contends that because the builder in good faith has failed to pay the price of the land after
the owners thereof exercised their option under Article 448 of the Civil Code, the builder lost his right of
retention provided in Article 546 and that by operation of Article 445, the spouses Timbang as owners of the
land automatically became the owners ipso facto of the school building.
ISSUE: Whether or not the spouses Timbang automatically become the owners of the building upon failure of
Filipinas to pay the value of the land.
HELD: No. Based on Article 448 and 546 of the New Civil Code, the owner of the land has the right to choose
between appropriating the building by reimbursing the builder of the value thereof or compelling the builder in
good faith to pay for his land. Even this second right cannot be exercised if the value of the land is
considerably more than that of the building. In addition to the right of the builder to be paid the value of his
improvement, Article 546 gives him the corollary right of retention of the property until he is indemnified by the
owner of the land. There is nothing in the language of these two articles, 448 and 546, which would justify the
conclusion of appellants that, upon the failure of the builder to pay the value of the land, when such is
demanded by the land-owner, the latter becomes automatically the owner of the improvement under Article
445. The case of Bataclan vs Bernardo cannot be applied in this case in the sense that although it is true it
was declared therein that in the event of the failure of the builder to pay the land after the owner thereof has
chosen this alternative, the builder's right of retention provided in Article 546 is lost, nevertheless there was
nothing said that as a consequence thereof, the builder loses entirely all rights over his own building. Also, in
the present case, the Court of Appeals has already adjudged that appellee Blas is entitled to the payment of
the unpaid balance of the purchase price of the school building. Blas is actually a lien on the school building

are concerned. The order of the lower court directing the Timbang spouses, as successful bidders, to pay in
cash the amount of their bid in the sum of P5,750.00 is therefore correct.

Manotok Realty v. Tecson

G.R. No. L-47475 August 19, 1988, 164 SCRA 287
Gutierrez Jr., J.
FACTS: Petitioner Manotok Realty filed a complaint against Nilo Madlangawa for recovery of
possession with damages with the Court of First Instance of Manila. Said court rendered judgment
declaring Madlangawa as a builder-possessor in good faith; ordering the company to recognize the
right of Madlangawa to remain in Lot 345, Block 1, of the Clara Tambunting Subdivision until after he
shall have been reimbursed by the company the sum of P7,500.00, without pronouncement as to
costs.
Not satisfied with the trial courts decision, petitioner appealed to the Court of Appeals and upon
affirming the trial courts decision, it elevated the case to the Supreme Court. On July 13, 1977, the
Supreme Court issued a resolution denying Manotoks petition for lack of merit. Petitioner then filed
with the trial court (Judge Jose H. Tecson), a motion for the approval of the companys exercise of
option and for satisfaction of judgment. However, Judge Tecson denied the motion for approval.
Hence, this petition is filed.
ISSUE: Whether or not respondent Judge Tecson can deny petitioners (landowner) motion to avail of
its option.
HELD: No. There is, therefore, no basis for the respondent judge to deny the petitioners motion to
avail of its option to appropriate the improvements made on its property. Neither can the judge deny
the issuance of a writ of execution because the private respondent was adjudged a builder in good
faith or on the ground of peculiar circumstances which supervened after the institution of this case,
like, for instance, the introduction of certain major repairs of and other substantial improvements
because the option given by law belongs to the owner of the land. Under Article 448 of the Civil Code,
the right to appropriate the works or improvements or to oblige the one who built or planted to pay the
proper price of the land belongs to the owner of the land. The only right given to the builder in good
faith is the right of reimbursement of necessary expenses for the preservation of the land; the builder
cannot compel the landowner to sell such land to the former.

Bernardo v. Bataclan
G.R. No. L-44606, November 28, 1938, 66 Phil. 598
Laurel, J.
FACTS: Bernardo bought a parcel of land from Samonte which was located in Cavite. In order that he
may take possession and occupy the said land, he filed a case in the CFI for such purpose and the
court rendered a favorable decision for Bernardo. However, when he was supposedly set in
occupying the said land, he found Bataclan. He was within the premises because he was authorized
by the previous owners to clear the land and make the necessary improvements he deems fit, further
claiming that such authorization was granted to him ever since 1922. Since Bataclan was not a party
in the first case, Bernardo filed against him a separate case. Bernardo was declared owner but the
defendant was held to be a possessor in good faith for whom the work done and improvements made
by him should be reimbursed. An appeal to the decision of the court was filed by both Bernardo and
Bataclan. The decision was modified by lowering the price of the land from P300 to P200 per hectare.
Bernardo was given 30 days to exercise his option, whether to sell the land to Bataclan or to buy the
improvements from him. Bernardo chose the option which would require Bataclan to pay him the
value of the land at the rate of P200 per hectare. However, Bataclan informed the court that he will
not be able to pay for the price of the land. The court then gave Bataclan 30 days to pay the price of
the property and after the lapse of the period, the land shall be sold in a public auction. After 30 days,
the land was sold to Teodoro at a public auction, after failure of Bataclan to pay within the period the
purchase price.
ISSUE: Whether or not Bataclan has the right of retention over the parcel of land in question.
HELD: No. Bataclan no longer has lost the right of retention. The option of the owner was already
exercised where he decided that he will just allow the defendant to purchase the land such that
Bataclan was to comply with the option if he wants to retain the land. From the moment that he told
the courts of his inability to pay for the price of the land, he already lost his right to retain the land.

Ballatan v. Court of Appeals

G.R. No. 125683, March 2, 1999, 304 SCRA 34
Puno, J.
FACTS: Ballatan, Martinez and Ling are the owners of adjacent lots in Malabon, Metro Manila. Lot
No. 24, 414 square meters in area, is registered in the name of petitioners Eden Ballatan and
spouses Betty Martinez and Chong Chy Ling. Lots Nos. 25 and 26 are registered in the name of
respondent Gonzalo Go, Sr. On Lot No. 25, respondent Winston Go, son of Gonzalo Go, Sr.,
constructed his house. Adjacent to Lot No. 26 is Lot No. 27, registered in the name of respondent Li
Ching Yao. In 1985, petitioner Ballatan constructed her house on Lot No. 24. During the construction,
she noticed that the concrete fence and side pathway of the adjoining house of respondent Winston
Go encroached on the entire length of the eastern side of her property. Her building contractor
informed her that the area of her lot was actually less than that described in the title. Forthwith,
Ballatan informed respondent Go of this discrepancy and his encroachment on her property. Go,
however, claimed that his house, including its fence and pathway, were built within the parameters of
his father's lot; and that this lot was surveyed by Engineer Jose Quedding, the authorized surveyor of
the Araneta Institute of Agriculture (AIA), the owner-developer of the subdivision project. So Ballatan
called the attention of the IAI and after another survey of the land, Engineer Quedding found that the
lot area of petitioner Ballatan was less by few meters and that of respondent Li Ching Yao, which was
three lots away, increased by two meters. Engineer Quedding declared that he made a verification
survey of Lots Nos. 25 and 26 of respondents Go in 1983 and allegedly found the boundaries to have
been in their proper position. He, however, could not explain the reduction in Ballatan's area since he
was not present at the time respondents Go constructed their boundary walls.
On 10 June 1985, petitioner Ballatan made a written demand on respondents Go to remove and
dismantle their improvements on Lot No. 24 but Go refused. So Ballatan instituted against Go a civil
case for recovery of possession the RTC of Malabon decided in favor of Ballatan, ordering the Go's to
vacate the subject portion of Lot No. 24, demolish their improvements and pay petitioner Ballatan
actual damages, attorney's fees and the costs of the suit. Go appealed.
ISSUE: Whether or not Ballatan have a right of remotion.
HELD: All the parties have acted in good faith so Article 448 must apply. Petitioners are ordered to
exercise within thirty (30) days from finality of the decision their option to either buy the portion of
respondents Go's improvement on their Lot No. 24, or sell to said respondents the portion of their
land on which the improvement stands. If petitioners elect to sell the land or buy the improvement, the
purchase price must be at the prevailing market price at the time of payment. If buying the
improvement will render respondents Go's house useless, then petitioners should sell the encroached
portion of their land to respondents Go. If petitioners choose to sell the land but respondents Go are
unwilling or unable to buy, then the latter must vacate the subject portion and pay reasonable rent
from the time petitioners made their choice up to the time they actually vacate the premises. But if the
value of the land is considerably more than the value of the improvement, then respondents Go may
elect to lease the land, in which case the parties shall agree upon the terms, the lease. Should they
fail to agree on said terms, the court of origin is directed to fix the terms of the lease.

Spouses Del Ocampo v. Abesia

G.R. No. L-49219, April 15, 1998, 160 SCRA 379
Gancayco, J.
FACTS: Plaintiffs spouses Concepcion Fernandez and Estanislao Del Campo and defendant
Bernarda Fernandez Abesia are co-owners of parcel of land with an area of 45 square meters and
divided in the proportion of 2/3 and 1/3 share each, respectively. A commissioner, who is appointed by
the court, conducted a survey and recommended that the property be divided into two lots: Lot 1161
A with an area of 30 square meters for the plaintiffs and Lot 1161 B with an area of 15 square
meters for the defendants. However, it was shown in the sketch plan that the house of the defendant
occupied the portion with an area of 5 square meters of Lot 1161 A of plaintiffs. The parties asked
the court to finally settle and adjudicate who among the parties should take possession of the 5
square meters of land.
ISSUES:
1.) Whether or not Article 448 of the Civil Code, the rights of a builder in good faith, should be applied
to the plaintiff-spouses Del Campo.
2.) Whether or not the house of the defendant Abesia should be removed and demolished at their
expense.
HELD: 1.) Yes. Article 448 of the Civil Code cannot apply where a co-owner builds, plants or sows on
the land owned in common for then, he did not build, plant or sow upon land that exclusively belongs
to another but of which he is a co-owner. The co-owner is not a third person under the circumstances,
and the situation is governed by the rules of co-ownership. However, when, as in this case, the coownership 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.
2.) It depends. Applying Article 448 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 defendant shall then pay the reasonable rent to the plaintiffs 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.

Pacific Farms Inc. v. Esguerra

G.R. No. L-21783, November 29, 1969, 30 SCRA 684
Castro, J.
FACTS: On October 1, 1956 to March 2, 1957 the Company sold and delivered lumber and
construction materials to the Insular Farms Inc. which the latter used in the construction of the si
buildings at its compound in Bolinao, Pangasinan, of the total procurement price of P15,000.00, the
sum of P4,710.18 has not been paid. Consequently, the Company instituted a civil case to recover
the unpaid balance and the court sustained their claim. The defendant sheriff levied th six buildings.
The Pacific Farms, Inc. filed a suit against the Company and the sheriff asserting ownership over the
levied buildings which it had acquired from the Insular Farms by virtue of absolute sale executed on
March 21, 1958. Pacific prays that the judicial sale of the six buildings be declared null and void. The
trial court rendered judgment annulling the levy and the certificate of sale. However, it denied the
plaintiff's claim for actual and exemplary damages on the ground that it was not "prepared to find
there was gross negligence or bad faith on the part of any defendants".
ISSUE: Whether or not the application by analogy of the rules of accession would suffice for a just
adjudication.
HELD: Article 447 of the Civil Code contemplates a principal and an accessory; the land being
considered the principal, and the plantings, constructions or works, the accessory. The owner of the
land who in good faith - whether personally or through another - makes constructions or works
thereon, using materials belonging to somebody else, becomes the owner of the said materials with
the obligation however of paying for their value. On the other hand, the owner of the materials is
entitled to remove them, provided no substantial injury is caused to the landowner. Otherwise, he has
the right to reimbursement for the value of his materials,
Applying article 447 by analogy, the Court consider the buildings as the principal and the lumber and
construction materials that went into their construction as the accessory. Thus the appellee, if it does
own the six buildings, must bear the obligation to pay for the values of the said materials; the
appellant which apparently has no desire to remove the materials, and, even if it were minded to
do so, cannot remove them without necessarily damaging the buildings has the corresponding
right to recover the value of the unpaid lumber and construction materials.

10
Technogas Philippines Manufacturing Corporation v. Court of Appeals
G.R. No. 108894, February, 10, 1997, 268 SCRA 5
Panganiban, J.
FACTS: Technogas purchased a parcel of land from Pariz Industries, Inc. In the same year, Eduardo
Uy purchased the land adjacent to it. The following year, Uy bought another lot adjoining the lot of
Technogas. Portions of the buildings and wall bought by Technogas together with the land from Pariz
Industries are occupying a portion of Uys adjoining land. The knowledge of some encroachment was
only made known to both parties after their parties of their respective parcels of land.
ISSUES:
1.) Whether or not petitioner Technogas Philippines is a possessor in bad faith.
2.) Whether or not petitioner Technogas Philippines has stepped into the shoes of the seller.
HELD: 1.) No. Unless one is versed in the science of surveying, no one can determine the precise
extent or location of his property by merely examining his paper title. There is no question in that
when Technogas purchased the land from Pariz Industries, the buildings and other structures were
already in existence. Furthermore, it is not clear as to who actually built these structures but it can be
assumed that the predecessor-in-interest of Technogas, Pariz Industries, did so. An article 527 of the
New Civil Code presumes good faith. Since no proof exists to show that the builder built the
encroaching structures in bad faith, the structures should be presumed to have been built in good
faith. 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. Furthermore, 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 aware that he possesses the thing improperly or wrongfully. The good faith ceases from the
moment the defects in the title are made known to the possessor, by extraneous evidence or by suit
for recovery of the property of the true owner.
2.) Yes. Has been shown, contrary as to the good faith of Technogas has not been overthrown.
Similarly, upon delivery of the property to Pariz Industries, as seller, to Technogas, as buyer, the latter
acquired ownership of the property. Consequently, Technogas is deemed to have stepped into the
shoes of the seller with regard to all the rights of ownership of the property over the immovable sold,
including the right to compel Uy to exercise either of the two options under Article 448 of the New Civil
Code. Thus, the landowners exercise of his option can only take place after the builder shall have to
know 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 with regard to their property rights.

11

Frederico Geminiano vs Court of Appeals

GR 120303
July 24, 1996
Facts:
On a 12 square meter portion of a lot originally owned by petitioners mother, Paulina Amando vda. de
Geminiano, stood an unfinished bungalow sold by the petitioner to Dominador and Mary Nicolas(private
respondents) with a verbal promise that the petitioner would sell to the respondents the portion of the land.
Later on, a lease agreement was entered into by Vda. De Geminano and the respondents over a portion of the
lot including the portion on which the bungalow was built.
The respondents introduced improvements therein and registered the same. Upon the expiration of their lease,
Vda. de Geminiano refused to accept any more rentals. In a separate suit, the lot was acquired by Maria Lee,
who later on sold the same to Lily Salcedo, who in turn sold it to Spouses Agustin and Ester Dionisio.
On February 14, 1992, the Dionisio Spouses executed a Deed of Quitclaim over the property in favor of the
petitioners. On February 9, 1993, petitioners demanded that the respondent vacate the property and pay the
monthly rentals unpaid.
Due to the respondents failure to comply, a complaint for unlawful detainer was filed with the MTCC. The
MTCC ruled that Artcile 448 and 546 of the Civil Code does not apply to the case at bar where the builder is a
lessee because the latter fully knows that his possession of the property would only continue during the life of
the lease. In sum, the MTCC ordered the respondent to vacate the premises.
On appeal, the RTC reversed the decision holding that the respondents are entitled to the reimbursement of
the value of the house and improvements and that they are allowed to retain possession until the
reimbursement is fully made. The RTCs ruling was based on the assurance made by the petitioner to the
respondent that the lot will eventually be sold to them. The CA affirmed.
Issue:
Whether or not the respondents are builders in good faith.
Decision:
The Court ruled the the respondents are not builders in bad faith. Being mere lessees, the private respondents
well knew that their occupation was temporary. Article 448 of the Civil Code, in relation to Article 546, allows
the retention of the premises until reimbursement is made applies only to possessors in good faith.
The alleged promise of the petitioners to sell the lot was not supported by sufficient evidence. Such promise
nor any option to buy or buy, was not provided in the lease agreement between the parties. Even if there was
in fact a promise to sell, the respondents still could not be held as possessors or builders in good faith. The
mere expectancy of ownership of the lot cannot be raised the respondents as the promise was not actually
fulfilled nor was it sufficiently proven.

12
Pershing Tan Queto v. Court of Appeals
G.R. No. L-35648, March 27, 1987, 148 SCRA 54
Paras, J.
FACTS: Herein private respondent Restituta Tacalinar Guangco de Pombuena received the questioned lot
from her mother Basilides Tacalinar either as a purported donation or by way of purchase with P50 as the
alleged consideration thereof. The donation or sale was consummated while Restituta was already married to
her husband Juan Pombuena. Juan then filed for himself and his supposed co-owner Resitituta an application
for a Torrens Title over the land which was later on granted pronouncing him (married to Resitiuta) as the
owner of the land.
A contract of lease over the lot was entered into between petitioner, Pershing Tan Queto and Restituta with the
consent of her husband for a period of 10 years. The lease of contract having expired, Restituta filed for
unlawful detainer against Tan Queto. The unlawful detainer case was won by the spouses in the Municipal
Court but on appeal in the CFI the entire case was dismissed because of a barter agreement whereby Tan
Queto became the owner of the disputed lot and the spouses became the owners of a parcel of land with the
house thereon previously owned before the barter by Tan Queto. After the barter agreement, Tan Queto
constructed on the disputed land a concrete building without any objection from Restituta. Afterwards Restituta
sued both Juan and Tan Queto for reconveyance of the title over the registered but disputed lot, for annulment
of the barter, and for recovery of the land with damages.
The respondent courts decision which later on was affirmed by the Supreme court led to the reformation of the
Contract of Sale of the disputed lot from Basilides to Restituta from a sale to a conveyance of the share of
Restituta in the future hereditary estate of her parents. Hence, this petition for a motion for reconsideration.
ISSUE: Whether or not the conveyance of the share of Restituta in the future hereditary estate of her parents
was valid hence a paraphernal property.
HELD: No. The court ruled that the land is conjugal, not paraphernal. The oral donation of the lot cannot be a
valid donation intervivos because it was not executed in a public instrument (Art. 749, Civil Code), nor as a
valid donation mortis causa for the formalities of a will were not complied with. The allegation that the transfer
was a conveyance to RESTITUTA of her hereditary share in the estate of her mother (or parents) cannot be
sustained for the contractual transmission of future inheritance is generally prohibited.
The fact is ownership was acquired by both JUAN and RESTITUTA by tradition (delivery) as a consequence of
the contract of sale (See Art. 712, Civil Code) with P50.00 (then a considerable amount) as the cause or
consideration of the transaction. The lot is therefore conjugal, having been acquired by the spouses thru
onerous title (the money used being presumably conjugal there being no proof that RESTITUTA had
paraphernal funds of her own).

13
Agustin v. Intermediate Appellate Court
G.R. No. 66075-76, July 5, 1990, 187 SCRA 218
Grino Aquino, J.
FACTS: The Cagayan River separates the towns of Solana on the west and Tuguegarao on the east
in the province of Cagayan. In 1919 the lands of the east of the river were covered by the Tuguegarao
Cadastre. In 1925, OCT 5472 was issued for land east of the Cagayan River owned by Eu logio
Agustin. As the years went by, the Cagayan River moved gradually eastward, depositing silt on the
west bank. The shifting of the river and siltation continued until 1968. In 1950, all lands west of the
river were included in the Solana Cadastre. Among these occupying lands covered by Solana
Cadastre were Pablo Binayug and Maria Melad. Through the years, the Cagayan River eroded lands
of the Tuguegarao Cadastre on its eastern bank among which was Agustins Lot 8457, depositing the
alluvium as accretion on the land possessed by Binayug on the western bank. However, 1968, after a
big flood, the Cagayan River changed its course, returned to its 1919 bed and in the process, cut
across the lands of Maria Melad, Timoteo Melad, and the spouses Pablo Binayug and Geronima
Ubina whose lands were transferred on the eastern, or Tuguegarao, side of the river. To cultivate
those lots they had to cross the river. In April 1969, while the Melads, Binayug, Urbina and their
tenants were planting corn on their lots located on the easter side of Cagayan River, Agustin, the
heirs of Baldomero Langcay, Juan Langcay, and Arturo Balisi, accompanied by the mayor and some
policemen of Tuguegarao, claimed the same lands as their own and drove away the Melads, Binayug
and Urbina from the premises.
ISSUE: Whether or not ownership of accretion is lost upon sudden and abrupt change of the river.
HELD: No. The ownership of the accretion to the lands was not lost upon sudden and abrupt change
of the course of the river (Cagayan River in 1968 or 1969 when it reverted to its old 1919 bed), and
separated or transferred said accretions to the other side (eastern bank) of the river. Articles 459 and
463 of the New Civil Code apply to this situation. Article 459 provides that whenever the current of a
river, creek or torrent segregates from an estate on its bank a known portion of land and transfer it to
another estate, the owner of the land to which the segregated portion belonged retains the ownership
of it, provided that he removes the same within two years. Article 463 provides 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 his ownership. He also retains it if a portion of land is separated from the
estate by the current.

14

Cureg v. Intermediate Appellate Court

G.R. No. 73465, September 7, 1989, 177 SCRA 313
Medialdea, J.
FACTS: On November 5, 1982, private respondents Domingo Apostol et al. filed a complaint for
quieting of title against petitioners Leonida Cureg et al. The complaint alleged that private
respondents, except Apostol, are the legal and/or the forced heirs of the late Domingo Gerardo, and
his predecessors-in-interest have been in actual, open, peaceful and continuous possession, under a
bona fide claim of ownership of a parcel of land (referred to as their motherland). Subsequently, the
heirs verbally sold the motherland to Apostol. The motherland showed signs of accretion caused
by the movement of the Cagayan River. When private respondents were about to cultivate their
motherland together with its accretion, they were prevented by the petitioners. Petitioners alleged
that the motherland claimed by the private respondents is non-existent, that the subject land is an
accretion to their registered land, and that petitioners have been in possession and cultivation of the
accretion for many years now.
ISSUE: Whether or not the petitioners have the better right of accretion.
HELD: Yes. The petitioners are entitled to the accretion. The subject land is an alluvial deposit left
by the northward movement of the Cagayan River and pursuant to Article 457 of the New Civil Code:
To the owners of land adjoining the banks of river belong the accretion which they gradually receive
from the effects of the current of the waters. However, the increase in the area of the petitioners
land, being an accretion left by the change of course or the northward movement of the Cagayan
River does not automatically become registered land just because the lot which receives such
accretion is covered by a Torrens title. As such, it must also be placed under the operation of the
Torrens system.

15
Viajar v. Court of Appeals
G.R. No. 77294, December 12, 1988, 168 SCRA 405
Medialdea, J.
FACTS: The spouses Ricardo and Leonor Ladrido were the owners of Lot 7511. Spouses Rosendo
and Ana Te were also the registered owners of a parcel of land described in their title as Lot 7340 of
the Cadastral Survey of Pototan. On 6 September 1973, Rosendo Te, with the conformity of his wife,
sold this lot to Angelica F. Viajar and Celso F. Viajar for P5,000. A Torrens title was later issued in the
latters names. Later, Angelica Viajar had Lot 7340 relocated and found out that the property was in
the possession of Ricardo Y. Ladrido. Consequently, she demanded its return but Ladrido refused.
The piece of real property which used to be Lot 7340 of the Cadastral Survey of Pototan was located
in barangay Guibuanogan, Pototan, Iloilo; that at the time of the cadastral survey in 1926, Lot 7511
and Lot 7340 were separated by the Suague River; that Lot 7340 has been in the possession of
Ladrido; that the area of 14,036 sq.ms., which was formerly the river bed of the Suague River per
cadastral survey of 1926, has also been in the possession of Ladrido; and that the Viajars have never
been in actual physical possession of Lot 7340. On 15 February 1974, Angelica and Celso Viajar
instituted a civil action for recovery of possession and damages against Ricardo Y. Ladrido. The trial
court rendered its decision in favor of Ladrido, dismissing the complaint of Angelica and Celso Viajar
with costs against them, declaring the Ladridos are entitled to the possession thereof. Not satisfied
with the decision, the Viajars appealed to the Court of Appeals. The Court of Appeals affirmed the
decision of the court. The Viajars filed a petition for review on certiorari.
ISSUE: Whether the respondents are entitled to the land on the ground of accretion.
HELD: Article 457 of the New Civil Code provides that 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."
The presumption is that the change in the course of the river was gradual and caused by accretion
and erosion. In the present case, the lower court correctly found that the evidence introduced by the
Viajars to show that the change in the course of the Suague River was sudden or that it occurred
through avulsion is not clear and convincing. The Ladridos have sufficiently established that for many
years after 1926 a gradual accretion on the eastern side of Lot 7511 took place by action of the
current of the Suague River so that in 1979 an alluvial deposit of 29,912 sq.ms. more or less, had
been added to Lot 7511. The established facts indicate that the eastern boundary of Lot 7511 was the
Suague River based on the cadastral plan. For a period of more than 40 years (before 1940 to 1980)
the Suague River overflowed its banks yearly and the property of the defendant gradually received
deposits of soil from the effects of the current of the river. The consequent increase in the area of Lot
7511 due to alluvion or accretion was possessed by the defendants whose tenants plowed and
planted the same with corn and tobacco. The quondam river bed had been filled by accretion through
the years. The land is already plain and there is no indication on the ground of any abandoned river
bed. Under the law, accretion which the banks or rivers may gradually receive from the effects of the
current of the waters becomes the property of the owners of the lands adjoining the banks. Therefore,
the accretion to Lot 7511 which consists of Lots A and B belong to the Ladridos.

16
Heirs of Navarro v. Intermediate Appellate Court
G.R. No. 68166, February 12, 1997, 268 SCRA 589
Hermosisima, J:
FACTS: On October 3, 1946, Sinforoso Pascual, filed an application for foreshore lease covering a tract of
foreshore land in Sibocon, Balanga, Bataan, having an area of approximately seventeen (17) hectares.
Subsequently, petitioners' predecessor-in-interest, Emiliano Navarro, filed a fishpond application with the
Bureau of Fisheries covering twenty five (25) hectares of foreshore land also in Sibocon, Balanga, Bataan.
Initially, such application was denied by the Director of Fisheries on the ground that the property formed part of
the public domain.
Sometime in the early part of 1960, Sinforoso Pascual flied an application to register and confirm his title to a
parcel of land, situated in Sibocon, Balanga, Bataan, described in Plan Psu-175181 and said to have an area
of 146,611 square meters. Pascual claimed that this land is an accretion to his property, situated in Barrio
Puerto Rivas, Balanga, Bataan, and covered by Original Certificate of Title No. 6830. It is bounded on the
eastern side by the Talisay River, on the western side by the Bulacan River, and 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. Sinforoso Pascual
claimed the accretion as the riparian owner.
On March 25, 1960, the Director of Lands, represented by the Assistant 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 Republic of the
Philippines.
ISSUE: Whether or not the land sought to be registered is accretion or foreshore land, or, whether or not said
land was formed by the action of the two rivers of Talisay and Bulacan or by the action of the Manila Bay.
HELD: 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. If the accretion were to be attributed to the action of either or both of the
Talisay and Bulacan Rivers, the alluvium should have been deposited on either or both of the eastern and
western boundaries of petitioners' own tract of land, not on the northern portion thereof which is adjacent to the
Manila Bay. Clearly lacking, thus, is the third requisite of accretion, which is, that the alluvium is deposited on
the portion of claimant's land which is adjacent to the river bank.
The disputed land, thus, 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 petitioners' own tract of land on the northern side. Applicant Pascual
has not presented proofs to convince the Court that the land he has applied for registration is the result of the
settling down on his registered land of soil, earth or other deposits so as to be rightfully be considered as an
accretion [caused by the action of the two rivers]. Article 457 finds no applicability where the accretion must
have been caused by action of the bay.
The conclusion formed by the trial court on the basis of the aforegoing observation is that the disputed land is
part of the foreshore of Manila Bay and therefore, part of the public domain. Thus, the disputed property is an
accretion on a sea bank, Manila Bay being an inlet or an arm of the sea; as such, the disputed property is,

under Article 4 of the Spanish Law of Waters of 1866, part of the public domain.