BACHRACH MOTOR CO., INC. v TALISAY-SILAY MILLING CO.

, ET AL, THE
PHILIPPINE NATIONAL BANK, intervenor-appellant
FACTS:
The proceeding originated in a complaint filed by the Bachrach Motor Co.,
Inc., 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.
The parties agreed to recognize and respect the sale made in favor of Cesar
Ledesma of the P7,500 part of the credit in question, for which reason the
trial court dismissed the complaint and cross-complaint against Cesar
Ledesma authorizing the defendant central to deliver to him the
aforementioned sum of P7,500.
The court held that the Bachrach Motor Co., Inc., had a preferred right to
receive the amount of P11,076.02 which was Mariano Lacson Ledesma's
bonus.
PNB appealed the decision. 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. It contended that the bonus in
question is civil fruits of the lands which the owners had mortgaged for the
benefit of the central giving the bonus.
ISSUE: Whether or not the bonus in question is civil fruits.
RULING: NO. Article 355 of the Civil Code considers three things as civil
fruits: First, the rents of buildings; second, the proceeds from leases of
lands; and, third, the income from perpetual or life annuities, or other
similar sources of revenue.
As the bonus in question is not rent of a building or of land, the only meaning
of "civil fruits" left to be examined is that of "income." It is to be noted that 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, which, as far as this case is concerned, has
nothing to do with it.
Finding no merit in this appeal, the judgment appealed from is affirmed.

IGNACIO v HILARIO
FACTS:
A case concerning the ownership of a parcel of land, partly rice-land and
partly residential. After the trial of the case, the lower court, presided over by
Hon. Alfonso Felix, 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, in a motion filed in the same Court of First Instance but now
presided over by the herein respondent Judge Hon. Felipe Natividad, 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. Motion was
granted by judge Natividad.
Defendants objected to this motion.
ISSUE: Whether or not Hilario, the owner in good faith, may eject a builder in good
faith without choosing either to appropriate the building for himself after payment
of its value or to sell his land to the builder in good faith.
RULING: NO. 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 such remotion only when, after
having chosen to sell his land, the other party fails to pay for the same.
But this is not the case before us.

We hold, therefore, that the order of Judge Natividad compelling defendantspetitioners to remove their buildings from the land belonging to plaintiffsrespondents only because the latter chose neither to pay for such buildings not to
sell the land, is null and void, for it amends substantially the judgment sought to
be executed and is, furthermore, offensive to articles 361 and 453 of the Civil Code.

IGNAO v IAC
FACTS:
Petitioner Florencio Ignao and his uncles private respondents Juan Ignao and
Isidro Ignao were co-owners of a parcel of land with an area of 534 square
meters situated in Barrio Tabon, Municipality of Kawit, Cavite.
The Court of First Instance of Cavite in a decision dated February 6, 1975
directed the partition of the aforesaid land, alloting 133.5 square meters or
2/8 thereof to private respondents Juan and Isidro, and giving the remaining
portion with a total area of 266.5 square meters to petitioner Florencio.
However, no actual partition was ever effected.
Petitioner instituted a complaint for recovery of possession of real property
against private respondents Juan and Isidro. Petitioner alleged that the area
occupied by the two (2) houses built by private respondents exceeded the
133.5 square meters previously alloted to them by the trial court.
In its decision, the trial court (thru Judge Luis L. Victor) ruled that although
private respondents occupied a portion of Florencio's property, they should
be considered builders in good faith. It also ordered Florencio to sell to Juan
and Isidro those portions of his land respectively occupied by the latter.
Appellate court affirms the decision of trial court. Plaintiff filed a petition for
review.
ISSUE: Whether or not the provisions of Art 448 should apply on a property held in
common.
RULING: YES. In the case of Spouses del Campo vs. Abesia, the court a quo
correctly held that 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
ownership is terminated by the partition and it appears that the home 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 is a co-ownership if
good faith has been established. In other words, when the co-ownership is
terminated by a partition and it appears that the house of an erstwhile coowner has encroached upon a portion pertaining to another co-owner

which was however made in good faith, then the provisions of Article 448
should apply to determine the respective rights of the parties.
Petitioner's second assigned error is however well taken. In Quemuel vs.
Olaes, 13 the Court categorically ruled that the right to appropriate the works
or improvements or to oblige the builder to pay the price of the land
belongs to the landowner.

FILIPINAS COLLEGES, Inc. v TIMBANG

FACTS:
This is an appeal taken from an order of the Court of First Instance of Manila
dated May 10, 1957 (a) declaring the Sheriffs certificate of sale covering a
school building sold at public auction null and void unless within 15 days from
notice of said order the successful bidders, defendants-appellants spouses
Maria Garcia Timbang and Marcelino Timbang, shall pay to, appellee Maria
Gervacio Blas directly or through the Sheriff of Manila the sum of P5,750.00
that the spouses Timbang had bid for the building at the Sheriffssale; (b)
declaring the other appellee Filipinas Colleges, Inc. owner of
24,500/3,285,934 undivided interest in Lot No. 2-a covered by certificate of
tile No 45970, on which the building sold in the auction sale is situated; and
ordering the sale in public auction of the said undivided interest of the
Filipinas Colleges, Inc., in lot No. 2-a aforementioned to satisfy the unpaid
portion of the judgment in favor of appellee Blas and against Filipinas
Colleges, Inc. in the amount of P8,200.00 minus the sum of P5,750.00
mentioned in (a) above.
The order appealed from is the result of three motions filed in the court a
quo in the course of the execution of a final judgment of the Court of Appeals
rendered in 2 cases appealed to it in which the spouses Timbang, the Filipinas
Colleges, Inc., and Maria Gervacio Blas were the parties.
The Timbang spouses presented their opposition to each and all of this
motion. In assailing the order of the court a quo directing the appellants to
pay appellee Blas the amount of their bid (P5,750.00) made at the public
auction, appellants counsel has presented a novel, albeit ingenious,
argument. They contend that since 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 has lost his right and the appellants
as owners of the land automatically became the owners ipso facto.
ISSUE: Whether or not the contention of the appellants is valid. If not, what are the
remedies left to the owner of the land if the builder fails to pay?
RULING: NO. The execution sale of the house in their favor was superfluous. The
Court cannot accept this oversimplification of appellants' position. Under the terms
of these article (448 and 546), it is true that 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 article, 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.
A builder in good faith not be required to pay rentals. he has right to retain
the land on which he has built in good faith until he is reimbursed the expenses
incurred by him. Possibly he might be made to pay rental only when the owner of
the land chooses not to appropriate the improvement and requires the builder in
good faith to pay for the land but that the builder is unwilling or unable to pay the
land, and then they decide to leave things as they are and assume the relation of
lessor and lessee, and should they disagree as to the amount of rental then they
can go to the court to fix that amount.
Should the parties not agree to leave things as they are and to assume the
relation of lessor and lessee, another remedy is suggested in the case of Ignacio vs.
Hilario, supra, wherein the court has ruled that the owner of the land in entitled to
have the improvement removed when after having chosen to sell his land to the
other party, i.e., the builder in good faith fails to pay for the same.
A further remedy is indicated in the case of Bernardo vs. Bataclan, supra,
where this Court approved the sale of the land and the improvement in a public
auction applying the proceeds thereof first to the payment of the value of the land
and the excess, if any, to be delivered to the owner of the house in payment
thereof.
in Matias vs. The Provincial Sheriff of Nueva Ecija(74 Phil., 326) that while it is
the inveriable practice, dictated by common sense, that where the successful bidder
is the execution creditor himself, he need not pay down the amount of the bid if it
does not exceed the amount of his judgement, nevertheless, when their is a claim
by a third-party, to the proceeds of the sale superior to his judgment credit, the
execution creditor, as successful bidder, must pay in cash the amount of his bid as a
condition precedent to the issuance to him of the certificate of sale. In the instant
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.

MANOTOK REALTY v TECSON

FACTS:
Manotok Realty, inc. filed a complaint against Nilo Madlangawa for the
recovery of possession of a parcel of land, but the trial court declared the
latter a building and possessor in good faith.

 Petitioner then filed a case for the appropriation of the building as provided in
Article 448 and 546 of the Civil Code. It was argued that since the judgment
became final it is entitled to the execution of the judgment and delivery of
possession over the property.
The CFI denied and held that circumstances intervened, such as the
construction of improvements, which would make the action not legally
proper. Appeal was then made to the Supreme Court. In their comment, the
respondent claim that the issue has already become moot because fire has
already gutted the buildings.
ISSUE: Whether or not the petitioner is entitled to the delivery of the possession of
the property in question.
RULING: YES. When the decision of the trial court became final and executory, it
became incumbent upon the respondent judge to issue the necessary writ for the
execution of the same. There is, therefore, no basis for the respondent judge to
deny the petitioner's motion to avail of its option to approriate the improvements
made on its property.
Neither can the respondent 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 either to retain the
premises and pay for the improvements thereon or to sell the said premises to the
builder in good faith belongs to the owner of the property.
Thus, the repairs and improvements introduced by the said respondents after
the complaint was filed cannot be considered to have been built in good faith, much
less, justify the denial of the petitioner's fai-rn of option.
Since the improvements have been gutted by fire, and therefore, the basis for
private respondent's right to retain the premises has already been extinguished
without the fault of the petitioner, there is no other recourse for the private
respondent but to vacate the premises and deliver the same to herein petitioner.
BERNARDO v BATACLAN
FACTS:
Plaintiff Vicente Bernardo acquired a parcel of land from Pastor Samonte thru
a contract of sale. Thereafter, Bernardo instituted a case against said vendor
to secure possession of the land. Bataclan was in the said premises as he
has been authorized by former owners, as far back as 1922, to clear the land
and make improvements thereon.
Plaintiff instituted a case against Bataclan in the Court of First Instance of
Cavite which declared him the owner of the land but the defendant was held
to be a possessor in good faith, entitled to reimbursement.
The plaintiff conveyed to the court his desire "to require the defendant to pay
him the value of the land at the rate of P200 per hectare or a total price of

P18,000 for the whole tract of land." The defendant indicated that he was
unable to pay the land and, on January 24, 1934, an order was issued giving
the plaintiff 30 days within which to pay the defendant the sum of P2,212.
Subsequently, on April 24, 1934, the court below, at the instance of the
plaintiff and without objection on the part of the defendant, ordered the sale
of the land in question at public auction. The land was sold on April 5, 1935 to
Toribio Teodoro for P8,000.
ISSUE: WON DEFENDANT BATACLAN IS STILL ENTITLED TO RECOVER THE COURT
MANDATED COMPENSATION ARISING FROM THE SALE OF THE PROPERTY TO TORIBIO
RULING: NO. The defendant avers that he is a possessor in good faith and that
the amount of P2,212 to which he is entitled has not yet been paid to him.
Defendant further claims that he has a right to retain the land in accordance with
the provisions of article 453 of the Civil Code. While the said argument is legally
tenable, the same must perforce be denied because defendant Bataclan has lost his
right of retention as he failed to pay for the land. The law, as we have already said,
requires no more than that the owner of the land should choose between
indemnifying the owner of the improvements or requiring the latter to pay for the
land.
Additional Doctrine: The principle of accession whereby the owner of property
acquires not only that which it produces but that which is united to it either
naturally or artificially. (Art. 353.) Whatever is built, planted or sown on the land of
another, and the improvements or repairs made thereon, belong to the owner of the
land (art. 358). Where, however, the planter, builder, or sower has acted in good
faith, a conflict of rights arises between the owners and it becomes necessary to
protect the owner of the improvements without causing injustice to the owner of the
land. In view of the impracticability of creating what Manresa calls a state of "forced
coownership" (vol. 3, 4th ed., p. 213), the law has provided a just and equitable
solution by giving the owner of the land the option to acquire the improvements
after payment of the proper indemnity or to oblige the builder or planter to pay for
the land and the sower to pay the proper rent (art. 361). It is the owner of the land
who is allowed to exercise the option because his right is older and because, by the
principle of accession, he is entitled to the ownership of the accessory thing (3
Manresa, 4th ed., p. 213). In the case before us, the plaintiff, as owner of the land,
chose to require the defendant, as owner of the improvements, to pay for the land.

BALLATAN v CA
FACTS:
The case arose from a dispute over forty-two (42) square meters of
residential land belonging to petitioners.
On June 2, 1985, Engineer Quedding made a third relocation survey upon
request of the parties. He found that Lot No. 24 (Ballatan) lost approximately

25 square meters on its eastern boundary, that Lot No. 25 (Go), although
found to have encroached on Lot No. 24, did not lose nor gain any area; that
Lot No. 26 (Go) lost some three (3) square meters which, however, were
gained by Lot No. 27 (Ching Yao) on its western boundary.[7] In short, Lots
Nos. 25, 26 and 27 moved westward to the eastern boundary of Lot No. 24.
On April 1, 1986, petitioner Ballatan instituted against respondents Go for
recovery of possession before the Regional Trial Court, Malabon, Branch 169.
RTC ruled in favor of the petitioner ordering respondent Go to demolish their
improvements and pay damages to Petitioner but dismissing the third-party
complaint. CA affirmed the dismissal of the third party-complaint as to AIA
but reinstated the the complaint against Yao and the Engineer. CA also
affirmed the demolition and damages awarded to petitioner and added that
Yao should also pay respondent for his encroachment of respondent Gos
property. Jose Quedding was also ordered to pay attorneys fees for his
negligence which caused all this fuzz.
ISSUE: What is the proper remedy in this situation (everyone was in good faith)?
RULING:
Art 448; The owner of the land on which anything has been built, sown or
planted in good faith shall have the right to appropriate as his own the building,
planting or sowing, after payment to the builder, planter or sower of the necessary
and useful expenses, and in the proper case, expenses for pure luxury or mere
pleasure. The owner of the land may also oblige the builder, planter or sower to
purchase and pay the price of the land. If the owner chooses to sell his land, the
builder, planter or sower must purchase the land, otherwise the owner may remove
the improvements thereon. The builder, planter or sower, however, is not obliged to
purchase the land if its value is considerably more than the building, planting or
sowing. In such case, the builder, planter or sower must pay rent to the owner of
the land. If the parties cannot come to terms over the conditions of the lease, the
court must fix the terms thereof. The right to choose between appropriating the
improvement or selling the land on which the improvement stands to the builder,
planter or sower, is given to the owner of the land.
In the event that petitioners elect to sell to respondents Go the subject
portion of their lot, the price must be fixed at the prevailing market value at the
time of payment.
Petitioner was given by SC 30 days to decide on what to do or which right to
exercise. Likewise, Go was also given time to do the regarding Yaos encroachment.
Engineer Quedding was still asked to pay attorneys fees.

DEL CAMPO v ABESIA

FACTS:

 This case involves a parcel of land, Lot No. 1161 of the Cadastral Survey of
Cebu, with an area of only about 45 square meters. An action for partition
was filed by plaintiffs in the CFI of Cebu. Plaintiffs and defendants are coowners pro indiviso of this lot in the proportion of and 1/3 share each,
respectively.
The houses of plaintiffs and defendants were surveyed and shown on the
sketch plan. The house of defendants occupied the portion with an area of 5
square meters of Lot 1161-A of plaintiffs.
Trial court ruled that Art 448 is not applicable because the matter should be
governed more by the provisions on co-ownership than on accession.
ISSUE: W/N the rules of accession applies on property that used to be co-owned,
but was subdivided.
RULING:
Yes. The court a quo correctly held that 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 co-ownership is terminated by the partition and it appears that the
house of defendants overlaps or occupies a portion of 5 square meters of the land
pertaining to plaintiffs which the defendants obviously built in good faith, then the
provisions of Article 448 of the new Civil Code should apply.
Decision appealed from is modified.

PACIFIC FARMS v ESGUERRA

FACTS:
Carried Lumber Co furnished lumber and construction materials to the Insular
Farms, Inc. (the appellee's predecessor-in-interest) which the latter used in
the construction of the six buildings.
Out of the total procurement price of P15,000, the amount of P4,710.18
remains outstanding and unpaid by the Insular Farms, Inc. The appellant is
therefore an unpaid furnisher of materials.
The CFI instituted a civil case to recover the balance. The CFI ruled in favour
of the Company causing the sheriff to levy the 6 buildings constructed by
insular farms.
Pacific Farms, Inc. filed a third-party claim, asserting ownership over the
levied buildings which it had acquired from the Insular Farms, Inc. by virtue of
a deed of absolute sale executed before the Company filed the abovementioned action.
Upon bond, the buildings were judicially sold to Carried Lumber Company.
Pacific Farms filed a complaint seeking nullification of the sale.

ISSUE: W/N Article 447 of the Civil Code is applicable.

RULING: Yes. Application by analogy of the rules of accession would suffice for a just
adjudication. The legal provision 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 praying for their value.2The owner of the materials, on the other hand,
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.
Pacific Farms cannot be considered a purchaser in good faith sing Atty
Antonio Araneta was the counsel of Pacific Farms who signed the complaint and is
also the President of Insular Farms. Therefore, if such sale was in fact made, the fact
that the property was already purchased should have already been raised by the
petitioner from the institution of the case.
Therefore in applying article 447, the owner of the materials may have the
materials removed if no injury would be resulted, otherwise, he must be reimbursed
of their value.
It follows, as a necessary corollary, that the sale at public auction conducted
by the defendant sheriff of the six buildings described in the certificate of sale was
valid and effective. However, of the equities clearly attendant in the case, it is the
sense of this Court that the Pacific Farms, Inc. should be, granted a period of thirty
(30) days from the date this judgment becomes final, within which it may exercise
the option of redeeming the six buildings, by paying to the defendant-appellant
Carried Lumber Company the sum of P4,710.18, with legal interest from September
23, 1961 until the said amount shall have been fully paid.

TECHNOGAS v CA
FACTS:
The parties in this case are owners of adjoining lots in Paraaque, Metro
Manila. It was discovered in a survey, that a portion of a building of
petitioner, which was presumably constructed by its predecessor-in-interest,
encroached on a portion of the lot owned by private respondent.
The land was purchased by plaintiff from Pariz Industries, Inc. in 1970,
together with all the buildings and improvements including the wall existing
thereon
that defendant dug or caused to be dug a canal along plaintiff's wall, a
portion of which collapsed in June, 1980, and led to the filing by plaintiff of
the supplemental complaint in the above-entitled case and a separate
criminal complaint for malicious mischief against defendant and his wife

which ultimately resulted into the conviction in court of defendant's wife for
the crime of malicious mischief.
..amicable settlement to have 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."
ISSUES:
1. Is petitioner considered a builder in bad faith because, as held by respondent
Court, he is "presumed to know the metes and bounds of his property as described
in his certificate of title"?
2. Does petitioner succeed into the good faith or bad faith of his predecessor-ininterest which presumably constructed the building?
RULING:
1. NO. There is nothing in the cases of J.M. Tuason & Co., Inc. vs. Vda. de
Lumanlan 17 and J.M. Tuason & Co., Inc.vs. Macalindong which would
suggest, however remotely, that bad faith is imputable to a registered owner
of land when a part of his building encroaches upon a neighbor's land, simply
because he is supposedly presumed to know the boundaries of his land as
described in his certificate of title. No such doctrinal statement could have
been made in those cases because such issue was not before the Supreme
Court. In Co Tao vs. Chico, 20 where we held that 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."
2. YES. Article 527 of the Civil Code presumes good faith, and since no proof
exists to show that the encroachment over a narrow, needle-shaped portion
of private respondent's land was done in bad faith by the builder of the
encroaching structures, the latter should be presumed to have built them in
good faith. Hence, such good faith, by law, passed on to Pariz's successor,
petitioner in this case. Further, "(w)here 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.

GERMINIANO v CA
FACTS:
The lot in question was originally owned by the petitioners' mother, Paulina
Geminiano. On a 12-square-meter portion of that lot stood the petitioners'

unfinished bungalow with an alleged promise to sell to the latter that portion
of the lot occupied by the house.
The petitioners' mother executed a contract of lease over a 126 square-meter
portion of the lot, including that portion on which the house stood. The
private respondents then introduced additional improvements and registered
the house in their names. After the expiration of the lease contract in
November 1985, however, the petitioners' mother refused to accept the
monthly rentals.
It turned out that the lot in question was the subject of a suit, which resulted
in its acquisition by one Maria Lee in 1972. In 1982, Lee sold the lot to Lily
Salcedo, who in turn sold it in 1984 to the spouses Agustin and Ester Dionisio.
Nicolas demands petitioner to vacate premises; a complaint for unlawful
detainer and damages was filed against petitioner.
Trial court ordered the private respondents to vacate the premises and pay
rent for their stay; RTC and CA reversed the decision

ISSUE: Whether the private respondents are builder in good faith or mere lessees.
RULING: They are mere lessees. The private respondents, as lessees who had
undisturbed possession for the entire term under the lease, are then estopped to
deny their landlord's title, or to assert a better title not only in themselves, but also
in some third person while they remain in possession of the leased premises and
until they surrender possession to the landlord. 14 This estoppel applies even
though the lessor had no title at the time the relation of lessor and lessee was
created, 15 and may be asserted not only by the original lessor, but also by those
who succeed to his title.
Being mere lessees, the private respondents knew that their occupation of
the premises would continue only for the life of the lease. Plainly, they cannot be
considered as possessors nor builders in good faith. It does not apply where one's
only interest is that of a lessee under a rental contract; otherwise, it would always
be in the power of the tenant to "improve" his landlord out of his property.
It must be stressed, however, that the right to indemnity under Article 1678
of the Civil Code arises only if the lessor opts to appropriate the improvements.
Since the petitioners refused to exercise that option, 20 the private respondents
cannot compel them to reimburse the one-half value of the house and
improvements. Neither can they retain the premises until reimbursement is made.
The private respondents' sole right then is to remove the improvements without
causing any more impairment upon the property leased than is necessary.
*** Art 1678. If the lessee makes, in good faith, useful improvements which are
suitable to the use for which the lease is intended, without altering the form or
substance of the property leased, the lessor upon the termination of the lease shall
pay the lessee one-half of the value of the improvements at that time. Should the
lessor refuse to reimburse said amount, the lessee may remover the improvements,
even though the principal thing may suffer damage thereby. He shall not, however,
cause any more impairment upon the property leased than is necessary.

QUETO v CA
FACTS:
That RESTITUTA received the questioned lot (no. 304-B), either as a purported
donation or by way of purchase on (February 11, 1927) (with P50.00) as the
alleged consideration thereof
That the donation or sale was consummated while RESTITUTA was already
married to her husband Juan
A contract of lease over the lot was entered into between Pershing Tan Queto
and RESTITUTA (with the consent of her husband JUAN) for a period of ten
(10) years. After expiration of lease, unlawful detainer was filed.
Unlawful detainer case was DISMISSED because of an understanding (barter)
whereby TAN QUETO became the owner of the disputed lot, and the spouses
RESTITUTA and JUAN in turn became the owners of a parcel of land (with the
house constructed thereon) previously owned (that is, before the barter) by
TAN QUETO.
After the barter agreement TAN QUETO constructed on the disputed land a
concrete building, without any objection on the part of RESTITUTA
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.
ISSUES:
(1) Is the questioned lot paraphernal or conjugal?
(2) In having constructed the building on the lot, should TAN QUETO be regarded as
a builder in good faith (and hence entitled to reimbursement) or a builder in bad
faith (with no right to reimbursement)?
RULING:
1.) The land is conjugal, not paraphernal. The oral donation of the lot cannot be a
valid donation interviews 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 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.
2.) Even assuming that despite registration of the lot as conjugal, Tan Queto
nursed the belief that the lot was actually RESTITUTA's (making him in bad
faith), still RESTITUTA's failure to prohibit him from building despite her
knowledge that construction was actually being done, makes her also in bad
faith. The net resultant of mutual bad faith would entitle TAN QUETO to the
rights of a builder in good faith (Art. 448, Civil Code), ergo, reimbursement
should be given him if RESTITUTA decides to appropriate the building for
herself (Art. 448, Civil Code). However, TAN QUETO having bartered his own
lot and small house with the questioned lot with JUAN may be said to be the
OWNER-POSSESSOR of the lot. Certainly he is not merely a possessor or

builder in good faith much less is he a builder in bad faith. He is a builderpossessor jus possidendi because he is the OWNER himself. Please
note further that the difference between a builder (or possessor) in good faith
and one in bad faith is that the former is NOT AWARE of the defect or flaw in
his title or mode of acquisition while the latter is AWARE of such defect or
flaw (Art. 526, Civil Code). But in either case there is a flaw or defect. In the
case of TAN QUETO there is no such flaw or defect because it is he himself
(not somebody else) who is the owner of the property.
AGUSTIN v IAC
FACTS:
The Cagayan River separates the towns of Solana on the west and
Tuguegarao on the east in the province of Cagayan.
The Cagayan River moved gradually eastward, depositing silt on the western
bank. The shifting of the river and the siltation continued until 1968. Through
the years, the Cagayan River eroded lands depositing the alluvium as
accretion on the land possessed by Pablo Binayug on the western bank.
In 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.
Petitioner claimed the lands as their own and drove away the private
respondents from the premises. Case filed, trial court and IAC rendered
decision to restore possession to plaintiffs.
ISSUE: W/N the ownership of private respondents over the accretion is not affected
by the sudden and abrupt change in the course of the Cagayan River when it
reverted to its old bed.
RULING: YES. The finding of the Court of Appeals that there had been accretions to
the lots of the private respondents who did not lose the ownership of such
accretions even after they were separated from the principal lots by the sudden
change of course of the river, is a finding of fact which is conclusive on this Court.
Art 457 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. Accretion
benefits a riparian owner when the following requisites are present: (1) that the
deposit be gradual and imperceptible; (2) that it resulted from the effects of the
current of the water; and (3) that the land where accretion takes place is adjacent to
the bank of a river
The private respondents' ownership of the accretion to their lands was not
lost upon the sudden and abrupt change of the course of the Cagayan River in 1968
or 1969 when it reverted to its old 1919 bed, and separated or transferred said
accretions to the other side (or eastern bank) of the river. Articles 459 and 463 of
the New Civil Code apply to this situation.

In the case at bar, the sudden change of course of the Cagayan River as a
result of a strong typhoon in 1968 caused a portion of the lands of the private
respondents to be "separated from the estate by the current." The private
respondents have retained the ownership of the portion that was transferred by
avulsion to the other side of the river.
CUREG v IAC
FACTS:
The object of the controversy in this case is the alleged "motherland" of
private respondents together with the accretion of about 3.5 hectares.
In this case, petitioners claimed to be riparian owners who are entitled to the
"subject land" which is an accretion to the registered land while private
respondents claimed to be entitled to the 3.5 hectares accretion attached to
their "motherland."
Respondents' claim of ownership of their alleged two and a half (2 & )
hectare "motherland" is anchored mainly on four (4) tax declarations
Anent Tax Declaration No. 13131, in the name of Antonio Carniyan (Exhibit
"C", p. 203, Rollo), which the appellate court considered as an admission by
him that his land is bounded on the north by the land of Domingo Gerardo
ISSUE: W/N the respondents are entitled to the quieting of title prayed for.
RULING: NO. This Court has repeatedly held that the declaration of ownership for
purposes of assessment on the payment of the tax is not sufficient evidence to
prove ownership (respondents only proof). An original certificate of title indicates
true and legal ownership by the registered owners over the disputed premises We
hold that said tax declaration, being of an earlier date cannot defeat an original
certificate of title which is of a later date. Since petitioner's original certificate of
title clearly stated that subject land is bounded on the north by the Cagayan River,
private respondents" claim over their "motherland," allegedly existing between
petitioners" land and the Cagayan River, is deemed barred and nullified with the
issuance of the original certificate of title. It is an elemental rule that a decree of
registration bars all claims and rights which arose or may have existed prior to the
decree of registration.
The foregoing considerations indubitably show that the alleged "motherland"
claimed by private respondents is non-existent. 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. The increase in the area of 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.

VIAJAR v CA

FACTS:
Private respondents Spouses Ladrido are owners of Lot 7511 of the Cadastral
Survey of Pototan Iloilo. Petitioners are owners of the Lot 7340, which they
bought from the Te. Viajar had lot 7340 relocated and found out that the
property was in the possession of Ladrido. She demanded the return but the
latter refused. She instituted a civil action for recovery of possession and
damages. She also impleaded Te as defedant for the reason that if Ladrido is
going to be favored then the sale was to be annulled and plaintiff must be
reimbursed. During the trial it was proven that during the cadastral survey in
1926, the two lots were separated by the Suague River and that a part of the
land of Lot 7340 and the old river bed were in the possession of the
defendants and that the plaintiffs have never been in actual physical
possession.
CFI ruled in favor of the defendants which the CA confirmed.
ISSUES:
1) Whether or not the change in the course of the Suague River was gradual or
sudden
2) Whether or not the plaintiffs are protected by the Torrens System (in relation to
the dimunition of the area of their land because the plaintiffs are contending that
Art 457 must be interpreted as applicable only to unregistered lands
RULING:
1.)Gradual. The trial court found that the change in the course of the Suague
River was gradual and this finding was affirmed by the respondent Court of
Appeals. We do not find any valid reason to disturb this finding of fact. It was
established in the trial that for a period of 40 years 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.
2.) The rule that registration under the Torrens System does not protect the
riparian owner against the diminution of the area of his registered land
through gradual changes in the course of an adjoining stream is well settled.
Accretions of that character are natural incidents to land bordering on
running streams and are not affected by the registration laws. It follows that
registration does not protect the riparian owner against diminution of the
area of his land through gradual changes in the course of the adjoining
stream.

HEIRS OF EMILIANO NAVARRO v IAC

FACTS:
Sinforoso Pascual sits in the midst of a land registration case. His current
registered property is bounded on the east by Talisay River, on the West by
Bulacan River and on the North by the Manila bay. Both rivers flow towards

the Manila Bay. Because of constantly flowing water, extra land of about
17hectares formed in the northern most section of the property. It is this
property he sought to register.
The RTC denied the registration claiming this to be foreshore land and part of
public domain. In 1960, he attempted registry again, claiming that the Talisay
and Bulacan rivers deposited more silt resulting on accretion. He claimed this
land as riprarian owner. The Director of Lands, Director of Forestry and the
Fiscal opposed
Then a new party surfaced. Mr Emiliano Navarro jumped into the fray
opposing the same application, stating the he leased part of the property
sought to be registered. He sought to protect his fishpond that rested on the
same property. Sinforoso filed ejectment against Mr. Navarro, claiming that
Navarro used stealth force and strategy to occupy a portion of his land.
On 1975, the court decided that the property was foreshore land and
therefore part of public domain. The RTC dismissed the complaint of Pascual
for ejectment against Navarro and also denied his land registration request.
ISSUE: Whether or not the accretion taking place on property adjacent to the sea
can be registered under the Torrens system.
RULING: NO. It cannot be registered. This is land of Public domain. Manila Bay is
obviously not a river. 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
private respindents' own tract of land on the northern side. As such, the applicable
law is not Article 457 of the Civil Code but Article 4 of the Spanish Law of Waters of
1866.
Article 4 of the Spanish Law of Waters of August 3, 1866 provides as follows:
"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."
The IAC decision granting registration was reversed and set aside.