Lao Chit v Security Bank
.FACTS:
Consolidated Investments (lessor), leaser to Domingo
Dikit part of the lobby of the Consolidated Building at
Plaza Goiti, Manila to be used as offices for a proposed
Bank of Manila to be organized by Dikit and Jose Silva.
The lessee undertook to construct walls, partitions, and
other improvements; such improvements shall
become the property of the lessor upon the
termination and/or rescission of the lease contract.
Dikit and Silva entered into a contract with plaintiff Lao
Chit for the latter to furnish the materials and the
work for the improvements at a total cost of P59,365
payable as soon as the Bank of Manila opens for
business, and is given permit by the Central Bank.
The permit was never issued.
The rentals for the lease of the space were also not
paid. The lessor then instituted an unlawful detainer
action.
Municipal Court of Manila: rendered judgment
sentencing Dikit.
Dikit appealed to the CFI and eventually the Supreme
Court.
The cases were soon dismissed upon agreement of the
parties that Dikit will relinquish whatever rights he
might have to the possession of the leased premises
and disclaimed all rights to and over any and all
improvements introduced therein.
Lao filed a separate civil action against Dikit and Silva
for recovery of whatever was due from them.
CFI of Manila: ruled in favor of Lao and sentenced
Dikit and Silva as solidarily liable for the sum of
P59,365.
A writ of execution was issued but remained
unsatisfied. Dikit nor Silva had any properties
registered in their respective names and Silva was
nowhere to be found.
Lao Chit then brought the present action against
Security Bank and (Bank) to which lessor had leased
the property, together with the improvements. He
demanded a payment of P1,000/month by way of
rentals.
In its answer, the Bank alleged that it used the
improvements pursuant to its contract of lease with
the lessor.
Soon after, Lao demanded the amount of the
improvements plus P1000/month from the lessor,
which did not heed said demand.
According to the lessor, it had no contractual or
juridical relation with Lao and that the improvements
belonged to it and not to Lao.
CFI of Manila: sentenced Consolidated Investments
and Security Bank solidarily to pay P59,365 and
rentals at the rate of P1,000/mo.
Defendants filed a motion for reconsideration and new
trial, but were denied. Hence, this appeal.
ISSUES + RULING:
WoN the lower court erred in rendering judgment
against the Bank. YES.
It is clear that the Bank entered into the premises in
question pursuant to a lease contract with the lessor.
The Bank paid the rentals and fulfilled its obligations
under the contract.
It cannot be denied that the improvements introduced
became property of the lessor pursuant to the
provision in the contract between it and Dikit and
Silva that the former shall own said improvements
upon expiration and/or rescission of the contract.
Although Lao Chit was not a party to said contract, this
stipulation is binding upon him, he having introduced
said improvements pursuant to his contract with Dikit,
from whom he derived, therefore, his right to enter
the building and make the improvements.
o In short, insofar as the construction thereof,
Lao Chit was, vis-a-vis the lessor, a mere agent
or representative of Dikit and, as such, was
privy to the undertakings of Dikit under his
contract of lease with the lessor.
WoN the lessor is liable to Lao Chit for the
improvements. NO.
The lower court held the lessor liable to Lao
upon the ground that he was a builder in good
faith, and under the theory of unjust
enrichment.
Art. 361 (now 448) of the [Old] Civil Code
provides:
o The owner of land on which anything has
been built, sown, or planted, in good faith,
shall be entitled to appropriate the thing so
built, sown, or planted, upon paying the
compensation mentioned in Articles 453
and 454, or to compel the person who has
built or planted to pay him the value of the
land, and the person who sowed thereon to
pay the proper rent therefor.
However, this provision refers to one who
builds upon a land which he believes to be his
property. Neither Lao nor Dikit claimed the
building as their own.
Moreover, the provision is limited in its
application to buddings constructed on
anothers land, and not to partitions, railing,
counters, shelves, and the like.
Moreover, there was no bad faith on the part of
the lessor since it was bound to permit Dikit
and Lao as his agent to construct
improvements.
The lower court also relied on Art. 356 (now
443) in ruling that there should be no unjust
enrichment:
o He who receives fruits is obliged to pay
any expenses which may have been
incurred by another in the production,
gathering, and preservation thereof.
The Supreme Court ruled, however, that the
provision is not on point since it refers to
"expenses" of production, gathering and
preservation" of fruits received by the owner of
a property, not to improvements, whereas the
claim of Lao Chit is based upon
"improvements" introduced, not "expenses"
incurred by him for the "production, gathering
and preservation" of fruits.
The provision on quasi-contracts (Art. 2142) of
the Civil Code cannot likewise be applied. It
provides:
o Certain lawful, voluntary and unilateral
acts give rise to the juridical relation of
quasi-contract to the end that no one
1
 shall be unjustly enriched or benefited
at the expense of another.
The construction of the improvements in
question was not a "purely voluntary act" or
"unilateral act" of Lao Chit.
He introduced them in compliance with a
bilateral "obligation" he undertook under his
contract with Dikit.
For the principle of undue enrichment to apply,
there must be "enrichment" and the same
must be "undue" or "unjust".
In the case at bar, Dikit failed to pay the
agreed monthly rental of P5,000 from October,
1949. Up to July 1, 1951, when the premises in
question were leased to the Bank, the rentals
due from Dikit aggregated, therefore,
P105,000.
Thus, despite the fact that the lessor had
become the owner of the improvements in
question, worth P59,365.00, it still suffered a
loss of over P45,000.00. Such "loss" negates
the idea of "enrichment".
Had he been reasonably vigilant, Lao Chit could
have demanded from Dikit a mortgage, or a
bond, or some other security, for the protection
of his rights, yet he did not do so.
Should the lessor be required to pay Lao Chit
what he is entitled to recover from Dikit, but
which he (Lao Chit) cannotdue to his
oversight, carelessness or negligencecollect
from Dikit, the effect would be to relieve Lao
Chit of the consequences of his own
inadvertence or negligence, and hold the lessor
responsible therefor.
DEPRA vs. DUMLAO
FACTS:
Dumlao is the owner of a parcel of land in Iloilo, while
Depra owns the lot adjoining his. Dumlao built his
house on his own land, but the kitchen encroached
about 34 sq.m on Depras property. Upon finding this,
Depras mom ordered Dumlao to move back from his
encroachment, then subsequently filed an action for
unlawful detainer against Dumlao.
The lower court found that Dumlao was a builder in
good faith, and ordered him to pay rent
(PhP5.00/month) forced lease between the parties.
Depra refused to accept the rentals so Dumlao
deposited this with the MTC. Neither party appealed
judgment so this became final and executory.
1 year later, though, Depra filed an complaint for
Quieting of Title. Dumlao contested this, stating that
the suit is barred by res judicata. But Depra averred
that the lower court did not have jurisdiction to rule on
encumbrances of real property only the CFI has
jurisdiction. A case to quiet title was also
instituted wherein Depra was held to be the owner of
the land.
ISSUE:
1. Whether or not res judicata would apply to the case
at bar?
2. Whether or not the land owner can be compelled to
accept rent payments by the court (with both LO and
BPS being in good faith)?
HELD:
In the first issue, res judicata would not apply should
the first case be one for ejectment and the other for
quieting of title. Article 448 of the Civil Code provides
that the land owner has 2 options to buy the building
or to sell/rent his land. This is so because the rights of
the owner of the land is older, and by the principle of
accession, he also has a right to the accessories.
The Court remanded the case to the RTC to determine
the fair price of the land, the expenses incurred by the
BPS (Dumlao), the increase in value of the land, and
whether the value of the land is considerably more
than the value of the kitchen built on it. The RTC shall
then give Depra 15 days to exercise such option.
Sarmiento vs. Agana 129 scra 122
Facts:
ERNESTO was still courting his wife, the latter's mother
had told him the couple could build a RESIDENTIAL
HOUSE whom Ernesto did construct a RESIDENTIAL
HOUSE on the LAND at a cost of P8,000.00 to
P10,000.00 who probably assumed that the wife's
mother was the owner of the LAND and that, it would
be transferred to the spouses. Subsequently turned out
that the LAND had been titled in the name of Mr. & Mrs.
Jose C. Santo, Jr. who, sold the same to petitioner
SARMIENTO. SARMIENTO filed an Ejectment suit
against them. In the evidentiary hearings before the
Municipal Court, SARMIENTO submitted the deed of
sale of the LAND in her favor, which showed the price
to be P15,000.00. On the other hand, ERNESTO
testified that the then cost of the RESIDENTIAL HOUSE
would be from P30,000.00 to P40,000.00.Sarmiento
refuse to pay and give option to buy the property.
Issue: 1.Whether or not Ernesto was in good faith.
2.Whether or not Sarmiento could exercise
both refusal to pay the spouses and give option to
purchase.
Held:
1.Yes. We agree that ERNESTO and wife were builders in
good faith in view of the peculiar circumstances
under which they had constructed the RESIDENTIAL
HOUSE. As far as they knew, the LAND was owned by
ERNESTO's mother-in-law who, having stated they
could build on the property, could reasonably be
expected to later on give them the LAND.
In regards to builders in good faith, Article 448 of the
Code provides:
ART. 448. The owner of the land on which anything has
been built, sown or planted in good faith ,shall have the
right to appropriate as his own the works, sowing or
planting, after payment of the indemnity provided for
in articles 546 and 548, or to oblige the one who built
or planted to pay the price of the land, and the one
who sowed, the proper rent. However, the builder or
planter cannot be obliged to buy the land if its value is
considerably more than that of the building or trees. In
such case, he shall pay reasonable rent, if the owner of
the land does not choose to appropriate the building or
trees after proper indemnity. The parties shall agree
2
 upon the terms of the lease and in case
disagreement, the court shall fix the terms thereof.
2.No. 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 (now Article 546). The
owner, of the land. upon, the other hand, has the
option, under article 361 (now Article 448), 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.
We hold, therefore, that the order of Judge
Natividad compelling defendants-petitioners to
remove their buildings from the land belonging to
plaintiffs-respondents only because the latter
chose neither to pay for such buildings nor 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 (now
Article 448) and 453 (now Article 546) of the Civil
Code. (Ignacio vs. Hilario, 76 Phil. 605, 608
[1946]).
FLORENCIO IGNAO, petitioner, vs. IAC
FACTS:
In this petition for review by certiorari, petitioner seeks
the reversal of the decision of the Intermediate
Appellate Court (now Court of Appeals) affirming in toto
the decision of the Court of First Instance of Cavite,
ordering petitioner Florencio Ignao to sell to private
respondents Juan and Isidro Ignao, that part of his
property where private respondents had built a portion
of their houses.
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. Pursuant to an action for partition filed by
petitioner docketed as Civil Case No. N-1681, the then
Court of First Instance of Cavite in a decision directed
the partition of the aforesaid land, allotting 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.
On July 17, 1978, petitioner instituted a complaint for
recovery of possession of real property against private
respondents Juan and Isidro before the Court of First
Instance of Cavite. In his complaint 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.
Consequently, the lower court conducted an ocular
inspection. It was found that the houses of Juan and
Isidro actually encroached upon a portion of the land
belonging to Florencio. Upon agreement of the parties,
of the trial court ordered a licensed geodetic engineer to
conduct a survey to determine the exact area occupied
by the houses of private respondents. The survey
subsequently disclosed that the house of Juan occupied
42 square meters while that of Isidro occupied 59
square meters of Florencio's land or a total of 101
square meters.
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.
Thus, it ordered Florencio to sell to Juan and Isidro
those portions of his land respectively occupied by the
latter. The dispositive portion of said decision reads as
follows:
IAC: Petitioner Florencio Ignao appealed to the
Intermediate Appellate Court. The Appellate Court,
promulgated a decision, affirming the decision of the
trial court.
ISSUE:
W/O the respondent Court is correct in considering the
private respondents builders in good faith on the land
on question, thus applying Art. 448 of the Civil Code,
although the land in question is still owned by the
parties in co-ownership, hence, the applicable provision
is Art. 486 of the Civil Code, which was not applied.
HELD:
The records of the case reveal that the disputed land
with an area of 534 square meters was originally
owned by Baltazar Ignao who married twice. In his first
marriage, he had four children, namely Justo (the
father of petitioner Florencio), Leon and private
respondents Juan and Isidro. In his second marriage,
Baltazar had also four children but the latter waived
their rights over the controverted land in favor of Justo.
Thus, Justo owned 4/8 of the land which was waived by
his half-brothers and sisters plus his 1/8 share or a total
of 5/8. Thereafter, Justo acquired the 1/8share of Leon
for P500.00 which he later sold to his son Florencio for
the same amount. When Justo died, Florencio inherited
the 5/8 share of his father Justo plus his 1/8 share of
the land which he bought or a total of 6/8 (representing
400.5 square meters). Private respondents, Juan and
Isidro, on the other hand, had 1/8 share (66.75sq) each
of the land or a total of 133.5square meters.
Before the decision in the partition case was
promulgated, Florencio sold 134 square meters of his
share to a certain Victa for P5,000.00 on January 27,
1975. When the decision was handed down on
February 6,1975, the lower court allotted 2/8 of the
land to private respondents Juan and Isidro, or a total
of 133.5 square meters.
It should be noted that prior to partition, all the co-
owners hold the property in common dominion but at
the same time each is an owner of a share which is
abstract and undetermined until partition is effected.
As co-owners, the parties may have unequal shares in
the common property, quantitatively speaking. But in a
qualitative sense, each co-owner has the same right as
any one of the other co-owners. Every co-owner is
therefore the owner of the whole, and over the whole
3
he exercises the right of dominion, but he is at the
same time the owner of a portion which is truly
abstract, because until division is effected such portion
is not concretely determined.
Petitioner Florencio, in his first assignment of error,
asseverates that the court a quo erred in applying
Article 448 of the Civil Code, since this article
contemplates a situation wherein the land belongs to
one person and the thing built, sown or planted
belongs to another. In the instant case the land in
dispute used to be owned in common by the
contending parties.
Whether or not the provisions of Article 448 should
apply to a builder in good faith on a property held in
common has been resolved in the affirmative in the
case of Spouses del Campo vs. Abesia, wherein the
Court ruled that:
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 co- owner 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.
SPOUSES DEL CAMPO V. ABESIA 160
Facts:
This case involves a parcel of land, situated at the
corner of F. Flores and Cavan Streets, Cebu City.
An action for partition was filed by plaintiffs in the
CFI of Cebu. Plaintiffs and defendants are co-
owners pro indiviso of this lot in the proportion of
and 1/3 share each, respectively. The trial court
appointed a commissioner in accordance with the
agreement of the parties. ,the Id commissioner
conducted a survey, prepared a sketch plan and
submitted a report to the trial court on May 29,
1976, recommending that the property be divided
into two lots: Lot 1161-A with an area of 30
square meters for plaintiffs and Lot No. 1161-B
with an area of 15 square meters for the
defendants. The houses of plaintiffs and
defendants were surveyed and shown on the
sketch plan. The house of defendants occupied
the portion with an area of 5 square meters of Lot
1161-A of plaintiffs. The parties manifested their
conformity to the report and asked the trial court
to finally settle and adjudicate who among the
parties should take possession of the 5 square
meters of the land in question.
Issue: Whether or Not Article 448 of the Civil
Code is applicable to a builder in good faith when
the property involved is owned in common.
Held: When the co-ownership is terminated by
the partition and it appears that the house of
defendants overlaps or occupies a portion of 5
square meters of the land pertaining to plaintiffs
which the defendants obviously built in good
faith, then the provisions of Article 448 of the new
Civil Code should apply. Manresa and Navarro
Amandi agree that the said provision of the Civil
Code may apply even when there was co-
ownership if good faith has been established.
Applying the aforesaid provision of the Civil Code,
the plaintiffs have the right to appropriate said
portion of the house of defendants upon payment
of indemnity to defendants as provided for in
Article 546 of the Civil Code. Otherwise, the
plaintiffs may oblige the defendants to pay the
price of the land occupied by their house.
However, if the price asked for is considerably
much more than the value of the portion of the
house of defendants built thereon, then the latter
cannot be obliged to buy the land. The
defendants shall then pay the reasonable rent to
the plaintiff upon such terms and conditions that
they may agree. In case of disagreement, the trial
court shall fix the terms thereof. Of course,
defendants may demolish or remove the said
portion of their house, at their own expense, if
they so decide.
Article 448 of the New Civil Code provides as
follows:
Art. 448. The owner of the land on which anything
has been built, sown, or planted in good faith,
shall have the right to appropriate as his own the
works, sowing or planting, after payment of the
indemnity provided for in articles 546 and 548, or
to oblige the one who built or planted to pay the
price of the land, and the one who sowed, the
proper rent. However, the builder or planter
cannot be obliged to buy the land if its value is
considerably more than that of the building or
trees. In such case, he shall pay reasonable rent,
if the owner of the land does not choose to
appropriate the building or trees after proper
indemnity. The parties shall agree upon the terms
of the lease and in case of disagreement, the
court shall fix the terms thereof.
Alviola v. CA
FACTS:
4
Victoria Tinagan bought two parcels of land in 1950.
She and her son Agustin took possession of the said
land thereafter.
Sometime in 1960, petitioners occupied portions of the
land whereat they built a copra dryer and put up a
store wherein they engaged in the business of buying
and selling copra.
On 1975, Victoria and Agustin died, the latter survived
by his wife and children who are the private
respondents in the instant case.
The private respondents filed a complaint for recovery
of possession against the petitioners asking the
Regional Trial Court of Negros Oriental that they be
declared the absolute owners of the said parcels of
land and that petitioners be ordered vacate the same,
to remove their copra dryer and store, to pay actual
damages (in the form of rentals), moral and punitive
damages, litigation expenses and attorney's fees.
The trial court ruled in favour of the private
respondents, hence this petition.
The petitioners put up the defense that the contested
parcels of land are public lands, making them qualify to
become beneficiaries of the comprehensive agrarian
reform program and rightful possessors of the land in
virtue of their occupation of the same for 20 years.
The petitioners also contend that the copra dryer and
the store are permanent structures as they are made of
hollow blocks and cement.
Private respondents on the other hand offer
overwhelming evidence of their ownership and
possession of the land and contended that they merely
tolerated the petitioners occupation of the disputed
property.
ISSUE:
WON the petitioners have ownership over the portions
of land where the copra dryer and store are located.
HELD:
No. The petitioners defense that the said parcels of
land are public lands is rebutted by the Private
respondents' tax declarations and receipts of payment
of real estate taxes, as well as other related documents
which prove their ownership of the disputed properties.
The record further discloses that Victoria S. Tinagan
and her son, Agustin Tinagan, took possession of the
said properties in 1950, introduced improvements
thereon, and for more than 40 years, have been in
open, continuous, exclusive and notorious occupation
thereof in the concept of owners.
The Court brushed as an afterthought the petitioners
later defense that the portions where the copra dryer
and store are located were ceded to them by Victoria in
exchange for a prior debt since it was not supported by
any document pointing to Victoria transferring the
ownership of the said portion and the lack of
declaration on the part of the petitioners.
The Court also ruled that though the petitioners were in
occupation of the portions of land in question for 20
years, they were able to do so out of the tolerance of
the private respondents and thus, their posture that
they have acquired the property by "occupation" for 20
years does not have any factual or legal foundation.
As correctly ruled by the respondent court, there was
bad faith on the part of the petitioners when they
constructed the copra dryer and store on the disputed
portions since they were fully aware that the parcels of
land belonged to Victoria Tinagan.
But there was likewise bad faith on the part of
the private respondents, having knowledge of the
arrangement between petitioners and Victoria Tinagan
relative to the construction of the copra dryer and
store.
Thus, for purposes of indemnity, Article 448 of the New
Civil Code should be applied. 32 However, the copra
dryer and the store, as determined by the trial
court and respondent court, are transferable in
nature. Thus, it would not fall within the
coverage of Article 448. As the noted civil law
authority, Senator Arturo Tolentino, aptly explains: "To
fall within the provision of this Article, the construction
must be of permanent character, attached to the soil
with an idea of perpetuity; but if it is of a transitory
character or is transferable, there is no accession, and
the builder must remove the construction. The proper
remedy of the landowner is an action to eject the
builder from the land." 33
The private respondents' action for recovery of
possession was the suitable solution to eject
petitioners from the premises.
Petition dismissed.
BALUCANAG VS. FRANCISCO
122 SCRA 344
FACTS: The petitioner bought a lot owned by Mrs.
Charvet which was then previously leased by the latter
to one Richard Stohner. The said lease contract
provided that the lessee may erect structures and
improvements which shall remain as lessee's property
and he may remove them at any time. It further
provided that should the lessee fail to remove the
same structures or improvements withing two months
after the expiration of the lease, the lessor may
remove them or cause them to be removed at the
expense of the lessee. Stohner made fillings on the
land and constructed a house. When he failed to pay
the rent, the petitioner, through counsel, sent Stohner
a demand letter ordering him to vacate the lot. The
lessee contended that he is a 'builder in good faith.'
5

ISSUE:Is the lessee a builder in good faith?
HELD: No, the lessee cannot be considered a builder in
good faith. The provision under Art. 448 of the New
Civil Code (Philippine) on a builder of good faith applies
only to the owner of the land who believes he is the
rightful owner thereof, but not to a lessee who's
interest in the land is derived only from a rental
contract. Neither can Stohner be considered a
'possessor in good faith'. A possessor in good faith is a
party who possesses property believing that he is its
rightful owner but discovers later on a flaw in his title
that could indicate that he might not be its legal owner.
It cannot apply to a lessee because he knows right
from the start that he is merely a lessee and not the
owner of the premises.
As a mere lessee, he introduces improvements
to the property at his own risk such that he cannot
recover from the owner the reimbursements nor he has
any right to retain the premises until reimbursements.
What applies in this case is Art. 1678 (NCC) which
provides that, " 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 1/2 of
the value of the improvements at the time. Should the
lessor refuse to reimburse said amount, the lessee may
remove 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."
Kilario v. CA
G.R. No. 134329. January 19, 2000
Respondent Silverio Pada filed an ejectment case
against sps. Kilario. The latter occupies a portion of the
intestate estate of Jacinto Pada, Grandfather of Silverio.
The Kilarios have been living therein since 1960 by
sheer tolerance. When Jacinto Pada dies, his heirs
entered into extrajudicial partition of his estate in
1951. As a result
thereof, lot 5581 was allocated to Ananias and
Marciano who became co-owners of said lot.
Ananias died and his daughter succeeded in his right
as co-owner. Eventually, Juanita sold her right in the
co-ownership to Engr. Paderes. Mariaon the other hand,
heir of Marciano, sold her share to her cousin
respondent Silverio Pada. The latter
demanded sps. Kilario to vacate but the sps.
refused.On June 1995, a complaint for ejectment was
filed against sps. Kilario. On July1995 a deed of
donation in their favor was executed by heirs
of Amador Pada.
ISSUE: Whether or not the partition was valid
The extrajudicial partition of the estate of Jacinto Pada
among his heirs made in 1951 is valid, albeit executed
in an unregistered private document. No law requires
partition among heirs to be in writing and
be registered in order to be valid. The object of
registration is to serve as constructive notice to others.
It follows then that the intrinsic validity of partition not
executed with the prescribed formalities is not
undermined when no creditors are involved.
Without creditors to take into consideration, it is
competent for the heirs of an estate to enter into an
agreement for distribution thereof in a manner and
upon a plan different from those provided by the rules
from which, in the first place, nothing can be inferred
that a writing or other formality is essential for the
partition to be valid. The partition of inherited property
need not be embodied in a public document so as to be
effective as regards the heirs that participated therein.
The extrajudicial partition which the heirs of Jacinto
Pada executed voluntarily and spontaneously in 1951
has produced a legal status. When they discussed and
agreed on the division of the estate of Jacinto Pada, it is
presumed that they did so in furtherance of
their mutual interests. As such, their division is
conclusive, unless and until it is shown that there were
debts existing against the estate which had not been
paid. No showing, however, has been made of any
unpaid charges against the estate of Jacinto Pada.
Thus, there is no reason why the heirs should not be
bound by their voluntary acts.
The belated act of Concordia, Esperanza and Angelito,
who are the heirs of
Amador Pada, of donating the subject property to
petitioners after forty four (44) years
of never having disputed the validity of the 1951
extrajudicial partition that allocated the subject
property to Marciano and Ananias, produced no legal
effect. The donation made by his heirs to petitioners of
the subject property, thus, is void for they were not the
owners thereof. At any rate it is too late in the day for
the heirs of Amador Pada to repudiate the legal effects
of the 1951 extrajudicial partition as prescription and
laches have equally set in.Petitioners are estopped
from impugning the extrajudicial partition executed by
the heirs of Jacinto Pada after explicitly admitting in
their Answer that they had been occupying the subject
property since 1960 without ever paying any rental
as they only relied on the liberality and tolerance of the
Pada family. Their admissions are evidence of a high
order and bind them insofar as the character of their
possession of the subject property is concerned.
LUMUNGO V. USMAN
25 SCRA 255
FACTS:
Dominga Usman sold and transfers her rights
in and to the 3 lots in question to Jose Angeles. The
latter made the purchase with the knowledge that the
property was already in dispute by Atty. Usman,
6
husband of Dominga, and by the plaintiffs. Angeles,
upon taking possession of the land, planted the same
with coconuts, which, together with those already
planted by Dominga Usman, numbered about 3,000,
most of which are now fruit-bearing. In short, Angeles
was a purchaser and a builder in bad faith.
ISSUE:
Whether or not Angeles is entitled to reimbursement
for the coconuts tree he planted on the property in
litigation.
HELD:
No. It should be noted that said trees are
improvements, not "necessary expenses of
preservation," which a builder, planter or sower in bad
faith may recover under Arts. 452 and 546, first
paragraph, of the Civil Code. The facts and findings of
both the trial court and the Court of Appeals leave no
room for doubt that Jose Angeles was a purchaser and
a builder in bad faith. The provision applicable to this
case is, accordingly, Article 449 of the Civil Code, which
provides that, "he who builds, plants or sows in bad
faith on the land of another, loses what is built, planted
or sown without right to indemnity."
ART. 453
MUNICIPALITY OF OAS V. ROA
FACTS:
The Municipality brought the action for the
recovery of a tract of land in the pueblo of Oas,
claiming that it was a part of the public square of said
town, while Roa alleged that he was the owner of the
property. The defendant admitted in writing that he
knew that the land is owned by the Municipality and
that Jose Castillo, whom he bought the property did not
own the land. When Roa constructed a substantial
building on the property in question after he acquired
the property from Castillo, the Municipality did not
oppose the construction.
ISSUE:
Whether or not the municipality owns the land.
HELD:
Yes. The defendant was not a purchaser in good faith.
The plaintiff, having permitted the erection by the
defendant of a building on the land without objection,
acted in bad faith. The rights of the parties must,
therefore, be determined as if they both had acted in
good faith. To the case are applicable those provisions
of the Civil Code which relate to the construction by
one person of a building upon land belonging to
another. Article 364 (now Art.453) of the Civil Code is
as follows: "When there has been bad faith, not only on
the part of the person who built, sowed, or planted on
another's land, but also on the part of the owner of the
latter, the rights of both shall be the same as if they
had acted in good faith. The Supreme declared that
the Municipality is the owner of the land and that it has
the option of buying the building thereon, which is the
property of the defendant, or of selling to him the land
on which it stands.
MWSS V. CA, CITY OF DAGUPAN,
FACTS:
The City of Dagupan (CITY) filed a complaint against
the former National Waterworks and Sewerage
Authority (NAWASA), now the Metropolitan Waterworks
and Sewerage System (MWSS), for recovery of the
ownership and possession of the Dagupan Waterworks
System. NAWASA interposed as one of its special
defenses R.A. 1383 which vested upon it the
ownership, possession and control of all waterworks
systems throughout the Philippines and as one of its
counterclaims the reimbursement of the expenses it
had incurred for necessary and useful improvements
amounting to P255,000.00. Judgment was rendered by
the trial court in favor of the CITY on the basis of a
stipulation of facts. The trial court found NAWASA to be
a possessor in bad faith and hence not entitled to the
reimbursement claimed by it.
ISSUE:
Whether or not MWSS has the right to remove all the
useful improvements introduced by NAWASA to the
Dagupan Waterworks System, notwithstanding the fact
that NAWASA was found to be a possessor in bad faith?
HELD: No.
Article 449 of the Civil Code of the Philippines
provides that "he who builds, plants or sows in
bad faith on the land of another, loses what is
built, planted or sown without right to
indemnity." As a builder in bad faith, NAWASA
lost whatever useful improvements it had made
without right to indemnity. Moreover, under
Article 546 of said code, only a possessor in good
faith shall be refunded for useful expenses with
the right of retention until reimbursed; and
under Article 547 thereof, only a possessor in
good faith may remove useful improvements if
this can be done without damage to the principal
thing and if the person who recovers the
possession does not exercise the option of
reimbursing the useful expenses. The right given
a possessor in bad faith is to remove
improvements applies only to improvements for
pure luxury or mere pleasure, provided the thing
suffers no injury thereby and the lawful
possessor does not prefer to retain them by
paying the value they have at the time he enters
into possession (Article 549).
7
 FILIPINAS COLLEGES INC. vs. MARIA GARCIA
TIMBANG, ET AL.
[G.R. No. L-1281, September 29, 1959]
FACTS:
This is an appeal taken from an order of the Court of
First Instance of Manila dated May 10, 1957 (a)
declaring the Sheriff's 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
Sheriff's sale; (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 (c) 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/S:
1. 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?
2. Whether or not the appellants, as owner of the
land, may seek recovery of the value of their
land by a writ of execution; levy the house of
the builder and sell it in public auction.
RULING: NO, THE APPELLANTS CONTENTION IS
SUPERFLUOUS. 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. 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. The remedy
left to the parties in such eventuality where the builder
fails to pay the value of the land, though the Code is
silent on this Court, 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.
This was ruled in the case of Miranda vs. Fadullon, et
al., 97 Phil., 801. 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. The second contention was
without merit. 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. With respect to
the order of the court declaring appellee Filipinas
Colleges, Inc. part owner of the land to the extent of
the value of its personal properties sold at public
auction in favor of the Timbang, this Court likewise
finds the same as justified, for such amount represents,
in effect, a partial payment of the value of the land.
Failure of the Timbang spouses to pay to the Sheriff or
to Manila Gervacio Blas said sum of P5,750.00 within
fifteen (15) days from notice of the final judgment, an
order of execution shall issue in favor of Maria Gervasio
Blas to be levied upon all properties of the Timbang
spouses not exempt from execution for the satisfaction
of the said amount.
Heirs of Navarro v. IAC
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. This
application was denied on January 15, 1953. So was his
motion for reconsideration. Subsequently, petitioners'
predecessor-in-interest, also now deceased, 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 the application was denied, eventually however
the grant was given. Pascual claimed that this land is
an accretion to his property, 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. On November 10, 1975, the courta
8
quorendered judgment finding the subject property to
be foreshore land and, being a part of the public
domain, it cannot be the subject of land registration
proceedings. On appeal, the respondent court reversed
the findings of the courta quoand granted the petition
for registration of the subject property but excluding
certain areas. A motion for reconsideration was filed by
in the CA but the same was denied. Anchoring their
claim of ownership on Article 457 of the Civil Code,
petitioners vigorously argue that the disputed 14-
hectare land is an accretion caused by the joint action
of the Talisay and Bulacan Rivers which run their
course on the eastern and western boundaries,
respectively, of petitioners' own tract of land.
Issue:
Whether or not the petitioners can rightfully claim the
land under the principle of accretion
Held:
The petitioners claim is misplaced. The principle of
accretion is only applicable to owners whose estates
are adjacent to rivers as stated in Article 457 of the
Civil Code. The disputed land 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. As such, the
applicable law is not Article 457 of to Civil Code but
Article 4 of the Spanish Law of Waters of 1866. 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. As part of
the public domain, the herein disputed land is intended
for public uses, and "so long as the land in litigation
belongs to the national domain and is reserved for
public uses, it is not capable of being appropriated by
any private person, except through express
authorization granted in due form by a competent
authority."Only the executive and possibly the
legislative departments have the right and the power
to make the declaration that the lands so gained by
action of the sea is no longer necessary for purposes of
public utility or for the cause of establishment of
special industries or for coast guard
services.Petitioners utterly fail to show that either the
executive or legislative department has already
declared the disputed land as qualified, under Article 4
of the Spanish Law of Waters of 1866, to be the
property of petitioners as owners of the estates
adjacent thereto.
MENESES vs. CA et al
FACTS: On March 1, 1977, Darum, then the District
Land Officer of Los Baos, Laguna, issued to Pablito
Meneses 2 Free Patent and 2 OCT covering lots located
in Los Baos, Laguna.
Pablito acquired said property from Bautista through a
Deed of Waiver and Transfer of Rights executed in 1975
in consideration of Bautistas love and affection for foreshore land as claimed by the Director of Lands, it is
and some monetary obligations in favor of Meneses.
After the execution of said document, Meneses took
possession of the land, introduced improvements
thereon, declared the land as his own for tax purposes
and paid the corresponding realty taxes. In turn,
Bautista acquired the land from his aunt. He had been
occupying the land since 1956.
On the other hand, the Quisumbing family traces
ownership of their land as far back as 1919 when their
matriarch was issued an OCT covering a lot, with the
Laguna de Bay as its northwestern boundary. The same
parcel of land was registered on 1973 under a TCT in
the names of her heirs, all surnamed Quisumbing.
The Quisumbings applied for registration and
confirmation of title over an additional area which had
gradually accrued to their property by the natural
action of the waters of Laguna de Bay. The CFI of Bian
confirmed the Quisumbings title thereto.
In 1979, the Quisumbings filed a case before the CFI of
Calamba against Lorenzo and Pablito Meneses, Darum
and Almendral for nullification of the free patents and
titles issued to Pablito Meneses. They alleged
that Lorenzo Menesis, then the Mayor of Los Baos,
using his brother Pablito as a tool and dummy,
illegally occupied their private accretion land and
confederating with District Land Officer Darum and
Land Inspector Almendral, obtained free patents and
OCTs to the land.
In 1984, the trial court rendered the decision finding
that the lands registered by the Meneses brothers are
accretion lands to which the Quisumbings have a valid
right as owners of the riparian land to which nature had
gradually deposited the disputed lots. (The lots
occupied by Meneses, as found by the court, are to be
accretion lands forming parts of the bigger accretion
land owned by the Quisumbings. )
Meanwhile, the Meneses brothers and Darum appealed
the to the CA, which affirmed in toto the lower
courts decision.The defendants-appellants filed two
MRs of the CA decision but it was denied, hence this
petition for review on certiorari.
ISSUE: WON
1. The lands in question were not accretion lands but
lands of the public domain
2. Conspiracy to commit fraud, deceit and bad faith
attended the issuance of the free patent and titles to
Pablito Meneses; and
HELD: WHEREFORE, the petition is DENIED. The
Decision CA is AFFIRMED
While the lots occupied by Villamor and Lanuzo may
not be the very same lots petitioners are claiming here,
the two cases refer to the same accretion lands
northwest of the original land owned by the
Quisumbings.
The submersion in water of a portion of the land in
question is due to the rains falling directly on or
flowing into Laguna de Bay from different sources.
Since the inundation of a portion of the land is not due
to flux and reflux of tides it cannot be considered a
foreshore land. The land sought to be registered not
being part of the bed or basin of Laguna de Bay, nor a
not a public land and therefore capable of registration
as private property provided that the applicant proves
that he has a registerable title.
Additionally, the provision of the law on waters will
govern in determining the natural bed or basin of the
9
lake. And accordingly, to Art. 84 of the Law of Waters of
August 3, 1866:
Accretions deposited gradually upon land contiguous to
creeks, streams, rivers and lakes by accessions or
sediments from the waters thereof, belong to the
owners of such lands.
As pointed out by the lower court, no act of
appropriation is necessary in order to acquire
ownership of the alluvial formation as the law does not
require the same.
2. As found by the CA, petitioners conspired in the
approval and grant of the free patents heirs
Quisumbing. Such fraud was confirmed by this Court in
Meneses v. People, which held the petitioners therein
liable for violation of the Anti-Graft and Corrupt
Practices Act in the issuance of the same free patents
and titles. In due course, the Sandiganbayan rendered
a decision finding the defendants guilty as charged.
The judgment of conviction was affirmed.
NOTES:
1. Accretion as a mode of acquiring property under
Article 457 of the Civil Code requires the concurrence
of these requisites:
(1) that the deposition of soil or sediment be gradual
and imperceptible;
(2) that it be the result of the action of the waters of
the river (or sea); and
(3) that the land where accretion takes place is
adjacent to the banks of rivers (or the sea coast).
2. The task of fixing the amount of damages is
primarily with the trial court. While it is the appellate
courts duty to review the same, a reduction of the
award of damages must pass the test of
reasonableness. The CA can only modify or change the
amount awarded as damages when they are palpably
or scandalously and reasonably excessive.
3. A public official is by law not immune from damages
in his personal capacity for acts done in bad faith
which, being outside the scope of his authority, are no
longer protected by the mantle of immunity for official
actions.
Advertis
Grande v. Court of Appeals
SUMMARY: Owners of a parcel of land filed a suit
for quieting of title and recovery of possession
over a portion of property that was added to the
original parcel of land via accretion. The
defendants claim ownership by acquisitive
prescription, being in open, continuous and
undisturbed possession of the property for over
30 years prior to the filing of this case.
DOCTRINE: Alluvial deposits become part of the
property to which it becomes attached, and
ownership of the alluvial portion belongs to the
owner of the attached property. However, this
land is not automatically covered by the Torrens
title of the land owned prior to the accretion,
and is considered unregistered land, making it
susceptible to acquisitive prescription.
FACTS: Petitioners Ignacio, Eulogia, Alfonso, Eulalia,
and Sofia Grande filed a suit for quieting of title and
recovery of possession over a parcel of land that came
about through alluvial deposits from the Cagayan River.
Their original lot, defined in OCT No. 2982 (issued in
1934) provides their northeastern boundary as the
Cagayan River, from a survey conducted in 1930. It is
to this boundary that the accretion occurred. The
Grandes allege that they have been in possession of
this property until 1948, when defendants Domingo
and Esteban Calalung entered the land on a claim of
ownership. On the issue of filing the case only in 1958,
the Grandes claim they could not acquire a copy of
their title as they could not afford a surveyor.
The Calalungs, on the other hand, claim to have been
in open, continuous, and undisturbed possession of the
contested property since 1933, and argue that they are
now the owners of the property through acquisitive
prescription, since the case was filed more than 30
years after they first took possession of the property.
The Calalungs had declared the property for taxation
purposes in 1944, and again in 1948 when the
municipality changed its name. The Calalungs allege
that the only reason the Grandes filed a case was
because a survey commissioned by the Calalungs
inadvertently included a part of the property covered
by OCT No. 2982 - property which they readily ceded
back to the Grandes in 1958. Two owners of adjoining
lots, Laman and Bacani, both testified in support of the
Calalungs.
The RTC ruled in favor of the Grandes, but the Court of
Appeals reversed the decision below and upheld the
Calalungs argument on acquisitive prescription.
ISSUES/HELD: WON the contested property can be
acquired by prescription
RATIO: The Supreme Court ruled in favor of the
Calalungs and upheld the decision of the Court of
Appeals.
The Supreme Court acknowledged that by Article 457
of the New Civil Code and Article 366 of the Old Civil
Code, the Grandes are the owners of the alluvial
property. However, this does not operate to
automatically include the alluvial property under OCT
No. 2892. While ownership is governed by the Civil
Code, imprescriptibility of registered land is provided in
the registration law. As the Grandes never sought to
have the alluvial property titled, it is considered
unregistered land.
10
The Supreme Court upheld the findings of the Court of
Appeals on the possession of the Calalungs of the
property since 1933-1934, openly, continuously and
adversely, under a claim of ownership up to the filing
of the action in 1958. The Court pointed out that it is
the provisions of Act No. 190, particularly Sec. 41, that
governs this case, since the provisions of the Old Civil
Code were not yet in effect. Sec. 41 provides an
acquisitive prescriptive period of only ten years,
meaning the Calalung acquired ownership as early as
1943-1944.
JAGUALING V. COURT OF APPEALS
194 SCRA 607
Facts:
A certain parcel of land is located in Sta. Cruz,
Tagoloan, Misamis Oriental with an area of 16,452 sq.
m., forming part of an island in a non-navigable river,
bounded by the Tagoloan River on the north, south,
and east and by the portion belonging to Vicente Neri
on the west.
Janita Eduave claims that she inherited the land from
her father, Felomino Factura, together with his co-heirs,
Reneiro Factura and Aldenora Factura, and acquired
sole ownership of the property by virtue of a Deed
of Extra Judicial Partition with sale. The land is declared
for tax purposes under Tax Declaration 26137 with an
area of 16,452 sq. m. Since the death of her father on 5
May 1949, Eduave had been in possession of the
property although the tax declaration remains in the
name of the deceased father. The entire land had an
area of 16,452 sq. m. appearing in the deed of
extrajudicial partition, while in tax declaration the area
is only 4,937 sq. m., and she reasoned out that she
included the land that was under water.
The land was eroded sometime in November 1964 due
to typhoon Ineng, destroying the bigger portion and
the improvements leaving only a coconut tree. In 1966
due to the movement of the river deposits on the land
that was not eroded increased the area to almost half a
hectare and in 1970 Eduave started to plant banana
trees.
In 1973, Maximo and Anuncita Jagualing asked her
permission to plant corn and bananas provided that
they prevent squatters to come to the area. Eduave
engaged the services of a surveyor who conducted a
survey and placed concrete monuments over the land.
Eduave also paid taxes on the land in litigation, and
mortgaged the land to the Luzon Surety and Co., for a
consideration of P6,000.00.
The land was the subject of a reconveyance case
between Janita Eduave vs. Heirs of Antonio Factura,
which was the subject of judgment by compromise in
view of the amicable settlement of the parties. The
heirs of Antonio Factura had ceded a portion of the land
with an area of 1,289 sq. m., to Janita Eduave in a
notarial document of conveyance, pursuant to the
decision of the CFI, after a subdivision of the lot 62 Pls-
799, and containing 1,289 sq. m. was designated as
Lot 62-A, and the subdivision plan was approved.
Eduave also applied for concession with the Bureau of
Mines to extract 200 m3 of grave, and after an ocular
inspection the permit was granted. Eduave, after
permit was granted, entered into an agreement with
Tagoloan Aggregates to extract sand and gravel, which
agreement was registered in the office of the Register
of Deeds. Maximo and Anuncita Jagualing assert that
they are the real owners of the land in litigation
containing an area of 18,000 sq. m. During the typhoon
Ineng in 1964 the river control was washed away
causing the formation of an island. Jagualing started
occupying the land in 1969, paid land taxes as
evidenced by tax declaration 26380 and tax receipts,
and tax clearances. Actual occupation of the land by
Jagualing included improvements and the house.
Rudy Gondo and Janita Eduave filed with the RTC
Misamis Oriental an action to quiet title and/or remove
a cloud over the property in question against Jagualing.
On 17 July 1987 the trial court dismissed the complaint
for failure of Eduave to establish by preponderance of
evidence their claim of ownership over the land in
litigation. The court found that the island is a delta
forming part of the river bed which the government
may use to reroute, redirect or control the course of the
Tagoloan River. Accordingly, it held that it was outside
the commerce of man and part of the public domain,
citing Article 420 of the Civil Code. As such it cannot be
registered under the land registration law or be
acquired by prescription. The trial court, however,
recognized the validity of Jagualings possession and
gave them preferential rights to use and enjoy the
property. The trial court added that should the State
allow the island to be the subject of private ownership,
the Jagualings have rights better than that of Eduave.
On appeal to the CA, the court found that the island
was formed by the branching off of the Tagoloan River
and subsequent thereto the accumulation of alluvial
deposits. Basing its ruling on Articles 463 and 465 of
the Civil Code, the CA reversed the decision of the trial
court, declared Eduave as the lawful and true owners
of the land subject of the case and ordered Jagualing to
vacate the premises and deliver possession of the land
to Eduave.
Issue:
Who between the one who has actual possession of an
island that forms in a non-navigable and non-floatable
river and the owner of the land along the margin
nearest the island, has the better right thereto?
Held:
The parcel of land is part of an island that formed in a
non-navigable and non-floatable river; from a small
mass of eroded or segregated outcrop of land, it
increased to its present size due to the gradual and
successive accumulation of alluvial deposits. The CA
did not err in applying Article 465 of the Civil Code.
Under this provision, the island belongs to the owner of
the land along the nearer margin as sole owner
thereof; or more accurately, because the island is
longer than the property of Eduave, they are deemed
ipso jure to be the owners of that portion which
corresponds to the length of their property along the
margin of the river.
Lands formed by accretion belong to the riparian
owner. This preferential right is, under Article 465, also
11
granted the owners of the land located in the margin
nearest the formed island for the reason that they are
in the best position to cultivate and attend to the
exploitation of the same. In fact, no specific act of
possession over the accretion is required. If, however,
the riparian owner fails to assert his claim thereof, the
same may yield to the adverse possession of third
parties, as indeed even accretion to land titled under
the Torrens system must itself still be registered.

There is no need to make a final determination

regarding the origins of the island, i.e., whether the
island was initially formed by the branching off or
division of the river and covered by Article 463 of the
Civil Code, in which case there is strictly no accession
because the original owner retains ownership, or
whether it was due to the action of the river under
Article 465, or whether it was caused by the abrupt
segregation and washing away of the stockpile of the
river control, which makes it a case of avulsion under
Article 459, as the case is not between parties as
opposing riparian owners contesting ownership over an
accession but rather between a riparian owner and the
one in possession of the island.

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