41. 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 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 FilipinasColleges, Inc. in the amount of P8,200.00 minus the sum of
P5,750.00mentioned in (a) above. The order appealed from is the result of threemotions 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 Blaswere 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.
Decision:
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 disagrees 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 appealable 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, apartial 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 this said amount.

42. Manotok Realty, Inc. vs Hon. Jose Tecson

Gr L-47475
August 19, 1988
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.
Decision:
The court ruled in the affirmative. When the judgement became final, it became incumbent
upon the court to issue the necessary writ of execution. The landowner cannot be denied of his
right to appropriate the building because it is an option given to him by law.
Furthermore, the buildings/improvements introduced father the filing of the complaint cannot
be held to be made in good faith. Since the improvements thereon has been gutted by fire, the
basis of the respondent’s right to retain the premises has already been extinguished. He
therefore, has no other choice but to deliver the property.
 43. Vicente Sto. Domingo Bernardo vs Catalino Bataclan
Gr L-44606
November 28, 1938
Facts:
Bernardo learned when he entered into the premises of the property purchased from Pastor
Samonte that the latter authorized Catalino Bataclan to make improvements thereon. In a civil
case to secure possession, the court ruled that Bataclan was a builder and possessor in good
faith and was entitled to reimbursement for the works and improvements,
The court gave the plaintiff 30 days within which to choose between the sale of the land or to
buy the works. Bernardo decided to sell the land to the defendant but the latter informed the
court that he is unable to pay the sum required. The court then awarded the respondent 30
days to purchase the land or else the property will be sold in a public auction.
In the auction sale, Toribio Teodoro was the highest bidder. The purchaser sought judicial
remedy for the possession of the property.
Issue:
Whether or not the defendant lost his right to retain the property pending payment for
indemnity.
Decision:
The court ruled that the right to retain the property has already been lost. Due to the failure
and inability of the defendant to pay the purchase price the subject property was sold in a
public auction which he himself asked for. Furthermore, he already received his share of the
purchase price. Therefore, the court find no reason to keep the property in the possession of
the defendant.

44. Heirs of Roman Durano, Sr. vs Spouses Uy, et al.

Gr 136456
October 24, 2000
Facts:
Congressman Ramon Durano, Sr, and son Ramon Durano III and the latter’s wife Elizabeth
Hotchkiss Durano (herein petitioners) filed a case for damages against respondents for allegedly
officiating a “hate campaign” against them by lodging complaints for invasion of the
respondents’ properties in Cahumayhumayan, Danao City. The complaints were filed with the
Police Department of Danao and the Office of the President. The said complaints were
investigated by the Department of Justice through the City Fiscal and the Philippine
Constabulary who later on dismissed the complaints for being baseless. The petitioners added
that the respondents spread false rumors and tales which subjected them to public contempt
and ridicule.
The respondents made a counterclaim demanding the return of their properties claiming that in
August 1970, they received mimeographed notices signed by Durano Sr. informing them that
the land they occupied is owned by Cebu Portland Cement Company and was purchased by
Durano & Co for immediate turn over. However, before many of them could even receive the
notice, employees of Durano & Co. proceeded to bulldoze the land, destroying plantings and
improvements made therein. On September 15, 1970, Durano & Co. sold the subject land to
Durano III. Claiming that during that time, they were not able to find local relief as Durano Sr.’s
wife was the Mayor at that time causing them to send a letter to then President Marcos.
On April 22, 1975, petitioners moved to dismiss their own complaint – granted by the RTC
without prejudice to the counterclaim of the respondents. According to the petitioners, the
property originally belonged to Cepoc and was sold to Durano & Co., and later on to Durano III.
But Durano III claimed that he only learned of the bulldozing when complaints were already
filed by the respondents. He further claimed that they dismissed the complaints against the
respondents as a form of reconciliation with them but the latter still pursued their counter
claim. According to him, the properties of the claimants, except for Sepulveda Uy, daughter of
former Mayor of Danao, were occupants of the said property and Durano & Co. purchased the
adjacent property for mining coal.
The RTC ordered in their ruling that the petitioners are to pay damages to the respondent and
the return of the properties of Venancia Repaso, Hermogenes Tito, and Marcelino Gonzales as
well as the property of Angeles Sepulveda Uy with respect to the are found outside of the
Cepoc property. On appeal, the CA affirmed the decision but modified the judgement ordering
the return of all properties to the respondents.
Issue:
Whether or not the respondents are builders in good faith.
Decision:
The court ruled that the records indicated that the respondents’ possession has already ripened
into ownership by acquisitive prescription. Acquisitive prescription is acquired by possession in
good faith with just tittle for a period of ten years. One is considered in good faith when he is
not aware of any flaw in his tittle or mode of acquisition of the property and there is just title
when the adverse claimant came into possession of the property through one of the modes of
acquiring ownership provided by law.
In the case at bar, the respondents acquired the properties by purchase or inheritance and
ever since were in actual, continuous, open, and adverse possession. The records showed that
they were unaware of any claims over the properties until the notices given on August 1970.
The petitioners on the other hand cannot claim good faith. The validity of the certificates of
title obtained by them were doubted by the courts as there was a lack of registered title of
Cepoc and the deed of sale between Cepoc and Durano & Co. we’re not notarized and
therefore cannot be registered. Furthermore, a buyer could not have been ignorant that the
property they bought were adversely possessed by the respondents nor did they investigate
the property – the petitioners cannot be held to be buyers in good faith, nor builders in good
faith.
Under the Article 449 of the New Civil Code, he who builds etc. in bad faith on the land of
another, loses what is built etc. without right of indemnity. Furthermore, Article 450 gives the
landowner over which something was built in bad faith the power to demolish the works to
replace the property in their former condition at the expense of the builder. And Article 451
gives him the right to damages.
 45. Eden Ballatan vs Court of Appeals
Gr 1256832
March 2, 1999
Facts:
When she was constructing a house, Eden Ballatan found out that Winston Go was
encroaching upon her land. Go, on the other hand, claims that the fence and pathway were
built within the parameters of his father’s lot. In a survey, it was also discovered that Ballatan’s
lot decreased while that of Li Ching Yao increased.
Ballatan instituted a case against Go who later on filed a third party complaint against Li Ching
Yao. The court ordered Go to vacate the property and demolish the construction made therein
and to pay Ballatan for damages. On appeal, the CA modified the decision ordering Go to pay
Ballatan for the amount of the land encroached and for Li Ching Yao to pay Go for the the
portion of the lot encroached.
Issue:
Whether or not Go is a builder in Good faith.
Decision:
The court ruled that both Li Ching Yao and Winston Go are petitioners in good faith because
there was no evidence showing the contrary, On the other hand, Li Ching Yao was found to
have constructed his house before any of the parties involved and had no notice of any
encroachment o adjoining lands. Good faith is presumed and it is upon one claiming bad faith
to prove the contrary.
Being builders in good faith, the respondents depend on the option granted to the landowner
by Article 448 of the civil code.