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SARMINETO, petitioner,
vs. HON. ENRIQUE A. AGANA, District Judge, Court of First Instance
of Rizal, Seventh Judicial District, Branch XXVIII, Pasay City, and
SPOUSES
ERNESTO
VALENTINO
and
REBECCA
LORENZOVALENTINO,respondents. G.R. No. L-57288
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 motherin-law who, having stated they could build on the property, could
reasonably be expected to later on give them the LAND.
This Petition for certiorari questions a March 29, 1979 Decision rendered by
the then Court of First Instance of Pasay City. The Decision was one made
on memoranda, pursuant to the provisions of RA 6031, and it modified, on
October 17, 1977, a judgment of the then Municipal Court of Paranaque,
Rizal, in an Ejectment suit instituted by herein petitioner Leonila
SARMIENTO against private respondents, the spouses ERNESTO Valentino
and Rebecca Lorenzo. For the facts, therefore, we have to look to the
evidence presented by the parties at the original level.
It appears that while ERNESTO was still courting his wife, the latter's
mother had told him the couple could build a RESIDENTIAL HOUSE on a lot
of 145 sq. ms., being Lot D of a subdivision in Paranaque (the LAND, for
short). In 1967, ERNESTO did construct a RESIDENTIAL HOUSE on the LAND
at a cost of P8,000.00 to P10,000.00. It was probably assumed that the
wife's mother was the owner of the LAND and that, eventually, it would
somehow be transferred to the spouses.
It subsequently turned out that the LAND had been titled in the name of
Mr. & Mrs. Jose C. Santo, Jr. who, on September 7 , 1974, sold the same to
petitioner SARMIENTO. The following January 6, 1975, SARMIENTO asked
ERNESTO and wife to vacate and, on April 21, 1975, 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. The figures were not questioned by SARMIENTO.
The Municipal Court found that private respondents had built the
RESIDENTIAL HOUSE in good faith, and, disregarding the testimony of
ERNESTO, that it had a value of P20,000.00. It then ordered ERNESTO and
wife to vacate the LAND after SARMIENTO has paid them the mentioned
sum of P20,000.00.
The Ejectment suit was elevated to the Court of First Instance of Pasay
where, after the submission of memoranda, said Court rendered a
modifying Decision under Article 448 of the Civil Code. SARMIENTO was
required, within 60 days, to exercise the option to reimburse ERNESTO and
wife the sum of 40,000.00 as the value of the RESIDENTIAL HOUSE, or the
option to allow them to purchase the LAND for P25,000.00. SARMIENTO did
not exercise any of the two options within the indicated period, and
ERNESTO was then allowed to deposit the sum of P25,000.00 with the
Court as the purchase price for the LAND. This is the hub of the
controversy. SARMIENTO then instituted the instant certiorari proceedings.
GANCAYCO, J.:
In this appeal from the decision of the Court of First Instance (CFI) of Cebu,
certified to this Court by the Court of Appeals on account of the question of
law involved, the sole issue is the applicability of the provisions of Article
448 of the Civil Code relating to a builder in good faith when the property
involved is owned in common.
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, situated at the corner
of F. Flores and Cavan Streets, Cebu City covered by TCT No. 61850. 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.
In solving the issue the trial court held as follows:
The Court believed that the plaintiffs cannot be obliged to
pay for the value of the portion of the defendants' house
which has encroached an area of five (5) sq. meters of the
land alloted to them. The defendants cannot also be
obliged to pay for the price of the said five (5) square
meters. The rights of a builder in good faith under Article
448 of the New Civil Code does (sic) not apply to a case
where one co-owner has built, planted or sown on the land
owned in common. "Manresa agreeing with Sanchez
Roman, says that as a general rule this article is not
applicable because the matter should be governed more
by the provisions on co-ownership than on accession.
Planiol and Ripert are also of the opinion that this article is
not applicable to a co-owner who constructs, plants or
sows on the community property, even if the land where
the construction, planting or sowing is made is a third
person under the circumstances, and the situation is
governed by the rules of co-ownership. Our Court of
Appeals has held that this article cannot be invoked by one
co-owner against another who builds, plants or sows upon
their land, since the latter does not do so on land not
belonging to him. (C.A.), O.G. Supp., Aug. 30, 194, p. 126).
In the light of the foregoing authorities and considering
that the defendants have expressed their conformity to the
partition that was made by the commissioner as shown in
the sketch plan attached to the commissioner's report, said
defendants have no other alternative except to remove
and demolish part of their house that has encroached an
area of five (5) sq. meters of the land allotted to the
plaintiffs.
WHEREFORE, judgment is hereby rendered assigning Lot
1161-A with an area of thirty (30) sq. meters to the
plaintiffs spouses Concepcion Fernandez Abesia, Lourdes
Fernandez Rodil, Genaro Fernandez and Dominga A.
Fernandez, in the respective metes and bounds as shown
in the subdivision sketch plan attached to the
Commissioner's Report dated may 29, 1976 prepared by
the Commissioner, Geodetic Engineer Espiritu Bunagan.
Further, the defendants are hereby ordered at their
expense to remove and demolish part of their house which
has encroached an area of five (5) square meters from Lot
1161-A of the plaintiffs; within sixty (60) days from date
hereof and to deliver the possession of the same to the
plaintiffs. For the Commissioner's fee of P400.00, the
defendants are ordered to pay, jointly and severally, the
sum of P133.33 and the balance thereof to be paid by the
plaintiffs. The costs of suit shall be paid by the plaintiffs
and the defendants in the proportion of two-thirds (2/3)
and one-third (1/3) shares respectively. A certified copy of
this judgment shall be recorded in the office of the Register
of Deeds of the City of Cebu and the expense of such
recording shall be taxed as a part of the costs of the action.
Hence, this appeal interposed by the defendants with the following
assignments of errors:
I
THE TRIAL COURT ERRED IN NOT APPLYING THE RIGHTS OF
A BUILDER IN GOOD FAITH UNDER ART. 448 OF THE NEW
CIVIL CODE TO DEFENDANTS-APPELLANTS WITH RESPECT
TO THAT PART OF THEIR HOUSE OCCUPYING A PROTION OF
THE LOT ASSIGNED TO PLAINTIFFS-APPELLEES.
II
THE TRIAL COURT ERRED IN ORDERING DEFENDANTSAPPELLANTS TO REMOVE AND DEMOLISH AT THEIR
EXPENSE, THAT PART OF THEIR HOUSE WHICH HAS
ENCROACHED ON AN AREA OF FIVE SQUARE METERS OF
LOT 1161-A OF PLAINTIFFS-APPELLEES.
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.
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. 1
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. Manresa and Navarro Amandi agree
that the said provision of the Civil Code may apply even when there was
co-ownership if good faith has been established. 2
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.
WHEREFORE, the decision appealed from is hereby MODIFIED by ordering
plaintiff to indemnify defendants for the value of the Id portion of the
house of defendants in accordance with Article 546 of the Civil Code, if
plaintiffs elect to appropriate the same. Otherwise, the defendants shall
pay the value of the 5 square meters of land occupied by their house at
such price as may be agreed upon with plaintiffs and if its value exceeds
the portion of the house that defendants built thereon, the defendants may
choose not to buy the land but defendants must pay a reasonable rental
for the use of the portion of the land of plaintiffs As may be agreed upon
between the parties. In case of disagreement, the rate of rental shall be
determined by the trial court. Otherwise, defendants may remove or
demolish at their own expense the said portion of their house. No costs.
SO ORDERED.
FLORENCIO
IGNAO, petitioner,
vs.
HON. INTERMEDIATE APPELLATE COURT, JUAN IGNAO, substituted
by his Legal Heirs, and ISIDRO IGNAO, respondents.
Dolorfino
and
Dominguez
Law
Offices
for
petitioner.
Ambrosio Padilla, Mempin & Reyes Law Offices for private respondents.
FERNAN, C.J.:
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.
The antecedent facts are as follows:
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 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. 1
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, docketed as Civil Case No.
2662. 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 in Civil Case No. N-1681.
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, 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
Furthermore, the trial court stated that pursuant to Article 448 of the Civil
Code, the owner of the land (Florencio) should have the choice to either
appropriate that part of the house standing on his land after payment of
indemnity or oblige the builders in good faith (Juan and Isidro) to pay the
price of the land. However, the trial court observed that based on the facts
of the case, it would be useless and unsuitable for Florencio to exercise the
first option since this would render the entire houses of Juan and Isidro
worthless. The trial court then applied the ruling in the similar case
of Grana vs. Court of Appeals, 4 where the Supreme Court had advanced a
more "workable solution". 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:
WHEREFORE, judgment is hereby rendered in favor of the
defendants and
(a) Ordering the plaintiff Florencio Ignao to sell to the defendants
Juan and Isidro Ignao that portion of his property with an area of
101 square meters at P40.00 per square meter, on which part the
defendants had built their houses; and
(b) Ordering the said plaintiff to execute the necessary deed of
conveyance to the defendants in accordance with paragraph (a)
hereof.
Without pronouncement as to costs.
Hence the instant petition for review which attributes to the Appellate
Court the following errors:
1. That the respondent Court has considered 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.
2. That, granting for the sake of argument that Art. 448 . . . is
applicable, the respondent Court has adjudged the working
solution suggested in Grana and Torralba vs. CA. (109 Phil. 260),
which is just an opinion by way of passing, and not the judgment
rendered therein, which is in accordance with the said provision of
the Civil Code, wherein the owner of the land to buy (sic) the
portion of the building within 30 days from the judgment or sell the
land occupied by the building.
3. That, granting that private respondents could buy the portion of
the land occupied by their houses, the price fixed by the court is
unrealistic and pre-war price. 7
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 1/8 share 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 (66.75 square meters) each of the land or a total of
133.5 square 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 alloted 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
cited in Eusebio vs. Intermediate Appellate Court, 8 "an undivided estate is
co-ownership by the heirs."
TECNOGAS
PHILIPPINES
MANUFACTURING
CORPORATION, petitioner, vs. COURT OF APPEALS (FORMER
SPECIAL
SEVENTEENTH
DIVISION)
and
EDUARDO
UY, respondents.
DECISION
PANGANIBAN, J.:
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-ininterest, encroached on a portion of the lot owned by private
respondent. What are the rights and obligations of the parties? 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? Does petitioner succeed into the good faith or bad
faith of his predecessor-in-interest which presumably constructed the
building?
These are the questions raised in the petition for review of the
Decision[1] dated August 28, 1992, in CA-G.R. CV No. 28293 of respondent
Court[2] where the disposition reads:[3]
WHEREFORE, premises considered, the Decision of the Regional Trial Court
is hereby reversed and set aside and another one entered 1. Dismissing the complaint for lack of cause of action;
2. Ordering Tecnogas to pay the sum of P2,000.00 per month as reasonable
rental from October 4, 1979 until appellee vacates the land;
3. To remove the structures and surrounding walls on the encroached area;
4. Ordering appellee to pay the value of the land occupied by the twostorey building;
5. Ordering appellee to pay the sum of P20,000.00 for and as attorneys
fees;
6. Costs against appellee.
The Facts
The facts are not disputed. Respondent Court merely reproduced the
factual findings of the trial court, as follows:[5]
That plaintiff (herein petitioner) which is a corporation duly organized and
existing under and by virtue of Philippine laws is the registered owner of a
parcel of land situated in Barrio San Dionisio, Paraaque, Metro Manila
known as Lot 4331-A (should be 4531-A) of Lot 4531 of the Cadastral
Survey of Paraaque, Metro Manila, covered by Transfer Certificate of Title
No. 409316 of the Registry of Deeds of the Province of Rizal; that said land
was purchased by plaintiff from Pariz Industries, Inc. in 1970, together with
all the buildings and improvements including the wall existing thereon; that
the defendant (herein private respondent) is the registered owner of a
parcel of land known as Lot No. 4531-B of Lot 4531 of the Cadastral Survey
of Paraaque, LRC (GLRO) Rec. No. 19645 covered by Transfer Certificate of
Title No. 279838, of the Registry of Deeds for the Province of Rizal; that
said land which adjoins plaintiffs land was purchased by defendant from a
certain Enrile Antonio also in 1970; that in 1971, defendant purchased
another lot also adjoining plaintiffs land from a certain Miguel Rodriguez
and the same was registered in defendants name under Transfer Certificate
of Title No. 31390, of the Registry of Deeds for the Province of Rizal; that
portions of the buildings and wall bought by plaintiff together with the land
from Pariz Industries are occupying a portion of defendants adjoining land;
that upon learning of the encroachment or occupation by its buildings and
wall of a portion of defendants land, plaintiff offered to buy from defendant
that particular portion of defendants land occupied by portions of its
buildings and wall with an area of 770 square meters, more or less, but
defendant, however, refused the offer. In 1973, the parties entered into a
private agreement before a certain Col. Rosales in Malacaang, wherein
plaintiff agreed to demolish the wall at the back portion of its land thus
giving to defendant possession of a portion of his land previously enclosed
by plaintiffs wall; that defendant later filed a complaint before the office of
Municipal Engineer of Paraaque, Metro Manila as well as before the Office
of the Provincial Fiscal of Rizal against plaintiff in connection with the
encroachment or occupation by plaintiffs buildings and walls of a portion of
its land but said complaint did not prosper; that defendant dug or caused
to be dug a canal along plaintiffs 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 defendants wife for the crime of malicious mischief;
that while trial of the case was in progress, plaintiff filed in Court a formal
proposal for settlement of the case but said proposal, however, was
ignored by defendant.
After trial on the merits, the Regional Trial Court [6] of Pasay City,
Branch 117, in Civil Case No. PQ-7631-P, rendered a decision dated
December 4, 1989 in favor of petitioner who was the plaintiff therein. The
dispositive portion reads:[7]
WHEREFORE, judgment is hereby rendered in favor of plaintiff and against
defendant and ordering the latter to sell to plaintiff that portion of land
owned by him and occupied by portions of plaintiffs buildings and wall at
the price of P2,000.00 per square meter and to pay the former:
The Issues
The petition raises the following issues: [8]
(A)
A
The time when to determine the good faith of the builder under Article 448
of the New Civil Code, is reckoned during the period when it was actually
being built; and in a case where no evidence was presented nor introduced
as to the good faith or bad faith of the builder at that time, as in this case,
he must be presumed to be a builder in good faith, since bad
faith cannot be presumed.[9]
B.
In a specific boundary overlap situation which involves a builder in good
faith, as in this case, it is now well settled that the lot owner, who builds on
the adjacent lot is not charged with constructive notice of the technical
metes and bounds contained in their torrens titles to determine the exact
and precise extent of his boundary perimeter. [10]
C.
The respondent courts citation of the twin cases of Tuason & Co. v.
Lumanlan and Tuason & Co. v. Macalindong is not the judicial authority for
a boundary dispute situation between adjacent torrens titled lot owners, as
the facts of the present case do not fall within nor square with the involved
principle of a dissimilar case.[11]
lots, was ahead of the purchase by petitioner of the building and lot from
Pariz Industries; (2) the declaration of the General Manager of Tecnogas
that the sale between petitioner and Pariz Industries was not registered
because of some problems with China Banking Corporation; and (3) the
Deed of Sale in favor of petitioner was registered in its name only in the
month of May 1973.[16]
D.
Quite contrary to respondent Uys reasoning, petitioner Tecnogas continues
to be a builder in good faith, even if it subsequently built/repaired the
walls/other permanent structures thereon while the case a quowas pending
and even while respondent sent the petitioner many letters/filed cases
thereon.[12]
D. (E.)
The amicable settlement between the parties should be interpreted as a
contract and enforced only in accordance with its explicit terms,
and not over and beyond that agreed upon; because the courts do nothave
the power to create a contract nor expand its scope.[13]
E. (F.)
As a general rule, although the landowner has the option to choose
between: (1) buying the building built in good faith, or (2) selling the
portion of his land on which stands the building under Article 448 of the
Civil Code; the first option is not absolute, because an exception thereto,
once it would be impractical for the landowner to choose to exercise the
first alternative, i.e. buy that portion of the house standing on his land, for
the whole building might be rendered useless. The workable solution is for
him to select the second alternative, namely, to sell to the builder that part
of his land on which was constructed a portion of the house. [14]
Private respondent, on the other hand, argues that the petition is
suffering from the following flaws:[15]
1. It did not give the exact citations of cases decided by the Honorable
Supreme Court that allegedly contradicts the ruling of the Hon.
Court of Appeals based on the doctrine laid down in Tuason vs.
Lumanlan case citing also Tuason vs. Macalindong case (Supra).
2. Assuming that the doctrine in the alleged Co Tao vs. Chico case is
contradictory to the doctrine in Tuason vs. Lumanlan and Tuason
vs. Macalindong, the two cases being more current, the same
should prevail.
Further, private respondent contends that the following unmistakably point
to the bad faith of petitioner: (1) private respondents purchase of the two
Article 527 of the Civil Code, as already stated, taken together with the
disputable presumptions of the law on evidence. These presumptions
state, under Section 3 (a) of Rule 131 of the Rules of Court, that the person
is innocent of a crime or wrong; and under Section 3 (ff) of Rule 131, that
the law has been obeyed. In fact, private respondent Eduardo Uy himself
was unaware of such intrusion into his property until after 1971 when he
hired a surveyor, following his purchase of another adjoining lot, to survey
all his newly acquired lots. Upon being apprised of the encroachment,
petitioner immediately offered to buy the area occupied by its building -- a
species of conduct consistent with good faith.
In the second place, upon delivery of the property by Pariz Industries,
as seller, to the petitioner, as buyer, the latter acquired ownership of the
property. Consequently and as earlier discussed, petitioner is deemed to
have stepped into the shoes of the seller in regard to all rights of
ownership over the immovable sold, including the right to compel the
private respondent to exercise either of the two options provided under
Article 448 of the Civil Code.
Estoppel
Respondent Court ruled that the amicable settlement entered into
between petitioner and private respondent estops the former from
questioning the private respondents right over the disputed property. It
held that by undertaking to demolish the fence under said settlement,
petitioner recognized private respondents right over the property, and
cannot later on compel private respondent to sell to it the land since
private respondent is under no obligation to sell.[28]
We do not agree. Petitioner cannot be held in estoppel for entering
into the amicable settlement, the pertinent portions of which read: [29]
That the parties hereto have agreed that the rear portion of the fence that
separates the property of the complainant and respondent shall be
demolished up to the back of the building housing the machineries which
demolision (sic) shall be undertaken by the complainant at anytime.
That the fence which serve(s) as a wall housing the electroplating
machineries shall not be demolished in the mean time which portion shall
be subject to negotiation by herein parties.
From the foregoing, it is clear that petitioner agreed only to the
demolition of a portion of the wall separating the adjoining properties of
the parties -- i.e. up to the back of the building housing the
machineries. But that portion of the fence which served as the wall housing
the electroplating machineries was not to be demolished. Rather, it was to
be subject to negotiation by herein parties. The settlement may have
recognized the ownership of private respondent but such admission cannot
be equated with bad faith. Petitioner was only trying to avoid a litigation,
one reason for entering into an amicable settlement.
As was ruled in Osmea vs. Commission on Audit,[30]
A compromise is a bilateral act or transaction that is expressly
acknowledged as a juridical agreement by the Civil Code and is therein
dealt with in some detail. `A compromise, declares Article 2208 of said
Code, `is a contract whereby the parties, by making reciprocal
concessions, avoid a litigation or put an end to one already commenced.
xxx xxx xxx
The Civil Code not only defines and authorizes compromises, it in fact
encourages them in civil actions. Art. 2029 states that `The Court shall
endeavor to persuade the litigants in a civil case to agree upon some fair
compromise. x x x.
In the context of the established facts, we hold that petitioner did not
lose its rights under Article 448 of the Civil Code on the basis merely of the
fact that some years after acquiring the property in good faith, it learned
about -- and aptly recognized -- the right of private respondent to a portion
of the land occupied by its building. The supervening awareness of the
encroachment by petitioner does not militate against its right to claim the
status of a builder in good faith. In fact, a judicious reading of said Article
448 will readily show that the landowners exercise of his option can only
take place after the builder shall have come to know of the intrusion -- in
short, when both parties shall have become aware of it. Only then will the
occasion for exercising the option arise, for it is only then that both parties
will have been aware that a problem exists in regard to their property
rights.
land. In view of the impracticality of creating a state of forced coownership, the law has provided a just 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. It is the owner of the land who is authorized
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 213; Bernardo vs. Bataclan, 37 Off. Gaz. 1382; Co Tao vs.
Chan Chico, G. R. No. 49167, April 30, 1949; Article applied; see Cabral, et
al. vs. Ibanez [S.C.] 52 Off. Gaz. 217; Marfori vs. Velasco, [C.A.] 52 Off. Gaz.
2050).
The private respondents insistence on the removal of the encroaching
structures as the proper remedy, which respondent Court sustained in its
assailed Decisions, is thus legally flawed. This is not one of the remedies
bestowed upon him by law. It would be available only if and when he
chooses to compel the petitioner to buy the land at a reasonable price but
the latter fails to pay such price. [33] This has not taken place. Hence, his
options are limited to: (1) appropriating the encroaching portion of
petitioners building after payment of proper indemnity, or (2) obliging the
latter to buy the lot occupied by the structure. He cannot exercise a
remedy of his own liking.
Neither is petitioners prayer that private respondent be ordered to sell
the land[34] the proper remedy. While that was dubbed as the more
workable solution in Grana and Torralba vs. The Court of Appeals, et al.,
[35]
it was not the relief granted in that case as the landowners were
directed to exercise within 30 days from this decision their option to either
buy the portion of the petitioners house on their land or sell to said
petitioners the portion of their land on which it stands. [36] Moreover, in
Grana and Torralba, the area involved was only 87 square meters while this
case involves 520 square meters[37]. In line with the case of Depra vs.
Dumlao,[38] this case will have to be remanded to the trial court for further
proceedings to fully implement the mandate of Art. 448. It is a rule of
procedure for the Supreme Court to strive to settle the entire controversy
in a single proceeding leaving no root or branch to bear the seeds of future
litigation.[39]
Petitioner, however, must also pay the rent for the property occupied
by its building as prescribed by respondent Court from October 4, 1979,
but only up to the date private respondent serves notice of its option upon
petitioner and the trial court; that is, if such option is for private
respondent to appropriate the encroaching structure. In such event,
petitioner would have a right of retention which negates the obligation to
pay rent.[40] The rent should however continue if the option chosen is
compulsory sale, but only up to the actual transfer of ownership.
The award of attorneys fees by respondent Court against petitioner is
unwarranted since the action appears to have been filed in good
faith. Besides, there should be no penalty on the right to litigate. [41]
fifteen (15) days from and after the termination of the said
period fixed for negotiation, shall then fix the terms of the
lease provided that the monthly rental to be fixed by the Court
shall not be less than two thousand pesos (P2,000.00) per
month, payable within the first five (5) days of each calendar
month. The period for the forced lease shall not be more than
two (2) years, counted from the finality of the judgment,
considering the long period of time since 1970 that petitioner
has occupied the subject area. The rental thus fixed shall be
increased by ten percent (10%) for the second year of the
forced lease. Petitioner shall not make any further
constructions or improvements on the building. Upon
expiration of the two-year period, or upon default by petitioner
in the payment of rentals for two (2) consecutive months,
private respondent shall be entitled to terminate the forced
lease, to recover his land, and to have the portion of the
building removed by petitioner or at latters expense. The
rentals herein provided shall be tendered by petitioner to the
trial court for payment to private respondent, and such tender
shall constitute evidence of whether or not compliance was
made within the period fixed by the said court.
c) In any event, petitioner shall pay private respondent an
amount computed at two thousand pesos (P2,000.00) per
month as reasonable compensation for the occupancy of
private respondents land for the period counted from October
4, 1979, up to the date private respondent serves notice of its
option to appropriate the encroaching structures, otherwise up
to the actual transfer of ownership to petitioner or, in case a
forced lease has to be imposed, up to the commencement
date of the forced lease referred to in the preceding
paragraph;
d) The periods to be fixed by the trial court in its decision shall be
non-extendible, and upon failure of the party obliged to tender
to the trial court the amount due to the obligee, the party
entitled to such payment shall be entitled to an order of
execution for the enforcement of payment of the amount due
and for compliance with such other acts as may be required
by the prestation due the obligee.
No costs.
SO ORDERED.
CORTES, J.:
Petitioner
Restituto
Calma,
through
this
Petition
for
Review
on certiorari, seeks to set aside the decision of the Court of Appeals in CAG.R. SP. No. 10684 dated 26 February 1987 declaring null and void an order
of the Human Settlements Regulatory Commission (hereinafter referred to
as the COMMISSION) dated 30 September 1986 calling for the issuance of
a writ of execution to enforce its decision of 22 May 1985.
The antecedents of this case are as follows:
Sometime in August 1975, the spouses Restituto and Pilar Calma
purchased a lot in respondent Pleasantville Development Corporation's
(hereinafter referred to as PLEASANTVILLE) subdivision in Bacolod City,
known as City Heights Phase II. In 1976, they built a house on said lot and
established residence therein. Fabian and Nenita Ong also purchased from
PLEASANTVILLE a lot fronting that of the Calma spouses sometime in the
years 1979-1980, and constructed their own buildings where they resided
and conducted their business. On 25 April 1981, petitioner Calma wrote the
president of the Association of Residents of City Heights, Inc. (ARCHI)
complaining that the compound of the Ongs was being utilized as a lumber
yard and that a "loathsome noise and nervous developing sound"
emanating therefrom disturbed him and his family and caused them and
their son to suffer nervous tension and illness [Rollo, p. 58]. The president
of the association, in his reply, stated that the association's board had
referred the matter to Fabian Ong who had already taken immediate action
on petitioner's complaint, i.e., by ordering the transfer of the lumber
cutting machine and by instructing his laborers not to do any carpentry or
foundry works in the early morning or afternoon and in the evening.
Finding the measures taken by the association and Fabian Ong
unsatisfactory, petitioner on 17 June 1981 wrote and asked
PLEASANTVILLE, as its duty and obligation, to abate the nuisance
emanating from the compound of the Ong family. Failing to get an answer,
the Calma spouses filed a complaint for damages against the Ong spouses
No pronouncement as to costs.
SO ORDERED. [Rollo, pp. 38-39.]
Petitioner moved for reconsideration of the decision but the Court of
Appeals denied his motion. Hence, petitioner brought the instant petition
for review on certiorari seeking the reversal of the decision of the Court of
Appeals and the reinstatement of the COMMISSION'S decision.
1. The power to abate a nuisance, is not one of those
enumerated under P.D. No. 957, the Subdivision and
Condominium Buyers Protective Decree. However, as
pointed out by the Solicitor General before the Court of
Appeals, the COMMISSION has been specifically authorized
by Executive Order No. 648 dated February 7, 1981
(otherwise known as the "Charter of the Human
Settlements Regulatory Commission"), toIssue orders after conducting the appropriate investigation
for the cessation or closure of any use or activity and to
issue orders to vacate or demolish any building or structure
that it determines to have violated or failed to comply with
any of the laws, presidential decrees, letter of instructions,
executive orders and other presidential issuances and
directives being implemented by it, either on its own
motion or upon complaint of any interested party. [Sec, 5
(p).] **
At this point the Court finds it unnecessary to go into whether or not the
COMMISSION's order to PLEASANTVILLE to take measures for the
prevention and abatement of the nuisance complained of finds solid
support in this provision because, as found by the Court of Appeals, the
COMMISSION's conclusion that the activities being conducted and the
structures in the property of the Ongs constituted a nuisance was not
supported by any evidence. The Solicitor General himself, in his comment
filed in the Court of Appeals, admits that the decision of the COMMISSION
did not make any finding of a nuisance [CA Rollo, p. 93]. Apparently, on the
basis of position papers, the COMMISSION assumed the existence of the
nuisance, without receiving evidence on the matter, to support its order for
the prevention or abatement of the alleged nuisance.
Moreover, the spouses Ong, were not even party to the proceedings before
the COMMISSION which culminated in the order for the prevention or
abatement of the alleged nuisance. The parties before the COMMISSION
were petitioner and PLEASANTVILLE only, although the persons who would
be directly affected by a decision favorable to petitioner would be the Ong
spouses. Certainly, to declare their property or the activities being
conducted therein a nuisance, and to order prevention and abatement,
No. T-1753, located at Sitio Petugo Barrio Bato, Plaridel, Misamis Occidental
and assessed at P3,433.86 (p. 29, Rollo).
That judgment became final and executory. The Serrano spouses did not
pay their mortgage debt. A writ of execution was issued. On January 13,
1975, the sheriff levied upon the mortgaged lot and advertised its sale at
public auction to satisfy the mortgage obligation which, together with the
sheriff's fees and costs, amounted to P2,223.60 on January 28, 1975.
At the auction sale held on March 3, 1975, the mortgaged lot was sold to
the bank as the only bidder. The sheriff issued a certificate of sale dated
March 4, 1975 (p. 34, Rollo).
There being no redemption within the one-year period (sec. 78, General
Banking Law), the sheriff issued a final certificate of sale dated April 19,
1976 which was registered on the following day.
On September 20, 1976, the bank sold the lot to Eufemia Mejos. TCT No.
6035 was issued to her (pp. 47-48, Rollo).
AQUINO, J.:
This case is about the mortgagor's equity of redemption in case of judicial
foreclosure of a mortgage in favor of a rural bank.
In Civil Case No. 2988 of the Court of First Instance of Misamis Occidental,
Oroquieta City Branch I, entitled "Rural Bank of Oroquieta (Mis. Occ.), Inc.
vs. Procopio Serrano and Maria Cueme a case of foreclosure of mortgage,
Judge Melecio A. Genato on July 3, 1974 rendered a decision, ordering the
defendants to pay plaintiff bank within a period of "not less than ninety
(90) days nor more than one hundred (100) days from" the receipt of the
decision the loan of P1,500 with twelve percent interest per annum from
January 16, 1972 plus ten percent of the principal as attorney's fees (p. 29,
Rollo).
In case of nonpayment within that period, the trial court, in order to satisfy
that obligation, ordered the sheriff to sell at public auction the mortgaged
lot, a parcel of coconut land with an area of 2.8 hectares, covered by TCT
The trial court denied the motion. The bank filed a notice of appeal,
deposited the appeal bond of P120 and submitted a record on appeal. It
specified in its notice of appeal that it was appealing to the Court of
Appeals from the trial court's order of October 12, 1977, allowing the
redemption.
The Serrano spouses filed a motion to dismiss the appeal on the ground
that they had already deposited with the clerk of court the redemption
price of P2,830.
The trial court in its order of February 27, 1978 dismissed the appeal on
the ground that the order sought to be appealed is interlocutory or not
appealable. The bank assailed that order in the Court of Appeals by means
of certiorari which was really a mandamus action to compel the trial court
to give due course to its appeal.
The Court of Appeals dismissed the petition. It sustained the trial court's
position that the order sought to be appealed is interlocutory because the
trial court had not yet confirmed the foreclosure sale (Rural Bank of
Oroquieta [Mis. Occ.], Inc. vs. Judge Genato, CA-G. R. No. SP-07756,
October 26, 1979).
The bank appealed to this Court. The issue is whether the trial court and
the Court of Appeals erred in not giving due course to the bank's appeal.
We hold that the trial court and the Court of Appeals acted correctly in
refusing to give due course to the bank's appeal not only because the
order sought to be appealed is in interlocutory but also because in the
present posture of the case it is imperative that the trial court
should consolidate the foreclosure case, Civil Case No. 2988, with the other
case, Civil Case No. 3265 filed by the Serrano spouses for the annulment of
the foreclosure sale and the subsequent sale of the mortgaged lot to the
Mejos spouses. Note that the latter case is also pending in the sala of
respondent Judge.
The trial court erred in unreservedly allowing the Serrano spouses to
redeem the mortgaged lot without taking into ac count the supervening
fact that the lot is now registered in the name of Eufemia Mejos who is not
a party in the foreclosure proceeding and who is entitled to be heard. That
complication cannot be summarily ignored.
At this stage, a decision cannot be rendered outright on the conflicting
rights of the Serrano spouses, the bank and the Mejos spouses with respect
to the mortgaged lot. The trial court should first try and resolve the issues
arising out of the lack of judicial confirmation of the foreclosure sale and
the subsequent sale of the mortgaged lot to a third person after the
expiration of the one-year period for exercising the right of redemption. We
can only state some guidelines in resolving those issues.
After the execution of a real estate mortgage, the mortgagor has an equity
of redemption exercisable within the period stipulated in the mortgage
deed. In case of judicial foreclosure, that equity of redemption subsists
after the sale and before it is confirmed by the court (Raymundo vs.
Sunico, 25 Phil. 365; Benedicto vs. Yulo, 26 Phil. 160; Grimalt vs. Velasquez
and Sy Quio 36 Phil. 936; Sun Life Assurance Co. vs. Gonzales Diez, 52 Phil.
271; La Urbana vs. Belando 54 Phil. 930; Villar vs. Javier de Paderanga 97
Phil. 604; Piano vs. Cayanong 117 Phil. 415).
However, in case of a judicial foreclosure of a mortgage in favor of a
banking institution, section 78 of the General Banking Law grants the
mortgagor a right of redemption which may be exercised within one year
from the sale.
Under section 3, Rule 68 of the Rules of Court, it is the confirmation by the
court of the auction sale that would divest the Serrano spouses of their
rights to the mortgaged lot and that would vest such rights in the bank as
purchaser at the auction sale.
The clause "subject to such rights of redemption as may be allowed by
law," found in the last part of section 3, has no application to this case
because the mortgagor did not exercise his right of redemption under
section 78 of the General BanKing Law.
What applies to this case is the settled rule that "a foreclosure sale is not
complete until it is confirmed, and before said confirmation, the court
retains control of the proceedings by exercising a sound discretion in
regard to it, either granting or withholding confirmation as the rights and
interests of the parties and the ends of justice may require." (Salazar vs.
Tor res, 108 Phil. 209, 214-5).
"In order that a foreclosure sale may be validly confirmed by the court, it is
necessary that a hearing be given the interested parties, at which they
may have an opportunity to show cause why the sale should not be
confirmed." (Raymundo vs. Sunico, 25 Phil. 365).
"The acceptance of a bid at the foreclosure sale confers no title on the
purchaser. Until the sale has been validly confirmed by the court, he is
nothing more than a preferred bidder. Title vests only when the sale has
been validly confirmed by the court." (Raymundo vs. Sunico, 25 Phil. 365).
The confirmation retroacts to the date of the sale (Villar vs. Javier de
Paderanga 97 Phil. 604, citing Binalbagan Estate, Inc. vs. Gatuslao, 74 Phil.
128).
A hearing should be held for the confirmation of the sale. The mortgagor
should be notified of that hearing. Lack of notice vitiates the confirmation
of the sale. The mortgagor may still redeem the mortgaged lot after the
rendition of the order confirming the sale which is void for lack of hearing
and notice to the mortgagor. Grimalt vs. Velasquez and Sy Quio 36 Phil.
936; Raymundo vs. Sunico, 25 Phil. 365).
Notice and hearing of a motion for confirmation of sale are essential to the
validity of the order of confirmation, not only to enable the interested
parties to resist the motion but also to inform them of the time when their
right of redemption is cut off (Tiglao vs. Botones, 90 Phil. 275, 279).
An order of confirmation, void for lack of notice and hearing, may be set
aside anytime (Tiglao vs. Botones,supra).
It is equally settled that after the foreclosure sale but before its
confirmation, the court may grant the judgment debtor or mortgagor an
opportunity to pay the proceeds of the sale and thus refrain from
confirming it (Anderson and De Mesa vs. Reyes and Gutierrez Saenz 54
Phil. 944, citing Grit vs. Velasquez and Sy Quio 36 Phil. 936 and La Urbana
vs. Belan do, 54 Phil. 930).
If after the foreclosure sale and before the confirmation thereof, the
mortgagee, as purchaser at the auction sale, sold the mortgaged property
to another person, that subsequent sale does not render the foreclosure
sale more effective. That subsequent sale does not prevent the trial court
from granting the mortgagor a period within which to redeem the
mortgaged lot by paying the judgment debt and the expenses of the sale
and costs (Anderson and De Mesa vs. Reyes and Gutierrez Saenz, 54 Phil.
944).
"Whatever may have been the old rule by all of the modern authorities, it
is the policy of the courts to assist rather than to defeat the right of
redemption" (De Castro vs. Olondriz and Escudero 50 Phil. 725, 732).
After the confirmation of the sale, made after hearing and with due notice
to the mortgagor, the latter cannot redeem anymore the mortgaged lot
(unless the mortgagee is a banking institution) (Piano vs. Cayanong 117
Phil. 415).
It is after the confirmation of the sale that the mortgagor loses all interest
in the mortgaged property (Clemente vs. H. E. Heacock Co., 106 Phil. 1163;
Clemente vs. Court of Appeals, 109 Phil. 798; Clemente vs. H.E. Heacock
Co., L-23212, May 18, 1967, 20 SCRA 115).
In the instant case, where the foreclosure sale has not yet been confirmed
but the statutory one-year period for redemption tion expired and the
mortgaged lot was sold by the mortgagee (as the only bidder at the
auction sale) to a third person, the trial court should give the purchaser a
chance to be heard before requiring the mortgagee-bank to accept the
redemption price tendered by the mortgagors.
explain the reduction in Ballatan's area since he was not present at the
time respondents Go constructed their boundary walls.[6]
On June 2, 1985, Engineer Quedding made a third relocation survey
upon request of the parties.He found that Lot No. 24 lost approximately 25
square meters on its eastern boundary, that Lot No. 25, although found to
have encroached on Lot No. 24, did not lose nor gain any area; that Lot No.
26 lost some three (3) square meters which, however, were gained by Lot
No. 27 on its western boundary. [7] In short, Lots Nos. 25, 26 and 27 moved
westward to the eastern boundary of Lot No. 24.
On the basis of this survey, on June 10, 1985, petitioner Ballatan made
a written demand on respondents Go to remove and dismantle their
improvements on Lot No. 24. Respondents Go refused.The parties,
including Li Ching Yao, however, met several times to reach an agreement
on the matter.
The instant case arose from a dispute over forty-two (42) square
meters of residential land belonging to petitioners. The parties herein are
owners of adjacent lots located at Block No. 3, Poinsettia Street, Araneta
University Village, Malabon, Metro Manila. Lot No. 24, 414 square meters
in area, is registered in the name of petitioners Eden Ballatan and spouses
Betty Martinez and Chong Chy Ling. [2] Lots Nos. 25 and 26, with an area
of 415 and 313 square meters respectively, are registered in the name of
respondent Gonzalo Go, Sr. [3] On Lot No. 25, respondent Winston Go, son of
Gonzalo Go, Sr., constructed his house. Adjacent to Lot No. 26 is Lot No.
27, 417 square meters in area, and is registered in the name of respondent
Li Ching Yao.[4]
Respondent Li Ching Yao built his house on his lot before any of the
other parties did.[24] He constructed his house in 1982, respondents Go in
1983, and petitioners in 1985.[25] There is no evidence, much less, any
allegation that respondent Li Ching Yao was aware that when he built his
house he knew that a portion thereof encroached on respondents Go's
adjoining land. Good faith is always presumed, and upon him who alleges
bad faith on the part of a possessor rests the burden of proof. [26]
All the parties are presumed to have acted in good faith. Their rights
must, therefore, be determined in accordance with the appropriate
provisions of the Civil Code on property.
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.[28]
Article 448 has been applied to improvements or portions of
improvements built by mistaken belief on land belonging to the adjoining
owner.[29] The facts of the instant case are similar to those in Cabral v.
Ibanez,[30] to wit:
"[P]laintiffs Geronima Zabala and her husband Justino Bernardo,
constructed their house in the belief that it was entirely within the area of
their own land without knowing at that time that part of their house was
occupying a 14-square meter portion of the adjoining lot belonging to the
defendants, and that the defendants Bernardo M. Cabral and Mamerta M.
Cabral were likewise unaware of the fact that a portion of plaintiff's house
was extending and occupying a portion of their lot with an area of 14
square meters. The parties came to know of the fact that part of the
plaintiff's house was occupying part of defendant's land when the
construction of plaintiff's house was about to be finished, after a relocation
of the monuments of the two properties had been made by the U.S. Army
through the Bureau of Lands, according to their 'Stipulation of Facts,' dated
August 17, 1951.
On the basis of these facts, we held that:
"The Court, therefore, concludes that the plaintiffs are builders in good
faith and the relative rights of the defendant Mamerta Cabral as owner of
the land and of the plaintiffs as owners of the building is governed by
Article 361 of the Civil Code (Co Tao v. Joaquin Chan Chico, 46 Off.
Gaz.5514). Article 361 of the old Civil Code has been reproduced with an
additional provision in Article 448 of the new Civil Code, approved June 18,
1949."[31]
Similarly, in Grana and Torralba v. Court of Appeals,[32] we held that:
"Although without any legal and valid claim over the land in question,
petitioners, however, were found by the Court of Appeals to have
constructed a portion of their house thereon in good faith. Under Article
361 of the old Civil Code (Article 448 of the new), the owner of the land on
which anything has been built in good faith shall have the right to
appropriate as his own the building, after payment to the builder of
necessary or useful expenses, and in the proper case, expenses for pure
luxury or mere pleasure, or to oblige the builder to pay the price of the
land. Respondents, as owners of the land, have therefore the
choice of either appropriating the portion of petitioners' house
which is on their land upon payment of the proper indemnity to
petitioners, or selling to petitioners that part of their land on
which stands the improvement. It may here be pointed out that it
would be impractical for respondents to choose to exercise the
6. ID.; ID.; ID,; ID.; WHEN THE OWNER OF THE LAND ELECTS TO
SELL THE LAND OR BUY THE IMPROVEMENT, THE PURCHASE
PRICE MUST BE FIXED AT PREVAILING MARKET VALUE AT THE
TIME OF PAYMENT. 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. The Court of
Appeals erred in fixing the price at the time of taking, which is the
time the improvements were built on the land. The time of taking is
determinative of just compensation in expropriation proceedings. The
instant case is not for expropriation. It is not a taking by the state of
private property for a public purpose upon payment of just
compensation. This is a case of an owner who has been paying real
estate taxes on his land but has been deprived of the use of a portion
of this land for years. It is but fair and just to fix compensation at the
time of payment. .Article 448 and the same conditions above-stated
also apply to respondents Go as owners and possessors of their land
and respondent Li Ching Yao as builder of the improvement that
encroached on thirty-seven (37) square meters of respondents Go's
land.
although it is but fair and just that private respondents pay petitioner the
construction cost of P53,000.00; and that petitioner be ordered to account
for any and all fruits of the improvements received by him starting on June
23, 1993, with the amount of P53,000.00 to be offset therefrom.
IT IS SO ORDERED.[11] [Underscoring supplied.]
Frustrated by this turn of events, Pecson filed a petition for review
docketed as G.R. No. 115814 before this Court.
On May 26, 1995, the Court handed down the decision in G.R. No
115814, to wit:
WHEREFORE, the decision of the Court of Appeals in CA-G.R. SP No. 32679
and the Order of 15 November 1993 of the Regional Trial Court, Branch
101,Quezon City in Civil Case No. Q-41470 are hereby SET ASIDE.
The case is hereby remanded to the trial court for it to determine the
current market value of the apartment building on the lot. For this purpose,
the parties shall be allowed to adduce evidence on the current market
value of the apartment building. The value so determined shall be
forthwith paid by the private respondents [Spouses Juan and Erlinda
Nuguid] to the petitioner [Pedro Pecson] otherwise the petitioner shall be
restored to the possession of the apartment building until payment of the
required indemnity.
No costs.
SO ORDERED.[12] [Emphasis supplied.]
In so ruling, this Court pointed out that: (1) Article 448 of the Civil
Code is not apposite to the case at bar where the owner of the land is the
builder, sower, or planter who then later lost ownership of the land by sale,
but may, however, be applied by analogy; (2) the current market value of
the improvements should be made as the basis of reimbursement; (3)
Pecson was entitled to retain ownership of the building and, necessarily,
the income therefrom; (4) the Court of Appeals erred not only in upholding
the trial courts determination of the indemnity, but also in ordering Pecson
to account for the rentals of the apartment building from June 23, 1993 to
September 23, 1993.
On the basis of this Courts decision in G.R. No. 115814, Pecson filed a
Motion to Restore Possession and a Motion to Render Accounting, praying
respectively for restoration of his possession over the subject 256-square
meter commercial lot and for the spouses Nuguid to be directed to render
an accounting under oath, of the income derived from the subject four-door
apartment from November 22, 1993 until possession of the same was
restored to him.
In an Order[13] dated January 26, 1996, the RTC denied the Motion to
Restore Possession to the plaintiff averring that the current market value of
the building should first be determined. Pending the said determination,
the resolution of the Motion for Accounting was likewise held in abeyance.
With the submission of the parties assessment and the reports of the
subject realty, and the reports of the Quezon City Assessor, as well as the
members of the duly constituted assessment committee, the trial court
issued the following Order[14] dated October 7, 1997, to wit:
The only question left is the determination of income of the four units of
apartments per month. But as correctly pointed out by plaintiff, the
defendants have themselves submitted their affidavits attesting that the
income derived from three of the four units of the apartment building is
P21,000.00 or P7,000.00 each per month, or P28,000.00 per month for the
whole four units. Hence, at P28,000.00 per month, multiplied by 48
months, plaintiff is entitled to be paid by defendants the amount of
P1,344,000.00.[17]
On November 21, 1996, the parties manifested that they have arrived at a
compromise agreement that the value of the said improvement/building
isP400,000.00 The Court notes that the plaintiff has already
received P300,000.00.However, when defendant was ready to pay the
balance of P100,000.00, the plaintiff now insists that there should be a
rental to be paid by defendants.Whether or not this should be paid by
defendants, incident is hereby scheduled for hearing on November 12,
1997 at 8:30 a.m.
The Nuguid spouses filed a motion for reconsideration but this was
denied for lack of merit.[18]
The Nuguid couple then appealed the trial courts ruling to the Court of
Appeals, their action docketed as CA-G.R. CV No. 64295.
balance
Meantime, defendants
of P100,000.00.
are
directed
to
pay
plaintiff
the
SO ORDERED.[15]
After conducting a hearing, the lower court issued an Order dated July
31, 1998, directing the spouses to pay the sum of P1,344,000 as
reimbursement of the unrealized income of Pecson for the period
beginning November 22, 1993 up to December 1997. The sum was based
on the computation of P28,000/month rentals of the four-door apartment,
thus:
The Court finds plaintiffs motion valid and meritorious. The decision of the
Supreme Court in the aforesaid case [Pecson vs. Court of Appeals, 244
SCRA 407] which set aside the Order of this Court of November 15, 1993
has in effect upheld plaintiffs right of possession of the building for as long
as he is not fully paid the value thereof. It follows, as declared by the
Supreme Court in said decision that the plaintiff is entitled to the income
derived therefrom, thus
...
Records show that the plaintiff was dispossessed of the premises
on November 22, 1993 and that he was fully paid the value of his building
accounted for, since this Court explicitly recognized in G.R. No. 115814, he
was entitled to the property. He points out that this Court ruled that [t]he
petitioner [Pecson] not having been so paid, he was entitled to retain
ownership of the building and, necessarily, the income therefrom. [22] In
other words, says respondent, accounting was necessary. For accordingly,
he was entitled to rental income from the property. This should be given
effect. The Court could have very well specifically included rent (as fruit or
income of the property), but could not have done so at the time the Court
pronounced judgment because its value had yet to be determined,
according to him. Additionally, he faults the appellate court for modifying
the order of the RTC, thus defeating his right as a builder in good faith
entitled to rental from the period of his dispossession to full payment of the
price of his improvements, which spans from November 22, 1993 to
December 1997, or a period of more than four years.
It is not disputed that the construction of the four-door two-storey
apartment, subject of this dispute, was undertaken at the time when
Pecson was still the owner of the lot. When the Nuguids became the
uncontested owner of the lot on June 23, 1993, by virtue of entry of
judgment of the Courts decision, dated May 25, 1993, in G.R. No.
105360, the apartment building was already in existence and occupied by
tenants. In its decision dated May 26, 1995 in G.R. No. 115814, the Court
declared the rights and obligations of the litigants in accordance
with Articles 448 and 546 of the Civil Code. These provisions of the Code
are directly applicable to the instant case.
Under Article 448, the landowner is given the option, either to
appropriate the improvement as his own upon payment of the proper
amount of indemnity or to sell the land to the possessor in good
faith. Relatedly, Article 546 provides that a builder in good faith is entitled
to full reimbursement for all the necessary and useful expenses incurred; it
also gives him right of retention until full reimbursement is made.
While the law aims to concentrate in one person the ownership of the
land and the improvements thereon in view of the impracticability of
creating a state of forced co-ownership, [23] it guards against unjust
enrichment insofar as the good-faith builders improvements are
concerned. The right of retention is considered as one of the measures
devised by the law for the protection of builders in good faith. Its object is
to guarantee full and prompt reimbursement as it permits the actual
possessor to remain in possession while he has not been reimbursed (by
the person who defeated him in the case for possession of the property) for
those necessary expenses and useful improvements made by him on the
thing possessed.[24] Accordingly, a builder in good faith cannot be
compelled to pay rentals during the period of retention [25] nor be disturbed
in his possession by ordering him to vacate. In addition, as in this case, the
owner of the land is prohibited from offsetting or compensating the
necessary and useful expenses with the fruits received by the builderpossessor in good faith. Otherwise, the security provided by law would be
impaired. This is so because the right to the expenses and the right to the
fruits both pertain to the possessor, making compensation juridically
impossible; and one cannot be used to reduce the other. [26]
herein petitioners, Spouses Juan and Erlinda Nuguid, to account for the
rental income of the four-door two-storey apartment building from
November 1993 until December 1997, in the amount of P1,344,000,
computed on the basis of Twenty-eight Thousand (P28,000.00) pesos
monthly, for a period of 48 months, is hereby REINSTATED.Until fully paid,
said amount of rentals should bear the legal rate of interest set at six
percent (6%) per annum computed from the date of RTC judgment. If any
portion thereof shall thereafter remain unpaid, despite notice of finality of
this Courts judgment, said remaining unpaid amount shall bear the rate of
interest set at twelve percent (12%) per annum computed from the date of
said notice. Costs against petitioners.
SO ORDERED.
their
Answer
with
DECISION
CARPIO MORALES, J.:
The present petition for review on certiorari assails the October 2, 2002
Decision1 and February 6, 2003 Resolution2 of the Court of Appeals (CA) in
CA G.R. CV No. 64046 and seeks to reinstate the April 21, 1999 Decision 3 of
the Regional Trial Court (RTC) of Calamba, Laguna, Branch 34 in Civil Case
No. 2229-95-C.
Spouses-petitioners Rodolfo V. Rosales and Lily Rosqueta-Rosales
(petitioners) are the registered owners of a parcel of land with an area of
approximately 315 square meters, covered by Transfer Certificate of Title
(TCT) No. 368564 and designated as Lot 17, Block 1 of Subdivision Plan LRC
Psd-55244 situated in Los Baos, Laguna.
On August 16, 1995, petitioners discovered that a house was being
constructed on their lot, without their knowledge and consent, by
respondent Miguel Castelltort (Castelltort). 5
It turned out that respondents Castelltort and his wife Judith had purchased
a lot, Lot 16 of the same Subdivision Plan, from respondent Lina LopezVillegas (Lina) through her son-attorney-in-fact Rene Villegas (Villegas) but
that after a survey thereof by geodetic engineer Augusto Rivera, he
pointed to Lot 17 as the Lot 16 the Castelltorts purchased.
Negotiations for the settlement of the case thus began, with Villegas
offering a larger lot near petitioners lot in the same subdivision as a
replacement thereof.6 In the alternative, Villegas proposed to pay the
purchase price of petitioners lot with legal interest. 7 Both proposals were,
however, rejected by petitioners 8 whose counsel, by letter 9 of August 24,
1995, directed Castelltort to stop the construction of and demolish his
house and any other structure he may have built thereon, and desist from
entering the lot.
In her Answer to the complaint, 14 Lina alleged that the Castelltorts acted in
good faith in constructing the house on petitioners lot as they in fact
consulted her before commencing any construction thereon, they having
relied on the technical description of the lot sold to them, Lot 16, which
was verified by her officially designated geodetic engineer.
Nevertheless, Lina proposed to give petitioners a lot containing an area of
536 square meters together with the house and duplex structure built
thereon or, if petitioners choose, to encumber the 536 square meter lot as
collateral "to get immediate cash" through a financing scheme in order to
compensate them for the lot in question. 15
Ruling out good faith, the RTC, by Decision of April 21, 1999, found for
petitioners in this wise:
In the instant case, there is no well-founded belief of ownership by the
defendants of the land upon which they built their house. The title or mode
of acquisition upon which they based their belief of such ownership
stemmed from a Contract to Sell (Exhibit "P") of which they were not even
parties, the designated buyer being Elizabeth Yson Cruz and the sale even
subjected to the judicial reconstitution of the title. And by their own
actions, particularly defendant Miguel Castelltort, defendants betrayed this
very belief in their ownership when realizing the inutility of anchoring their
ownership on the basis of the Contract of Sale, defendant Miguel
Castelltort in his testimony declared Elizabeth Yson Cruz as his wife (tsn,
pp. 7-8, March 24, 1998) despite an admission in their answer that they are
the spouses named as defendants (tsn, p. 8, January 12, 1998) and which
declaration is an utter falsehood as the Contract to Sell itself indicates the
civil status of said Elizabeth Yson Cruz to be single.
Even if we are to concede that defendants built their house in good faith on
account of the representation of attorney-in-fact Rene Villegas, their failure
to comply with the requirements of the National Building Code, particularly
the procurement of a building permit, stained such good faith and belief.
xxx
From any and all indications, this deliberate breach is an unmitigated
manifestation of bad faith. And from the evidence thus adduced, we hold
that defendants and the intervenor were equally guilty of negligence which
led to the construction of the defendants house on plaintiffs property and
therefore jointly and severally liable for all the damages suffered by the
plaintiffs.16 (Underscoring supplied)
The dispositive portion of the trial courts Decision reads, quoted verbatim:
ACCORDINGLY, in view of all the foregoing, judgment is hereby rendered in
favor of plaintiffs and against the defendants, ordering the latter to
surrender the possession of the property covered by TCT No. 36856 of the
Register of Deeds of Laguna including any and all improvements built
thereon to the plaintiffs.
Defendants and intervenors are likewise jointly and severally directed to
pay to plaintiffs the following damages:
a) TWO THOUSAND (P2,000.00) PESOS per month from February 1995 by
way of reasonable compensation for the use of plaintiffs property until the
surrender of the same;
b) FIFTY THOUSAND (P50,000.00) PESOS by way of moral damages;
c) THIRTY THOUSAND (P30,000.00) PESOS as exemplary damages;
d) TWENTY THOUSAND (P20,000.00) PESOS as attorneys fees and cost of
suit.
The counterclaim interposed by the defendants in their responsive
pleading is hereby dismissed for lack of merit.
SO ORDERED.17
WHEREFORE,
premises
considered,
the
instant
appeal
is
hereby GRANTED and the assailed decision of the court a quo REVERSED
AND SET ASIDE. In accordance with the cases of Technogas Philippines
Manufacturing Corp. vs. Court of Appeals and Depra vs. Dumlao, applying
Article 448 of the Civil Code, this case is REMANDEDto the Regional Trial
Court of Calamba, Laguna, Branch 34, for further proceedings, as follows:
1. to determine the present fair price of appellees 315 square meter area
of land and the amount of the expenses actually spent by the appellants
for building the house as of 21 August 1995, which is the time they were
notified of appellees rightful claim over Lot 17.
2. to order the appellees to exercise their option under the law (Article 448,
Civil Code), whether to appropriate the house as their own by paying to the
appellants the amount of the expenses spent for the house as determined
by the court a quo in accordance with the limitations as aforestated or to
oblige the appellants to pay the price of the land.
In case the appellees exercise the option to oblige the appellants to pay
the price of the land but the latter reject such purchase because, as found
by the court, the value of the land is considerably more than that of the
house, the court shall order the parties to agree upon the terms of a forced
lease, and give the court a quo a formal written notice of such agreement
and its provisos. If no agreement is reached by the parties, the court a quo
shall then fix the terms of the forced lease, provided that the monthly
rental to be fixed by the Court shall not be less that Two Thousand Pesos
(P2,000.00) per month, payable within the first five (5) days of each
calendar month and the period thereof shall not be more than two (2)
years, counted from the finality of the judgment.
Upon the expiration of the forced lease, or upon default by the appellants
in the payment of rentals for two (2) consecutive months, the appellees
shall be entitled to terminate the forced lease, to recover their land, and to
have the improvement removed by the appellants at the latters expense.
The rentals herein provided shall be tendered by the appellants to the
court for payment to the appellees, and such tender shall constitute
evidence of whether or not compliance was made within the period fixed
by the court.
In any event, the appellants shall pay the appellees the amount of Two
Thousand Pesos (P2,000.00) as reasonable compensation for their
occupancy of the encroached property from the time said appellants good
faith cease (sic) to exist until such time the possession of the property is
delivered to the appellees subject to the reimbursement of the aforesaid
expenses in favor of the appellants or until such time the payment of the
purchase price of the said lot be made by the appellants in favor of the
appellees in case the latter opt for the compulsory sale of the same.
SO ORDERED.19 (Emphasis in the original)
In holding the appellants as builders in bad faith, the court a quo defied
law and settled jurisprudence considering that the factual basis of its
findings and the incontrovertible evidence in support thereof prove that the
appellant Miguel, in good faith, built the house on appellees land without
knowledge of an adverse claim or any other irregularities that might cast a
doubt as to the veracity of the assurance given to him by the intervenor.
Having been assured by the intervenor that the stone monuments were
purposely placed, albeit wrongfully, by the land surveyor in said land to
specifically identify the lot and its inclusive boundaries, the appellants
cannot be faulted for having relied on the expertise of the land surveyor
who is more equipped and experienced in the field of land surveying.
Although under the Torrens system of land registration, the appellant is
presumed to have knowledge of the metes and bounds of the property with
which he is dealing, appellant however, considering that he is a layman not
versed in the technical description of his property, cannot be faulted in his
reliance on the survey plan that was delivered to him by the intervenor and
the stone monuments that were placed in the encroached property.
xxx
Peremptorily, contrary to the flawed pronouncements made by the court a
quo that appellant Miguel is deemed as a builder in bad faith on the basis
of a mere assertion that he built his house without initially satisfying
himself that he owns the said property, this Court finds reason to maintain
good faith on the part of the appellant. Admittedly, the appellants house
erroneously encroached on the property of the appellees due to a mistake
in the placement of stone monuments as indicated in the survey plan,
which error is directly attributable to the fault of the geodetic engineer who
conducted the same. This fact alone negates bad faith on the part of
appellant Miguel.
xxx
Moreover, it is quite illogical for appellant Miguel to knowingly build his
house on a property which he knew belongs to another person. x x x
xxx
In view of the good faith of both parties in this case, their rights
and obligations are to be governed byArticle 448, which has been
applied to improvements or portions of improvements built by
mistaken belief on land belonging to the adjoining owner. x x x
x x x20 (Emphasis and underscoring supplied)
Petitioners Motion for Reconsideration21 dated October 22, 2002 having
been denied by the CA by Resolution of March 13, 2002, the present
petition was filed raising the following issues:
I.
WHETHER OR NOT THE HONORABLE COURT OF APPEALS COMMITTED A
GRAVE ABUSE OF DISCRETION IN MAKING A FINDING THAT IS CONTRARY
TO THE ADMISSIONS BY THE PARTIES
II.
WHETHER OR NOT THE HONORABLE COURT OF APPEALS COMMITTED A
REVERSIBLE ERROR OF LAW IN CONCLUDING THAT THE TRIAL COURT, IN
DECIDING THE CASE, RELIED ON FLIMSY, IF NOT IMMATERIAL,
ALLEGATIONS OF THE PETITIONERS, WHICH HAVE NO DIRECT BEARING IN
THE DETERMINATION OF WHETHER THE RESPONDENTS ARE BUILDERS IN
GOOD FAITH
III.
WHETHER OR NOT THE HONORABLE COURT OF APPEALS COMMITTED A
REVERSIBLE ERROR OF LAW IN RENDERING A DECISION THAT IS
UNENFORCEABLE AGAINST BOTH RESPONDENT JUDITH CASTELLTORT AND
THIRD-PARTY ELIZABETH CRUZ22
Petitioners initially hammer against respondents proving that Castelltort
and a certain Elizabeth Cruz are the builders of the house on the subject
property, they faulting them with estoppel for alleging in their Answer
before the trial court that "they (respondents Castelltort and Judith) caused
the construction of their house which they bought from a certain Lina
Lopez-Villegas."
Petitioners rely on the following doctrine established in Elayda v. Court of
Appeals:23
"an admission made in the pleadings cannot be controverted by the party
making such admission and are conclusive as to him and that all proofs
submitted by him contrary thereto or inconsistent therewith, should be
ignored, whether objection is interposed by the party or not x x x"
Petitioners contention is hardly relevant to the case at bar. Whether it was
Castelltort and Judith or Castelltort and Elizabeth Cruz who purchased the
property from Lina is not material to the outcome of the instant
controversy. As found by the CA:
The fact remains that appellant [Castelltort] is the builder of the house on
Lot 17 xxx The court a quo should have focused on the issue of whether
appellant Miguel built, in good faith, the subject house without notice of
the adverse claim of the appellees and under the honest belief that the lot
which he used in the construction belongs to him. xxx it cannot be gainsaid
that appellant Miguel has a title over the land that was purchased from the
intervenor x x x24
At all events, as this Court held in the case of Gardner v. Court of
Appeals:25
In its Resolution reversing the original Decision, respondent Court
discredited the testimony of Ariosto SANTOS for being at variance with the
allegations in his Answer. The fact, however, that the allegations made by
Ariosto SANTOS in his pleadings and in his declarations in open Court
differed will not militate against the findings herein made nor support the
reversal by respondent Court. As a general rule, facts alleged in a partys
pleading are deemed admissions of that party and binding upon it, but this
is not an absolute and inflexible rule. An Answer is a mere statement of
fact which the party filing it expects to prove, but it is not evidence. As
Ariosto SANTOS himself, in open Court, had repudiated the defenses he
had raised in his Answer and against his own interest, his testimony is
deserving of weight and credence.26 (Underscoring supplied)
The issue determinative of the controversy in the case at bar hinges on
whether Castelltort is a builder in good faith.
A builder in good faith is one who builds with the belief that the land he is
building on is his, or that by some title one has the right to build thereon,
and is ignorant of any defect or flaw in his title. 27
Article 527 of the Civil Code provides that good faith is always presumed,
and upon him who alleges bad faith on the part of a possessor rests the
burden of proof.28
In the case at bar, Lot 16 was sold by Lina, through her attorney-in-fact
Villegas, to Castelltort and a certain Elizabeth Cruz 29 for a consideration
of P500,000.00. While prior to the sale, what Villegas showed Castelltort as
evidence of his mother Linas ownership of the property was only a
photocopy of her title TCT No. (T-42171) T-18550 30 he explaining that the
owners duplicate of the title was lost and that judicial reconstitution
thereof was ongoing, Castelltort acted in the manner of a prudent man and
went to the Registry of Deeds of Laguna to procure a certified true copy of
the TCT.31 The certified true copy bore no annotation indicating any prior
adverse claim on Lot 16.
The records indicate that at the time Castelltort began constructing his
house on petitioners lot, he believed that it was the Lot 16 he bought and
delivered to him by Villegas.
In his cross-examination, Villegas testified:
Q: You said the surveyor placed a mujon along boundary of the property?
A: Yes.
Q: Now, aside from inspecting personally the site, what else did your men
or assistants do?
A: After computing the subdivision lots, they went back to the field to plant
those subdivision corners with concrete monuments.
Q: Which is (sic) also called as "mohons"?
xxx
A: Yes, sir.
Q: Is it not a fact that before Miguel Castelltort started constructing that
house he sought your advice or permission to construct the same over that
particular lot?
A: Yes.
Q: Now, can you point to this Honorable Court where exactly did your men
place these additional mohons and how many?
A: Later on we discovered that they placed the mohons in the adjoining lot,
lot 17.
Q: x x x when again did you meet Mr. Rene Villegas or after how many
months or year?
xxx
A: Maybe after a year, sir.
Q: Was there any remarkable difference between lot 16 and 17 at the time
that this particular lot was sold to Miguel Castelltort and Elizabeth Cruz?
Q: And you met him again because he had a problem regarding the
property of one Engr. Rosales?
xxx
A: Yes, sir.
A: Both lots 16 and 17 are practically the same. The (sic) have the same
frontage. There is only a difference of 4 square meters, one is 311 square
meters and the other 315 square meters. Both sides were fenced, as drawn
they were facing the same road. They are practically the same.
Q: And when he confided to you this matter, did you go to the site of Lot 16
or 17?
A: Yes, sir.
xxx
Q: Considering that you found out that a mistake was actually made by
your assistants Dennis Orencio, Mario Carpio and Sovejano when you
allowed them to proceed on their own to make this computation, did you
confront these men of yours afterwards?
A: Yes, sir.
Q: And how did they commit a mistake when you said they checked the lot
at the back of Lot 16?
Q: In what manner?
A: I actually reprimanded them verbally and also I dismissed Mario Carpio
from my office.
A: Because they were quite confident since we had already relocated the
property two years ago so they thought that they get (sic) the right lot
without checking the other side of the subdivision.
xxx
xxx
Q: And did you investigate how your men committed this mistake of
planting these monuments on another lot when corners 4 & 1 were clearly
planted on the ground?
Q: Now, you said that when you went to the place because you heard from
Rene Villegas that there was a mistake you no longer could find the
monuments on lines 1 and 4 and according to you the reason is that a
fence was already constructed?
A: Yes, sir.
Q: For clarification, is this line 1 & 4 on Lot 16 a common line 1 &4 on Lot
17?
A: Yes, sir a common line.
Q: In other words, this line 1 &4 devides (sic) Lot 16 & 17?
A: Yes, sir.
xxx
Q: In this particular case, did you find out how your men checked the
succeeding lots, how they determine (sic) the exact location of lot 16?
Lot 17 also with Lot 16, it could also be construed that these are
monuments for Lot 17?
As correctly found by the CA, both parties having acted in good faith at
least until August 21, 1995, the applicable provision in this case is Article
448 of the Civil Code which reads:
A: Yes, sir.
Q: Without making any actual measurement?
A: They made an actual measurement but the reference point is not the
one, the correct one because they also checked it with the other corner of
the road going back.
xxx
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.
Under the foregoing provision, the landowner can choose between
appropriating the building by paying the proper indemnity or obliging the
builder to pay the price of the land, unless its value is considerably more
than that of the structures, in which case the builder in good faith shall pay
reasonable rent.34 If the parties cannot come to terms over the conditions
of the lease, the court must fix the terms thereof.
The choice belongs to the owner of the land, a rule that accords with the
principle of accession, i.e., that the accessory follows the principal and not
the other way around. Even as the option lies with the landowner, the
grant to him, nevertheless, is preclusive. 35 The landowner cannot refuse to
exercise either option and compel instead the owner of the building to
remove it from the land.36
The raison detre for this provision has been enunciated thus:
Where the builder, planter 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 a state of forced coownership, the law has provided a just 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 the proper rent. He cannot refuse to exercise either option. It is the
owner of the land who is authorized 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.37
Possession acquired in good faith does not lose this character except in the
case and from the moment facts exist which show that the possessor is not
unaware that he possesses the thing improperly or wrongfully. 38 The good
faith ceases or is legally interrupted 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. 39
In the case at bar, Castelltorts good faith ceased on August 21, 1995 when
petitioners personally apprised him of their title over the questioned lot. As
held by the CA, should petitioners then opt to appropriate the house, they
should only be made to pay for that part of
the improvement built by Castelltort on the questioned property at the
time good faith still existed on his part or until August 21, 1995.
The CA, however, failed to qualify that said part of the improvement should
be pegged at its current fair market value consistent with this Courts
pronouncement in Pecson v. Court of Appeals.40
And, as correctly found by the CA, the commencement of Castelltorts
payment of reasonable rent should start on August 21, 1995 as well, to be
paid until such time that the possession of the property is delivered to
petitioners, subject to the reimbursement of expenses, that is, if such
option is for petitioners to appropriate the house.
This Court quotes the CAs ratiocination with approval:
x x x Generally, Article 448 of the Civil Code provides that the payment of
reasonable rent should be made only up to the date appellees serve notice
of their option as provided by law upon the appellants and the court a quo;
that is, if such option is for appellees to appropriate the encroaching
structure. In such event, appellants would have a right to retain the land on
which they have built in good faith until they are reimbursed the expenses
incurred by them. This is so because the right to retain the improvements
while the corresponding indemnity is not paid implies the tenancy or
possession in fact of the land on which it is built, planted or sown.
However, considering that appellants had ceased as builders in good faith
at the time that appellant Miguel was notified of appellees lawful title over
the disputed property, the payment of reasonable rent should accordingly
commence at that time since he can no longer avail of the rights provided
under the law for builders in good faith.41
If the option chosen by petitioners is compulsory sale, however, the
payment of rent should continue up to the actual transfer of ownership. 42
Respecting petitioners argument that the appellate court erred in
rendering a decision that is "unenforceable against Judith who is not the
owner of the house and Elizabeth Cruz who was found to be a part owner
of the house built on their lot but is not a party to the case," the same does
not lie.
While one who is not a party to a proceeding shall not be affected or
bound43 by a judgment rendered therein, 44like Elizabeth Cruz, this does not
detract from the validity and enforceability of the judgment on petitioners
and respondents Castelltorts.
WHEREFORE, the petition is DENIED. The Decision dated October 2, 2002
and Resolution dated February 6, 2003 of the Court of Appeals
are AFFIRMED with MODIFICATION such that the trial court shall include
for determination the increase in value ("plus value") which petitioners
315 square meter lot may have acquired by reason of the existence of that
portion of the house built before respondents Miguel and Judith Castelltort
were notified of petitioners rightful claim on said lot, and the current fair
market value of said portion.
SO ORDERED
Spouses
ISMAEL
and
TERESITA
MACASAET, petitioners,
vs.
Spouses VICENTE and ROSARIO MACASAET, respondents.
DECISION
PANGANIBAN, J.:
The present case involves a dispute between parents and children. The
children were invited by the parents to occupy the latters two lots, out of
parental love and a desire to foster family solidarity. Unfortunately, an
unresolved conflict terminated this situation. Out of pique, the parents
asked them to vacate the premises. Thus, the children lost their right to
remain on the property. They have the right, however, to be indemnified
for the useful improvements that they constructed thereon in good faith
and with the consent of the parents. In short, Article 448 of the Civil Code
applies.
The Case
Before us is a Petition for Review 1 under Rule 45 of the Rules of Court,
assailing the March 22, 2002 Decision 2and the June 26, 2002 Resolution 3 of
the Court of Appeals (CA) in CA-GR SP Nos. 56205 & 56467. The
challenged Decision disposed as follows:
"WHEREFORE, the assailed Decision is AFFIRMED with the following
MODIFICATIONS:
1. Vicente and Rosario should reimburse Ismael and
Teresita one-half of the value of the useful improvements
introduced in the premises prior to demand, which is
equivalent to P475,000.00. In case the former refuse to
reimburse the said amount, the latter may remove the
improvements, even though the land may suffer damage
thereby. They shall not, however, cause any more
impairment upon the property leased than is necessary.
2. The award of attorneys fees is DELETED.
3. The records of these consolidated cases are REMANDED
to the Court of origin for further proceedings to determine
the option to be taken by Vicente and Rosario and to
implement the same with dispatch."4
On December 10, 1997, the parents filed with the Municipal Trial Court in
Cities (MTCC) of Lipa City an ejectment suit against the
children.7 Respondents alleged that they were the owners of two (2)
parcels of land covered by Transfer Certificate of Title (TCT) Nos. T-78521
and T-103141, situated at Banay-banay, Lipa City; that by way of a verbal
lease agreement, Ismael and Teresita occupied these lots in March 1992
and used them as their residence and the situs of their construction
business; and that despite repeated demands, petitioners failed to pay the
agreed rental of P500 per week.8
Ismael and Teresita denied the existence of any verbal lease agreement.
They claimed that respondents had invited them to construct their
residence and business on the subject lots in order that they could all live
near one other, employ Marivic (the sister of Ismael), and help in resolving
the problems of the family.9 They added that it was the policy of
respondents to allot the land they owned as an advance grant of
inheritance in favor of their children. Thus, they contended that the lot
covered by TCT No. T-103141 had been allotted to Ismael as advance
inheritance. On the other hand, the lot covered by TCT No. T-78521 was
allegedly given to petitioners as payment for construction materials used
in the renovation of respondents house.10
The MTCC11 ruled in favor of respondents and ordered petitioners to vacate
the premises. It opined that Ismael and Teresita had occupied the lots, not
by virtue of a verbal lease agreement, but by tolerance of Vicente and
Rosario.12 As their stay was by mere tolerance, petitioners were necessarily
bound by an implied promise to vacate the lots upon demand. 13 The MTCC
dismissed their contention that one lot had been allotted as an advance
inheritance, on the ground that successional rights were inchoate.
Moreover, it disbelieved petitioners allegation that the other parcel had
been given as payment for construction materials.14
On appeal, the regional trial court 15 (RTC) upheld the findings of the MTCC.
However, the RTC allowed respondents to appropriate the building and
other improvements introduced by petitioners, after payment of the
indemnity provided for by Article 448 in relation to Articles 546 and 548 of
the Civil Code.16 It added that respondents could oblige petitioners to
purchase the land, unless its value was considerably more than the
building. In the latter situation, petitioners should pay rent if respondents
would not choose to appropriate the building.17
Upon denial of their individual Motions for Reconsideration, the parties filed
with the CA separate Petitions for Review, which were later consolidated. 18
Ruling of the Court of Appeals
The CA sustained the finding of the two lower courts that Ismael and
Teresita had been occupying the subject lots only by the tolerance of
Vicente and Rosario.19 Thus, possession of the subject lots by petitioners
became illegal upon their receipt of respondents letter to vacate it. 20
Citing Calubayan v. Pascual, 21 the CA further ruled that petitioners status
was analogous to that of a lessee or a tenant whose term of lease had
expired, but whose occupancy continued by tolerance of the
owner.22Consequently, in ascertaining the right of petitioners to be
reimbursed for the improvements they had introduced on respondents
properties,23 the appellate court applied the Civil Codes provisions on
lease. The CA modified the RTC Decision by declaring that Article 448 of
the Civil Code was inapplicable. The CA opined that under Article 1678 of
the same Code, Ismael and Teresita had the right to be reimbursed for one
half of the value of the improvements made.24
Not satisfied with the CAs ruling, petitioners brought this recourse to this
Court.25
"3. Whether or not Article 1678 of the Civil Code should apply to
the case on the matters of improvements, or is it Article 447 of the
Civil Code in relation to the Article 453 and 454 thereof that should
apply, if ever to apply the Civil Code;
"4. Whether or not the [D]ecision of the Court of Appeals is
supported by evidence, appropriate laws, rules and jurisprudence;
"5. Whether or not Assisting Judge Norberto Mercado of the MTCC
Lipa City should be held accountable in rendering the MTCC
[D]ecision;
"6. Whether or not Atty. Glenn Mendoza and Atty. Andrew Linatoc of
the same [l]aw office should be held accountable for pursuing the
[e]jectment case[.]"26
The Courts Ruling
The Petition is partly meritorious.
First Issue:
Ejectment
The Issues
Petitioners raise the following issues for our consideration:
"1. a) Whether or not Section 17[,] Rule 70 of the Rules of Court on
Judgment should apply in the rendition of the decision in this case;
b) Whether or not the Complaint should have been
dismissed;
c) Whether or not damages including attorneys fees
should have been awarded to herein petitioners;
"2. a) Whether or not the rule on appearance of parties during the
Pretrial should apply on appearance of parties during Preliminary
Conference in an unlawful detainer suit;
b) Whether or not the case of Philippine Pryce Assurance
Corporation vs. Court of Appeals (230 SCRA 164) is
applicable to appearance of parties in an unlawful detainer
suit;
Petitioners dispute the lower courts finding that they occupied the subject
lots on the basis of mere tolerance. They argue that their occupation was
not under such condition, since respondents had invited, offered and
persuaded them to use those properties. 39
This Court has consistently held that those who occupy the land of another
at the latters tolerance or permission, without any contract between them,
are necessarily bound by an implied promise that the occupants will vacate
the property upon demand.40 A summary action for ejectment is the proper
remedy to enforce this implied obligation. 41 The unlawful deprivation or
withholding of possession is to be counted from the date of the demand to
vacate.42
Toleration is defined as "the act or practice of permitting or enduring
something not wholly approved of."43Sarona v. Villegas44 described what
tolerated acts means, in this language:
"Professor Arturo M. Tolentino states that acts merely tolerated are
those which by reason of neighborliness or familiarity, the owner
of property allows his neighbor or another person to do on the
property; they are generally those particular services or benefits
which ones property can give to another without material injury or
prejudice to the owner, who permits them out of friendship or
courtesy. x x x. And, Tolentino continues, even though this is
continued for a long time, no right will be acquired by
prescription." x x x. Further expounding on the concept, Tolentino
writes: There is tacit consent of the possessor to the acts which
are merely tolerated. Thus, not every case of knowledge and
silence on the part of the possessor can be considered mere
tolerance. By virtue of tolerance that is considered as an
authorization, permission or license, acts of possession are realized
or performed. The question reduces itself to the existence or nonexistence of the permission."45
We hold that the facts of the present case rule out the finding of
possession by mere tolerance. Petitioners were able to establish that
respondents had invited them to occupy the subject lots in order that they
could all live near one other and help in resolving family problems. 46 By
occupying those lots, petitioners demonstrated their acceptance of the
invitation. Hence, there was a meeting of minds, and an agreement
regarding possession of the lots impliedly arose between the parties.
The occupancy of the subject lots by petitioners was not merely
"something not wholly approved of" by respondents. Neither did it arise
from what Tolentino refers to as "neighborliness or familiarity." In point of
fact, their possession was upon the invitation of and with the complete
approval of respondents, who desired that their children would occupy the
premises. It arose from familial love and a desire for family solidarity,
which are basic Filipino traits.
No Right to Retain
That Ismael and Teresita had a right to occupy the lots is therefore clear.
The issue is the duration of possession. In the absence of a stipulation on
this point, Article 1197 of the Civil Code allows the courts to fix the
duration or the period.
Possession
"Article 1197. If the obligation does not fix a period, but from its
nature and the circumstances it can be inferred that a period was
intended, the courts may fix the duration thereof.
"The courts shall also fix the duration of the period when it
depends upon the will of the debtor.
"In every case the courts shall determine such period as may
under the circumstances have been probably contemplated by the
parties. Once fixed by the courts, the period cannot be changed by
them."
Article 1197, however, applies to a situation in which the parties intended
a period. Such qualification cannot be inferred from the facts of the present
case.
To repeat, when Vicente and Rosario invited their children to use the lots,
they did so out of parental love and a desire for solidarity expected from
Filipino parents. No period was intended by the parties. Their mere failure
to fix the duration of their agreement does not necessarily justify or
authorize the courts to do so.47
Based on respondents reasons for gratuitously allowing petitioners to use
the lots, it can be safely concluded that the agreement subsisted as long
as the parents and the children mutually benefited from the arrangement.
Effectively, there is a resolutory condition in such an agreement. 48 Thus,
when a change in the condition existing between the parties occurs -- like a
change of ownership, necessity, death of either party or unresolved conflict
or animosity -- the agreement may be deemed terminated. Having been
based on parental love, the agreement would end upon the dissipation of
the affection.
When persistent conflict and animosity overtook the love and solidarity
between the parents and the children, the purpose of the agreement
ceased.49 Thus, petitioners no longer had any cause for continued
possession of the lots. Their right to use the properties became untenable.
It ceased upon their receipt of the notice to vacate. And because they
refused to heed the demand, ejectment was the proper remedy against
them. Their possession, which was originally lawful, became unlawful when
the reason therefor -- love and solidarity -- ceased to exist between them.
Petitioners have not given this Court adequate reasons to reverse the
lower courts dismissal of their contention that Lots T-78521 and T-103141,
respectively, were allegedly allotted to them as part of their inheritance
and given in consideration for past debts.
The right of petitioners to inherit from their parents is merely inchoate and
is vested only upon the latters demise. Indisputably, rights of succession
are
transmitted
only
from
the
moment
of
death
of
the
decedent.50 Assuming that there was an "allotment" of inheritance,
ownership nonetheless remained with respondents. Moreover, an intention
to confer title to certain persons in the future is not inconsistent with the
owners taking back possession in the meantime for any reason deemed
sufficient.51 Other than their self-serving testimonies and their affidavits,
petitioners offered no credible evidence to support their outlandish claim of
inheritance "allocation."
We also agree with the lower courts that petitioners failed to prove the
allegation that, through a dation in payment, Lot T-78521 had been
transferred to the latter as payment for respondents debts. 52 The evidence
presented by petitioners related only to the alleged indebtedness of the
parents
arising
from
the
latters
purported
purchases
and
advances.53 There was no sufficient proof that respondents had entered
into a contract of dation to settle the alleged debt. Petitioners even stated
that there was a disagreement in the accounting of the purported debt, 54 a
fact that disproves a meeting of the minds with the parents.
Petitioners also admitted that a portion of the alleged debt is the subject
matter of a collection case against respondents (Civil Case No. 059496).55 Thus, the formers allegation that the indebtedness has been paid
through a dation cannot be given credence, inconsistent as it is with their
action to recover the same debt.
Despite their protestations, petitioners recognized the right of the parents
to recover the premises when they admitted in their Position Paper filed
with the MTCC that respondents had a title to the lots.
"The [respondents] want to get their property because the title is
theirs, the [petitioners] do not object but what is due the
[petitioners] including the reparation for the tarnish of their dignity
and honor must be given the [petitioners] for the benefits of their
children before the premises will be turned over." 56
As a rule, the right of ownership carries with it the right of possession.
Second Issue:
Appearance at the Preliminary Conference
Section 8 of Rule 70 of the Rules of Court requires the appearance of the
plaintiff and the defendant during the preliminary conference. On the basis
of this provision, petitioners claim that the MTCC should have dismissed
the case upon the failure of respondents to attend the conference.
However, petitioners do not dispute that an attorney-in-fact with a written
authorization from respondents appeared during the preliminary
conference.57 The issue then is whether the rules on ejectment allow a
representative to substitute for a partys personal appearance.
Unless inconsistent with Rule 70, the provisions of Rule 18 on pretrial
applies to the preliminary conference. 58Under Section 4 of this Rule, the
nonappearance of a party may be excused by the showing of a valid cause;
or by the appearance of a representative, who has been fully authorized in
writing to enter into an amicable settlement, to submit to alternative
modes of dispute resolution, and to enter into stipulations or admissions of
facts and of documents.59
Section 4 of Rule 18 may supplement Section 8 of Rule 70. Thus, the spirit
behind the exception to personal appearance under the rules on pretrial is
applicable to the preliminary conference. If there are valid reasons or if a
representative has a "special authority," a partys appearance may be
waived. As petitioners are challenging only the applicability of the rules on
pretrial to the rule on preliminary conference, the written authorization
from respondents can indeed be readily considered as a "special
authorization."
We clarify. Article 447 is not applicable, because it relates to the rules that
apply when the owner of the property uses the materials of another. It does
not refer to the instance when a possessor builds on the property of
another, which is the factual milieu here.
In view of the unique factual setting of the instant case, the contention of
petitioners regarding the inapplicability of Article 1678 deserves attention.
The CA applied the provisions on lease, because it found their possession
by mere tolerance comparable with that of a lessee, per the
pronouncement in Calubayan v. Pascual, 62 from which we quote:
"x x x. It has been held that a person who occupies the land of
another at the latters tolerance or permission, without any
contract between them, is necessarily bound by an implied
promise that he will vacate upon demand, failing which a summary
action for ejectment is the proper remedy against them. The status
of defendant is analogous to that of a lessee or tenant whose term
of lease has expired but whose occupancy continued by tolerance
of the owner. In such a case, the unlawful deprivation or
withholding of possession is to be counted from the date of the
demand to vacate."63 (Emphasis in the original.)
As explained earlier, Ismael and Teresitas possession of the two lots was
not by mere tolerance, a circumstance that negates the applicability of
Calubayan.
Article 448 Applicable
On the other hand, when a person builds in good faith on the land of
another, the applicable provision is Article 448, which reads: 64
Third Issue:
Rights of a Builder in Good Faith
As applied to the present case, accession refers to the right of the owner to
everything that is incorporated or attached to the property. 60 Accession
industrial -- building, planting and sowing on an immovable -- is governed
by Articles 445 to 456 of the Civil Code.
Articles 447 and 1678 of the
Civil Code Inapplicable
To buttress their claim of reimbursement for the improvements introduced
on the property, petitioners cite Article 447. 61 They allege that the CA erred
in applying Article 1678, since they had no lease agreement with
respondents.
"Article 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."
This Court has ruled that this provision covers only cases in which the
builders, sowers or planters believe themselves to be owners of the land
or, at least, to have a claim of title thereto. 65 It does not apply when the
interest is merely that of a holder, such as a mere tenant, agent or
usufructuary.66 From these pronouncements, good faith is identified by the
belief that the land is owned; or that -- by some title -- one has the right to
build, plant, or sow thereon.67
However, in some special cases, this Court has used Article 448 by
recognizing good faith beyond this limited definition. Thus, in Del Campo v.
Abesia,68 this provision was applied to one whose house -- despite having
been built at the time he was still co-owner -- overlapped with the land of
another.69 This article was also applied to cases wherein a builder had
constructed improvements with the consent of the owner. The Court ruled
that the law deemed the builder to be in good faith. 70 In Sarmiento v.
Agana,71 the builders were found to be in good faith despite their reliance
on the consent of another, whom they had mistakenly believed to be the
owner of the land.72
Based on the aforecited special cases, Article 448 applies to the present
factual milieu. The established facts of this case show that respondents
fully consented to the improvements introduced by petitioners. In fact,
because the children occupied the lots upon their invitation, the parents
certainly knew and approved of the construction of the improvements
introduced thereon.73 Thus, petitioners may be deemed to have been in
good faith when they built the structures on those lots.
The instant case is factually similar to Javier v. Javier. 74 In that case, this
Court deemed the son to be in good faith for building the improvement
(the house) with the knowledge and consent of his father, to whom
belonged the land upon which it was built. Thus, Article 448 75 was applied.
Rule on Useful Expenses
The structures built by petitioners were "useful" improvements, because
they augmented the value or income of the bare lots. 76 Thus, the indemnity
to be paid by respondents under Article 448 is provided for by Article 546,
which we quote:
"Art. 546. Necessary expenses shall be refunded to every
possessor; but only the possessor in good faith may retain the
thing until he has been reimbursed therefor.
"Useful expenses shall be refunded only 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 of paying the increase in value which the thing
may have acquired by reason thereof."
Consequently, respondents have the right to appropriate -- as their own -the building and other improvements on the subject lots, but only after (1)
refunding the expenses of petitioners or (2) paying the increase in value
acquired by the properties by reason thereof. They have the option to
oblige petitioners to pay the price of the land, unless its value is
considerably more than that of the structures -- in which case, petitioners
shall pay reasonable rent.
In accordance with Depra v. Dumlao,77 this case must be remanded to the
trial court to determine matters necessary for the proper application of
Article 448 in relation to Article 546. Such matters include the option that
respondents would take and the amount of indemnity that they would pay,
should they decide to appropriate the improvements on the lots. We
disagree with the CAs computation of useful expenses, which were based
only on petitioners bare allegations in their Answer. 78
Ruling on Improvement Justified
While, ordinarily, the jurisdiction of the MTCC on ejectment proceedings is
limited to the issue of physical or material possession of the property in
question, this Court finds it necessary to abbreviate the issue on the
improvements in relation to Article 448. First, the determination of the
parties right to those improvements is intimately connected with the MTCC
proceedings in the light of the ejectment of petitioners. Second, there is no
dispute that while they constructed the improvements, respondents owned
the land. Third, both parties raised no objection when the RTC and the CA
ruled accordingly on this matter.
Equitable considerations compel us to settle this point immediately, pro
hoc vice, to avoid needless delay. Both parties have already been heard on
this issue; to dillydally or equivocate would not serve the cause of
substantial justice.
Other Issues Raised
Given the foregoing rulings, it is no longer necessary to address
petitioners allegation that the MTCC judge and respondents lawyers
should be respectively held personally accountable for the Decision and for
filing the case.79 The insinuation of petitioners that the lawyers
manipulated the issuance of a false barangay certification is
unavailing.80 Their contention that respondents did not attend the
barangay conciliation proceedings was based solely on hearsay, which has
little or no probative value.81
WHEREFORE, the assailed Decision and Resolution of the Court of Appeals
are AFFIRMED with the followingMODIFICATIONS:
1. The portion requiring Spouses Vicente and Rosario Macasaet to
reimburse one half of the value of the useful improvements,
amounting to P475,000, and the right of Spouses Ismael and Rosita
Macasaet to remove those improvements (if the former refuses to
reimburse) is DELETED.
lessor's land based on Articles 448 and 546 of the New Civil Code, we
pointed out that reliance on said legal provisions was misplaced.
The reliance by the respondent Court of Appeals on Articles
448 and 546 of the Civil Code of the Philippines is
misplaced. These provisions have no application to a
contract of lease which is the subject matter of this
controversy. Instead, Article 1678 of the Civil Code applies.
We quote:
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 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 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.
xxx xxx xxx
On the other hand, Article 448 governs the right of
accession while Article 546 pertains to effects of
possession. The very language of these two provisions
clearly manifest their inapplicability to lease contracts.
They provide:
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
obligate 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
the
instant
petition
is
hereby
Enterprises
4. 59549 3-31-69 Natividad 3,239.88 4-23-69
Rosario
5. 59552 4-1-69 Villarama 987.59 5-6-69
Metropolitan
Waterworks
and
Sewerage
System
(hereinafter referred to as MWSS) is a government owned
and controlled corporation created under Republic Act No.
6234 as the successor-in- interest of the defunct NWSA.
The Philippine National Bank (PNB for short), on the other
hand, is the depository bank of MWSS and its predecessorin-interest NWSA. Among the several accounts of NWSA
with PNB is NWSA Account No. 6, otherwise known as
Account No. 381-777 and which is presently allocated No.
010-500281. The authorized signature for said Account No.
6 were those of MWSS treasurer Jose Sanchez, its auditor
Pedro Aguilar, and its acting General Manager Victor L.
Recio. Their respective specimen signatures were
submitted by the MWSS to and on file with the PNB. By
special arrangement with the PNB, the MWSS used
personalized checks in drawing from this account. These
checks were printed for MWSS by its printer, F. Mesina
Enterprises, located at 1775 Rizal Extension, Caloocan City.
During the months of March, April and May 1969, twentythree (23) checks were prepared, processed, issued and
released by NWSA, all of which were paid and cleared by
& Sons
6. 59554 4-1-69 Gascom 6,057.60 4-16 69
Engineering
7. 59558 4-2-69 The Evening 112.00 Unreleased
News
8. 59544 3-27-69 Progressive 18,391.20 4-18 69
Const.
9. 59564 4-2-69 Ind. Insp. 594.06 4-18 69
Int. Inc.
10. 59568 4-7-69 Roberto 800.00 4-22-69
Marsan
Inc. --------------------
P 320,636.26
Santos
13.59578
Mendoza
4-10-69
Antonio
93,950.00
Torres
4-29-69
addressed to the Chief Auditor of the petitioner; (5) the admission of the
respondent bank's counsel in open court that the National Bureau of
Investigation found the signature on the twenty-three (23) checks in
question to be forgeries; and (6) the admission of the respondent bank's
witness, Mr. Faustino Mesina, Jr. that the checks in question were not
printed by his printing press. The petitioner contends that since the
signatures of the checks were forgeries, the respondent drawee bank must
bear the loss under the rulings of this Court.
A bank is bound to know the signatures of its customers;
and if it pays a forged check it must be considered as
making the payment out of its obligation funds, and cannot
ordinarily charge the amount so paid to the account of the
depositor whose name was forged.
xxx xxx xxx
The petitioner submits that the above provision does not apply to the facts
of the instant case because the questioned checks were not those of the
MWSS and neither were they drawn by its authorized signatories. The
petitioner states that granting that Section 24 of the Negotiable
Instruments Law is applicable, the same creates only a prima facie
presumption which was overcome by the following documents, to wit: (1)
the NBI Report of November 2, 1970; (2) the NBI Report of November 21,
1974; (3) the NBI Chemistry Report No. C-74891; (4) the Memorandum of
Mr. Juan Dino, 3rd Assistant Auditor of the respondent drawee bank
(4) The petitioner failed to furnish the respondent drawee bank with
samples of typewriting, cheek writing, and print used by its printer in the
printing of its checks and of the inks and pens used in signing the same;
and
This gross negligence of the petitioner is very evident from the sworn
statement dated June 19, 1969 of Faustino Mesina, Jr., the owner of the
printing press which printed the petitioner's personalized checks:
instruction
did
you
do
with
these
on
Negotiable
This failure of the petitioner to reconcile the bank statements with its
cancelled checks was noted by the National Bureau of Investigation in its
report dated November 2, 1970:
58. One factor which facilitate this fraud was the delay in
the reconciliation of bank (PNB) statements with the
NAWASA bank accounts. x x x. Had the NAWASA
representative come to the PNB early for the statements
and had the bank been advised promptly of the reported
bogus check, the negotiation of practically all of the
remaining checks on May, 1969, totalling P2,224,736.00
could have been prevented.
The records likewise show that the petitioner failed to provide appropriate
security measures over its own records thereby laying confidential records
open to unauthorized persons. The petitioner's own Fact Finding
Committee, in its report submitted to their General manager underscored
this laxity of records control. It observed that the "office of Mr. Ongtengco
(Cashier No. VI of the Treasury Department at the NAWASA) is quite open
to any person known to him or his staff members and that the check writer
is merely on top of his table."
When confronted with this report at the Anti-Fraud Action Section of the
National Bureau of Investigation. Mr. Ongtengco could only state that:
A. Generally my order is not to allow
anybody to enter my office. Only
authorized persons are allowed to enter my
office. There are some cases, however,
where some persons enter my office
because they are following up their checks.
Maybe, these persons may have been
authorized by Mr. Pantig. Most of the
people entering my office are changing
checks as allowed by the Resolution of the
Board of Directors of the NAWASA and the
Treasurer. The check writer was never
placed on my table. There is a place for the
check write which is also under lock and
key.
We cannot fault the respondent drawee Bank for not having detected the
fraudulent encashment of the checks because the printing of the
petitioner's personalized checks was not done under the supervision and
control of the Bank. There is no evidence on record indicating that because
of this private printing the petitioner furnished the respondent Bank with
samples of checks, pens, and inks or took other precautionary measures
with the PNB to safeguard its interests.
Under the circumstances, therefore, the petitioner was in a better position
to detect and prevent the fraudulent encashment of its checks.
WHEREFORE, the petition for review on certiorari is hereby DISMISSED for
lack of merit. The decision of the respondent Court of Appeals dated
October 29, 1982 is AFFIRMED. No pronouncement as to costs.
SO ORDERED
the rights granted to a builder in good faith. He, therefore, must remove all
his useful improvements over Lot "B" at his own expense and if the same
have already been removed, he cannot be entitled to the right of retention
or to any reimbursement. Thus, in the case of Metropolitan Waterworks
and Sewarage System v. Court of Appeals, (143 SCRA 623, 629), we ruled:
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 (Santos v. Mojica, Jan. 31, 1969, 26 SCRA 703)
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 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, Id.).
We, therefore, find that the appellate court committed reversible error in
holding that the private respondent is entitled to exercise the option to pay
the value of the disputed area of Lot "B" and to reimbursement for the
value of the demolished portion of his building. We, however, affirm its
ruling that the petitioner's bill of costs must be set aside and that while the
resolution of May 16, 1983 included attorney's fees and damages, the
necessity of proof cannot be dispensed with. Since no proof was presented
before the trial regarding any of these claims, they cannot be awarded.
WHEREFORE, the petition is GRANTED and the decision of the court of
Appeals dated September 20, 1985 is ANNULED and SET ASIDE. The writ of
attachment issued by the trial court for the purpose of satisfying the award
for damages and the bill of costs is, however, permanently SET ASIDE.
SO ORDERED.
not fall in any of the exceptions enumerated in Article 285 of the Civil
Code.[6]
[G.R. No. 117642. April 24, 1998]
EDITHA
ALVIOLA and PORFERIO
ALVIOLA, petitioners, vs. HONORABLE COURT OF APPEALS,
FLORENCIA BULING VDA DE TINAGAN, DEMOSTHENES
TINAGAN, JESUS TINAGAN, ZENAIDA T. JOSEP AND
JOSEPHINE TINAGAN, respondents.
DECISION
MARTINEZ, J.:
In this petition for review on certiorari, petitioners assail the
decision[1] of the Court of Appeals dated April 8, 1994 which affirmed the
decision of the lower court ordering petitioners to peacefully vacate and
surrender the possession of the disputed properties to the private
respondents.
Culled from the record are the following antecedent facts of this case
to wit:
On April 1, 1950, Victoria Sonjaconda Tinagan purchased from Mauro
Tinagan two (2) parcels of land situated at Barangay Bongbong, Valencia,
Negros Oriental.[2] One parcel of land contains an area of 5,704 square
meters, more or less;[3] while the other contains 10,860 square meters.
[4]
Thereafter, Victoria and her son Agustin Tinagan, took possession of said
parcels of land.
Sometime in 1960, petitioners occupied portions thereof whereat they
built a copra dryer and put up a store wherein they engaged in the
business of buying and selling copra.
On June 23, 1975, Victoria died. On October 26, 1975, Agustin died,
survived by herein private respondents, namely his wife, Florencia
Buling Vda. de Tinagan and their children Demosthenes, Jesus, Zenaida
and Josephine, all surnamed Tinagan.
On December 24, 1976, petitioner Editha assisted by her husband
filed a complaint for partition and damages before the then Court of First
Instance of Negros Oriental, Branch 1, Dumaguete City, docketed as Civil
Case No. 6634, claiming to be an acknowledged natural child of deceased
Agustin
Tinagan and demanding the delivery of her shares in the
properties left by the deceased.[5]
On October 4, 1979, the aforesaid case was dismissed by the trial
court on the ground that recognition of natural children may be brought
only during the lifetime of the presumed parent and petitioner Editha did
Agustin Tinagan, effective 1980[25] and Tax Declaration No. 08-794 in the
name of Agustin Tinagan, effective 1985. [26] Moreover, the realty taxes on
the two lots have always been paid by the private respondents. [27] There
can be no doubt, therefore, that the two parcels of land are owned by the
private respondents.
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.
Petitioners own evidence recognized the ownership of the land in
favor of Victoria Tinagan. In their tax declarations, [28] petitioners stated that
the house and copra dryer are located on the land of Victoria S.
Tinagan/Agustin Tinagan. By acknowledging that the disputed portions
belong to Victoria/Agustin Tinagan in their tax declarations, petitioners
claim as owners thereof must fail.
The assailed decision of the respondent court states that Appellants
do not dispute that the two parcels of land subject matter of the present
complaint for recovery of possession belonged to Victoria S. Tinagan, the
grandmother of herein plaintiffs-appellees; that Agustin Tinagan inherited
the parcels of land from his mother Victoria; and that plaintiffs-appellees,
in turn, inherited the same from Agustin.[29]
Taking exception to the aforequoted finding, petitioners contend that
while the 2 parcels of land are owned by private respondents, the portions
wherein the copra dryers and store stand were ceded to them by Victoria
S. Tinagan in exchange for an alleged indebtedness of Agustin Tinagan in
the sum of P7,602.04.[30]
This claim of the petitioners was brushed aside by the respondent
court as merely an afterthought, thus Appellants claim that they have acquired ownership over the floor areas of
the store and dryer 'in consideration of the account of Agustin Tinagan in
the sum ofP7,602.04' is not plausible. It is more of an 'after-thought'
defense which was not alleged in their answer. Although the evidence
presented by them in support of this particular claim was not duly objected
to by counsel for appellees at the proper time and therefore deemed
admissible in evidence, an examination of the oral and documentary
evidence submitted in support thereof, reveals the weakness of their claim.
Appellant testified that the areas on which their store and dryer were
located were exchanged for the amount of P7,602.04 owed to them by
Agustin in 1967 (TSN, Hearing of April 14, 1989, p. 9); that he did not
bother to execute a document reflecting such agreement `because they
were our parents and we had used the land for quite sometime already
they had also sold their copra to us for a long time. (Id.) Yet, as earlier
discussed, the tax declarations in appellants answer show that even after
1967, they expressly declared that the parcels of land on which their store
and dryer were constructed, belonged to Victoria and Agustin (Exhs. 2-A, 2B, 2-C, 3-A, 3-B). If appellants really believed that they were in possession
of the said particular areas in the concept of owners, they could have
easily declared it in said tax declarations. [31]
Concededly, petitioners have been on the disputed portions since
1961. However, their stay thereon was merely by tolerance on the part of
the private respondents and their predecessor-in-interest. The evidence
shows that the petitioners were permitted by Victoria Sanjoco Tinagan to
build a copra dryer on the land when they got married. Subsequently,
petitioner Editha Alviola, claiming to be the illegitimate daughter of Agustin
Tinagan, filed a petition for partition demanding her share in the estate of
the deceased Agustin Tinagan on December 6, 1976. However, the petition
was dismissed since it was brought only after the death of Agustin Tinagan.
This Court dismissed the petition for certiorari and mandamusfiled by
petitioner Editha Alviola on August 9, 1982. It was on March 29, 1988,
when private respondents filed this complaint for recovery of possession
against petitioners. Considering that the petitioners occupation of the
properties in dispute was merely tolerated by private respondents, 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. And, 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.
WHEREFORE, this petition should be, as it is hereby, DISMISSED. The
assailed decision is hereby AFFIRMED.
SO ORDERED
met with the Spouses Firme on 23 January 1995 and he presented them
with a draft deed of sale [4] (First Draft) dated February 1995. The First Draft
of the deed of sale provides:
[G.R. No. 146608. October 23, 2003]
The Case
This is a petition for review on certiorari of the Decision[1] dated 3
January 2001 of the Court of Appeals in CA-G.R. CV No. 60747. The Court of
Appeals reversed the Decision [2]of the Regional Trial Court, Branch
223, Quezon City (trial court), which held that there was no perfected
contract of sale since there was no consent on the part of the seller.
The Facts
Petitioner Spouses Constante and Azucena Firme (Spouses Firme) are
the registered owners of a parcel of land [3] (Property) located on Dahlia
Avenue, Fairview Park, Quezon City. Renato de Castro (De Castro), the vice
president of Bukal Enterprises and Development Corporation (Bukal
Enterprises) authorized his friend, Teodoro Aviles (Aviles), a broker, to
negotiate with the Spouses Firme for the purchase of the Property.
On 28 March 1995, Bukal Enterprises filed a complaint for specific
performance and damages with the trial court, alleging that the Spouses
Firme reneged on their agreement to sell the Property. The complaint asked
the trial court to order the Spouses Firme to execute the deed of sale and
to deliver the title to the Property to Bukal Enterprises upon payment of
the agreed purchase price.
During
trial,
Bukal
Enterprises
presented
five
witnesses,
namely, Aviles, De Castro, Antonio Moreno, Jocelyn Napa and
Antonio Ancheta.
Aviles testified that De Castro authorized him to negotiate on behalf of
Bukal Enterprises for the purchase of the Property. According to Aviles, he
This DEED OF ABSOLUTE SALE made and executed by and between the
Spouses CONSTANTE FIRME and AZUCENA E. FIRME, both of legal age,
Filipino citizens and with postal address at No. 1450 Union, Paco, City of
Manila, hereinafter called the VENDOR, and
BUKAL ENTERPRISES and DEVELOPMENT CORPORATION, a corporation duly
organized and registered in accordance with Philippine Laws, with business
address at Dahlia Avenue, Fairview Park, Quezon City, herein represented
by its PRESIDENT, MRS. ZENAIDA A. DE CASTRO, hereinafter called the
VENDEE.
WITNESSETH:
That the VENDOR is the absolute and registered owner of a certain parcel
of land located at Fairview Park, Quezon City, and more particularly
described as follows:
A parcel of land (Lot 4, Block 33 of the consolidation-subdivision plan (LRC)
Pcs-8124, Sheet No. I, being a portion of the consolidation of Lots 41-B-2-A
and 41-B-2-C, Psd-1136 and Lot (LRC) Pcs-2665, (LRC) GLRO) Record. No.
1037), situated in Quezon City, Island of Luzon. Bounded on the NE., points
2 to 5 by Road Lot 24, of the consolidation-subdivision plan. Beginning at a
point marked 1 on plan, being S. 67 deg. 23W., 9288.80 m. from BLLM I, Mp
of Montalban, Rizal; thence N. 85 deg. 35E., 17.39 m. to point 2; thence S.
54 deg. 22E., 4.00 m. to point 3; thence S. 14 deg. 21E., 17.87 m. to point
4; thence 3 deg. 56E., 17.92 m. to point 5; thence N. 85 deg. 12 W., 23.38
m. to point 6; thence N. 4 deg. 55 W., 34.35 m. to the point of beginning;
containing an area of EIGHT HUNDRED AND SIX (806) SQUARE METERS,
more or less.
VENDORS title thereto being evidenced by Transfer Certificate of Title No.
264243 issued by the Register of Deeds of Quezon City;
That the VENDOR, for and in consideration of the sum of THREE MILLION
TWO HUNDRED TWENTY FOUR THOUSAND PESOS (P3,224,000.00)
Philippine Currency, to them in hand paid and receipt whereof is hereby
acknowledged, do hereby SELL, TRANSFER and CONVEY unto the said
VENDEE, its assigns, transferees and successors in interest the above
described property, free from all liens and encumbrances whatsoever;
It is hereby mutually agreed that the VENDEE shall bear all the expenses
for the capital gains tax, documentary stamps, documentation,
notarization, removal and relocation of the squatters, registration, transfer
tax and other fees as may be required by law;
That the VENDOR shall pay the real estate tax for the current year and
back real estate taxes, charges and penalties if there are any.
IN WITNESS WHEREOF, we have hereunto affixed our signatures this ____
day of February, 1995, at Quezon City, Philippines.
CONSTANTE FIRME BUKAL ENTERPRISES AND
DEVELOPMENT
CORP.
BY:
AZUCENA E. FIRME ZENAIDA A. DE CASTRO
VENDOR President
xxx
The Spouses Firme rejected this First Draft because of several
objectionable conditions, including the payment of capital gains and other
government taxes by the seller and the relocation of the squatters at the
sellers expense. During their second meeting, Avilespresented to the
Spouses Firme another draft deed of sale [5] (Second Draft) dated March
1995. The Spouses Firme allegedly accepted the Second Draft in view of
the deletion of the objectionable conditions contained in the First
Draft. According to Aviles, the Spouses Firme were willing to sell the
Property at P4,000 per square meter. They then agreed that payment
would be made at the Far East Bank and Trust Company (FEBTC), Padre
Faura Branch,Manila. However, the scheduled payment had to be
postponed due to problems in the transfer of funds. The Spouses Firme
later informed Aviles that they were no longer interested in selling the
Property.[6]
De Castro testified that he authorized Aviles to negotiate for Bukal
Enterprises the purchase of the Property owned by the Spouses Firme. The
Property was located beside the Dahlia Commercial Complex owned by
Bukal Enterprises. Aviles informed him that the Spouses Firme agreed to
sell the Property at P4,000 per square meter, payable in cash for a lump
sum of P3,224,000. Furthermore, Bukal Enterprises agreed to pay the taxes
due and to undertake the relocation of the squatters on the Property. For
this purpose, Bukal Enterprises applied for a loan of P4,500,000 which
FEBTC granted. Bukal Enterprises then relocated the four families squatting
on the Property at a cost of P60,000 per family. After the squatters vacated
the Property, Bukal Enterprises fenced the area, covered it with filling
materials, and constructed posts and riprap. Bukal Enterprises spent
WITNESSETH:
That for and in consideration of the sum of THREE MILLION TWO HUNDRED
TWENTY FOUR THOUSAND PESOS (P3,224,000.00), Philippine Currency,
payable in the form hereinafter expressed, agreed to sell to the VENDEE
and the VENDEE has agreed to buy from the VENDORS, a parcel of land
situated at Dahlia Avenue corner Rolex Street, Fairview Park, Quezon City,
containing an area of 806 Square Meters more or less, of which the
VENDORS are the absolute registered owners in accordance with the Land
Registration Act, as evidenced by Transfer Certificate of Title No.
264243 issued by the Register of Deeds of Quezon City, more particularly
described and bounded as follows:
The Issues
The Spouses Firme raise the following issues:
1. WHETHER THE COURT OF APPEALS ERRED IN FINDING THAT
THERE WAS A PERFECTED CONTRACT OF SALE BETWEEN
PETITIONERS AND RESPONDENT DESPITE THE ADDUCED
EVIDENCE PATENTLY TO THE CONTRARY;
2. WHETHER THE COURT OF APPEALS ERRED IN NOT FINDING
THAT THE ALLEGED CONTRACT OF SALE IS ENFORCEABLE
DESPITE THE FACT THAT THE SAME IS COVERED BY THE
STATUTE OF FRAUDS;
3. WHETHER THE COURT OF APPEALS ERRED IN DISREGARDING
THE FACT THAT IT WAS NOT LEGALLY AND FACTUALLY
the Spouses Firme rejected. [28] On their second meeting, Aviles showed the
Spouses Firme the Second Draft, which the Spouses Firme allegedly
approved because the objectionable conditions contained in the First Draft
were already deleted. However, a perusal of the First Draft and the Second
Draft would show that both deeds of sale contain exactly the same
provisions. The only difference is that the date of the First Draft is February
1995 while that of the Second Draft is March 1995.
When Aviles testified again as rebuttal witness, his testimony became
more confusing.Aviles testified that during his first meeting with the
Spouses Firme on 30 January 1995, he showed them the Third Draft, which
was not acceptable to the latter. [29] However, upon further questioning by
his counsel, Aviles concurred with Dr. Firmes testimony that he presented
the Third Draft (Exh. 5; Exh. L) to the Spouses Firme only during their
second meeting. He also stated that he prepared and presented to the
Spouses Firme the First Draft (Exh. C) and the Second Draft (Exh. C-1)
during their first or second meeting. He testified:
ATTY. MARQUEDA:
Q: On page 11 of the tsn dated August 5, 1997 a question was
posed How did you find this draft the Contract of Sale which
was presented to you by Mr. Aviles on the second
meeting? The answer is On the first meeting(sic), we find it
totally unacceptable, sir.[30]What can you say on this? Before
that, Mr. Witness, what is this Contract of Sale that you
presented to Mr. Aviles on the second meeting? Is this
different from the Contract of Sale that was marked as
Exhibit 5-L?
Q: May I see the document Exhibit 5 L?[31]
INTERPRETER:
Witness going over the record.
ATTY. MARQUEDA:
Q: Is that the same document that was presented by you
to Mr. Firme on the second meeting or there is a
different contract?
A: This is the same document draft of the document that I
submitted to them during our second meeting. That
was February. This was the draft.
Q: What about Exhibit C and C-1 [which] were identified by
you. When was this presented to Dr. Firme?
A: This is the same.
Q: Exhibit C and C-1?
A: Yes because I prepared two documents during our
meeting. One already with notarial, the one without notarial
Firme was When I found out that he was calling, I told him
that the property is not for sale. What can you say on this?
A. He mentioned that they are no longer interested to sell
their property, perhaps they would like a higher price of
the property. They did not mention to me. I do not know
what was their reason.
Q. The next question So, what happened next? The answer is He
called up two days later, March 4 and my wife answered the
telephone and told him that the property is not for sale,
sir. What can you say on this?
A. That is true. That is what Mrs. Firme told me during our
conversation on the telephone that they are no
longer interested to sell the property for obvious
reason.
Q. When was that?
A. March 4, 1995, your honor.[39] (Emphasis supplied)
Significantly, De Castro also admitted that he was aware of the
Spouses Firmes refusal to sell the Property. [40]
The confusing testimony of Aviles taken together with De Castros
admission that he was aware of the Spouses Firmes refusal to sell the
Property reinforces Dr. Firmes testimony that he and his wife never
consented to sell the Property.
Consent is one of the essential elements of a valid contract. The Civil
Code provides:
Art. 1318. There is no contract unless the following requisites concur:
1. Consent of the contracting parties;
2. Object certain which is the subject matter of the contract;
3. Cause of the obligation which is established.
The absence of any of these essential elements will negate the
existence of a perfected contract of sale.[41] Thus, where there is want of
consent, the contract is non-existent. [42] As held in Salonga, et al. v.
Farrales, et al.:[43]
It is elementary that consent is an essential element for the existence of a
contract, and where it is wanting, the contract is non-existent. The
essence of consent is the conformity of the parties on the terms of
the contract, the acceptance by one of the offer made by the
other. The contract to sell is a bilateral contract. Where there is merely an
offer by one party, without the acceptance of the other, there is no
consent. (Emphasis supplied)
In this case, the Spouses Firme flatly rejected the offer of Aviles to buy
the Property on behalf of Bukal Enterprises. There was therefore no
concurrence of the offer and the acceptance on the subject matter,
consideration and terms of payment as would result in a perfected contract
of sale.[44] Under Article 1475 of the Civil Code, the contract of sale is
perfected at the moment there is a meeting of minds on the thing which is
the object of the contract and on the price.
Another piece of evidence which supports the contention of the
Spouses Firme that they did not consent to the contract of sale is the fact
they never signed any deed of sale. If the Spouses Firme were already
agreeable to the offer of Bukal Enterprises as embodied in the Second
Draft, then the Spouses Firme could have simply affixed their signatures on
the deed of sale, but they did not.
Even the existence of a signed document purporting to be a contract
of sale does not preclude a finding that the contract is invalid when the
evidence shows that there was no meeting of the minds between the seller
and buyer.[45] In this case, what were offered in evidence were mere
unsigned deeds of sale which have no probative value. [46] Bukal Enterprises
failed to show the existence of a perfected contract of sale by competent
proof.
Second, there was no approval from the Board of Directors of Bukal
Enterprises as would finalize any transaction with the Spouses
Firme. Aviles did not have the proper authority to negotiate for Bukal
Enterprises. Aviles testified that his friend, De Castro, had asked him to
negotiate with the Spouses Firme to buy the Property. [47] De Castro, as
Bukal Enterprises vice president, testified that he authorized Aviles to buy
the Property.[48]However, there is no Board Resolution authorizing Aviles to
negotiate and purchase the Property on behalf of Bukal Enterprises. [49]
It is the board of directors or trustees which exercises almost all the
corporate powers in a corporation. Thus, the Corporation Code provides:
SEC. 23. The board of directors or trustees. Unless otherwise provided in
this Code, the corporate powers of all corporations formed under this Code
shall be exercised, all business conducted and all property of such
corporations controlled and held by the board of directors or trustees to be
elected from among the holders of stock, or where there is no stock, from
among the members of the corporation, who shall hold office for one (1)
year and until their successors are elected and qualified. x x x
SEC. 36. Corporate powers and capacity. Every corporation incorporated
under this Code has the power and capacity:
xxx
7. To purchase, receive, take or grant, hold, convey, sell, lease,
pledge, mortgage and otherwise deal with such real and personal
property, including securities and bonds of other corporations, as
the transaction of a lawful business of the corporation may
reasonably and necessarily require, subject to the limitations
prescribed by the law and the Constitution.
xxx
Under these provisions, the power to purchase real property is vested
in the board of directors or trustees. While a corporation may appoint
agents to negotiate for the purchase of real property needed by the
corporation, the final say will have to be with the board, whose approval
will finalize the transaction. [50] A corporation can only exercise its powers
and transact its business through its board of directors and through its
officers and agents when authorized by a board resolution or its by-laws.
[51]
As held in AF Realty & Development, Inc. v. Dieselman Freight
Services, Co.:[52]
Section 23 of the Corporation Code expressly provides that the corporate
powers of all corporations shall be exercised by the board of directors. Just
as a natural person may authorize another to do certain acts in his behalf,
so may the board of directors of a corporation validly delegate some of its
functions to individual officers or agents appointed by it. Thus, contracts
or acts of a corporation must be made either by the board of
directors or by a corporate agent duly authorized by the board.
Absent such valid delegation/authorization, the rule is that the
declarations of an individual director relating to the affairs of the
corporation, but not in the course of, or connected with, the
performance of authorized duties of such director, are held not
binding on the corporation.(Emphasis supplied)
In this case, Aviles, who negotiated the purchase of the Property, is
neither an officer of Bukal Enterprises nor a member of the Board of
Directors of Bukal Enterprises. There is no Board Resolution
authorizing Aviles to negotiate and purchase the Property for Bukal
Enterprises. There is also no evidence to prove that Bukal Enterprises
approved whatever transaction Aviles made with the Spouses Firme. In
fact, the president of Bukal Enterprises did not sign any of the deeds of
sale presented to the Spouses Firme. Even De Castro admitted that he had
never met the Spouses Firme.[53] Considering all these circumstances, it is
highly improbable for Aviles to finalize any contract of sale with the
Spouses Firme.
Furthermore, the Court notes that in the Complaint filed by Bukal
Enterprises with the trial court, Aviles signed[54] the verification and
certification of non-forum shopping. [55] The verification and certification of
non-forum shopping was not accompanied by proof that Bukal Enterprises
authorized Aviles to file the complaint on behalf of Bukal Enterprises.
The power of a corporation to sue and be sued is exercised by the
board of directors. The physical acts of the corporation, like the signing of
documents, can be performed only by natural persons duly authorized for
the purpose by corporate by-laws or by a specific act of the board of
directors.[56]
The purpose of verification is to secure an assurance that the
allegations in the pleading are true and correct and that it is filed in good
faith.[57] True,
this
requirement
is
procedural
and
not
jurisdictional. However, the trial court should have ordered the correction
of the complaint since Aviles was neither an officer of Bukal Enterprises nor
authorized by its Board of Directors to act on behalf of Bukal Enterprises.
A: That March.
Q: When in March?
A: 1995.
Q: When in March 1995?
A: From the period of March 2, 1995 or two (2) weeks after
the removal of the squatters.
Q: When were the squatters removed?
WITNESS:
A: March 6 and 7 because there were four (4) squatters.
ATTY. EJERCITO:
Q: When did you find out that the Spouses Firme did not want to
sell the same?
A: First week of March 1995.
Q: In your Complaint you said you find out on March 3, 1995. Is
that not correct?
A: I cannot exactly remember, sir.
ATTY. MARQUEDA:
In the Complaint it does not state March 3. Maybe counsel was
thinking of this Paragraph 6 which states, When the property
was rid of the squatters on March 2, 1995 for the
documentation and payment of the sale, xxx.
ATTY. EJERCITO:
Q: So, you found out on March 2, 1995 that the
defendants were no longer interested in selling to
you the property. Is that correct?
A: Yes, sir, because Mr. Aviles relayed it to me.
Art. 449. He who builds, plants or sows in bad faith on the land of another,
loses what is built, planted or sown without right of indemnity.
Art. 450. The owner of the land on which anything has been built, planted
or sown in bad faith may demand the demolition of the work, or that the
planting or sowing be removed, in order to replace things in their former
condition at the expense of the person who built, planted or sowed; or he
may compel the builder or planter to pay the price of the land, and the
owner the proper rent.
Under these provisions the Spouses Firme have the following options:
(1) to appropriate what Bukal Enterprises has built without any obligation
to pay indemnity; (2) to ask Bukal Enterprises to remove what it has built;
or (3) to compel Bukal Enterprises to pay the value of the land. [61] Since the
Spouses Firme are undoubtedly not selling the Property to Bukal
Enterprises, they may exercise any of the first two options. They may
appropriate what has been built without paying indemnity or they may ask
Bukal Enterprises to remove what it has built at Bukal Enterprises own
expense.
Bukal Enterprises is not entitled to reimbursement for the expenses
incurred in relocating the squatters. Bukal Enterprises spent for the
relocation of the squatters even after learning that the Spouses Firme were
no longer interested in selling the Property. De Castro testified that even
though the Spouses Firme did not require them to remove the squatters,
they chose to spend for the relocation of the squatters since they were
interested in purchasing the Property. [62]
Art. 2221. Nominal damages are adjudicated in order that a right of the
plaintiff, which has been violated or invaded by the defendant, may be
vindicated or recognized, and not for the purpose of indemnifying the
plaintiff for any loss suffered by him.
Art. 2222. The court may award nominal damages in every obligation
arising from any source enumerated in article 1157, or in every case where
any property right has been invaded.
The award of damages is also in accordance with Article 451 of the
Civil Code which states that the landowner is entitled to damages from the
builder in bad faith.[65]
WHEREFORE, we SET ASIDE the Decision of the Court of Appeals and
RENDER a new one:
1. Declaring that there was no perfected contract of sale;
2. Ordering Bukal Enterprises to pay the Spouses Firme P30,000
as nominal damages.
SO ORDERED
On December 10, 1981, the trial court rendered its decision, the dispositive
portion of which reads:
WHEREFORE, judgment is hereby rendered in favor of the
defendants and against the plaintiffs:
1. Dismissing the complaint of plaintiffs
Angelica F. Viajar and Celso F. Viajar with
costs against them;
2. Declaring defendants Leonor P. Ladrido,
Lourdes Ladrido-Ignacio, Eugenio P. Ladrido
and Manuel P. Ladrido as owner of the
parcel of land indicated as Lots A and B in
the sketch plan (Exhs. 'C' as well as '4,' '4B' and '4-C') situated in barangays
Cawayan and Guibuanogan Pototan, Iloilo,
and containing an area of 25,855 square
meters, more or less; and
3. Pronouncing that as owners of the land
described in the preceding paragraph, the
defendants are entitled to the possession
thereof.
Defendants' claim for moral damages and attorney's fees
are dismissed.
SO ORDERED (p. 36, Rollo).
Not satisfied with the decision, the plaintiffs appealed to the Court of
Appeals and assigned the following errors:
I.
THE LOWER COURT ERRED IN NOT HOLDING THAT
PLAINTIFFS ARE ENTITLED TO LOT B APPEARING IN EXHIBIT
"4" AND TO ONE-HALF () OF LOT A IN THE SAID EXHIBIT
"4."
II
THE LOWER COURT ERRED IN NOT AWARDING DAMAGES
TO PLAINTIFFS (p. 42, Rollo).
As earlier stated, the Court of Appeals affirmed the decision of the court a
quo. Plaintiffs (the petitioners herein) now come to Us claiming that the
Court of Appeals palpably erred in affirming the decision of the trial court
on the ground that the change in the course of the Suague River was
gradual and not sudden.
In the decision appealed from, the Court of Appeals held:
This appeal is not impressed with merit.
Article 457 of the New Civil Code provides that:
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.
The presumption is that the change in the course of the
river was gradual and caused by accretion and erosion
(Martinez Canas vs. Tuason, 5 Phil. 668; Payatas Estate
Improvement Co. vs. Tuason, 53 Phil. 55; C.H. Hodges vs.
Garcia, 109 Phil. 133). In the case at bar, the lower court
correctly found that the evidence introduced by the
plaintiff to show that the change in the course of the
Suague River was sudden or that it occurred through
avulsion is not clear and convincing.
Contrariwise, the lower court found that:
... the defendants have sufficiently established that for
many years after 1926 a gradual accretion on the eastern
side of Lot No. 7511 took place by action of the current of
the Suague River so that in 1979 an alluvial deposit of
29,912 square meters (2.9912 hectares), more or less, had
been added to Lot No. 7511. (Exhs. '1' as well as Exhs. 'C'
and '4'). Apropos it should be observed that the accretion
consisted of Lot A with an area of 14,036 square meters;
Lot B, 11,819 square meters; and Lot C, 4,057 square
meters. (Exhs. '4-B,' '4-C' and '4-D'). Only Lot C is not
involved in this litigation. (See Pre-trial Order, supra)
The established facts indicate that the eastern boundary of
Lot No. 7511 was the Suague River based on the cadastral
plan. For a period of more than 40 years (before 1940 to
1980) the Suague River overflowed its banks yearly and
the property of the defendant gradually received deposits
of soil from the effects of the current of the river. The
consequent increase in the area of Lot No. 7511 due to
alluvion or accretion was possessed by the defendants
whose tenants plowed and planted the same with coin and
tobacco.
The quondam river bed had been filled by accretion
through the years. The land is already plain and there is no
indication on the ground of any abandoned river bed. The
river bed is definitely no longer discernible now.
What used to be the old river bed (Lot A) is in level with Lot
No. 7511. So are the two other areas to the East. (Lots B
and C) Lots A, B and C are still being cultivated.
Under the law, accretion which the banks or rivers may
gradually receive from the effects of the current of the
waters becomes the property of the owners of the lands
adjoining the banks. (Art. 366, Old Civil Code; Art. 457,
New Civil Code which took effect on August 30, 1950 [Lara
v. Del Rosario, 94 Phil. 778]. Therefore, the accretion to Lot
No. 7511 which consists of Lots A and B (see Exhs. 'C' and
'4') belongs to the defendants (pp. 34-35, Record on
Appeal).
We find no cogent reason to disturb the foregoing finding
and conclusion of the lower court.
The second assignment of error is a mere offshoot of the
first assignment of error and does not warrant further
discussion (pp. 4244, Rollo).
The petition is without merit.
The petitioners contend that the first issue raised during the trial of the
case on the merits in the Court of First Instance, that is, "whether the
change in the course of the Suague River was sudden as claimed by the
plaintiffs or gradual as contended by the defendants," was abandoned and
never raised by them in their appeal to the Court of Appeals. Hence, the
Court of Appeals, in holding that the appeal is without merit, because of
the change of the Suague River was gradual and not sudden, disposed of
the appeal on an issue that was never raised and, accordingly, its decision
is void. In support of its contention, petitioners cite the following
authorities:
Petitioners contend that this article must be read together with Sections 45
an 46 of Act No. 496 which provides:
As a result, petitioners contend, Article 457 of the New Civil Code must be
construed to limit the accretion mentioned therein as accretion of
MARIO
C.
RONQUILLO, petitioner
vs.
THE COURT OF APPEALS, DIRECTOR OF LANDS, DEVELOPMENT
BANK OF THE PHILIPPINES, ROSENDO DEL ROSARIO, AMPARO DEL
ROSARIO and FLORENCIA DEL ROSARIO, respondents.*
Angara, Abello, Concepcion, Regala & Cruz for petitioner.
REGALADO, J.:
This petition seeks the review of the decision 1 rendered by respondent
Court of Appeals on September 25, 1975 in CA-G.R. No. 32479-R, entitled
"Rosendo del Rosario, et al., Plaintiffs-Appellees, versus Mario Ronquillo,
Defendant-Appellant," affirming in toto the judgment of the trial court, and
its amendatory resolution 2 dated January 28, 1976 the dispositive portion
of which reads:
IN VIEW OF THE FOREGOING, the decision of this Court dated
September 25, 1975 is hereby amended in the sense that the first
part of the appealed decision is set aside, except the last portion
"declaring the plaintiffs to be the rightful owners of the dried-up
portion of Estero Calubcub which is abutting plaintiffs' property,"
which we affirm, without pronouncement as to costs.
SO ORDERED.
The following facts are culled from the decision of the Court of Appeals:
It appears that plaintiff Rosendo del Rosario was a registered owner
of a parcel of land known as Lot 34, Block 9, Sulucan Subdivision,
situated at Sampaloc, Manila and covered by Transfer Certificate of
Title No. 34797 of the Registry of Deeds of Manila (Exhibit "A"). The
other plaintiffs Florencia and Amparo del Rosario were daughters of
said Rosendo del Rosario. Adjoining said lot is a dried-up portion of
the old Estero Calubcub occupied by the defendant since 1945
which is the subject matter of the present action.
Plaintiffs claim that long before the year 1930, when T.C.T. No.
34797 over Lot No. 34 was issued in the name of Rosendo del
Rosario, the latter had been in possession of said lot including the
adjoining dried-up portion of the old Estero Calubcub having
bought the same from Arsenio Arzaga. Sometime in 1935, said
titled lot was occupied by Isabel Roldan with the tolerance and
consent of the plaintiff on condition that the former will make
improvements on the adjoining dried-up portion of the Estero
5. That the plaintiffs and defendant have both filed with the Bureau
of Lands miscellaneous sales application for the purchase of the
abandoned river bed known as Estero Calubcub and their sales
applications, dated August 5, 1958 and October 13, 1959,
respectively, are still pending action before the Bureau of Lands;
6. That the parties hereby reserve their right to prove such facts as
are necessary to support their case but not covered by this
stipulation of facts. 4
On December 26, 1962, the trial court rendered judgment the decretal
portion of which provides:
WHEREFORE, judgment is hereby rendered ordering the defendant
to deliver to the plaintiffs the portion of the land covered by
Transfer Certificate of title No. 34797 which is occupied by him and
to pay for the use and occupation of said portion of land at the rate
of P 5.00 a month from the date of the filing of the complaint until
such time as he surrenders the same to the plaintiffs and declaring
plaintiffs to be the owners of the dried-up portion of estero
Calubcub which is abutting plaintiffs' property.
With costs to the defendant.
SO ORDERED.
On May 17, 1976, this Court issued a resolution 7 requiring the Solicitor
General to comment on the petition in behalf of the Director of Lands as an
indispensable party in representation of the Republic of the Philippines,
and who, not having been impleaded, was subsequently considered
impleaded as such in our resolution of September 10, 1976. 8 In his Motion
to Admit Comment, 9 the Solicitor General manifested that pursuant to a
request made by this office with the Bureau of Lands to conduct an
investigation, the Chief of the Legal Division of the Bureau sent a
communication informing him that the records of his office "do not show
that Mario Ronquillo, Rosendo del Rosario, Amparo del Rosario or Florencia
del Rosario has filed any public land application covering parcels of land
situated at Estero Calubcub Manila as verified by our Records Division.
The position taken by the Director of Lands in his Comment 10 filed on
September 3, 1978, which was reiterated in the Reply dated May 4, 1989
and again in the Comment dated August 17, 1989, explicates:
5. We do not see our way clear to subscribe to the ruling of the
Honorable Court of Appeals on this point for Article 370 of the Old
Civil Code, insofar as ownership of abandoned river beds by the
owners of riparian lands are concerned, speaks only of a situation
where such river beds were abandoned because of a natural
change in the course of the waters. Conversely, we submit that if
the abandonment was for some cause other than the natural
change in the course of the waters, Article 370 is not applicable
and the abandoned bed does not lose its character as a property of
public dominion not susceptible to private ownership in accordance
with Article 502 (No. 1) of the New Civil Code. In the present case,
the drying up of the bed, as contended by the petitioner, is clearly
caused by human activity and undeniably not because of the
natural change of the course of the waters (Emphasis in the
original text).
In his Comment
adds:
11
In a letter dated June 29, 1979 12 Florencia del Rosario manifested to this
Court that Rosendo, Amparo and Casiano del Rosario have all died, and
that she is the only one still alive among the private respondents in this
case.
The main issue posed for resolution in this petition is whether the dried-up
portion of Estero Calubcub being claimed by herein petitioner was caused
by a natural change in the course of the waters; and, corollary thereto, is
the issue of the applicability of Article 370 of the old Civil Code.
Respondent court, in affirming the findings of the trial court that there was
a natural change in the course of Estero Calubcub declared that:
The defendant claims that Article 370 of the old Civil Code is not
applicable to the instant case because said Estero Calubcub did not
actually change its course but simply dried up, hence, the land in
dispute is a land of public domain and subject to the disposition of
the Director of Land(s). The contention of defendant is without
merit. As mentioned earlier, said estero as shown by the relocation
plan (Exhibit "D") did not disappear but merely changed its course
by a more southeasternly (sic) direction. As such, "the abandoned
river bed belongs to the plaintiffs-appellees and said land is private
and not public in nature. Hence, further, it is not subject to a
Homestead Application by the appellant." (Fabian vs. Paculan CAG.R. Nos. 21062-63-64-R, Jan. 25 1962). Even assuming for the
sake of argument that said estero did not change its course but
merely dried up or disappeared, said dried-up estero would still
belong to the riparian owner as held by this Court in the case
of Pinzon vs. Rama (CA-G.R. No. 8389, Jan. 8, 1943; 2 O.G. 307). 20
On
September
13,
1990,
respondent
DBP
filed
a
Manifestation/Compliance 19 stating that DBP's interest over Transfer
Certificate of Title No. 139215 issued in its name (formerly Transfer
Certificate of Title No. 34797 of the Del Rosarios and Transfer Certificate of
Title No. 135170 of Benjamin Diaz) has been transferred to Spouses
Victoriano and Pacita A. Tolentino pursuant to a Deed of Sale dated
September 11, 1990.
Elementary is the rule that the jurisdiction of the Supreme Court in cases
brought to it from the Court of Appeals in a petition for certiorari under
Rule 45 of the Rules of Court is limited to the review of errors of law, and
that said appellate court's finding of fact is conclusive upon this Court.
However, there are certain exceptions, such as (1) when the conclusion is a
finding grounded entirely on speculation, surmises or conjectures; (2) when
the inference made is manifestly absurd, mistaken or impossible; (3) when
there is grave abuse of discretion in the appreciation of facts; (4) when the
judgment is premised on a misapprehension of facts; (5) when the findings
of fact are conflicting; and (6) when the Court of Appeals in making its
findings went beyond the issues of the case and the same is contrary to
the
admissions
of
both
appellant
and
appellee. 21
case at bar and, hence, the Del Rosarios cannot be entitled thereto
supposedly as riparian owners.
The dried-up portion of Estero Calubcub should thus be considered as
forming part of the land of the public domain which cannot be subject to
acquisition by private ownership. That such is the case is made more
evident in the letter, dated April 28, 1989, of the Chief, Legal Division of
the Bureau of Lands 25 as reported in the Reply of respondent Director of
Lands stating that "the alleged application filed by Ronquillo no longer
exists in its records as it must have already been disposed of as a rejected
application for the reason that other applications "covering Estero
Calubcub Sampaloc, Manila for areas other than that contested in the
instant case, were all rejected by our office because of the objection
interposed by the City Engineer's office that they need the same land for
drainage purposes". Consequently, since the land is to be used for
drainage purposes the same cannot be the subject of a miscellaneous
sales application.
Lastly, the fact that petitioner and herein private respondents filed their
sales applications with the Bureau of Lands covering the subject dried-up
portion of Estero Calubcub cannot but be deemed as outright admissions
by them that the same is public land. They are now estopped from
claiming otherwise.
WHEREFORE, the decision appealed from, the remaining effective portion
of which declares private respondents Del Rosarios as riparian owners of
the dried-up portion of Estero Calubcub is hereby REVERSED and SET
ASIDE.
SO ORDERED.
PARAS, J.:
This is a petition for review on certiorari which seeks the reversal of: a)
decision 1 of the Court of Appeals dated February 28, 1990 in CA-G.R. No.
1917 entitled "JOSE REYNANTE versus HON. VALENTIN CRUZ, Judge, RTC of
Malolos, Bulacan, and HEIRS OF LEONCIO AND DOLORES CARLOS, et al.",
affirming
the
decision 2 of
the
Regional
Trial
Court
of Malolos, Bulacan, Branch 8, Third Judicial Region which reversed the
decision 3 of the Municipal Trial Court of Meycauayan, Bulacan, Branch 1,
Third Judicial Region in Civil Case No. 1526 entitled "HEIRS OF LEONCIO
CARLOS & DOLORES A. CARLOS and HEIRS OF GORGONIO A. CARLOS &
CONCEPCION CARLOS versus JOSE REYNANTE: and b) the resolution
denying the motion for reconsideration.
The facts as culled from the records of the case are as follows:
More than 50 years ago, petitioner Jose Reynante was taken as tenant by
the late Don Cosme Carlos, owner and father-in-law of herein private
respondents, over a fishpond located at Barrio Liputan, Meycauayan,
Bulacan with an area of 188.711 square meters, more or less and covered
by Transfer Certificate of Title No. 25618, Land Registry of Bulacan.
During the tenancy, petitioner Jose Reynante constructed a nipa hut where
he and his family lived and took care of the nipa palms (sasahan) he had
planted on lots 1 and 2 covering an area of 5,096 square meters and 6,011
square meters respectively. These lots are located between the fishpond
covered by TCT No. 25618 and the Liputan (formerly Meycauayan) River.
Petitioner harvested and sold said nipa palms without interference and
prohibition from anybody. Neither did the late Don Cosme Carlos question
his right to plant the nipa palms near the fishpond or to harvest and
appropriate them as his own.
After the death of Don Cosme Carlos, his heirs (private respondents'
predecessors-in-interest) entered into a written agreement denominated as
"SINUMPAANG SALAYSAY NG PAGSASAULI NG KARAPATAN" dated
November 29, 1984 with petitioner Jose Reynante whereby the latter for
and in consideration of the sum of P200,000.00 turned over the fishpond
he was tenanting to the heirs of Don Cosme Carlos and surrendered all his
rights therein as caretaker or "bantay-kasama at tagapamahala" (Rollo, p.
77).
Pursuant to the said written agreement, petitioner surrendered the
fishpond and the two huts located therein to private respondents. Private
respondents thereafter leased the said fishpond to one Carlos de la Cruz.
Petitioner continued to live in the nipa hut constructed by him on lots 1 and
2 and to take care of the nipa palms he had planted therein.
On February 17, 1988, private respondents formally demanded that the
petitioner vacate said portion since according to them petitioner had
already been indemnified for the surrender of his rights as a tenant.
Despite receipt thereof, petitioner refused and failed to relinquish
possession of lots 1 and 2.
Hence, on April 22, 1988, private respondents filed a complaint for forcible
entry with preliminary mandatory injunction against petitioner alleging that
the latter by means of strategy and stealth, took over the physical, actual
and material possession of lots 1 and 2 by residing in one of the kubos or
huts bordering the Liputan River and cutting off and/or disposing of
the sasa or nipa palms adjacent thereto.
On January 10, 1989, the trial court rendered its decision dismissing the
complaint and finding that petitioner had been in prior possession of lots 1
and 2.
Private respondents appealed to the Regional Trial Court and on August 8,
1989 it rendered its decision, the dispositive portion of which reads as
follows:
WHEREFORE, this Court renders judgment in favor of the
plaintiffs and against defendant and hereby reverses the
decision of the Court a quo. Accordingly, the defendant is
ordered to restore possession of that piece of land
particularly described and defined as Lots 1 & 2 of the land
survey conducted by Geodetic Engineer Restituto Buan on
March 2, 1983, together with the sasa or nipa palms
planted thereon. No pronouncement as to attorney's fees.
Each party shall bear their respective costs of the suit.
SO ORDERED. (Rollo, p. 55; Decision, p. 4).
From said decision, petitioner filed with the Court of Appeals a petition for
review (Rollo, p. 30; Annex "A"). On February 28, 1990, the Court of
Assuming private respondents had acquired the alluvial deposit (the lot in
question), by accretion, still their failure to register said accretion for a
period of fifty (50) years subjected said accretion to acquisition through
prescription by third persons.
It is undisputed that petitioner has been in possession of the subject lots
for more than fifty (50) years and unless private respondents can show a
better title over the subject lots, petitioner's possession over the property
must be respected.
PREMISES CONSIDERED, the decision of the respondent Court of Appeals
dated February 28, 1990 is REVERSED and SET ASIDE and the decision of
the Municipal Trial Court of Meycauayan, Bulacan, Branch I, is hereby
REINSTATED.
SO ORDERED.
such, part of the public domain. In the case at bar, the subject land
was the direct result of the dumping of sawdust by the Sun Valley
Lumber Co. consequent to its sawmill operations.
[G.R. No. 98045. June 26, 1996]
APPEALS IN A WHIMSICAL,
MANNER AFFIRMED THE
WHICH IS CONTRARY TO THE
ON THE MATTER;
the Balacanas Creek and the Cagayan River. In Hilario v. City of Manila,
[4]
this Court held that the word "current" indicates the participation of the
body of water in the ebb and flow of waters due to high and low
tide. Petitioners' submission not having met the first and second
requirements of the rules on alluvion, they cannot claim the rights of a
riparian owner.
In any case, this court agrees with private respondents that
petitioners are estopped from denying the public character of the subject
land, as well as the jurisdiction of the Bureau of Lands when the late
Antonio Nazareno filed his Miscellaneous Sales Application MSA (G-6) 571.
[5]
The mere filing of said Application constituted an admission that the land
being applied for was public land, having been the subject of Survey Plan
No. MSI-10-06-000571-D (Equivalent to Lot No. 36302, Cad-237) which was
conducted as a consequence of Antonio Nazareno's Miscellaneous Sales
Application wherein said land was described as an orchard. Said
description by Antonio Nazareno was, however, controverted by
respondent Labis in his investigation report to respondent Hilario based on
the findings of his ocular inspection that said land actually covers a dry
portion of Balacanas Creek and a swampy portion of Cagayan River. The
investigation report also states that except for the swampy portion which is
fully planted to nipa palms, the whole area is fully occupied by a part of a
big concrete bodega of petitioners and several residential houses made of
light materials, including those of private respondents which were erected
by themselves sometime in the early part of 1978.[6]
Furthermore, the Bureau of Lands classified the subject land as an
accretion area which was formed by deposits of sawdust in the Balacanas
Creek and the Cagayan river, in accordance with the ocular inspection
conducted by the Bureau of Lands. [7] This Court has often enough held that
findings of administrative agencies which have acquired expertise because
their jurisdiction is confined to specific matters are generally accorded not
only respect but even finality. [8] Again, when said factual findings are
affirmed by the Court of Appeals, the same are conclusive on the parties
and not reviewable by this Court.[9]
It is this Court's irresistible conclusion, therefore, that the accretion
was man-made or artificial. In Republic v. CA,[10] this Court ruled that the
requirement that the deposit should be due to the effect of the current of
the river is indispensable. This excludes from Art. 457 of the Civil Code all
deposits caused by human intervention. Putting it differently, alluvion must
be the exclusive work of nature. Thus, in Tiongco v. Director of Lands, et
al.,[11] where the land was not formed solely by the natural effect of the
water current of the river bordering said land but is also the consequence
of the direct and deliberate intervention of man, it was deemed a manmade accretion and, as such, part of the public domain.
In the case at bar, the subject land was the direct result of the
dumping of sawdust by the Sun Valley Lumber Co. consequent to its
sawmill operations.[12] Even if this Court were to take into consideration
petitioners' submission that the accretion site was the result of the late
Antonio Nazareno's labor consisting in the dumping of boulders, soil and
other filling materials into the Balacanas Creek and Cagayan River
bounding his land,[13] the same would still be part of the public domain.
Having determined that the subject land is public land, a fortiori, the
Bureau of Lands, as well as the Office of the Secretary of Agriculture and
Natural Resources have Jurisdiction over the same in accordance with the
Public Land Law. Accordingly, the court a quodismissed petitioners'
complaint for non-exhaustion of administrative remedies which ruling the
Court of Appeals affirmed.
However, this Court agrees with petitioners that administrative
remedies have been exhausted. Petitioners could not have intended to
appeal to respondent Ignacio as an Officer-in-Charge of the Bureau of
Lands. The decision being appealed from was the decision of respondent
Hilario who was the Regional Director of The Bureau of Lands. Said decision
was made "for and by authority of the Director of Lands." [14] It would be
incongruous to appeal the decision of the Regional Director of the Bureau
of Lands acting for the Director of the Bureau of Lands to an Officer-InCharge of the Bureau of Lands.
In any case, respondent Rolleo Ignacio's official designation was
"Undersecretary of the Department of Agriculture and Natural Resources."
He was only an "Officer-In-Charge" of the Bureau of Lands. When he acted
on the late Antonio Nazareno's motion for reconsideration by affirming or
adopting respondent's Hilario's decision, he was acting on said motion as
an Undersecretary on behalf of the Secretary of the Department. In the
case of Hamoy v. Secretary of Agriculture and Natural Resources, [15] This
Court held that the Undersecretary of Agriculture and Natural Resources
may modify, adopt, or set aside the orders or decisions of the Director of
Lands with respect to questions involving public lands under the
administration and control of the Bureau of Lands and the Department of
Agriculture and Natural Resources. He cannot therefore, be said to have
acted beyond the bounds of his jurisdiction under Sections 3, 4 and 5 of
Commonwealth Act No. 141.[16]
As borne out by the administrative findings, the controverted land is
public land, being an artificial accretion of sawdust. As such, the Director of
Lands has jurisdiction, authority and control over the same, as mandated
under Sections 3 and 4 of the Public Land Law (C.A. No. 141) which states,
thus:
"Sec. 3. The Secretary of Agriculture and Natural Resources shall be the
exclusive officer charged with carrying out the provisions of this Act
through the Director of Lands who shall act under his immediate control.
Sec. 4. Subject to said control, the Director of Lands shall have direct
executive control of the survey, classification, lease, sale or any other form
of concession or disposition and management of the lands of the public
domain, and his decisions as to questions of fact shall be conclusive when
approved by the Secretary of Agriculture and Natural Resources."
combined area of the lots described by Engineer Magno in the survey plan
tallied with the technical description of Bagaipos land under TCT No. T15757. Magno concluded that the land presently located across the river
and parallel to Bagaipos property still belonged to the latter and not to
Lozano, who planted some 350 fruit-bearing trees on Lot 415-C and the old
abandoned river bed.
Bagaipo also presented Godofredo Corias, a former barangay captain
and long-time resident of Ma-a to prove her claim that the Davao River had
indeed changed its course.Corias testified that the occurrence was caused
by a big flood in 1968 and a bamboo grove which used to indicate the
position of the river was washed away. The river which flowed previously in
front of a chapel located 15 meters away from the riverbank within
Bagaipos property now flowed behind it. Corias was also present when
Magno conducted the relocation survey in 1988.
For his part, Lozano insisted that the land claimed by Bagaipo is
actually an accretion to their titled property. He asserted that the Davao
River did not change its course and that the reduction in Bagaipos domain
was caused by gradual erosion due to the current of the Davao
River. Lozano added that it is also because of the rivers natural action that
silt slowly deposited and added to his land over a long period of time. He
further averred that this accretion continues up to the present and that
registration proceedings instituted by him over the alluvial formation could
not be concluded precisely because it continued to increase in size.
Lozano presented three witnesses: Atty. Pedro Castillo, his brother-inlaw; Cabitunga Pasanday, a tenant of Atty. Castillo; and Alamin Catucag, a
tenant of the Lozanos.
Atty. Castillo testified that the land occupied by the Lozanos was
transferred to his sister, Ramona when they extra-judicially partitioned
their parents property upon his fathers death. On September 9, 1973, Atty.
Castillo filed a land registration case involving the accretion which formed
on the property and submitted for this purpose, a survey plan [4]approved
by the Bureau of Lands as well as tax declarations [5] covering the said
accretion.An Order of General Default [6] was already issued in the land
registration case on November 5, 1975, but the case itself remained
pending since the petition had to be amended to include the continuing
addition to the land area.
Mr. Cabitunga Pasanday testified that he has continuously worked on
the land as tenant of the Castillos since 1925, tilling an area of about 3
hectares. However, the land he tilled located opposite the land of the
Lozanos and adjacent to the Davao River has decreased over the years to
its present size of about 1 hectare. He said the soil on the bank of the river,
as well as coconut trees he planted would be carried away each time there
was a flood. This similar erosion occurs on the properties of Bagaipo and a
certain Dr. Rodriguez, since the elevation of the riverbank on their
properties is higher than the elevation on Lozanos side.
Alamin Catucag testified that he has been a tenant of the Castillos
since 1939 and that the portion he occupies was given to Ramona, Lozanos
wife. It was only 1 hectare in 1939 but has increased to 3 hectares due to
soil deposits from the mountains and river. Catucag said that Bagaipos
property was reduced to half since it is in the curve of the river and its soil
erodes and gets carried away by river water.
On April 5, 1991, the trial court conducted an ocular inspection. It
concluded that the applicable law is Article 457 [7]. 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.7 of the New Civil
Code and not Art. 461[8] The reduction in the land area of plaintiff was
caused by erosion and not by a change in course of the Davao
River. Conformably then, the trial court dismissed the complaint.
On appeal, the Court of Appeals affirmed the decision of the trial court
and decreed as follows:
WHEREFORE, the decision appealed from is hereby affirmed, with costs
against the plaintiff-appellant. [9]
Hence, this appeal.
Petitioner asserts that the Court of Appeals erred in:
....NOT GIVING PROBATIVE VALUE TO THE RELOCATION SURVEY
(EXHIBIT B) PREPARED BY LICENSED GEODETIC ENGINEER GERSACIO
MAGNO. THE CASE OF DIRECTOR OF LANDS VS. HEIRS OF JUANA
CAROLINA 140 SCRA 396 CITED BY THE RESPONDENT COURT IN
DISREGARDING EXHIBIT B IS NOT APPLICABLE TO THE CASE AT BAR.
that petitioner owns the abandoned river bed pursuant to Article 461 of the
Civil Code? Did private respondent own Lot 415-C in accordance with the
principle of accretion under Article 457? Should the relocation survey
prepared by a licensed geodetic engineer be disregarded since it was not
approved by the Director of Lands? Is petitioners claim barred by laches?
On the first issue. The trial court and the appellate court both found
that the decrease in land area was brought about by erosion and not a
change in the rivers course. This conclusion was reached after the trial
judge observed during ocular inspection that the banks located on
petitioners land are sharp, craggy and very much higher than the land on
the other side of the river. Additionally, the riverbank on respondents side
is lower and gently sloping. The lower land therefore naturally received the
alluvial soil carried by the river current. [11] These findings are factual, thus
conclusive on this Court, unless there are strong and exceptional reasons,
or they are unsupported by the evidence on record, or the judgment itself
is based on a misapprehension of facts. [12] These factual findings are based
on an ocular inspection of the judge and convincing testimonies, and we
find no convincing reason to disregard or disbelieve them.
The decrease in petitioners land area and the corresponding
expansion of respondents property were the combined effect of erosion
and
accretion
respectively. Art.
461
of
the
Civil
Code
is
inapplicable. Petitioner cannot claim ownership over the old abandoned
riverbed because the same is inexistent. The riverbeds former location
cannot even be pinpointed with particularity since the movement of the
Davao River took place gradually over an unspecified period of time, up to
the present.
The fact that the accretion to his land used to pertain to plaintiffs estate,
which is covered by a Torrens certificate of title, cannot preclude him
(defendant) from being the owner thereof. Registration does not protect
the riparian owner against the diminution of the area of his land through
gradual changes in the course of the adjoining stream. Accretions which
the banks of rivers may gradually receive from the effect of the current
become the property of the owners of the banks (Art. 366 of the old Civil
Code; Art. 457 of the new). Such accretions are natural incidents to land
bordering on running streams and the provisions of the Civil Code in that
respect are not affected by the Land Registration Act.[15]