LUCIANO BRIONES and NELLY BRIONES v. JOSE MACABAGDAL, FE D.

MACABAGDAL and
VERGON REALTY INVESTMENTS CORPORATION
G.R. No. 150666VILLARAMA, JR.,
FACTS:

Respondent-spouses purchased from Vergon Realty InvestmentsCorporation yVergon2 Lot No. 2-R, a
325-square-meter land petitioners are the owners of Lot No. 2-S, which is adjacent torespondents land

After obtaining the necessary building permit and the approval of Vergon,petitioners constructed a house
on Lot 2-R which they thought was Lot No. 2-S

Respondent-spouses immediately demanded petitioners to demolish thehouse and vacate the property

Respondent-spouses filed an action to recover ownership and possession CA affirmed the RTCus finding
contracts to sell, and the survey report made by the geodetic engineer,petitionersu house was built on the
lot of the respondent-spouses.

CA further ruled that petitioners cannot use the defense of allegedly beinga purchaser in good faith for
wrongful occupation of land

ISSUE: Whether CA was correct in affirming the decision of the trial courtordering the petitioner to
demolish their only house and vacate the lot and paydamages

HELD:
The petition is partly meritorious.
Trial court and ca erred

Article 527[14]of the Civil Code presumes good faith, and since no proofexists to show that the mistake
was done by petitioners in bad faith, thelatter should be presumed to have built the house in good faith.

When a person builds in good faith on the land of another, Article 448 ofthe Civil Code governs

The builder in good faith can compel the landowner to make a choicebetween appropriating the building
by paying the proper indemnity orobliging the builder to pay the price of the land.

The choice belongs to the owner of the land, a rule that accords with theprinciple of accession, i.e. that the
accessory follows the principal and notthe other way around.

SPS. MACASAET vs SPS. MACASAET G.R. 154391-92 Sept. 30, 2004Facts:

Petitioners Ismael and Teresita Macasaet and Respondents Vicente and Rosario Macasaet are first-
degree relatives. Ismael is theson of respondents and Teresita is his wife.

On December 1! 1997! the parents filed with the MTC of Lipa an ejectment suit against the children.

Respondents alleged that they were the owners of 2 parcels of land! situated at *anay-banay! Lipa City+
that by way of a verbal lease agreement! Ismael and Teresita occupied these lots in Mar. 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 P,.

Ismael and Teresita denied the existence of any verbal lease agreement. They claimed that respondents
had invited them toconstruct their residence and business on the subject lots in order that they could all
live near one another! employ marivic! The sister of Ismael! and help in resolving the problems of
the family.

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.

The MTCC 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.

as their stay was merely tolerance! petitioners were necessarily bound by an implied promise to
vacate the lots upon demand.

On appeal! the regional trial court upheld the findings fo the MTCC. However! the RTC allowed the
respondents to appropriate the building and other improvements introduced by petitioners! after payment
of the indemnity provided for by art. 448 in relation to art.546 and 548 of the NCC.

The Ca sustained the finding of the two lower courts that Ismael and Teresita had been occupying the
subject lots only by thetolerance of Vicente and Rosario. Citing Calubayan v. pascual! the Ca further ruled
that petitioners status was analogous to that ofa lessee or a tenant whose term of lease had expired! but
whose occupancy continued by tolerance of the owner.

Consequently ! in ascertaining the right of the petitioners to be reimbursed for the improvements they had
introduced onrespondents properties! the appellate court applied the Civil Codes provisions on lease.

Issue:
W.O.N. the courts should fix the duration of possession.

HELD

That Ismael and Teresita had a right to occupy the lots is therefore clear! the issue is the duration of
possession. In the absence ofa stipulation on this point! art. 1197 of the civil Code allows the courts to fix
the duration or the period.

article 1197. If the obligation does not fix a period! but from its nature and the circumstances it can be
inferred that a period wasintended! 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.

article 1197! however! applies to a situation in which the parties intended a period. Such qualification
cannot be inferred from thefacts of the present case.

The mere failure to fix the duration of their agreement does not necessarily justify or authorize the courts
to do so

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.

Their possession which was originally lawful became unlawful when the reason therefore - love and
solidarity - ceased to exist between them
LEONOR GRANA and JULIETA TORRALBA VS. THE COURT
OF APPEALS, AURORA BONGATO and JARDENIO
SANCHEZ
GR L-12486 31 AUG 1960

Facts:

The herein Petitioners were sued by Bongato and Sanchez for the recovery of 87 square meters of
residential land which they have inherited as the children of the spouses Marcos Bongato and Eusebia.
The former were ordered by the to vacate and deliver it to said respondents and to pay a monthly rental of
P10.00 from the filing of the complaint until they actually vacate the same, plus attorney's fees and costs.

The Petitioners alleged that the said property became a subject of a cadastral survey due to conflicts and
overlapping of boundaries. In that survey, Gregorio Bongato's lot, according to petitioners, was identified
as Lot No. 311 and that of Isidaria Trillo, their predecessor in interest, as Lot No. 310. Citing the fact that
Original Certificate of Title No. RO-72 (138) covers 295 square meters of land, while the sketch plan of
the second cadastral survey of Butuan shows that Lot No. 311 has only 230 square meters, petitioners
maintain that it is the latter area properly belongs to respondents and that the land in question is part of
the adjoining land, Lot No. 310, which belonged to their predecessor in interest.

Issue:

Whether or not the first survey was erroneous or that it included part of the contiguous land of petitioners'
predecessor in interest?

Held:

Petitioners' stand is untenable. No proof was presented to show that the first survey was erroneous or
that it included part of the contigous land of petitioners' predecessor in interest as part of the lot now
covered by Original Certificate of Title No. RO-72 (138). Note that the difference in area between the land
covered by said title and Lot No. 311 of the resurvey plan is 65 square meters while the area of the land in
dispute if 87 square meters. And what is more, the alleged sketch plan of the resurvey was not presented
in evidence.

Upon the other hand, it is not disputed that the land in question is part of the lot covered by the Torrens
title issued way back in 1923 in the name of respondents' predecessor in interest. Said title has not been
contested up to the present, and, therefore, has become inconvertible evidence of the ownership of the
land covered by it. Well settled is the rule that a Torrens certificate of title becomes conclusive and
indefeasible after the lapse of the period within which it may be impugned (Reyes, et al. vs. Borbon, et al.,
50 Phil., 791; Yumul vs. Rivera, et al., 64 Phil., 13).
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 faith shall have the right to appropriate as his own
the building, after payment to the builder of necessary and 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 first alternative, i.e., buy that
portion of the house standing on their land, for in that event the whole building might be
rendered useless. The more workable solution, it would seem, is for respondents to sell
to petitioners that part of their land on which was constructed a portion of the latter's
house. If petitioners are unwilling or unable to buy, then they must vacate the land and
must pay rentals until they do so. Of course, respondents cannot oblige petitioners to
buy the land if its value is considerably more than that of the aforementioned portion of
the house. If such be the case, then petitioners must pay reasonable rent. The parties
must come to an agreement as to the conditions of the lease, and should they fail to do
so, then the court shall fix the same. (Article 361, old Civil Code; Article 448 of the new).

Tayag vs Yuseco
FACTS:
Yuseco had been rendering professional services without compensation to Lim.
Lim offered to Yuseco, to build a house within their lot.
Yuseco accepted the offer (believing that the same was a donation or was
compensation for the services rendered)
Yuseco built a house thereon.
Lim sold to her daughter(Tayag) the lots where Yusecos house stood.
Tayag asked Yuseco to remove their house from the lots or pay a monthly rental.
Yuseco refused.
Tayag filed an action of ejection for restitution of the lots.
The case reached the SC and remanded the case to the Trial court to give an
opportunity to Tayag to exercise their choice and option whether they would
appropriate the buildings and pay Yuseco for the value thereof OR compel
Yuseco to pay for the value of the lots.
In a manifestation, Tayag chose to appropriate the buildings.
TC issued a writ of execution to collect from Tayag the sum for the building.
Tayag question said writ, contending that she still retain the right of option and
even if she already had made her choice, she cannot be compelled to pay the
price fixed by the court because of her financial inability.
ISSUE: WON Tayag still retain the right of option.
HELD: NO. Once a choice is made by the landowner, it is generally irrevocable.
Thus, if the landowner has opted/elected to appropriate the building but he is
unable to pay for the indemnity or amount, the landowner CANNOT afterwards
opt/elect to sell the land. Since Tayags first choice had already been
communicated to the court and she had already been ordered to pay, her duty
has been converted into a monetary obligation which can be enforced by a writ of
execution.
Note: Yuseco is a possessor in good faith, as she believed the land given was a
donation or was compensation for the services rendered
SPOUSES DEL CAMPO V. ABESIA 160
SCRA 379
Jul 4
Facts:

This case involves a parcel of land, situated at the corner of F. Flores and Cavan Streets,
Cebu City. An action for partition was filed by plaintiffs in the CFI of Cebu. Plaintiffs and
defendants are co-owners pro indiviso of this lot in the proportion of and 1/3 share each,
respectively. The trial court appointed a commissioner in accordance with the agreement of
the parties. ,the Id commissioner conducted a survey, prepared a sketch plan and submitted
a report to the trial court on May 29, 1976, recommending that the property be divided into
two lots: Lot 1161-A with an area of 30 square meters for plaintiffs and Lot No. 1161-B with
an area of 15 square meters for the defendants. The houses of plaintiffs and defendants
were surveyed and shown on the sketch plan. The house of defendants occupied the portion
with an area of 5 square meters of Lot 1161-A of plaintiffs. The parties manifested their
conformity to the report and asked the trial court to finally settle and adjudicate who among
the parties should take possession of the 5 square meters of the land in question.

Issue: Whether or Not Article 448 of the Civil Code is applicable to a builder in good faith
when the property involved is owned in common.

Held: When the co-ownership is terminated by the partition and it appears that the house of
defendants overlaps or occupies a portion of 5 square meters of the land pertaining to
plaintiffs which the defendants obviously built in good faith, then the provisions of Article
448 of the new Civil Code should apply. Manresa and Navarro Amandi agree that the said
provision of the Civil Code may apply even when there was co-ownership if good faith has
been established.

Applying the aforesaid provision of the Civil Code, the plaintiffs have the right to appropriate
said portion of the house of defendants upon payment of indemnity to defendants as
provided for in Article 546 of the Civil Code. Otherwise, the plaintiffs may oblige the
defendants to pay the price of the land occupied by their house. However, if the price asked
for is considerably much more than the value of the portion of the house of defendants built
thereon, then the latter cannot be obliged to buy the land. The defendants shall then pay
the reasonable rent to the plaintiff upon such terms and conditions that they may agree. In
case of disagreement, the trial court shall fix the terms thereof. Of course, defendants may
demolish or remove the said portion of their house, at their own expense, if they so decide.
Article 448 of the New Civil Code provides as follows:

Art. 448. The owner of the land on which anything has been built, sown, or planted in good
faith, shall have the right to appropriate as his own the works, sowing or planting, after
payment of the indemnity provided for in articles 546 and 548, or to oblige the one who built
or planted to pay the price of the land, and the one who sowed, the proper rent. However,
the builder or planter cannot be obliged to buy the land if its value is considerably more than
that of the building or trees. In such case, he shall pay reasonable rent, if the owner of the
land does not choose to appropriate the building or trees after proper indemnity. The parties
shall agree upon the terms of the lease and in case of disagreement, the court shall fix the
terms thereof.

PEDRO P. PECSON v. COURT OF APPEALS, SPS. NUGUID

FACTS:

Pedro Pecson was the owner of a commercial lot on which he built a 4-door-2-storey apartment building.
He failed to pay realty taxes amounting to P12k so the lot was sold at public auction to Mamerto
Nepomuceno who later on sold it to the Sps. Nuguid.

Pecson challenged the validity of the auction before the RTC but was dismissed but the RTC held that the
apartment bldg was not subject of the litigation. On appeal, the CA appealed in toto the decision of the
RTC that the apartment bldg was not included in the auction sale.

After an entry of judgment was made, the Sps. Nuguid filed a motion with the RTC for a motion for
delivery of possession of the lot and the apartment bldg citing Art. 546 of the CC. The RTC issued an
order declaring that the owner of the lot and apartment bldg were the Sps. Nuguid and to pay the
construction cost of the apartment before a writ of possession would be issued and to pay rent to the
spouses. Pecson moved for reconsideration but the Trial court did not act on it, instead it issued a writ of
possession. The CA affirmed in part the decision declaring the cost of construction can be offset from the
amount of rents to be collected and that since Sps. Nuguid opted to appropriate the improvement, Pecson
is entitled to be reimbursed the cost of construction at the time it was built in 1965 which is at P53k and
the right the retain the improvement until full indemnity is paid.

Thus the case at bar.

ISSUE:

Whether or not Art. 448 and 546 applies in the case at bar

HELD: YES

> With regard to Art. 448, the provision on indemnity may be applied in analogy. Whoever is the owner of
the land may appropriate whatever has been built, planted or sown after paying indemnity. However, it
does not apply when the owner of the land is also the builder of the works on his own land who later on
loses ownership by sale or donation.

> Art. 546 refers to the necessary and useful expenses which shall be refunded to the possessor in good
faith with right of retention. However, it does not state how to determine the value of the useful
improvement. The respondents [court and private respondents alike] espouses as sufficient
reimbursement the cost of construction in 1965, however, this is contrary to previous rulings which
declares that the value to the reimbursed should be the present market value of said improvements so as
not to unjustly enrich either of the parties. [the trial court erred in ordering Pecson to pay rent since the
Sps. Nuguid has yet to pay the indemnity therefore Pecson has the right to retain the improvements and
the income thereof. The case was remanded to the trial court for determination of the current market
value of the apartment bldg and ordered the Sps to pay Pecson otherwise it shall be restored to Pecson
until payment of indemnity.]

DAMIAN IGNACIO, FRANCISCO IGNACIO and LUIS IGNACIO, petitioners,

vs.
ELIAS HILARIO and his wife DIONISIA DRES, and FELIPE NATIVIDAD, Judge of First
Instance of Pangasinan

FACTS: Petition for certiorari arising from a case in the Court of First Instance of Pangasinan
concerning the ownership of a parcel of land, partly rice-land and partly residential. The
lower court rendered judgment holding plaintiffs as the legal owners of the whole property
but conceding to defendants the ownership of the houses and granaries built by them on the
residential portion with the rights of a possessor in good faith, in accordance with article 361
of the Civil Code. Judgment declared defendants are entitled to hold the position of the
residential lot until after they are paid the actual market value of their houses and granaries
erected thereon, unless the plaintiffs prefer to sell them said residential lot, Once this
decision becomes final, the plaintiffs and defendants may appear again if they cannot come
to an extra-judicial settlement with regard to their rights under 361.
In a motion filed in the same Court of First Instance but now presided over by the herein
respondent Judge Hon. Felipe Natividad, the plaintiffs prayed for an order of execution
since they chose neither to pay defendants for the buildings nor to sell to them the
residential lot, said defendants should be ordered to remove the structure at their own
expense. Motion was granted.

ISSUE: Whether or not the order of execution was valid; whether respondent may
refuse to choose any of the options available under Art. 361.

RULING: NO. The order of Judge Natividad is null and void, for it amends substantially the
judgment sought to be executed and is, furthermore, offensive to articles 361 and 453 of the
Civil Code.

NO. The court must determine the period of time within which the plaintiffs-respondents may
exercise their option either to pay for the buildings or to sell their land, and, in the last
instance, the period of time within which the defendants-petitioners may pay for the land, all
these periods to be counted from the date the judgment becomes executory or
unappealable.

On the matter of procedure, the decision of Judge Felix fails to determine the value of the
buildings and of the lot where they are erected as well as the periods of time within which
the option may be exercised and payment should be made, these particulars having been
left for determination apparently after the judgment has become final. This procedure is
erroneous, for after the judgment has become final, no additions can be made thereto and
nothing can be done therewith except its execution. And execution cannot be had, the
sheriff being ignorant as to how, for how much, and within what time may the option be
exercised, and certainly no authority is vested in him to settle these matters which involve
exercise of judicial discretion. Thus the judgment rendered by Judge Felix has never become
final, it having left matters to be settled for its completion in a subsequent proceeding,
matters which remained unsettled up to the time the petition is filed in the instant case.

Sulo sa Nayon Inc vs Nayong Pilipino Foundation

Facts:
On 1975, Respondent leased to petitioner Sulo sa Nayon a portion of land for the construction and
operation of a hotel building for an initial period of 21 years until May 1996 and renewable for 25 years
upon due notice in writing to respondent at least 6 months prior of the expiration of the lease. On March
1995, petitioners sent respondent a letter notifying the latters intention to renew the contract fro another
25 years and tha they executed a Voluntary Addendum to the lease agreement. Beginning
2001, petitioners defaulted in the payment of their monthly rental so respondent demanded petitioner to
pay. On September 2001, respondent filed a complaint for unlawful detainer. Petitioners insist
that they should be considered builders in good faith who have the right of retention until reimbursement
by respondent is made and they also argue that to apply Art 1678 to their case would result to sheer
injustice, as it would amount to giving away the hotel and its other structures at virtually bargain prices.
Issue: Is petitioners a builder in good faith?
Ruling: No. In the case at bar, petitioners have no adverse claim or title to the land. In fact, as lessees,
they recognize that the respondent is the owner of the land. What petitioners insist is that because of the
improvements, which are of substantial value, that they have introduced on the leased premises with the
permission of respondent, they should be considered builders in good faith who have the right to retain
possession of the property until reimbursement by respondent. We affirm the ruling of the CA that
introduction of valuable improvements on the leased premises does not give the petitioners the
right of retention and reimbursement which rightfully belongs to a builder in good faith. Otherwise, such a
situation would allow the lessee to easily improve the lessor out of its property. His right are governed by
Art 1678 of the Civil Code

ELVIRA T. ARANGOTE, petitioner,

vs.
SPS. MARTIN MAGLUNOB and LOURDES S. MAGLUNOB, and ROMEO SALIDO

FACTS: Elvira T. Arangote, herein petitioner married to Ray Mars E. Arangote, is the
registered owner of the subject property, as evidenced by Original Certificate of Title yOCT2
No. CLOA-1748.6 Respondents Martin yMartin II2 and Romeo are first cousins and the
grandnephews of Esperanza Maglunob-Dailisan yEsperanza2, from whom petitioner acquired
the subject property.

A Complaint7 filed by petitioner and her husband against the respondents for Quieting of
Title. The Complaint alleged that Esperanza inherited the subject property from her uncle
Victorino Sorrosa by virtue of a notarized Partition Agreement. Thereafter, Esperanza
declared the subject property in her name for real property tax purposes. Esperanza
executed another document, an Affidavit, in which she renounced, relinquished, waived and
quitclaimed all her rights, share, interest and participation whatsoever in the subject
property in favor of petitioner and her husband. In 1989, petitioner and her husband
constructed a house on the subject property. However, respondents, together with some
hired persons, entered the subject property on 3 June 1994 and built a hollow block wall
behind and in front of petitionerus house, which effectively blocked the entrance to its main
door.

Respondents averred that they co-owned the subject property with Esperanza. Esperanza
and her siblings, Tomas and Inocencia, inherited the subject property, in equal shares, from
their father Martin Maglunob. Thus, Esperanza could not validly waive her rights and interest
over the entire subject property in favor of the petitioner.

Respondents also asserted in their Counterclaim that petitioner and her husband, by means
of fraud, undue influence and deceit were able to make Esperanza, who was already old and
illiterate, affix her thumbmark to the Affidavit dated 9 June 1986, wherein she renounced all
her rights and interest over the subject property in favor of petitioner and her husband.
Respondents thus prayed that the OCT issued in petitionerus name be declared null and void
insofar as their two-thirds shares are concerned. MCTC decided in favour of petitioner. RTC
reversed and declared affidavit null and void, CA affirmed RTC.

ISSUE: y12 Whether or not petitioner is the lawful owner of subject property by
virtue of the affidavit issued by Esperanza. y22 That, for the sake of argument, if
the affidavit is null and void, whether or not petitioner is a builder in good faith.

RULING: NO. It is clear from the records that the subject property was not Esperanzaus
exclusive share, but also that of the other heirs of her father. The petitioner derived her title
to the subject property from the notarized Affidavit executed by Esperanza, wherein the
latter relinquished her rights, share, interest and participation over the same in favor of the
petitioner and her husband. Esperanzaus Affidavit is, in fact, a Donation.

As no onerous undertaking is required of petitioner and her husband under the said Affidavit,
the donation is regarded as a pure donation of an interest in a real property covered by
Article 749 of the Civil Code. there are three requisites for the validity of a simple donation
of a real property, to wit: y12 it must be made in a public instrument; y22 it must be
accepted, which acceptance may be made either in the same Deed of Donation or in a
separate public instrument; and y32 if the acceptance is made in a separate instrument, the
donor must be notified in an authentic form, and the same must be noted in both
instruments. This Court agrees with the RTC and the Court of Appeals that the Affidavit
suffered from legal infirmities, as it failed to comply with the aforesaid requisites of the law.
This last legal requisite of annotation in both instruments of donation and acceptance was
not fulfilled by the petitioner. For this reason, even Esperanzaus one-third share in the
subject property cannot be adjudicated to the petitioner. Thus RTC and the Court of Appeals
did not err in declaring null and void Esperanzaus Affidavit.

NO. When respondents came to know that an OCT over the subject property was issued and
registered in petitionerus name on 26 March 1993, respondents brought a Complaint on 7
August 1993 before the Lupon of Barangay Maloco, Ibajay, Aklan, challenging the title of
petitioner to the subject property, From that moment, the good faith of the petitioner had
ceased. Article 448 of the Civil Code, a builder in good faith is one who, not being the owner
of the land, builds on that land, believing himself to be its owner and unaware of any defect
in his title or mode of acquisition.

Good faith, is an intangible and abstract quality with no technical meaning or statutory
definition, an honest belief, the absence of malice and the absence of design to defraud or
to seek an unconscionable advantage. Thus, when petitioner and her husband built a house
thereon in 1989 they cannot be considered to have acted in good faith. The only proof of
Esperanzaus ownership over the same was a mere tax declaration. This fact or circumstance
alone was enough to put the petitioner and her husband under inquiry. Settled is the rule
that a tax declaration does not prove ownership. It is merely an indicium of a claim of
ownership.