DEPRA v DUMLAO

FACTS: Plaintiff-appellee, Francisco Depra, is the owner of a parcel of land registered.

Agustin Dumlao, defendant appellant, owns an adjoining lot. When DUMLAO
constructed his house on his lot, the kitchen thereof had encroached on an area of thirty
four (34) square meters of DEPRA's property, after the encroachment was discovered in
a relocation survey of DEPRA's lot made on November 2,1972, his mother, Beatriz
Depra after writing a demand letter asking DUMLAO to move back from his
encroachment, filed an action for Unlawful Detainer against DUMLAO in the Municipal
Court. Said complaint was later amended to include DEPRA as a party plaintiff.

After trial, the Municipal Court found that DUMLAO was a builder in good faith and
rendered judgment ordering that a forced lease is created between the parties with the
plaintiffs, as lessors, and the defendants as lessees, over the disputed portion with an
area of thirty four (34) square meters. DEPRA did not accept payment of rentals so that
DUMLAO deposited such rentals with the Municipal Court. DEPRA filed a Complaint for
Quieting of Title against DUMLAO before the then Court of First Instance involving the
very same 34 square meters, which was the bone of contention in the Municipal Court.
DUMLAO, in his Answer, admitted the encroachment but alleged, in themain, that the
present suit is barred by res judicata by virtue of the Decision of the Municipal Court,
which had become final and executory. Trial Court issued an order holding that the thirty
four (34) square meters subject of this litigation is owned by the plaintiff and the latter is
entitled to possession on the said land.

ISSUE: WON is a builder in good faith.

RULING: Yes. In regards to builders in good faith, Article 448 of the Civil Code
provides:

ART. 448. The owner of the land on which anything has been built sown or planted in
good faith, shall have the right to appropriate as his own the works, sowing or planting,
after payment of the indemnity provided for in articles 546 and 548, or to oblige the one
who built or planted to pay the price of the land, and the one who sowed, the proper
rent. However, the builder or planter cannot be obliged to buy the land if its value is
considerably more than that of the building or trees. In such case, he shall pay
reasonable rent, if the owner of the land does not choose to appropriate the building or
trees after proper indemnity. The parties shall agree upon the terms of the lease and in
case of disagreement, the court shall fix the terms thereof. DEPRA has the option either
to pay for the encroaching part of DUMLAO's kitchen, or to sell the encroached 34
square meters of his lot to DUMLAO. He cannot refuse to pay for the encroaching part
of the building, and to sell the encroached part of his land, as he had manifested before
the Municipal Court. But that manifestation is not binding because it was made in a void
proceeding.
However, the good faith of DUMLAO is part of the Stipulation of Facts in the Court of
First Instance. It was thus error for the Trial Court to have ruled that DEPRA is "entitled
to possession," without more, of the disputed portion implying thereby that he is entitled
to have the kitchen removed. He is entitled to such removal only when, after having
chosen to sell his encroached land, DUMLAO fails to pay for the same. In this case,
DUMLAO had expressed his willingness to pay for the land, but DEPRA refused to sell.
The fairness of the rules in Article 448 has also been explained as follows:

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 co-ownership, 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 for 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.
 SARMIENTO v AGANA

FACTS: This Petition for Certiorari questions a March 29, 1979 Decision rendered by
the then Court of First Instance of Pasay City. 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 Parañaque (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. Santos, 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 P40,000.00 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.

ISSUE: Whether or not Ernesto and wife were builders in good faith.

RULING: YES. WHEREFORE, the Petition for Certiorari is hereby ordered dismissed,
without pronouncement as to costs.

RATIO: We agree that ERNESTO and wife were builders in good faith in view of the
peculiar circumstances under which they had constructed the RESIDENTIAL HOUSE.
As far as they knew, the LAND was owned by ERNESTO's mother-in-law who, having
stated they could build on the property, could reasonably be expected to later on give
them the LAND. In regards to builders in good faith, Article 448 of the Code provides:

"ART. 448. The owner of the land on which anything has been build, 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." (Paragraphing supplied)

The value of the LAND, purchased for P15,000.00 on September 7, 1974, could not
have been very much more than that amount during the following January when
ERNESTO and wife were asked to vacate. However, ERNESTO and wife have not
questioned the P25,000.00 valuation determined by the Court of First Instance. In
regards to the valuation of the RESIDENTIAL HOUSE, the only evidence presented
was the testimony of ERNESTO that its worth at the time of the trial should be from
P30,000.00 to P40,000.00. The Municipal Court chose to assess its value at
P20,000.00, or below the
minimum testified by ERNESTO, while the Court of First Instance chose the maximum
of P40,000.00. In the latter case, it cannot be said that the Court of First Instance had
abused its discretion.
The challenged decision of respondent Court, based on valuations of P25,000.00 for the
LAND and P40,000.00 for the RESIDENTIAL HOUSE, cannot be viewed as not
supported by the evidence. The provision for the exercise by petitioner SARMIENTO of
either the option to indemnify private respondents in the amount of P40,000.00, or the
option to allow private respondents to purchase the LAND at P25,000.00, in our opinion,
was a correct decision. "The owner of the building erected in good faith on a land owned
by another, is entitled to retain the possession of the land until he is paid the value of his
building, under article 453 (now Article 546). The owner of the land, upon the other
hand, has the option, under article 361 (now Article 448), either to pay for the building or
to sell his land to the owner of the building. But he cannot, as respondents here did,
refuse both to pay for the building and to sell the land and compel the owner of the
building to remove it from the land where it is erected. He is entitled to such remotion
only when, after having chosen to sell his land, the other party fails to pay for the same.
(underscoring ours)
 ALVIOLA V CA

FACTS: Victoria Tinagan purchased from Mauro Tinagan 2 parcels of land. Victoria and
her son Agustin took possession of said parcels. Petitioners occupied portions thereof
where they built a copra dryer and put up store wherein they engaged in the business of
buying and selling copra. Victoria and Agustin died. Agustin was survived by private
respondents, his wife and children. Petitioner Editha filed a complaint for partition and
damages claiming to be an acknowledged natural child of Agustin and demanding
delivery of her shares in the properties. This was dismissed by the TC on the ground
that recognition of natural children may be brought onlyduring the lifetime of the
presumed parent and petitioner Editha did not fall in any of the exceptions enumerated
in Article 285 of the Civil Code. The case was elevated to the SC but was dismissed.
Private respondents filed a complaint for recovery of possession against Editha and her
husband praying that they be declared absolute owners and for petitioners to vacate the
properties. The lower court declared them as absolute owners and ordered petitioners
to vacate the premises. CA affirmed. Petitioners aver that the properties are public land.
They maintain that the respondent court erred in holding that they were in bad faith in
possessing the disputed properties and in ruling that the improvements thereon are
transferable. They claim that the copra dryer and the store are permanent structures,
the walls thereof being made of hollow-blocks and the floors made of cement

ISSUE: WON there was bad faith on the part of petitioners when they constructed the
copra dryer and store

RULING: Respondent adduced overwhelming evidence toprove their ownership and

possession of the 2 parcels.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 of P7,602.04' is not plausible. It is more of an 'after-thought' defense which
was not alleged in their answer.

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. 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 thepart 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. The private respondents action for recovery of possession was the suitable
solution to eject petitioners from the premises.
 ARANGOTE V MAGLUNOG

FACTS: Elvira Arangote acquired the subject parcel of land from Esperanza Maglunob,
who is grandaunt of respondents Martin Maglunob and Romeo Salido. In June 1986,
Esperenza executed an affidavit in which she renounced her rights, share and
participation in the land infavor of Elvira and her husband. It appears that the lot was
not exclusive property of Esperanza but also of the other heirs of Martin I whom
she represented in the partition agreement (herein respondents –coheirs). Elvira
and her husband, Ray constructed a house on the land in 1989 and in 1993, OCT was
issued in her name by the DAR. However, respondents with the help of hired persons
entered the property and built a wall behind and in front of Elvira’s house. Elvira and
Ray sued respondents for quieting of title and declaration of ownership.
Respondents averred that they were coowners of the land with Esperanza who
allegedly inherited the land from Martin 1 together with Tomas and Inocencia (Martin 2’s
and Romeo’s predecessor in interest).

Petitioner argues that, assuming for the sake of argument, that Esperanzas Affidavit is
null and void, petitioner and her husband had no knowledge of any flaw in Esperanzas
title when the latter relinquished her rights to and interest in the subject property in their
favor. Hence, petitioner and her husband can be considered as possessors in good faith
and entitled to the rights provided under Articles 448 and 546 of the Civil Code.

Ruling: With the foregoing, the petitioner is not entitled to the rights under Article 448
and 546 as the petitioner is not a builder and possessor in good faith.

Ratio: Possession in good faith ceases from the moment defects in the title are made
known to the possessor by extraneous evidence or by a suit for recovery of the property
by the true owner. Every possessor in good faith becomes a possessor in bad faith from
the moment he becomes aware that what he believed to be true is not so. In the present
case, when respondents came to know that an OCT over the subject property was
issued and registered in petitioners 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 on the basis that said property
constitutes the inheritance of respondent, together with their grandaunt Esperanza, so
Esperanza had no authority to relinquish the entire subject property to petitioner. From
that moment, the good faith of the petitioner had ceased. Petitioner cannot be entitled to
the rights under Articles 448 and 546 of the Civil Code, because the rights mentioned
therein are applicable only to builders in good faith and not to possessors in good faith.
Moreover, the petitioner cannot be considered a builder in good faith of the house on
the subject property. In the context that such term is used in particular reference to
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. Under the foregoing provisions, the
builder in good faith can compel the landowner to make a choice between appropriating
the building by paying the proper indemnity or obliging the builder to pay the price of the
land. 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.
He must choose one. He cannot, for instance, compel the owner of the building to
instead remove it from the land. In order, that the builder can invoke that accruing
benefit and enjoy his corresponding right to demand that a choice be made by the
landowner, he should be able to prove good faith on his part. Good faith, here
understood, is an intangible and abstract quality with no technical meaning or statutory
definition, and it encompasses, among other things, an honest belief, the absence of
malice and the absence of design to defraud or to seek an unconscionable advantage.
An individuals personal good faith is a concept of his own mind and, therefore, may not
conclusively be determined by his protestations alone. It implies honesty of intention,
and freedom from knowledge of circumstances which ought to put the holder upon
inquiry. The essence of good faith lies in an honest belief in the validity of ones right,
ignorance of a superior claim, and absence of intention to overreach another.

Applied to possession, one is considered in good faith if he is not aware that

there exists in his title or mode of acquisition any flaw which invalidates it. In this
case, the subject property waived and quit claimed by Esperanza to the petitioner and
her husband in the Affidavit was only covered by a tax declaration in the name of
Esperanza. Petitioner did not even bother to look into the origin of the subject property
and to probe into the right of Esperanza to relinquish the same. Thus, when petitioner
and her husband built a house thereon in 1989 they cannot be considered to have acted
in good faith as they were fully aware that when Esperanza executed an Affidavit
relinquishing in their favor the subject property the only proof of Esperanzas 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. Payment of taxes is not proof of ownership; it is, at best, an indicium
of possession in the concept of ownership. Neither tax receipts nor a declaration
of ownership for taxation purposes is evidence of ownership or of a right to
possess realty when not supported by other effective proofs
 ADILLE VS CA

FACTS: The property in dispute was originally owned by Felisa Alzul who got married
twice. Her child in the first marriage was petitioner Rustico Adile and her children in the
second marriage were respondents Emetria Asejo et al.

During her lifetime, Felisa Alzul sodl the property in pacto de retro with a three-year
repurchase period.

Felisa died before she could repurchase the property.

During the redemption period, Rustico Adille repurchased the property by himself alone
at his own expense, and after that, he executed a deed of extra-judicial partition
representing himself to be the only heir and child of his mother Felisa. Consequently, he
was able to secure title in his name alone.

His half-siblings, herein respondents, filed a case for partition and accounting claiming
that Rustico was only a trustee on an implied trust when he redeemed the property, and
thus, he cannot claim exclusive ownership of the entire property.

ISSUE: Whether or not a co-owner may acquire exclusive ownership over the property
held in common.
Whether or nor Rustico had constituted himself a negotiorum gestor

HELD: No. The right to repurchase may be exercised by a co-owner with respect to his
share alone. Although Rustico Adille redeemed the property in its entirety, shouldering
the expenses did not make him the owner of all of it.

Yes. The petitioner, in taking over the property, did so on behalf of his co-heirs, in which
event, he had constituted himself a negotiorum gestor under Art 2144 of the Civil Code,
or for his exclusive benefit, in which case, he is guilty of fraud, and must act as trustee,
the respondents being the beneficiaries, pursuant to Art 1456.
 CABALES vs. CA

FACTS: Sometime in 1964, Rurfino Cabales died leaving behind a parcel of land in
Southern Leyte to his wife, Saturnina and six children, namely, Bonifacio, Francisco,
Alberto, Albino, Lenora, and Rito. On 1971, the brothers and co-owners Bonifacio,
Alberto and Albino sold the property to Dr. Corrompido with a right to repurchase within
eight (8) years. On 1972, prior to the redemption of the property, Alberto died leaving
behind his wife and son, Nelson, herein petitioner.

Sometime later and within the redemption period, the said brothers and their mother, in
lieu of Alberto, tendered their payment to Dr. Corrompido. Subsequently, Saturnina, and
her four children, Bonifacio, Albino, Francisco and Leonora sold the said land to
Spouses Feliano. It was provided in the deed of sale that the shares of Nelson and Rito,
being minor at the time of the sale, will be held in trust by the vendee and will paid upon
them reaching the age of 21.

In 1986, Rito received the sum of 1,143 pesos from the Spouses Feliano representing
his share from the proceeds of the sale of the property. It was only in 1988, that Nelson
learned of the sale from his uncle, Rito. He signified his intention to redeem the property
in 1993 but it was only in 1995 that he filed a complaint for redemption against the
Spouses Feliano. The respondent Spouses averred that the petitioners are estopped
from denying the sale since: (1) Rito already received his share; and (2) Nelson, failed
to tender the total amount of the redemption price.

The Regional Trial Court ruled in favour of Spouses Feliano on the ground that Nelson
was no longer entitled to the property since, his right was subrogated by Saturnina upon
the death of his father, Alberto. It also alleged that Rito had no more right to redeem
since Saturnina, being his legal guardian at the time of the sale was properly vested
with the right to alienate the same.

The Court of Appeals modified the decision of the trial court stating that the sale made
by Saturnina in behalf of Rito and Nelson were unenforceable.

ISSUE: Whether or not the sale made by a legal guardian (Saturnina) in behalf of the
minors were binding upon them.

HELD: With regard to the share of Rito, the contract of sale was valid. Under Section 1,
Rule 96 “A guardian shall have the care and custody of the person of his ward, and the
management of his estate, or the management of the estate only. x x x” Indeed, the
legal guardian only has the plenary power of administration of the minor’s property. It
does not include the power of alienation which needs judicial authority. Thus, when
Saturnina, as legal guardian of petitioner Rito, sold the latter’s pro indiviso share in
subject land, she did not have the legal authority to do so. Accordingly, the contract as
to the share of Rito was unenforceable. However, when he received the proceeds of the
sale, he effectively ratified it. This act of ratification rendered the sale valid and binding
as to him.
With respect to petitioner Nelson, the contract of sale was void. He was a minor at the
time of the sale. Saturnina or any and all the other co-owners were not his legal
guardians; rather it was his mother who if duly authorized by the courts, could validly
sell his share in the property. Consequently, petitioner Nelson retained ownership over
their undivided share in the said property. However, Nelson can no longer redeem the
property since the thirty day redemption period has expired and thus he remains as co-
owner of the property with the Spouses Feliano.