RODOLFO V.

ROSALES,
(represented by his heirs, Rodolfo,
Jr., Romeo Allan, Lillian Rhodora,
Roy Victor, Roer Lyle and
Ale!ander "icolai, all s#rnamed
Rosales$ and L%L& ROS'(E)A*
ROSALES,
Petitioners,

- versus -

+%,(EL -AS)ELL)OR), J(D%).
-AS)ELL)OR), and L%"A LO/E0*
V%LLE,AS, assisted by her
Attorney*in*Fact, Rene Villeas,
Respondents.

,.R. "o. 123455

Present:

PANGANIBAN, J., Chairman,
SANDOVAL-GUTIERREZ,
CORONA,
CARPIO MORALES, an
GARCIA, JJ.








Pr!"u#$ate:


O%t!&er ', ())'
** - - - - - - - - - - - - - - - - - - - - - - - - - - - - - - - - - - - - - - - - - - - - **

D E - % S % O "


-AR/%O +ORALES, J.6
T+e ,resent ,et-t-!n .!r rev-e/ !n %ert-!rar- assa-#s t+e O%t!&er (,
())( De%-s-!n
012
an 3e&ruar4 5, ())6 Res!#ut-!n
0(2
!. t+e C!urt !. A,,ea#s
7CA8 -n CA G.R. CV N!. 59)95 an see:s t! re-nstate t+e A,r-# (1, 1;;;
De%-s-!n
062
!. t+e Re$-!na# Tr-a# C!urt 7RTC8 !. Ca#a"&a, La$una, Bran%+
69 -n C-v-# Case N!. (((;-;'-C.
S,!uses-,et-t-!ners R!!#.! V. R!sa#es an L-#4 R!s<ueta-R!sa#es
7,et-t-!ners8 are t+e re$-stere !/ners !. a ,ar%e# !. #an /-t+ an area !.
a,,r!*-"ate#4 61' s<uare "eters, %!vere &4 Trans.er Cert-.-%ate !. T-t#e
7TCT8 N!. 65='5
092
an es-$nate as L!t 1>, B#!%: 1 !. Su&-v-s-!n P#an
LRC Ps-''(99 s-tuate -n L!s Ba?!s, La$una.

On Au$ust 15, 1;;', ,et-t-!ners -s%!vere t+at a +!use /as &e-n$
%!nstru%te !n t+e-r #!t, /-t+!ut t+e-r :n!/#e$e an %!nsent, &4
res,!nent M-$ue# Caste##t!rt 7Caste##t!rt8.
0'2

It turne !ut t+at res,!nents Caste##t!rt an +-s /-.e @u-t+ +a
,ur%+ase a #!t, L!t 15 !. t+e sa"e Su&-v-s-!n P#an, .r!" res,!nent L-na
L!,eA-V-##e$as 7L-na8 t+r!u$+ +er s!n-att!rne4--n-.a%t Rene V-##e$as
7V-##e$as8 &ut t+at a.ter a surve4 t+ere!. &4 $e!et-% en$-neer Au$ust!
R-vera, +e ,!-nte t! L!t 1> as t+e L!t 15 t+e Caste##t!rts ,ur%+ase.

Ne$!t-at-!ns .!r t+e sett#e"ent !. t+e %ase t+us &e$an, /-t+ V-##e$as
!..er-n$ a #ar$er #!t near ,et-t-!nersB #!t -n t+e sa"e su&-v-s-!n as a
re,#a%e"ent t+ere!..
052
In t+e a#ternat-ve, V-##e$as ,r!,!se t! ,a4 t+e
,ur%+ase ,r-%e !. ,et-t-!nersB #!t /-t+ #e$a# -nterest.
0>2
B!t+ ,r!,!sa#s /ere,
+!/ever, reCe%te &4 ,et-t-!ners
0=2
/+!se %!unse#, &4 #etter
0;2
!. Au$ust (9,
1;;', -re%te Caste##t!rt t! st!, t+e %!nstru%t-!n !. an e"!#-s+ +-s
+!use an an4 !t+er stru%ture +e "a4 +ave &u-#t t+ere!n, an es-st .r!"
enter-n$ t+e #!t.
Pet-t-!ners su&se<uent#4 .-#e !n Se,te"&er 1, 1;;' a
%!",#a-nt
01)2
.!r re%!ver4 !. ,!ssess-!n an a"a$es /-t+ ,ra4er .!r t+e
-ssuan%e !. a restra-n-n$ !rer an ,re#-"-nar4 -nCun%t-!n a$a-nst s,!uses-
res,!nents M-$ue# an @u-t+ Caste##t!rt &e.!re t+e RTC !. Ca#a"&a,
La$una, !%:ete as C-v-# Case N!. (((;-;'-C.

T! t+e %!",#a-nt, t+e Caste##t!rts %#a-"e -n t+e-r Ans/er /-t+
C!unter%#a-"
0112
t+at t+e4 /ere &u-#ers -n $!! .a-t+.

L-na, re,resente &4 +er s!n-att!rne4--n-.a%t V-##e$as, s!!n .-#e a
M!t-!n .!r Intervent-!n
01(2
&e.!re t+e RTC /+-%+ /as $rante &4 Orer
0162
!.
De%e"&er 1;, 1;;'.

In +er Ans/er t! t+e %!",#a-nt,
0192
L-na a##e$e t+at t+e Caste##t!rts
a%te -n $!! .a-t+ -n %!nstru%t-n$ t+e +!use !n ,et-t-!nersB #!t as t+e4 -n
.a%t %!nsu#te +er &e.!re %!""en%-n$ an4 %!nstru%t-!n t+ere!n, t+e4
+av-n$ re#-e !n t+e te%+n-%a# es%r-,t-!n !. t+e #!t s!# t! t+e", L!t 15,
/+-%+ /as ver-.-e &4 +er !..-%-a##4 es-$nate $e!et-% en$-neer.

Nevert+e#ess, L-na ,r!,!se t! $-ve ,et-t-!ners a #!t %!nta-n-n$ an
area !. '65 s<uare "eters t!$et+er /-t+ t+e +!use an u,#e* stru%ture
&u-#t t+ere!n !r, -. ,et-t-!ners %+!!se, t! en%u"&er t+e '65 s<uare "eter #!t
as %!##atera# Dt! $et -""e-ate %as+E t+r!u$+ a .-nan%-n$ s%+e"e -n !rer
t! %!",ensate t+e" .!r t+e #!t -n <uest-!n.
01'2

Ru#-n$ !ut $!! .a-t+, t+e RTC, &4 De%-s-!n !. A,r-# (1, 1;;;, .!un
.!r ,et-t-!ners -n t+-s /-se:

In t+e -nstant %ase, t+ere -s n! /e##-.!une &e#-e. !.
!/ners+-, &4 t+e e.enants !. t+e #an u,!n /+-%+ t+e4
&u-#t t+e-r +!use. T+e t-t#e !r "!e !. a%<u-s-t-!n u,!n
/+-%+ t+e4 &ase t+e-r &e#-e. !. su%+ !/ners+-, ste""e
.r!" a C!ntra%t t! Se## 7E*+-&-t DPE8 !. /+-%+ t+e4 /ere n!t
even ,art-es, t+e es-$nate &u4er &e-n$ E#-Aa&et+ Fs!n
CruA an t+e sa#e even su&Ce%te t! t+e Cu-%-a#
re%!nst-tut-!n !. t+e t-t#e. An &4 t+e-r !/n a%t-!ns,
,art-%u#ar#4 e.enant M-$ue# Caste##t!rt, e.enants
&etra4e t+-s ver4 &e#-e. -n t+e-r !/ners+-, /+en rea#-A-n$
t+e -nut-#-t4 !. an%+!r-n$ t+e-r !/ners+-, !n t+e &as-s !. t+e
C!ntra%t !. Sa#e, e.enant M-$ue# Caste##t!rt -n +-s
test-"!n4 e%#are E#-Aa&et+ Fs!n CruA as +-s /-.e 7tsn, ,,.
>-=, Mar%+ (9, 1;;=8 es,-te an a"-ss-!n -n t+e-r ans/er
t+at t+e4 are t+e s,!uses na"e as e.enants 7tsn, ,. =,
@anuar4 1(, 1;;=8 an /+-%+ e%#arat-!n -s an utter
.a#se+!! as t+e C!ntra%t t! Se## -tse#. -n-%ates t+e %-v-#
status !. sa- E#-Aa&et+ Fs!n CruA t! &e s-n$#e.

Even -. /e are t! %!n%ee t+at e.enants &u-#t t+e-r
+!use -n $!! .a-t+ !n a%%!unt !. t+e re,resentat-!n !.
att!rne4--n-.a%t Rene V-##e$as, t+e-r .a-#ure t! %!",#4 /-t+
t+e re<u-re"ents !. t+e Nat-!na# Bu-#-n$ C!e, ,art-%u#ar#4
t+e ,r!%ure"ent !. a &u-#-n$ ,er"-t, sta-ne su%+ $!!
.a-t+ an &e#-e..

* * *

3r!" an4 an a## -n-%at-!ns, t+-s e#-&erate &rea%+
-s an un"-t-$ate "an-.estat-!n !. &a .a-t+. An .r!" t+e
ev-en%e t+us au%e, /e +!# t+at e.enants an t+e
-nterven!r /ere e<ua##4 $u-#t4 !. ne$#-$en%e /+-%+ #e t! t+e
%!nstru%t-!n !. t+e e.enantsB +!use !n ,#a-nt-..sB ,r!,ert4
an t+ere.!re C!-nt#4 an severa##4 #-a&#e .!r a## t+e a"a$es
su..ere &4 t+e ,#a-nt-..s.
0152
7Uners%!r-n$ su,,#-e8



T+e -s,!s-t-ve ,!rt-!n !. t+e tr-a# %!urtBs De%-s-!n reas,
<u!te verbatim:

ACCORDINGLF, -n v-e/ !. a## t+e .!re$!-n$, Cu$"ent
-s +ere&4 renere -n .av!r !. ,#a-nt-..s an a$a-nst t+e
e.enants, !rer-n$ t+e #atter t! surrener t+e ,!ssess-!n !.
t+e ,r!,ert4 %!vere &4 TCT N!. 65='5 !. t+e Re$-ster !.
Dees !. La$una -n%#u-n$ an4 an a## -",r!ve"ents &u-#t
t+ere!n t! t+e ,#a-nt-..s.

De.enants an -nterven!rs are #-:e/-se C!-nt#4 an
severa##4 -re%te t! ,a4 t! ,#a-nt-..s t+e .!##!/-n$ a"a$es:

a8 TGO THOUSAND 7P(,))).))8
PESOS ,er "!nt+ .r!" 3e&ruar4 1;;' &4 /a4 !.
reas!na&#e %!",ensat-!n .!r t+e use !. ,#a-nt-..sB
,r!,ert4 unt-# t+e surrener !. t+e sa"eI
&8 3I3TF THOUSAND 7P'),))).))8
PESOS &4 /a4 !. "!ra# a"a$esI
%8 THIRTF THOUSAND 7P6),))).))8
PESOS as e*e",#ar4 a"a$esI
8 TGENTF THOUSAND
7P(),))).))8 PESOS as att!rne4Bs .ees an %!st
!. su-t.

T+e %!unter%#a-" -nter,!se &4 t+e e.enants -n t+e-r
res,!ns-ve ,#ea-n$ -s +ere&4 -s"-sse .!r #a%: !. "er-t.

SO ORDERED.
01>2


Res,!nents t+ereu,!n .-#e t+e-r res,e%t-ve a,,ea#s /-t+ t+e CA.

Pet-t-!ner R!!#.! R!sa#es, -n t+e "eant-"e, -e !n De%e"&er >,
())1. H-s +e-rs R!!#.!, @r., R!"e! A##an, L-##-an R+!!ra, R!4 V-%t!r,
R!$er L4#e an A#e*aner N-%!#a-, a## surna"e R!sa#es, .-#e t+e-r
A,,earan%e
01=2
as +-s su&st-tute.

B4 De%-s-!n !. O%t!&er (, ())(, t+e CA $rante t+e a,,ea# an set
as-e t+e A,r-# (1, 1;;; RTC De%-s-!n. T+e -s,!s-t-ve ,!rt-!n !. t+e
De%-s-!n reas, <u!te verbatim:

7.EREFORE, ,re"-ses %!ns-ere, t+e -nstant
a,,ea# -s +ere&4 ,RA")ED an t+e assa-#e e%-s-!n !.
t+e %!urt a <u! REVERSED A"D SE) AS%DE. In
a%%!ran%e /-t+ t+e %ases !. Technogas Philippines
Manufacturing Corp. vs. Court of Appeals an Depra vs.
Dumlao, a,,#4-n$ Art-%#e 99= !. t+e C-v-# C!e, t+-s %ase
-s RE+A"DED t! t+e Re$-!na# Tr-a# C!urt !. Ca#a"&a,
La$una, Bran%+ 69, .!r .urt+er ,r!%ee-n$s, as .!##!/s:

1. t! eter"-ne t+e ,resent .a-r ,r-%e !. a,,e##eesB
61' s<uare "eter area !. #an an t+e a"!unt !. t+e
e*,enses a%tua##4 s,ent &4 t+e a,,e##ants .!r &u-#-n$ t+e
+!use as !. (1 Au$ust 1;;', /+-%+ -s t+e t-"e t+e4 /ere
n!t-.-e !. a,,e##eesB r-$+t.u# %#a-" !ver L!t 1>.

(. t! !rer t+e a,,e##ees t! e*er%-se t+e-r !,t-!n
uner t+e #a/ 7Art-%#e 99=, C-v-# C!e8, /+et+er t!
a,,r!,r-ate t+e +!use as t+e-r !/n &4 ,a4-n$ t! t+e
a,,e##ants t+e a"!unt !. t+e e*,enses s,ent .!r t+e +!use
as eter"-ne &4 t+e %!urt a <u! -n a%%!ran%e /-t+ t+e
#-"-tat-!ns as a.!restate !r t! !&#-$e t+e a,,e##ants t! ,a4
t+e ,r-%e !. t+e #an.

In %ase t+e a,,e##ees e*er%-se t+e !,t-!n t! !&#-$e
t+e a,,e##ants t! ,a4 t+e ,r-%e !. t+e #an &ut t+e #atter
reCe%t su%+ ,ur%+ase &e%ause, as .!un &4 t+e %!urt, t+e
va#ue !. t+e #an -s %!ns-era&#4 "!re t+an t+at !. t+e
+!use, t+e %!urt s+a## !rer t+e ,art-es t! a$ree u,!n t+e
ter"s !. a .!r%e #ease, an $-ve t+e %!urt a <u! a .!r"a#
/r-tten n!t-%e !. su%+ a$ree"ent an -ts ,r!v-s!s. I. n!
a$ree"ent -s rea%+e &4 t+e ,art-es, t+e %!urt a <u! s+a##
t+en .-* t+e ter"s !. t+e .!r%e #ease, ,r!v-e t+at t+e
"!nt+#4 renta# t! &e .-*e &4 t+e C!urt s+a## n!t &e #ess t+at
T/! T+!usan Pes!s 7P(,))).))8 ,er "!nt+, ,a4a&#e
/-t+-n t+e .-rst .-ve 7'8 a4s !. ea%+ %a#enar "!nt+ an t+e
,er-! t+ere!. s+a## n!t &e "!re t+an t/! 7(8 4ears, %!unte
.r!" t+e .-na#-t4 !. t+e Cu$"ent.

U,!n t+e e*,-rat-!n !. t+e .!r%e #ease, !r u,!n
e.au#t &4 t+e a,,e##ants -n t+e ,a4"ent !. renta#s .!r t/!
7(8 %!nse%ut-ve "!nt+s, t+e a,,e##ees s+a## &e ent-t#e t!
ter"-nate t+e .!r%e #ease, t! re%!ver t+e-r #an, an t!
+ave t+e -",r!ve"ent re"!ve &4 t+e a,,e##ants at t+e
#atterBs e*,ense. T+e renta#s +ere-n ,r!v-e s+a## &e
tenere &4 t+e a,,e##ants t! t+e %!urt .!r ,a4"ent t! t+e
a,,e##ees, an su%+ tener s+a## %!nst-tute ev-en%e !.
/+et+er !r n!t %!",#-an%e /as "ae /-t+-n t+e ,er-! .-*e
&4 t+e %!urt.

In an4 event, t+e a,,e##ants s+a## ,a4 t+e a,,e##ees
t+e a"!unt !. T/! T+!usan Pes!s 7P(,))).))8 as
reas!na&#e %!",ensat-!n .!r t+e-r !%%u,an%4 !. t+e
en%r!a%+e ,r!,ert4 .r!" t+e t-"e sa- a,,e##antsB $!!
.a-t+ %ease 7s-%8 t! e*-st unt-# su%+ t-"e t+e ,!ssess-!n !.
t+e ,r!,ert4 -s e#-vere t! t+e a,,e##ees su&Ce%t t! t+e
re-"&urse"ent !. t+e a.!resa- e*,enses -n .av!r !. t+e
a,,e##ants !r unt-# su%+ t-"e t+e ,a4"ent !. t+e ,ur%+ase
,r-%e !. t+e sa- #!t &e "ae &4 t+e a,,e##ants -n .av!r !.
t+e a,,e##ees -n %ase t+e #atter !,t .!r t+e %!",u#s!r4 sa#e
!. t+e sa"e.

SO ORDERED.
01;2
7E",+as-s -n t+e !r-$-na#8


In revers-n$ t+e tr-a# %!urt, t+e CA +e#:

* * *

* * * A ,erusa# !. t+e re%!rs rea-#4 revea#s t+at
sa- %!urt -nstea re#-e !n .#-"s4, -. n!t -""ater-a#,
a##e$at-!ns !. t+e a,,e##ees, /+-%+ +ave n! -re%t &ear-n$ -n
t+e eter"-nat-!n !. /+et+er t+e a,,e##ants are &u-#ers -n
&a .a-t+.

3!r !ne, t+e ,-v!ta# -ssue t! &e res!#ve -n t+-s %ase,
-.e. /+et+er a,,e##ant M-$ue# -s a &u-#er -n $!! .a-t+, /as
-$n!re &4 t+e %!urt a <u!. T+e -nstant %ase !es n!t -n
an4 /a4 %!n%ern t+e ,ers!na# an ,r!,ert4 re#at-!ns !.
s,!uses-a,,e##ants an E#-Aa&et+ Fs!n CruA /+-%+ -s an
a#t!$et+er -..erent "atter t+at %an &e vent-#ate &4 t+e
%!n%erne ,art-es t+r!u$+ t+e -nst-tut-!n !. a ,r!,er a%t-!n.
*** T+e %!urt a <u! s+!u# +ave .!%use !n t+e -ssue !.
/+et+er a,,e##ant M-$ue# &u-#t, -n $!! .a-t+, t+e su&Ce%t
+!use /-t+!ut n!t-%e !. t+e averse %#a-" !. t+e a,,e##ees
an uner t+e +!nest &e#-e. t+at t+e #!t /+-%+ +e use -n t+e
%!nstru%t-!n &e#!n$s t! +-". ***

*** As -t -s, a,,e##ant M-$ue# re#-e !n t+e t-t#e /+-%+
t+e -nterven!r s+!/e t! +-" /+-%+, s-$n-.-%ant#4, +as n!
ann!tat-!n t+at /!u# !t+er/-se s+!/ a ,r-!r averse
%#a-". T+us, as .ar as a,,e##ant M-$ue# -s %!n%erne, +-s
t-t#e !ver t+e su&Ce%t #!t, as /e## as t+e t-t#e !. t+e -nterven!r
t+eret!, -s %#ean an unta-nte &4 an averse %#a-" !r !t+er
-rre$u#ar-t-es.

3!r an!t+er, t+e a,,e##antsB .a-#ure t! se%ure a
&u-#-n$ ,er"-t .r!" t+e Mun-%-,a# En$-neerBs O..-%e !n t+e-r
%!nstru%t-!n !n L!t 1> !es n!t -",-n$e !n t+e $!! .a-t+ !.
t+e a,,e##ants. In .a%t, -t %an &e t!# t+at a &u-#-n$ ,er"-t
/as a%tua##4 .-#e &4 a,,e##ant M-$ue# /-t+ res,e%t t! L!t 15
an -t /as !n#4 ue t! t+e %!n.us-!n an "-sa,,re+ens-!n
&4 t+e -nterven!r !. t+e e*a%t ,ara"eters !. t+e ,r!,ert4
/+-%+ %ause a,,e##antBs &e#-e. t+at L!t 1> 0t+e <uest-!ne
#!t2, -s +-s. T+-s .a%t &!#sters a,,e##ant M-$ue#Bs $!! .a-t+ -n
&u-#-n$ +-s +!use !n a,,e##eesB #!t uner t+e "-sta:en
&e#-e. t+at t+e sa"e -s +-s ,r!,ert4. Ot+er/-se, +e s+!u#
+ave se%ure a &u-#-n$ ,er"-t !n L!t 1> -nstea !r s+!u#
n!t +ave &!t+ere t! ta:e t+e ne%essar4 "easures t! !&ta-n
a &u-#-n$ ,er"-t !n L!t 15 -n t+e .-rst ,#a%e.

B4 an #ar$e, t+e re%!rs s+!/ t+at, as test-.-e t! &4
En$r. Re&e%%a T. Lanuan$, a,,e##ant M-$ue# +a a#rea4
a,,#-e .!r a &u-#-n$ ,er"-t as ear#4 as 3e&ruar4 1;;9 an
/as -n .a%t -ssue a te",!rar4 &u-#-n$ ,er"-t ,en-n$ t+e
%!",#et-!n !. t+e re<u-re"ents .!r sa- ,er"-t. A#t+!u$+
t+e &u-#-n$ ,er"-t /as &e#ate#4 -ssue -n @anuar4 1;;5,
t+-s !es n!t -n an4 /a4 etra%t .r!" a,,e##ant M-$ue#Bs
$!! .a-t+.

* * *

In +!#-n$ t+e a,,e##ants as &u-#ers -n &a .a-t+, t+e
%!urt a <u! e.-e #a/ an sett#e Cur-s,ruen%e %!ns-er-n$
t+at t+e .a%tua# &as-s !. -ts .-n-n$s an t+e -n%!ntr!vert-&#e
ev-en%e -n su,,!rt t+ere!. ,r!ve t+at t+e a,,e##ant M-$ue#,
-n $!! .a-t+, &u-#t t+e +!use !n a,,e##eesB #an /-t+!ut
:n!/#e$e !. an averse %#a-" !r an4 !t+er -rre$u#ar-t-es
t+at "-$+t %ast a !u&t as t! t+e vera%-t4 !. t+e assuran%e
$-ven t! +-" &4 t+e -nterven!r. Hav-n$ &een assure &4 t+e
-nterven!r t+at t+e st!ne "!nu"ents /ere ,ur,!se#4
,#a%e, a#&e-t /r!n$.u##4, &4 t+e #an surve4!r -n sa- #an t!
s,e%-.-%a##4 -ent-.4 t+e #!t an -ts -n%#us-ve &!unar-es, t+e
a,,e##ants %ann!t &e .au#te .!r +av-n$ re#-e !n t+e
e*,ert-se !. t+e #an surve4!r /+! -s "!re e<u-,,e an
e*,er-en%e -n t+e .-e# !. #an surve4-n$. A#t+!u$+ uner
t+e T!rrens s4ste" !. #an re$-strat-!n, t+e a,,e##ant -s
,resu"e t! +ave :n!/#e$e !. t+e "etes an &!uns !.
t+e ,r!,ert4 /-t+ /+-%+ +e -s ea#-n$, a,,e##ant +!/ever,
%!ns-er-n$ t+at +e -s a #a4"an n!t verse -n t+e te%+n-%a#
es%r-,t-!n !. +-s ,r!,ert4, %ann!t &e .au#te -n +-s re#-an%e
!n t+e surve4 ,#an t+at /as e#-vere t! +-" &4 t+e
-nterven!r an t+e st!ne "!nu"ents t+at /ere ,#a%e -n t+e
en%r!a%+e ,r!,ert4.

* * *

Pere",t!r-#4, %!ntrar4 t! t+e .#a/e ,r!n!un%e"ents
"ae &4 t+e %!urt a <u! t+at a,,e##ant M-$ue# -s ee"e as
a &u-#er -n &a .a-t+ !n t+e &as-s !. a "ere assert-!n t+at
+e &u-#t +-s +!use /-t+!ut -n-t-a##4 sat-s.4-n$ +-"se#. t+at +e
!/ns t+e sa- ,r!,ert4, t+-s C!urt .-ns reas!n t! "a-nta-n
$!! .a-t+ !n t+e ,art !. t+e a,,e##ant. A"-tte#4, t+e
a,,e##antsB +!use err!ne!us#4 en%r!a%+e !n t+e ,r!,ert4
!. t+e a,,e##ees ue t! a "-sta:e -n t+e ,#a%e"ent !. st!ne
"!nu"ents as -n-%ate -n t+e surve4 ,#an, /+-%+ err!r -s
-re%t#4 attr-&uta&#e t! t+e .au#t !. t+e $e!et-% en$-neer /+!
%!nu%te t+e sa"e. T+-s .a%t a#!ne ne$ates &a .a-t+ !n
t+e ,art !. a,,e##ant M-$ue#.

* * *

M!re!ver, -t -s <u-te -##!$-%a# .!r a,,e##ant M-$ue# t!
:n!/-n$#4 &u-# +-s +!use !n a ,r!,ert4 /+-%+ +e :ne/
&e#!n$s t! an!t+er ,ers!n. * * *

* * *

%n 8ie9 of the ood faith of both parties in this
case, their rihts and obliations are to be o8erned
by Article 55:, 9hich has been applied to impro8ements
or portions of impro8ements b#ilt by mista;en belief on
land belonin to the ad<oinin o9ner. ! ! !

* * *
0()2
7E",+as-s an uners%!r-n$ su,,#-e8


Pet-t-!nersB M!t-!n .!r Re%!ns-erat-!n
0(12
ate O%t!&er ((, ())(
+av-n$ &een en-e &4 t+e CA &4 Res!#ut-!n !. Mar%+ 16, ())(, t+e
,resent ,et-t-!n /as .-#e ra-s-n$ t+e .!##!/-n$ -ssues:

I.

GHETHER OR NOT THE HONORABLE COURT O3
APPEALS COMMITTED A GRAVE ABUSE O3 DISCRETION
IN MAJING A 3INDING THAT IS CONTRARF TO THE
ADMISSIONS BF THE PARTIES

II.

GHETHER OR NOT THE HONORABLE COURT O3
APPEALS COMMITTED A REVERSIBLE ERROR O3 LAG
IN CONCLUDING THAT THE TRIAL COURT, IN DECIDING
THE CASE, RELIED ON 3LIMSF, I3 NOT IMMATERIAL,
ALLEGATIONS O3 THE PETITIONERS, GHICH HAVE NO
DIRECT BEARING IN THE DETERMINATION O3
GHETHER THE RESPONDENTS ARE BUILDERS IN
GOOD 3AITH





III.

GHETHER OR NOT THE HONORABLE COURT O3
APPEALS COMMITTED A REVERSIBLE ERROR O3 LAG
IN RENDERING A DECISION THAT IS UNEN3ORCEABLE
AGAINST BOTH RESPONDENT @UDITH CASTELLTORT
AND THIRD-PARTF ELIZABETH CRUZ
0((2


Pet-t-!ners -n-t-a##4 +a""er a$a-nst res,!nentsB ,r!v-n$ t+at
Caste##t!rt an a %erta-n E#-Aa&et+ CruA are t+e &u-#ers !. t+e +!use !n t+e
su&Ce%t ,r!,ert4, t+e4 .au#t-n$ t+e" /-t+ est!,,e# .!r a##e$-n$ -n t+e-r
Ans/er &e.!re t+e tr-a# %!urt t+at Dt+e4 7res,!nents Caste##t!rt an @u-t+8
%ause t+e %!nstru%t-!n !. t+e-r +!use /+-%+ t+e4 &!u$+t .r!" a %erta-n
L-na L!,eA-V-##e$as.E

Pet-t-!ners re#4 !n t+e .!##!/-n$ !%tr-ne esta&#-s+e -n Elada v.
Court of Appeals:
0(62

Dan a"-ss-!n "ae -n t+e ,#ea-n$s %ann!t &e
%!ntr!verte &4 t+e ,art4 "a:-n$ su%+ a"-ss-!n an are
%!n%#us-ve as t! +-" an t+at a## ,r!!.s su&"-tte &4 +-"
%!ntrar4 t+eret! !r -n%!ns-stent t+ere/-t+, s+!u# &e
-$n!re, /+et+er !&Ce%t-!n -s -nter,!se &4 t+e ,art4 !r n!t
* * *E


Pet-t-!nersB %!ntent-!n -s +ar#4 re#evant t! t+e %ase at &ar.
G+et+er -t /as Caste##t!rt an @u-t+ !r Caste##t!rt an E#-Aa&et+ CruA /+!
,ur%+ase t+e ,r!,ert4 .r!" L-na -s n!t "ater-a# t! t+e !ut%!"e !. t+e
-nstant %!ntr!vers4. As .!un &4 t+e CA:

T+e .a%t re"a-ns t+at a,,e##ant 0Caste##t!rt2 -s t+e
&u-#er !. t+e +!use !n L!t 1> *** T+e %!urt a <u! s+!u#
+ave .!%use !n t+e -ssue !. /+et+er a,,e##ant M-$ue# &u-#t,
-n $!! .a-t+, t+e su&Ce%t +!use /-t+!ut n!t-%e !. t+e averse
%#a-" !. t+e a,,e##ees an uner t+e +!nest &e#-e. t+at t+e #!t
/+-%+ +e use -n t+e %!nstru%t-!n &e#!n$s t! +-". *** -t
%ann!t &e $a-nsa- t+at a,,e##ant M-$ue# +as a t-t#e !ver t+e
#an t+at /as ,ur%+ase .r!" t+e -nterven!r * * *
0(92

At a## events, as t+-s C!urt +e# -n t+e %ase !. !ardner v. Court of
Appeals:
0('2

In -ts Res!#ut-!n revers-n$ t+e !r-$-na# De%-s-!n,
res,!nent C!urt -s%re-te t+e test-"!n4 !. Ar-!st!
SANTOS .!r &e-n$ at var-an%e /-t+ t+e a##e$at-!ns -n +-s
Ans/er. T+e .a%t, +!/ever, t+at t+e a##e$at-!ns "ae &4
Ar-!st! SANTOS -n +-s ,#ea-n$s an -n +-s e%#arat-!ns -n
!,en C!urt -..ere /-## n!t "-#-tate a$a-nst t+e .-n-n$s
+ere-n "ae n!r su,,!rt t+e reversa# &4 res,!nent
C!urt. As a $enera# ru#e, .a%ts a##e$e -n a ,art4Bs ,#ea-n$
are ee"e a"-ss-!ns !. t+at ,art4 an &-n-n$ u,!n -t,
&ut t+-s -s n!t an a&s!#ute an -n.#e*-&#e ru#e. An Ans/er -s
a "ere state"ent !. .a%t /+-%+ t+e ,art4 .-#-n$ -t e*,e%ts t!
,r!ve, &ut -t -s n!t ev-en%e. As Ar-!st! SANTOS +-"se#., -n
!,en C!urt, +a re,u-ate t+e e.enses +e +a ra-se -n
+-s Ans/er an a$a-nst +-s !/n -nterest, +-s test-"!n4 -s
eserv-n$ !. /e-$+t an %reen%e.
0(52
7Uners%!r-n$
su,,#-e8


T+e -ssue eter"-nat-ve !. t+e %!ntr!vers4 -n t+e %ase at &ar +-n$es
!n /+et+er Caste##t!rt -s a &u-#er -n $!! .a-t+.

A &u-#er -n $!! .a-t+ -s !ne /+! &u-#s /-t+ t+e &e#-e. t+at t+e #an
+e -s &u-#-n$ !n -s +-s, !r t+at &4 s!"e t-t#e !ne +as t+e r-$+t t! &u-#
t+ere!n, an -s -$n!rant !. an4 e.e%t !r .#a/ -n +-s t-t#e.
0(>2


Art-%#e '(> !. t+e C-v-# C!e ,r!v-es t+at $!! .a-t+ -s a#/a4s
,resu"e, an u,!n +-" /+! a##e$es &a .a-t+ !n t+e ,art !. a ,!ssess!r
rests t+e &uren !. ,r!!..
0(=2
In t+e %ase at &ar, L!t 15 /as s!# &4 L-na, t+r!u$+ +er att!rne4--n-
.a%t V-##e$as, t! Caste##t!rt an a %erta-n E#-Aa&et+ CruA
0(;2
.!r a
%!ns-erat-!n !. P')),))).)). G+-#e ,r-!r t! t+e sa#e, /+at V-##e$as
s+!/e Caste##t!rt as ev-en%e !. +-s "!t+er L-naBs !/ners+-, !. t+e
,r!,ert4 /as !n#4 a ,+!t!%!,4 !. +er t-t#e TCT N!. 7T-9(1>18 T-1='')
06)2
+e
e*,#a-n-n$ t+at t+e !/nerBs u,#-%ate !. t+e t-t#e /as #!st an t+at Cu-%-a#
re%!nst-tut-!n t+ere!. /as !n$!-n$, Caste##t!rt a%te -n t+e "anner !. a
,ruent "an an /ent t! t+e Re$-str4 !. Dees !. La$una t! ,r!%ure a
%ert-.-e true %!,4 !. t+e TCT.
0612
T+e %ert-.-e true %!,4 &!re n! ann!tat-!n
-n-%at-n$ an4 ,r-!r averse %#a-" !n L!t 15.

T+e re%!rs -n-%ate t+at at t+e t-"e Caste##t!rt &e$an %!nstru%t-n$
+-s +!use !n ,et-t-!nersB #!t, +e &e#-eve t+at -t /as t+e L!t 15 +e &!u$+t
an e#-vere t! +-" &4 V-##e$as.

In +-s %r!ss-e*a"-nat-!n, V-##e$as test-.-e:

K: F!u sa- t+e surve4!r ,#a%e a "uC!n a#!n$ &!unar4 !.
t+e ,r!,ert4L
A: Fes.

K: G+en /ere t+e "uC!ns ,#a%e -n t+e &!unar4 !. t+e
,r!,ert4L
A: T+ese "uC!ns /ere t+e &as-s .!r "4 #!%at-n$ t+e
,r!,ert4 -n ,!-nt-n$ t! Mr. Caste##t!rt.

* * *

K: Is -t n!t a .a%t t+at &e.!re M-$ue# Caste##t!rt starte
%!nstru%t-n$ t+at +!use +e s!u$+t 4!ur av-%e !r
,er"-ss-!n t! %!nstru%t t+e sa"e !ver t+at ,art-%u#ar
#!tL
A: Fes.

K: An 4!u $ave 4!ur %!nsentL
A: Fes, &e%ause &ase !n "4 :n!/#e$e a#s! t+at t+at
/as t+e #!t as pointed by Enr. Ri8era.

* * *

K: Gas t+ere an4 re"ar:a&#e -..eren%e &et/een #!t 15
an 1> at t+e t-"e t+at t+-s ,art-%u#ar #!t /as s!# t!
M-$ue# Caste##t!rt an E#-Aa&et+ CruAL

* * *

A: B!t+ #!ts 15 an 1> are ,ra%t-%a##4 t+e sa"e. T+e 7s-%8
+ave t+e sa"e .r!nta$e. T+ere -s !n#4 a -..eren%e !. 9
s<uare "eters, !ne -s 611 s<uare "eters an t+e !t+er
61' s<uare "eters. B!t+ s-es /ere .en%e, as ra/n
t+e4 /ere .a%-n$ t+e sa"e r!a. T+e4 are ,ra%t-%a##4
t+e sa"e.

K: But at t+e t-"e !r -""e-ate#4 &e.!re Mr. Caste##t!rt
starte t+e %!nstru%t-!n !. t+e +!use, /as t+ere an4
re"ar:a&#e -st-n%t-!n &et/een t+ese t/! ,r!,ert-esL
A: N!ne.
06(2
7E",+as-s an uners%!r-n$ su,,#-e8


T+e %!n.us-!n -n t+e -ent-.-%at-!n !. L!t 15 /as eventua##4 tra%e
t! t+e err!r %!""-tte &4 $e!et-% en$-neer Au$ust! R-veraBs e",#!4ees
-n ,#a%-n$ st!ne "!nu"ents !n ,et-t-!nersB ,r!,ert4, -nstea !. !n L!t 15,
t+e #!t s!# t! Caste##t!rt, &ase !n t+e surve4 "ae &4 t+e en$-neer -n
1;;(.

T+e en$-neer s! test-.-e:

K: N!/, as-e .r!" -ns,e%t-n$ ,ers!na##4 t+e s-te, /+at
e#se - 4!ur "en !r ass-stants !L
A: A.ter %!",ut-n$ t+e su&-v-s-!n #!ts, t+e4 /ent &a%: t!
t+e .-e# t! ,#ant t+!se su&-v-s-!n %!rners /-t+ %!n%rete
"!nu"ents.


K: G+-%+ -s 7s-%8 a#s! %a##e as D"!+!nsEL
A: Fes, s-r.


K: N!/, %an 4!u ,!-nt t! t+-s H!n!ra&#e C!urt /+ere
e*a%t#4 - 4!ur "en ,#a%e t+ese a-t-!na# "!+!ns
an +!/ "an4L
A: Later !n /e -s%!vere t+at t+e4 ,#a%e t+e "!+!ns -n
t+e aC!-n-n$ #!t, #!t 1>.

* * *

K: * * * /+en a$a-n - 4!u "eet Mr. Rene V-##e$as !r
a.ter +!/ "an4 "!nt+s !r 4earL
A: Ma4&e a.ter a 4ear, s-r.

K: An 4!u "et +-" a$a-n &e%ause +e +a a ,r!&#e"
re$ar-n$ t+e ,r!,ert4 !. !ne En$r. R!sa#esL
A: Fes, s-r.

K: An /+en +e %!n.-e t! 4!u t+-s "atter, - 4!u $! t!
t+e s-te !. L!t 15 !r 1>L
A: Fes, s-r.

K: An /+at - 4!u see t+ereL
A: A +!use &e-n$ %!nstru%te t+en I re%+e%:e t+e
#!%at-!n !. t+e +!use an -t turne !ut t! &e -n L!t 1>.

* * *

K: C!ns-er-n$ t+at 4!u .!un !ut t+at a "-sta:e /as
a%tua##4 "ae &4 4!ur ass-stants Denn-s Oren%-!, Mar-!
Car,-! an S!veCan! /+en 4!u a##!/e t+e" t!
,r!%ee !n t+e-r !/n t! "a:e t+-s %!",utat-!n, - 4!u
%!n.r!nt t+ese "en !. 4!urs a.ter/arsL
A: Fes, s-r.

K: In /+at "annerL
A: I a%tua##4 re,r-"ane t+e" ver&a##4 an a#s! I
-s"-sse Mar-! Car,-! .r!" "4 !..-%e.

* * *

K: An - 4!u -nvest-$ate +!/ 4!ur "en %!""-tte t+-s
"-sta:e !. ,#ant-n$ t+ese "!nu"ents !n an!t+er #!t
/+en %!rners 9 M 1 /ere %#ear#4 ,#ante !n t+e
$r!unL
A: I "4se#. re%+e%:e -t an .!un !ut t+at t+e4 %!""-tte
an err!r.

* * *

K: An n!/, 4!u are sa4-n$ t+at 4!ur "en %!""-tte a
"-sta:e &4 ,#a%-n$ t+ere!n "!nu"ents &4 ,#ant-n$
t+ese "!nu"ents n!t !n L!t 15 &ut !n L!t 1>L
A: G+en I -nvest-$ate +!/ - t+e4 %!""-t 7s-%8 a
"-sta:e -t %a"e t! &e #-:e t+-s. Be.!re /+en /e
surve4e .-rst t+-s -n 1;;(, at t+at t-"e Dante V-##e$as
%!ntra%te "4 serv-%es t+ere /as a .en%e +ere t+en
/+en /e /ent &a%:, t+e r!a /as a#rea4 re"!ve s!
t+e4 %!""-tte an err!r t+at t+-s ,!-nt -s L!t 1;, t+e4
t+!u$+t t+at -t /as L!t 1;, t+e &a%: ,!rt-!n.

* * *

K: In t+-s ,art-%u#ar %ase, - 4!u .-n !ut +!/ 4!ur "en
%+e%:e t+e su%%ee-n$ #!ts, +!/ t+e4 eter"-ne 7s-%8
t+e e*a%t #!%at-!n !. #!t 15L
A: T+e4 Cust re#-e !n !ne s-e !. t+e su&-v-s-!n.

K: B4 Cust %!unt-n$ t+e nu"&er !. #!tsL
A: Fes, s-r.

K: G-t+!ut "a:-n$ an4 a%tua# "easure"entL
A: T+e4 "ae an a%tua# "easure"ent &ut t+e re.eren%e
,!-nt -s n!t t+e !ne, t+e %!rre%t !ne &e%ause t+e4 a#s!
%+e%:e -t /-t+ t+e !t+er %!rner !. t+e r!a $!-n$ &a%:.

* * *

K: An +!/ - t+e4 %!""-t a "-sta:e /+en 4!u sa- t+e4
%+e%:e t+e #!t at t+e &a%: !. L!t 15L
A: Be%ause t+e4 /ere <u-te %!n.-ent s-n%e /e +a
a#rea4 re#!%ate t+e ,r!,ert4 t/! 4ears a$! s! t+e4
t+!u$+t t+at t+e4 $et 7s-%8 t+e r-$+t #!t /-t+!ut %+e%:-n$
t+e !t+er s-e !. t+e su&-v-s-!n.

* * *

K: N!/, 4!u sa- t+at /+en 4!u /ent t! t+e ,#a%e
&e%ause 4!u +ear .r!" Rene V-##e$as t+at t+ere /as a
"-sta:e 4!u n! #!n$er %!u# .-n t+e "!nu"ents !n
#-nes 1 an 9 an a%%!r-n$ t! 4!u t+e reas!n -s t+at a
.en%e /as a#rea4 %!nstru%teL
A: Fes, s-r.

K: 3!r %#ar-.-%at-!n, -s t+-s #-ne 1 M 9 !n L!t 15 a %!""!n
#-ne 1 M9 !n L!t 1>L
A: Fes, s-r a %!""!n #-ne.

K: In !t+er /!rs, t+-s #-ne 1 M9 ev-es 7s-%8 L!t 15 M 1>L
A: Fes, s-r.

K: S! t+at /+en t+ese "!nu"ents /ere ,#a%e !n #-nes 1
M 9 s!"e&!4 %!u# "-sta:e -t .!r L!t 1> a#s! &e%ause
t+ere /ere "!nu"ents n!/ 1 M9 .!r #!t 15 s-n%e t+ese
are %!""!n #-nes .!r
L!t 1> a#s! /-t+ L!t 15, -t %!u# a#s! &e %!nstrue t+at
t+ese are "!nu"ents .!r L!t 1>L
A: Fes, s-r ,!ss-&#e.
0662
7Uners%!r-n$ su,,#-e8


As %!rre%t#4 .!un &4 t+e CA, &!t+ ,art-es +av-n$ a%te -n $!!
.a-t+ at #east unt-# Au$ust (1, 1;;', t+e a,,#-%a&#e ,r!v-s-!n -n t+-s %ase -s
Art-%#e 99= !. t+e C-v-# C!e /+-%+ reas:

Art. 99=. T+e !/ner !. t+e #an !n /+-%+ an4t+-n$
+as &een &u-#t, s!/n !r ,#ante -n $!! .a-t+, s+a## +ave t+e
r-$+t t! a,,r!,r-ate as +-s !/n t+e /!r:s, s!/-n$ !r
,#ant-n$, a.ter ,a4"ent !. t+e -ne"n-t4 ,r!v-e .!r -n
Art-%#es '95 an '9=, !r t! !&#-$e t+e !ne /+! &u-#t !r
,#ante t! ,a4 t+e ,r-%e !. t+e #an, an t+e !ne /+!
s!/e, t+e ,r!,er rent. H!/ever, t+e &u-#er !r ,#anter
%ann!t &e !&#-$e t! &u4 t+e #an -. -ts va#ue -s %!ns-era&#4
"!re t+an t+at !. t+e &u-#-n$ !r trees. In su%+ %ase, +e
s+a## ,a4 reas!na&#e rent, -. t+e !/ner !. t+e #an !es n!t
%+!!se t! a,,r!,r-ate t+e &u-#-n$ !r trees a.ter ,r!,er
-ne"n-t4. T+e ,art-es s+a## a$ree u,!n t+e ter"s !. t+e
#ease an -n %ase !. -sa$ree"ent, t+e %!urt s+a## .-* t+e
ter"s t+ere!..


Uner t+e .!re$!-n$ ,r!v-s-!n, t+e #an!/ner %an %+!!se &et/een
a,,r!,r-at-n$ t+e &u-#-n$ &4 ,a4-n$ t+e ,r!,er -ne"n-t4 !r !&#-$-n$ t+e
&u-#er t! ,a4 t+e ,r-%e !. t+e #an, un#ess -ts va#ue -s %!ns-era&#4 "!re
t+an t+at !. t+e stru%tures, -n /+-%+ %ase t+e &u-#er -n $!! .a-t+ s+a## ,a4
reas!na&#e rent.
0692
I. t+e ,art-es %ann!t %!"e t! ter"s !ver t+e
%!n-t-!ns !. t+e #ease, t+e %!urt "ust .-* t+e ter"s t+ere!..

T+e %+!-%e &e#!n$s t! t+e !/ner !. t+e #an, a ru#e t+at a%%!rs
/-t+ t+e ,r-n%-,#e !. a%%ess-!n, i.e., t+at t+e a%%ess!r4 .!##!/s t+e ,r-n%-,a#
an n!t t+e !t+er /a4 ar!un. Even as t+e !,t-!n #-es /-t+ t+e #an!/ner,
t+e $rant t! +-", nevert+e#ess, -s ,re%#us-ve.
06'2
T+e #an!/ner %ann!t
re.use t! e*er%-se e-t+er !,t-!n an %!",e# -nstea t+e !/ner !. t+e
&u-#-n$ t! re"!ve -t .r!" t+e #an.
0652

T+e raison d"etre .!r t+-s ,r!v-s-!n +as &een enun%-ate t+us:

G+ere t+e &u-#er, ,#anter !r s!/er +as a%te -n
$!! .a-t+, a %!n.#-%t !. r-$+ts ar-ses &et/een t+e !/ners,
an -t &e%!"es ne%essar4 t! ,r!te%t t+e !/ner !. t+e
-",r!ve"ents /-t+!ut %aus-n$ -nCust-%e t! t+e !/ner !. t+e
#an. In v-e/ !. t+e -",ra%t-%a&-#-t4 !. %reat-n$ a state !.
.!r%e %!-!/ners+-,, t+e #a/ +as ,r!v-e a Cust s!#ut-!n &4
$-v-n$ t+e !/ner !. t+e #an t+e !,t-!n t! a%<u-re t+e
-",r!ve"ents a.ter ,a4"ent !. t+e ,r!,er -ne"n-t4, !r t!
!&#-$e t+e &u-#er !r ,#anter t! ,a4 .!r t+e #an an t+e
s!/er t+e ,r!,er rent. He %ann!t re.use t! e*er%-se e-t+er
!,t-!n. It -s t+e !/ner !. t+e #an /+! -s aut+!r-Ae t!
e*er%-se t+e !,t-!n, &e%ause +-s r-$+t -s !#er, an &e%ause,
&4 t+e ,r-n%-,#e !. a%%ess-!n, +e -s ent-t#e t! t+e !/ners+-,
!. t+e a%%ess!r4 t+-n$.
06>2

P!ssess-!n a%<u-re -n $!! .a-t+ !es n!t #!se t+-s %+ara%ter
e*%e,t -n t+e %ase an .r!" t+e "!"ent .a%ts e*-st /+-%+ s+!/ t+at t+e
,!ssess!r -s n!t una/are t+at +e ,!ssesses t+e t+-n$ -",r!,er#4 !r
/r!n$.u##4.
06=2
T+e $!! .a-t+ %eases !r -s #e$a##4 -nterru,te .r!" t+e
"!"ent e.e%ts -n t+e t-t#e are "ae :n!/n t! t+e ,!ssess!r, &4
e*trane!us ev-en%e !r &4 su-t .!r re%!ver4 !. t+e ,r!,ert4 &4 t+e true
!/ner.
06;2

In t+e %ase at &ar, Caste##t!rtBs $!! .a-t+ %ease !n Au$ust (1,
1;;' /+en ,et-t-!ners ,ers!na##4 a,,r-se +-" !. t+e-r t-t#e !ver t+e
<uest-!ne #!t. As +e# &4 t+e CA, s+!u# ,et-t-!ners t+en !,t t!
a,,r!,r-ate t+e +!use, t+e4 s+!u# !n#4 &e "ae t! ,a4 .!r t+at ,art !.
t+e -",r!ve"ent &u-#t &4 Caste##t!rt !n t+e <uest-!ne ,r!,ert4 at t+e t-"e
$!! .a-t+ st-## e*-ste !n +-s ,art !r unt-# Au$ust (1, 1;;'.

T+e CA, +!/ever, .a-#e t! <ua#-.4 t+at sa- ,art !. t+e -",r!ve"ent
s+!u# &e ,e$$e at -ts %urrent .a-r "ar:et va#ue %!ns-stent /-t+ t+-s
C!urtBs ,r!n!un%e"ent -n Pecson v. Court of Appeals.
09)2

An, as %!rre%t#4 .!un &4 t+e CA, t+e %!""en%e"ent !.
Caste##t!rtBs ,a4"ent !. reas!na&#e rent s+!u# start !n Au$ust (1, 1;;' as
/e##, t! &e ,a- unt-# su%+ t-"e t+at t+e ,!ssess-!n !. t+e ,r!,ert4 -s
e#-vere t! ,et-t-!ners, su&Ce%t t! t+e re-"&urse"ent !. e*,enses, t+at -s,
-. su%+ !,t-!n -s .!r ,et-t-!ners t! a,,r!,r-ate t+e +!use.




T+-s C!urt <u!tes t+e CABs rat-!%-nat-!n /-t+ a,,r!va#:

* * * Genera##4, Art-%#e 99= !. t+e C-v-# C!e ,r!v-es
t+at t+e ,a4"ent !. reas!na&#e rent s+!u# &e "ae !n#4
u, t! t+e ate a,,e##ees serve n!t-%e !. t+e-r !,t-!n as
,r!v-e &4 #a/ u,!n t+e a,,e##ants an t+e %!urt a <u!I
t+at -s, -. su%+ !,t-!n -s .!r a,,e##ees t! a,,r!,r-ate t+e
en%r!a%+-n$ stru%ture. In su%+ event, a,,e##ants /!u#
+ave a r-$+t t! reta-n t+e #an !n /+-%+ t+e4 +ave &u-#t -n
$!! .a-t+ unt-# t+e4 are re-"&urse t+e e*,enses -n%urre
&4 t+e". T+-s -s s! &e%ause t+e r-$+t t! reta-n t+e
-",r!ve"ents /+-#e t+e %!rres,!n-n$ -ne"n-t4 -s n!t ,a-
-",#-es t+e tenan%4 !r ,!ssess-!n -n .a%t !. t+e #an !n
/+-%+ -t -s &u-#t, ,#ante !r s!/n.

H!/ever, %!ns-er-n$ t+at a,,e##ants +a %ease as
&u-#ers -n $!! .a-t+ at t+e t-"e t+at a,,e##ant M-$ue# /as
n!t-.-e !. a,,e##eesB #a/.u# t-t#e !ver t+e -s,ute ,r!,ert4,
t+e ,a4"ent !. reas!na&#e rent s+!u# a%%!r-n$#4
%!""en%e at t+at t-"e s-n%e +e %an n! #!n$er ava-# !. t+e
r-$+ts ,r!v-e uner t+e #a/ .!r &u-#ers -n $!! .a-t+.
0912


I. t+e !,t-!n %+!sen &4 ,et-t-!ners -s %!",u#s!r4 sa#e, +!/ever, t+e
,a4"ent !. rent s+!u# %!nt-nue u, t! t+e a%tua# trans.er !. !/ners+-,.
09(2

Res,e%t-n$ ,et-t-!nersB ar$u"ent t+at t+e a,,e##ate %!urt erre -n
rener-n$ a e%-s-!n t+at -s Dunen.!r%ea&#e a$a-nst @u-t+ /+! -s n!t t+e
!/ner !. t+e +!use an E#-Aa&et+ CruA /+! /as .!un t! &e a ,art !/ner
!. t+e +!use &u-#t !n t+e-r #!t &ut -s n!t a ,art4 t! t+e %ase,E t+e sa"e !es
n!t #-e.

G+-#e !ne /+! -s n!t a ,art4 t! a ,r!%ee-n$ s+a## n!t &e a..e%te
!r &!un
0962
&4 a Cu$"ent renere t+ere-n,
0992
#-:e E#-Aa&et+ CruA, t+-s
!es n!t etra%t .r!" t+e va#--t4 an en.!r%ea&-#-t4 !. t+e Cu$"ent !n
,et-t-!ners an res,!nents Caste##t!rts.

7.EREFORE, t+e ,et-t-!n -s DE"%ED. T+e De%-s-!n ate
O%t!&er (, ())( an Res!#ut-!n ate 3e&ruar4 5, ())6 !. t+e C!urt !.
A,,ea#s are AFF%R+ED /-t+ +OD%F%-A)%O" su%+ t+at t+e tr-a# %!urt s+a##
-n%#ue .!r eter"-nat-!n t+e -n%rease -n va#ue 7D,#us va#ueE8 /+-%+
,et-t-!nersB 61' s<uare "eter #!t "a4 +ave a%<u-re &4 reas!n !. t+e
e*-sten%e !. t+at ,!rt-!n !. t+e +!use &u-#t &e.!re res,!nents M-$ue# an
@u-t+ Caste##t!rt /ere n!t-.-e !. ,et-t-!nersB r-$+t.u# %#a-" !n sa- #!t, an
t+e %urrent .a-r "ar:et va#ue !. sa- ,!rt-!n.

SO ORDERED.
ROSALES VS. -AS)ELLFOR) (Diests$
3ACTS:
S,!uses-,et-t-!ners R!!#.! V. R!sa#es an L-#4 R!s<ueta-R!sa#es
7,et-t-!ners8 are t+e re$-stere !/ners !. a ,ar%e# !. #an /-t+ an area !.
a,,r!*-"ate#4 61' s<uare "eters, %!vere &4 Trans.er Cert-.-%ate !. T-t#e
7TCT8 N!. 65='5092 an es-$nate as L!t 1>, B#!%: 1 !. Su&-v-s-!n P#an
LRC Ps-''(99 s-tuate -n L!s Ba?!s, La$una.
On Au$ust 15, 1;;', ,et-t-!ners -s%!vere t+at a +!use /as &e-n$
%!nstru%te !n t+e-r #!t, /-t+!ut t+e-r :n!/#e$e an %!nsent, &4 res,!nent
M-$ue# Caste##t!rt 7Caste##t!rt8.
It turne !ut t+at res,!nents Caste##t!rt an +-s /-.e @u-t+ +a
,ur%+ase a #!t, L!t 15 !. t+e sa"e Su&-v-s-!n P#an, .r!" res,!nent L-na
L!,eA-V-##e$as 7L-na8 t+r!u$+ +er s!n-att!rne4--n-.a%t Rene V-##e$as
7V-##e$as8 &ut t+at a.ter a surve4 t+ere!. &4 $e!et-% en$-neer Au$ust!
R-vera, +e ,!-nte t! L!t 1> as t+e L!t 15 t+e Caste##t!rts ,ur%+ase.
Ne$!t-at-!ns .!r t+e sett#e"ent !. t+e %ase t+us &e$an, /-t+ V-##e$as !..er-n$
a #ar$er #!t near ,et-t-!nersB #!t -n t+e sa"e su&-v-s-!n as a re,#a%e"ent
t+ere!.. In t+e a#ternat-ve, V-##e$as ,r!,!se t! ,a4 t+e ,ur%+ase ,r-%e !.
,et-t-!nersB #!t /-t+ #e$a# -nterest. B!t+ ,r!,!sa#s /ere, +!/ever, reCe%te &4
,et-t-!ners /+!se %!unse#, &4 #etter !. Au$ust (9, 1;;', -re%te Caste##t!rt
t! st!, t+e %!nstru%t-!n !. an e"!#-s+ +-s +!use an an4 !t+er stru%ture
+e "a4 +ave &u-#t t+ere!n, an es-st .r!" enter-n$ t+e #!t.
Pet-t-!ners su&se<uent#4 .-#e !n Se,te"&er 1, 1;;' a %!",#a-nt .!r
re%!ver4 !. ,!ssess-!n an a"a$es /-t+ ,ra4er .!r t+e -ssuan%e !. a
restra-n-n$ !rer an ,re#-"-nar4 -nCun%t-!n a$a-nst s,!uses-res,!nents
M-$ue# an @u-t+ Caste##t!rt &e.!re t+e RTC !. Ca#a"&a, La$una, !%:ete
as C-v-# Case N!. (((;-;'-C.
ISSUE:
Uner Art 99=, /+! +as t+e r-$+t !. !,t-!nL
HELD:
Uner t+e .!re$!-n$ ,r!v-s-!n 7Art 99=8, t+e #an!/ner %an %+!!se
&et/een a,,r!,r-at-n$ t+e &u-#-n$ &4 ,a4-n$ t+e ,r!,er -ne"n-t4 !r
!&#-$-n$ t+e &u-#er t! ,a4 t+e ,r-%e !. t+e #an, un#ess -ts va#ue -s
%!ns-era&#4 "!re t+an t+at !. t+e stru%tures, -n /+-%+ %ase t+e &u-#er -n
$!! .a-t+ s+a## ,a4 reas!na&#e rent.0692 I. t+e ,art-es %ann!t %!"e t! ter"s
!ver t+e %!n-t-!ns !. t+e #ease, t+e %!urt "ust .-* t+e ter"s t+ere!..
T+e %+!-%e &e#!n$s t! t+e !/ner !. t+e #an, a ru#e t+at a%%!rs
/-t+ t+e ,r-n%-,#e !. a%%ess-!n, -.e., t+at t+e a%%ess!r4 .!##!/s t+e ,r-n%-,a#
an n!t t+e !t+er /a4 ar!un. Even as t+e !,t-!n #-es /-t+ t+e #an!/ner,
t+e $rant t! +-", nevert+e#ess, -s ,re%#us-ve. T+e #an!/ner %ann!t re.use
t! e*er%-se e-t+er !,t-!n an %!",e# -nstea t+e !/ner !. t+e &u-#-n$ t!
re"!ve -t .r!" t+e #an.
T+e ra-s!n Betre .!r t+-s ,r!v-s-!n +as &een enun%-ate t+us:
G+ere t+e &u-#er, ,#anter !r s!/er +as a%te -n $!! .a-t+, a
%!n.#-%t !. r-$+ts ar-ses &et/een t+e !/ners, an -t &e%!"es
ne%essar4 t! ,r!te%t t+e !/ner !. t+e -",r!ve"ents /-t+!ut %aus-n$
-nCust-%e t! t+e !/ner !. t+e #an. In v-e/ !. t+e -",ra%t-%a&-#-t4 !.
%reat-n$ a state !. .!r%e %!-!/ners+-,, t+e #a/ +as ,r!v-e a Cust
s!#ut-!n &4 $-v-n$ t+e !/ner !. t+e #an t+e !,t-!n t! a%<u-re t+e
-",r!ve"ents a.ter ,a4"ent !. t+e ,r!,er -ne"n-t4, !r t! !&#-$e t+e
&u-#er !r ,#anter t! ,a4 .!r t+e #an an t+e s!/er t+e ,r!,er rent.
He %ann!t re.use t! e*er%-se e-t+er !,t-!n. It -s t+e !/ner !. t+e #an
/+! -s aut+!r-Ae t! e*er%-se t+e !,t-!n, &e%ause +-s r-$+t -s !#er,
an &e%ause, &4 t+e ,r-n%-,#e !. a%%ess-!n, +e -s ent-t#e t! t+e
!/ners+-, !. t+e a%%ess!r4 t+-n$.