CASES IN PROPERTY BATCH 4 (DIGEST)

1.Bernardo v. Bataclan 66 Phil. 598

Facts:
By a contract of sale executed from Pastor Samonte and others ownership of a parcel
of land of about 90 hectares. To secure possession of the land from the vendors the said
plaintiff, on July 20, 1929, instituted a civil case. The trial court found for the plaintiff in a
decision which was affirmed by this Supreme Court on appeal (G.R. No. 33017). When
plaintiff entered upon the premises, however, he found the defendant herein, Catalino
Bataclan, who appears to have been authorized by former owners, as far back as 1922, to
clear the land and make improvements thereon. As Bataclan was not a party in the civil
case, plaintiff, on June 11, 1931, instituted against him a civil case. In this case, plaintiff was
declared owner but the defendant was held to be a possessor in good faith, entitled for
reimbursement in the total sum of P1,642, for work done and improvements made.
The defendant states that he is a possessor in good faith and that the amount of
P2,212 to which he is entitled has not yet been paid to him. Therefore, he says, he has a
right to retain the land in accordance with the provisions of article 453 of the Civil Code. In
obedience to the decision of this court in G.R. No. 37319, the plaintiff expressed his desire to
require the defendant to pay for the value of the land. The said defendant could have
become owner of both land and improvements and continued in possession thereof. But he
said he could not pay and the land was sold at public auction to Toribio Teodoro. When he
failed to pay for the land, the defendant herein lost his right of retention.
Issue:
Whether or not there is good faith.
Held:
The judgment of the lower court is accordingly modified by eliminating therefrom the
reservation made in favor of the defendant-appellant to recover from the plaintiff the sum of
P2,212. In all the respects, the same is affirmed, without pronouncement regarding costs. So
ordered
The sale at public auction having been asked by the plaintiff himself (p. 22, bill of
exceptions) and the purchase price of P8,000 received by him from Toribio Teodoro, we find
no reason to justify a rapture of the situation thus created between them, the defendantappellant not being entitled, after all, to recover from the plaintiff the sum of P2,212.

2. Spouses Del Ocampo v. Abesia 160 SCRA 379

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.

3. Ignao v. Intermediate Appellate Court (193 SCRA 17)

Facts:
Petitioner seeks the reversal of the decision of the Intermediate Appellate Court
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. Petitioner
Florencio Ignao and his uncles private respondents Juan Ignao and Isidro Ignao were coowners of a parcel of land in Barrio Tabon, Municipality of Kawit, Cavite. No actual partition
was ever effected.
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. In his
complaint petitioner alleged that the area occupied by the two (2) houses built by private
respondents exceeded the lot previously alloted to them. In its decision, the trial court ruled
that although private respondents occupied a portion of Florencios property, they should be
considered builders in good faith.
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 square meters while that
of Isidro occupied 59 square meters of Florencios land or a total of 101 square meters.
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.
Issue:
Whether or not the provisions of Article 448 should apply to a builder in good faith on
a property held in common.
Held:
When the co-ownership is terminated by a partition and it appears that the house of
an erstwhile co-owner has encroached upon a portion pertaining to another co-owner which
was however made in good faith, then the provisions of Article 448 should apply to
determine the respective rights of the parties.
Florencio Ignao is directed within thirty (30) days from entry of judgment to exercise
his option to either appropriate as his own the portions of the houses of Juan and Isidro Ignao

occupying his land upon payment of indemnity in accordance with Articles 546 and 548 of
the Civil Code, or sell to private respondents the 101 square meters occupied by them at
such price as may be agreed upon. Should the value of the land exceed the value of the
portions of the houses that private respondents have erected thereon, private respondents
may choose not to buy the land but they must pay reasonable rent for the use of the portion
of petitioners land as may be agreed upon by the parties. In case of disagreement, the rate
of rental and other terms of the lease shall be determined by the trial court. Otherwise,
private respondents may remove or demolish at their own expense the said portions of their
houses encroaching upon petitioners land.

4. Manotok Realty, Inc. v. Tecson (164 SCRA 587)

Facts:
Manotok Realty, inc. filed a complaint against Nilo Madlangawa for the recovery of
possession of a parcel of land, but the trial court declared the latter a building and possessor
in good faith.
Petitioner then filed a case for the appropriation of the building as provided in Article
448 and 546 of the Civil Code. It was argued that since the judgment became final it is
entitled to the execution of the judgment and delivery of possession over the property. The
CFI denied and held that circumstances intervened, such as the construction of
improvements, which would make the action not legally proper. Appeal was then made to
the Supreme Court. In their comment, the respondent claim that the issue has already
become moot because fire has already gutted the buildings.
Issue:
Whether or not the petitioner is entitled to the delivery of the possession of the
property in question.
Held:
The court ruled in the affirmative. When the judgement became final, it became
incumbent upon the court to issue the necessary writ of execution. The landowner cannot be
denied of his right to appropriate the building because it is an option given to him by law.
Furthermore, the buildings/improvements introduced father the filing of the complaint cannot
be held to be made in good faith. Since the improvements thereon has been gutted by fire,
the basis of the respondents right to retain the premises has already been extinguished. He
therefore, has no other choice but to deliver the property.

5.Filipinas Colleges Inc. v. Garcia Timbang et. al. (106 Phil. 247)
Facts:
This is an appeal taken from an order of the Court of First Instance of Manila dated May
10, 1957 (a) declaring the Sheriffs certificate of sale covering a school building sold at public
auction null and void unless within 15 days from notice of said order the successful bidders,
defendants-appellants spouses Maria Garcia Timbang and Marcelino Timbang, shall pay to,
appellee Maria Gervacio Blas directly or through the Sheriff of Manila the sum of P5,750.00
that the spouses Timbang had bid for the building at the Sheriffs sale; (b) declaring the
other appellee Filipinas Colleges, Inc. owner of 24,500/3,285,934 undivided interest in Lot
No. 2-a covered by certificate of tile No 45970, on which the building sold in the auction sale
is situated; and ordering the sale in public auction of the said undivided interest of the
Filipinas Colleges, Inc., in lot No. 2-a aforementioned to satisfy the unpaid portion of the
judgment in favor of appellee Blas and against Filipinas Colleges, Inc. in the amount of
P8,200.00 minus the sum of P5,750.00mentioned in (a) above. The order appealed from is
the result of three motions filed in the court a quo in the course of the execution of a final
judgment of the Court of Appeals rendered in 2 cases appealed to it in which the spouses
Timbang, the Filipinas Colleges, Inc., and Maria Gervacio Blaswere the parties. The Timbang
spouses presented their opposition to each and all of this motion. In assailing the order of
the court a quo directing the appellants to pay appellee Blas the amount of their bid
(P5,750.00) made at the public auction, appellants counsel has presented a novel, albeit
ingenious, argument. They contend that since the builder in good faith has failed to pay the
price of the land after the owners thereof exercised their option under Article 448 of the Civil
Code, the builder has lost his right and the appellants as owners of the land automatically
became the owners ipso facto.
Issues:
1. Whether or not the contention of the appellants is valid. If not, what are the
remedies left to the owner of the land if the builder fails to pay?
2. Whether or not the appellants, as owner of the land, may seek recovery of the value
of their land by a writ of execution; levy the house of the builder and sell it in public auction.
Held:

1) NO, THE APPELLANTS CONTENTION IS SUPERFLUOUS.

There is nothing in the language of these two articles, 448 and 546, which would
justify the conclusion of appellants that, upon the failure of the builder to pay the value of
the land, when such is demanded by the land-owner, the latter becomes automatically the
owner of the improvement under Article 445. Although it is true, it was declared therein that
in the event of the failure of the builder to pay the land after the owner thereof has chosen
this alternative, the builders right of retention provided in Article 546 is lost, nevertheless
there was nothing said that as a consequence thereof, the builder loses entirely all rights
over his own building. The remedy left to the parties in such eventuality where the builder
fails to pay the value of the land, though the Code is silent on this Court, a builder in good
faith not be required to pay rentals. He has right to retain the land on which he has built in
good faith until he is reimbursed the expenses incurred by him.
Possibly he might be made to pay rental only when the owner of the land chooses not
to appropriate the improvement and requires the builder in good faith to pay for the land but
that the builder is unwilling or unable to pay the land, and then they decide to leave things
as they are and assume the relation of lessor and lessee, and should they disagree as to the
amount of rental then they can go to the court to fix that amount.

This was ruled in the case of Miranda vs. Fadullon, et al., 97 Phil.,801. A further
remedy is indicated in the case of Bernardo vs. Bataclan, supra, where this Court approved
the sale of the land and the improvement in a public auction applying the proceeds thereof
first to the payment of the value of the land and the excess, if any, to be delivered to the
owner of the house in payment thereof.
2) The second contention was without merit. In the instant case, the Court of Appeals
has already adjudged that appellee Blas is entitled to the payment of the unpaid balance of
the purchase price of the school building. With respect to the order of the court declaring
appellee Filipinas Colleges, Inc. part owner of the land to the extent of the value of its
personal properties sold at public auction in favor of the Timbang, this Court likewise finds
the same as justified, for such amount represents, in effect, a partial payment of the value of
the land. Failure of the Timbang spouses to pay to the Sheriff or to Manila Gervacio Blas said
sum of P5, 750.00 within fifteen (15) days from notice of the final judgment, an order of
execution shall issue in favor of Maria Gervasio Blas to be levied upon all properties of the
Timbang spouses not exempt from execution for the satisfaction of the said amount.

6.Agustin v. Intermediate Appellate Court (187 SCRA 218)

Facts:
Private respondents, Maria Melad and Pablo Binuyag are among those who are
occupying the western bank of the Cagayan River while on the eastern bank is owned by
petitioner Eulogio Agustin. From 1919 to 1968, the Cagayan river has eroded the lands on
the eastern bank including Agustins Lot depositing alluvium on the land possessed by Pablo
Binuyag. In 1968, after a typhoon which caused a big flood, the Cagayan River changed its
course and returned it to its 1919 bed and it cut through the lands of respondents whose
lands were transferred on the eastern side. To cultivate the lands they had to cross the river.
When they were cultivating said lands, (they were planting corn) Agustin accompanied by
the mayor and some policemen claimed the land and drove them away. So Melad and
Binuyag filed separate complaints for recovery of their lots and its accretions. The Trial Court
held ordered Agustin et. al to vacate the lands and return them to respondents. On appeal,
the IAC affirmed in toto the judgment thus the case at bar.
Issue:
Whether or not private respondents own the accretion and such ownership is not
affected by the sudden and abrupt change in the course of the Cagayan River when it
reverted to its old bed
Held:
Yes. Art. 457 states that the owner of the lands adjoining river banks own the accretion
which they gradually receive from the effects of the currents of the waters. Accretion
benefits a riparian owner provided that these elements are present: 1) deposit be gradual
and imperceptible 2) it resulted from the effects of the current of the water and 3) the land is
adjacent to the river bank. When the River moved from 1919 to 1968, there was alluvium
deposited and it was gradual and imperceptible.

Accretion benefits the riparian owner because these lands are exposed to floods and
other damage due to the destructive force of the waters, and if by virtue of law they are
subject to encumbrances and various kinds of easements, it is only just that such risks or
dangers should in some way be compensated by the right of accretion. Also, respondents
ownership over said lots was not removed when due to the sudden and abrupt change in the
course of the river; their accretions were transferred to the other side. Art. 459 states when
the current of a river x x x segregates from an estate on its bank a known portion of land and
transfers it to another estate, the owner of segregated portion retains ownership provided he
removes the same w/in 2 years. And Art. 463 states that whenever the current of a river
divides itself into branches, leaving a piece of land or part thereof isolated, the owner of the
land retains ownership. He also retains it if a portion of land is separated from the estate by
the current.

7. Heirs of Navarro v. Intermediate Appellate Court (268 SCRA 74)

Accretion along an area adjacent to the sea is public domain, even if the accretion results
from rivers emptying into the sea. It cannot be registered.
Facts:
Sinforoso Pascual sits in the midst of a land registration case. The story begins on
1946 upon his desire to register land on the northern section of his existing property. His
current registered property is bounded on the east by Talisay River, on the West by Bulacan
River and on the North by the Manila bay. Both rivers flow towards the Manila Bay. Because
of constantly flowing water, extra land of about 17hectares (thats about the size of Disney
Park!) formed in the northern most section of the property. It is this property he sought to
register.
The RTC denied the registration claiming this to be foreshore land and part of public domain
(remember, accretion formedby the sea is public dominion). His Motion for Reconsideration
likewise burned. In 1960, he attempted registry again, claiming that the Talisay and Bulacan
rivers deposited more silt resulting on accretion. He claimed this land as riprarian owner. The
Director of Lands, Director of Forestry and the Fiscal opposed.
Then a new party surfaced. Mr Emiliano Navarro jumped into the fray opposing the same
application, stating the he leased part of the property sought to be registered. He sought to
protect his fishpond that rested on the same property. Sinforoso was not amused and filed
ejectment against Mr. Navarro, claiming that Navarro used stealth force and strategy to
occupy a portion of his land. Pascual lost the case against Navarro so he appealed. During

the appeal, his original land registration case was consolidated and tried jointly. (alas Pascual
died) The heirs of Pascual took over the case.
On 1975, the court decided that the property was foreshore land and therefore part of public
domain. The RTC dismissed the complaint of Pascual for ejectment against Navarro and also
denied his land registration request. Pascuals heirs appealed and the RTC was reversed by
the IAC. The Apellate court granted petition for registration! The reason? The accretion was
caused by the two rivers, not manila bay. Hence it wasnt foreshore land. (BUT the confusion
lies in the fact that the accretion formed adjacent to Manila Bay which is sea!) Aggrieved,
the Director of Forestry moved for reconsideration (Government insists it is foreshore and
hence, public domain). The Apellate court denied all motions of the Director and the
Government.
The matter went to the SC.
Issue:
Whether or not the accretion taking place on property adjacent to the sea can be
registered under the Torrens system.
Held:
It cannot be registered. This is land of Public domain. Pascual claimed ownership under
Article 457 of the Civil Code saying that the disputed 14-hectare land is an accretion caused
by the joint action of the Talisay and Bulacan Rivers Art 457: Accretion as a mode of
acquiring property and requires the concurrence of the following requisites: (1) that the
accumulation of soil or sediment be gradual and imperceptible; (2) that it be the result of the
action of the waters of the river; and (3) that the land where the accretion takes place is
adjacent to the bank of the river. Unfortunately, Pasucal and Heirs claim of ownership based
on Art 457 is misplaced. If theres any land to be claimed, it should be land ADJACENT to the
rivers Talisay and Bulacan. The law is clear on this. Accretion of land along the river bank
may be registered. This is not the case of accretion of land on the property adjacent to
Manila Bay.

Furthermore, Manila Bay is a sea. Accretion on a sea bank is foreshore land and the
applicable law is not Art 457 but Art 4 of the Spanish Law of Waters of 1866. This law, while
old, holds that accretion along sea shore cannot be registered as it remains public domain
unless abandoned by government for public use and declared as private property capable of
alienation.
Article 4 of the Spanish Law of Waters of August 3, 1866 provides as follows:
Lands added to the shores by accretions and alluvial deposits caused by the action of the
sea, form part of the public domain. When they are no longer washed by the waters of the
sea and are not necessary for purposes of public utility, or for the establishment of special
industries, or for the coast-guard service, the Government shall declare them to be the
property of the owners of the estates adjacent thereto and as increment thereof.
The IAC decision granting registration was reversed and set aside. Registration cannot be
allowed.

8. Tecnogas Philippines v. Court of Appeals (268 SCRA 5)

Facts:
Petitioner bought a lot together with the building and improvements including the wall
which encroached that of the defendant. Upon learning of such encroachment, petitioner
offered to buy the land but defendant refused. After 2 years, through an agreement,
petitioner agreed to demolish the wall (but the case did not state what happened to this
agreement, my assumption is that it did not happen due to conflicts that arose after)
Defendant dug a canal along the wall which caused a portion of it to collapse. Petitioner filed
a supplemental complaint re the action and a separate criminal action of malicious mischief
(which the wife was convicted of) RTC decided for the petitioners and the CA reversed. Note
that respondent wants to have the wall demolished.

Issues:

A. Whether or not petitioner is a builder in bad faith because it is 'presumed to know

the metes and bounds of his property.'
B. Whether or not amicable settlement was a proper remedy
C. Whether or not respondent can opt to demolish the structure without exercising the
option to sell the land to the petitioner and the latter cannot do buy the same

Held:
Petition was granted.
Good faith or Bad Faith No such doctrinal statement that supports that the
knowledge of metes and bounds of a land due to the Torrens system would amount to bad
faith if there was encroachment on the land of another.
A. When the petitioner purchased the lot, the wall was already built. Even the
respondent did not knew about the encroachment until he has hired a surveyor.
B. Where one derives title to the property from another, the act, declaration, or
omission of the latter, while holding the title, in relation to the property, is evidence against
the former. And possession in good faith does not lose this character except when the
possessor is aware of this impropriety.
C. The encroachment was very narrow which can be considered as a mere error.
Remedy the petitioner, despite being a purchaser of the original builder, can compel the
landowner to either buy the property or sell the piece of land because:
He was really unaware of the encroachment basing on the fact presented by both sides.
When the petitioner bought the land, he has stepped into the rights of the original owner
(hence, the right to compel the LO to buy or sell is also transferred)
Estoppel Petitioner is not considered in estoppel only because it has previously agreed to
demolish a part of the wall. Rather, it was to be negotiated by the parties concern. In the
meantime, petitioner has to pay the rent for the property occupied by its building only up to
the date when respondent serves notice of their option. Case remanded back to the trial
court for determination of the value of the land and the number of days to allot for the
respondent to choose an option.

9. Vda. De Nazareno v. Court of Appeals (257 SCRA 589)

Facts:
Assailed in this Petition for Review on Certiorari is the Decision of the respondent Court
of Appeals. Felicidad Vda. de Cabrera and Marykane Cabrera was ordered to vacate the
portion of Lot 2238 occupied by them and surrender possession thereof to plaintiff, as
ordered by the CA adverse from what the RTC had decided which is reconveyance of the said
parcel of land to Felicidad.
These are their prayers:
xxx WHEREFORE, this Honorable Court, after due notice and hearing on the merits of this
case; to issue order or orders;

1. Finding the defendants as the rightful, lawful, and legal owner of that portion which was
sold to them by Felicidad Teokemian and which was included in the title of plaintiff;
2. To find that the plaintiff did not own the said portion and that they have personal
knowledge of the same when the plaintiff filed and secured the title under the Administrative
Proceeding;
3. Finding that the plaintiff is only holding the title to that portion only in an implied trust in
favor of the real owner;
4. Finding the plaintiff legally obligated to cause the segregation of the portion at their
expense and deliver formally the said portion to the real owners, the defendants.
5. To order the plaintiff to execute, prepare and or make any instrument or document to
finally vest in the Defendants absolute, clear and flawless title or ownership over the portion
which the plaintiff holds title in trust in defendants favor. xxx
The respondent court held that such a petition has been barred by laches due to
inaction for more than thirty years. An act by Felicidad though as stated: the registration of
the plaintiffs title over the subject property was fraudulent insofar as it involved the onethird interest of Felicidad Teokemian who did not sign the Deed of Sale in favor of plaintiffs
predecessor-in-interest and, therefore, the latter held that portion as a trustee of an implied
trust for the benefit of Felicidad, pursuant to Art. 1456 of the Civil Code. Needless to state,
these conclusions, being matters of fact, are entitled to our full affirmation, since they are
congruent with the findings of the trial court.
Issue:
WON Felicidad could not have recovered the land due to laches.
Held:
The right of the defendants for reconveyance of the subject property arising from an
implied trust under Article 1456 of the Civil Code is material to the instant case, such
remedy has not yet lapsed, as erroneously submitted by the plaintiffs, and, is thus, a bar to
the plaintiffs action. In the case of Heirs of Jose Olviga vs. Court of Appeals, we observed
that an action for reconveyance of a parcel of land based on implied or constructive trust
prescribes in ten years, the point of reference being the date of registration of the deed or
the date of the issuance of the certificate of title over the property, but this rule applies only
when the plaintiff or the person enforcing the trust is not in possession of the property, since
if a person claiming to be the owner thereof is in actual possession of the property, as the
defendant is in the instant case, the right to seek reconveyance, which in effect seeks to
quiet title to the property, does not prescribe. The reason for this is that one who is in actual
possession of a piece of land claiming to be the owner thereof may wait until his possession
is disturbed or his title is attacked before taking steps to vindicate his right, the reason for
the rule being, that his undisturbed possession gives him a continuing right to seek the aid
of a court of equity to ascertain and determine the nature of the adverse claim of a third
party and its effect on his own title, which right can be claimed only by one who is in
possession.
As it is, before the period of prescription may start, it must be shown that (a) the trustee has
performed unequivocal acts of repudiation amounting to an ouster of the cestui que trust; (b)
such positive acts of repudiation have been made known to the cestui que trust; and, (c) the
evidence thereon is clear and positive.

In the case at bar, the defendant Felicidad Teokemian, and thereafter, the Cabreras, were in
actual possession of the property since it was left to Felicidad Teokemian by her father in
1941, which possession had not been interrupted, despite the sale of the two-third portion
thereof to the plaintiff in 1950, and the latters procurement of a Certificate of Title over the
subject property in 1957. Until the institution of the present action in 1988, plaintiffs,
likewise, have not displayed any unequivocal act of repudiation, which could be considered
as an assertion of adverse interest from the defendants, which satisfies the above-quoted
requisites. Thus, it cannot be argued that the right of reconveyance on the part of the
defendants, and its use as defense in the present suit, has been lost by prescription.
Undisputed is the fact that since the sale of the two-third portion of the subject property to
the plaintiff, the latter had allowed Felicidad Teokemian to occupy that one-third portion
allotted to her. There has, therefore, been a partial partition, where the transferees of an
undivided portion of the land allowed a co-owner of the property to occupy a definite portion
thereof and has not disturbed the same, for a period too long to be ignored--the possessor is
in a better condition or right (Potior est conditio possidentis).

Clearly, the plaintiff in this instance is barred from asserting her alleged right over the
portion subject matter in the instant case on the ground that their right has been lost by
laches.

10.Ballatan v. Court of Appeals G.R. No. 125683, March 2, 1999, 304 SCRA 34

-Land Owner in Good faith, Builder in Good faith scenario -The right to choose between
appropriating the improvement or selling the land on which the improvement of the builder,
planter or sower stands, is given to the owner.
-If the option chooses is to sell the lot, the price must be fixed at the prevailing market value
at the time of payment.
Facts:
Eden Ballatan, together with other petitioners, is living in and registered owners of Lot
No. 24. Respondent Winston Go is living in and registered owners of Lot No. 25 and 26. And
Li Ching Yao is living in and the registered owner of Lot. 27. The Lots are adjacent to each
other.
When Ballatan constructed her house in her lot, she noticed that the concrete fence
and side pathway of the adjoining house of respondent Winston Go encroached on the entire
length of the eastern side of her property. She was informed by her contractor of this
discrepancy, who then told respondent Go of the same. Respondent, however, claims that
his house was built within the parameters of his fathers lot; and that this lot was surveyed
by engineer Jose Quedding, the authorized surveyor of Araneta Institute of Agriculture (AIA).
Petitioner called the attention of AIA on the matter and so the latter authorized another
survey of the land by Engineer Quedding. The latter then did the survey twice which led to
the conclusion that Lots Nos 25, 26 (owned by respondent Go) and 27 (owned by Li Ching
Yao) moved westward to the eastern boundary of Lot 24 (owned by petitioner Ballatan.) (it
was later on discovered by the courts that Go encroached 42 square meters from the
property of Ballatan and Yao encroached 37 square meters on Gos property, all of which
were in GOOD FAITH) Ballatan made written demands to the respondent to dismantle and
move their improvements and since the latter wasnt answering the petitioner filed accion
publiciana in court. Gos filed their Answer with Third-Party Complaint impleading as third
party defendants respondents Li Ching Yao, the AIA and Engineer Quedding.
RTC ruled in favor of the petitioner ordering respondent Go to demolish their
improvements and pay damages to Petitioner but dismissing the third-party complaint. CA
affirmed the dismissal of the third party-complaint as to AIA but reinstated the the complaint
against Yao and the Engineer. CA also affirmed the demolition and damages awarded to
petitioner and added that Yao should also pay respondent for his encroachment of
respondent Gos property. Jose Quedding was also ordered to pay attorneys fees for his
negligence which caused all this fuzz.
Issue:
What is the proper remedy in this situation (everyone was in good faith)?
Held:
Art 448 is the proper remedy (Lower Courts are wrong in awarding the damages). It
was established in the case that the parties had no knowledge of the encroachment until
Ballatan noticed it there all of them were builders in Good faith. In that scenario they have
two options. 1st option is that the land owner will buy the improvements and the 2nd option
is to oblige the builders to buy the land given that the value of the land is not considerably
more than the buildings or tree; otherwise the owner may remove the improvements
thereon.

The builder, planter or sower, however, is not obliged to purchase the land if its value
is considerably more than the building, planting or sowing. In such case, the builder, planter
or sower must pay rent to the owner of the land. If the parties cannot come to terms over
the conditions of the lease, the court must fix the terms thereof. The right to choose between
appropriating the improvement or selling the land on which the improvement of the builder,
planter or sower stands, is given to the owner. If the option chooses is to sell the lot, the
price must be fixed at the prevailing market value at the time of payment.
Petitioner was given by SC 30 days to decide on what to do or which right to exercise.
Likewise, Go was also given time to do the regarding Yaos encroachment. Engineer
Quedding was still asked to pay attorneys fees.

11. Development Corporation v. Court of Appeals G.R. No. 79688, February 1, 1996
Doctrine: Good faith consists in the belief of the builder that he land he is building
on is his and his ignorance of any defect or flaw in his title. The burden of proving
bad faith belongs to the one asserting it.

Facts:
Edith Robillo purchased from Pleasantville Development Corporation, herein petitioner
a parcel of land at Pleasantville Subdivision, Bacolod City. The property was designated as
Lot 9, Phase II. In 1975, herein respondent Eldred Jardinico bought the said subject lot from
the former purchaser. Eldred later discovered that the property he purchased had
improvements introduced therein by respondent Wilson Kee.
Kee on the other hand bought on installments Lot 8 of the same subdivision from C.T.
Torres Enterprises, Inc. (CTTEI) which is the exclusive real estate agent of the petitioner.
Under the contract Kee was allowed to take possession of the property even before full
payment of the price. CTTEI through an employee, Zenaida Octaviano accompanied Kees
wife Donabelle to inspect Lot No. 8. Octaviano however mistakenly pointed towards Lot 9.
Hence spouses Kee had their residence, an auto repair shop, a store and other
improvements constructed on the wrong lot.
Upon discovery of the blunder both Kee and Jardinico tried to reach an amicable
settlement but they failed. Jardinico demanded that the improvements be removed but as
Kee refused, Jardinico filed a complaint for ejectment with damages against Kee at the
Municipal Trial Court in Cities (MTCC) of Bacolod City. Kee filed a third-party complaint
against herein petitioner and CTTEI.
The MTCC found that the error was attributable to CTTEI also since at present the
contract with Kee has rescinded for Kees failure to pay installments. Kee no longer had any
right over the subject property and must pay rentals for its use. The Regional Trial Court
(RTC) of Bacolod City ruled that petitioner and CTTEI were not at fault or were not negligent.
It argued that Kee was a builder in bad faith. Even if assuming that he was in good faith, he
was no longer so and must pay rentals from the time that he was given notice to vacate the
lot. The Court of Appeals ruled that Kee was a builder in good faith as he was unaware of the
mix-up when he constructed the improvements. It was in fact due to the negligence and
wrongful delivery of CTTEI which included its principal the herein petitioner. It further ruled
that the award of rental was without basis.
Pending the resolution of the case at the Court of Appeals Jardinico and Kee entered
into a deed of sale, wherein Lot 9 was sold to Kee. In the said deed a provision stating that
regardless of the outcome of the decision, such shall not be pursued by the parties and shall
be considered dismissed and without effect. The appellate court was not informed of this
deal.
Issue:
Whether or not a lot buyer who constructs improvements on the wrong property
erroneously delivered by the owners agent, a builder in good faith?

Held:
Yes. Article 527 of the Civil Code provides the presumption that petitioner has the
burden of proving that Kee was a builder in bad faith. Kee may be made liable for the
violation of the contract with CTTEI but this may not be used as a basis of bad faith and as a
sufficient ground to negate the presumption of good faith. Jardinico is presently only allowed
to file a complaint for unlawful detainer. Good faith is based on the belief of the builder that
the land he is building on is his and his ignorance of any flaw or defect in is title. Since at the
time when Kee constructed his improvements on Lot 8, he was not aware that it was actually
Lot 9 that was delivered to him. Petitioner further contends that Kee was negligent as a
provision in the Contract of Sale on Installment stated that the vendee must have personally
examined the property and shall bear on his own the consequential expenses in the changes
that may happen thereon. The court held that such provision cannot be interpreted as a
waiver of the vendees right to recover damages resulting from petitioners negligence. Such
interpretation of the waiver is contrary to law and public policy and cannot be allowed.
Petitioner cannot claim and excuse itself from liability by claiming that it was not directly
involved in the delivery of the property. The principal must be responsible for the acts of the
agent done within the scope of his authority. CTTEI was the sole real estate representative of
the petitioner when the delivery was made. Wilson Kee is therefore declared a builder in
good faith. Petitioner and respondent CTTEI are declared solidarily liable for damages due to
negligence. The award of rentals to Jardinico is dispensed with

12.Cureg v. Intermediate Appellate Court G.R. No. 73465, September 7, 1989