Property Digest 2 - Lucky 9 and friends

FELICIDAD JAVIER vs. HON. REGINO T. VERIDIANO quieting title clearly sets up title to herself and prays that
II, Presiding Judge, Branch I, Court of First Instance of respondent Rosete be ejected from the disputed land and that
Zambales and REINO ROSETE she be declared the owner and given possession thereof. Thus, a
judgment in forcible entry or detainer case disposes of no other
Facts: In 1963, petitioner filed a Miscellaneous Sales issue than possession and declares only who has the right of
Application for Lot No. 1641 of the Olongapo Townsite possession, but by no means constitutes a bar to an action for
Subdivision with the District Land Officer of Olongapo City. determination of who has the right or title of ownership.
Sometime in December 1970, alleging that she was forcibly
dispossessed of a portion of the land by a certain Ben Babol, she De Leon vs. Public Estates Authority (PEA), 626 SCRA 547,
instituted a complaint for forcible entry before the City Court of August 3, 2010)
Olongapo City. The Civil Case was dismissed on the ground
that the Bureau of Lands has considered the area in question to FACTS: On January 15, 1993, petitioner De Leon filed a
be outside Lot 1641 of the plaintiff. The Court of First Instance Complaint for Damages with Prayer for Preliminary Injunction
of Zambales and Olongapo City dismissed the appeal and before the Regional Trial Court (RTC) against respondent PEA,
affirmed the findings and conclusions of the City Court. a government-owned corporation, as well as its officers. The
Subsequently, on 17 December 1973, petitioner was granted suit for damages hinged on the alleged unlawful destruction of
Miscellaneous Sales Patent No. 5548 and issued Original De Leons fence and houses constructed on Lot 5155, situated
Certificate of Title No. P-3259 covering Lot No. 1641. in Paranaque, which De Leon claimed has been in the
Meanwhile, Ben Babol who was the defendant in the complaint possession of his family for more than 50 years. Essentially, De
for forcible entry had sold the property he was occupying, Leon prayed that one, lawful possession of the land in question
including the portion of about 200 square meters in question, to be awarded to him; two, PEA be ordered to pay damages for
a certain Reino Rosete. Thus petitioner demanded the surrender demolishing the improvements constructed on Lot 5155; and,
of the same area in dispute from Reino Rosete who repeatedly three, an injunctive relief be issued to enjoin PEA from
refused to comply with the demand. About four (4) years from committing acts which would violate his lawful and peaceful
the finality of the dismissal of Civil case filed by petitioner, he possession of the subject premises.
instituted a complaint for quieting of title and recovery of
The court a quo found merit in De Leons application for writ of
possession with damages against Ben Babol and Reino Rosete
preliminary injunction.
before the then Court of First Instance of Zambales and
Olongapo City. Instead of filing a responsive pleading, therein PEA appealed to the Supreme Court via a Petition for Certiorari
defendant Reino Rosete (private respondent herein) moved to insisting that Lot 5155 was a salvage zone until it was reclaimed
dismiss the complaint on the ground of res judicata. Defendant through government efforts in 1982. The land was previously
Ben Babol did not file any pleading. The Court of First Instance under water on the coastline which reached nine to twenty
of Zambales sustained the argument of Rosete and granted his meters deep. In 1989, PEA started constructing R-1 Toll
motion to dismiss. Expressway Road for the Manila-Cavite Coastal Road, which
project directly traversed Lot 5155. PEA argued that the
Issue: Whether or not the action for quieting title is barred
documentary evidence presented by De Leon to bolster his
by res judicata
fallacious claim of possession and ownership were procured
Held: NO. For res judicata to bar the institution of a only in 1992, thus negating his very own allegation that he and
subsequent action the following requisites must concur: (1) his predecessors-in-interest have been in occupation since time
There must be a final judgment or order; (2) The court immemorial.
rendering the judgment must have jurisdiction over the subject
The Supreme Court declared that Lot 5155 was a public land so
matter; (3) The former judgment is a judgment on the merits;
that De Leons occupation thereof, no matter how long ago,
and, (4) There is between the first and second actions identity of
could not confer ownership or possessory rights. Prescinding
parties, of subject matter and of causes of action. Although
therefrom, it ruled that no writ of injunction may lie to protect
there is identity in the parties as Reino Rosete is a successor in
De Leons nebulous right of possession.
interest of Ben Babol, there is no identity of subject matter and
cause of action as in the previous civil case, a complaint for The aforesaid Decision became final and executory as no
forcible entry was filed where what is at issue is prior motion for reconsideration was filed. In due course, PEA moved
possession, regardless of who has lawful title over the disputed for the issuance of a writ of execution praying that De Leon and
property. Thus, the only issue in an action for forcible entry is persons claiming rights under him be ordered to vacate and
the physical or material possession of real property, that is, peaceably surrender possession of Lot 5155. Court a quo
possession de facto and not possession de jure. On the other granted it.
hand, the civil case recently filed by petitioner is an action for
"Quieting of Title and Recovery of Possession with Damages" De Leon moved for reconsideration thereof and quashal of the
which in reality, is an action to recover a parcel of land or an writ of execution. He adamantly insisted that the court a quos
accion reivindicatoria under Art. 434. of the Civil Code. It Order for the issuance of the writ of execution completely
should be distinguished from the previously filed civil case, deviated from the dispositive portion of the Supreme Courts
which is an accion interdictal. Petitioner in the action for Decision as it did not categorically direct him to surrender
possession of Lot 5155 in favor of PEA.
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ISSUE: WON PEA is really entitled to possess the subject possession if the defeated party has not shown any right to
property. possess the land independently of his claim of ownership which
was rejected. This is precisely what happened in the present
RULING: Yes. The question of ownership and rightful case. This Court had already declared the disputed property as
possession of the subject property had already been settled and owned by the State and that De Leon does not have any right to
laid to rest in PEA v. CA: possess the land independent of his claim of ownership.
An applicant seeking to establish ownership of land must In addition, a judgment for the delivery or restitution of
conclusively show that he is the owner in fee simple, for the property is essentially an order to place the prevailing party in
standing presumption is that all lands belong to the public possession of the property. If the defendant refuses to surrender
domain of the State, unless acquired from the Government possession of the property to the prevailing party, the sheriff or
either by purchase or by grant x x x. other proper officer should oust him. No express order to this
In this case, the land in question is admittedly public. The effect needs to be stated in the decision; nor is a categorical
respondent Bernardo de Leon has no title thereto at all. His statement needed in the decision that in such event the sheriff or
claim of ownership is based on mere possession by himself other proper officer shall have the authority to remove the
and his predecessors-in-interests, who claim to have been in improvements on the property if the defendant fails to do so
open, continuous, exclusive and notorious possession of the within a reasonable period of time. The removal of the
land in question, under a bona fide claim of ownership for a improvements on the land under these circumstances is deemed
period of at least fifty (50) years. However, the survey plan for read into the decision, subject only to the issuance of a special
the land was approved only in 1992, and respondent paid the order by the court for the removal of the improvements.
realty taxes thereon on October 30, 1992, shortly before the
Sps Bustos v. CA
filing of the suit below for damages with injunction. Hence,
respondent must be deemed to begin asserting his adverse claim Facts: Paulino Faustino died intestate on April 2, 1957. She
to Lot 5155 only in 1992. More, Lot 5155 was certified as had four children; (1) Manuela, (2) Trinidad, (3) Beatriz, and
alienable and disposable on March 27, 1972, per certificate of (4) Marcial. They executed an extra-judicial partition of the
the Department of Environment and Natural Resources. It is estate of Paulino Faustino. Later on, Manuela sold her share to
obvious that respondents possession has not ripened into Moses, husband of Beatriz, by virtue of deed of absolute sale.
ownership.
The property involved in partition case were specified as Lots
x x x x 280, 283, 284, 1000-A and 1000-B. The share of Manuela,
which was sold to Moses, includes Lot 284 of the Masantol
Consequently, respondent De Leon has no clear legal right Cadastre and Lot 284 was subdivided into Lots 284-A and 284-
to the lot in question, and a writ of injunction will not lie to
B.
protect such nebulous right of possession. x x x.
Trinidad was in physical possession of the land. She refused to
De Leon insists that what this Court did in PEA v. CA was to surrender the land to her brother-in-law Moses G. Mendoza,
simply dismiss his complaint for damages and nothing more,
despite several demands.
and that the RTC erred and committed grave abuse of discretion
in issuing a writ of execution placing PEA in possession of the Thereafter, Moses filed before RTC Pampanga a complaint for
disputed property. He insists that he can only be removed from partition claiming the one fourth share of Manuela which was
the disputed property through an ejectment proceeding. sold to him. During the pendency of the case, Trinidad Fajardo
died. The heirs of Trinidad executed an extra-judicial partition
The Court is not persuaded.
of her estate. Then, Lucio Fajardo, son of Trinidad sold Lot
As a general rule, a writ of execution should conform to the 284-B to spouses Venancio Viray and Cecilia Nunga-Viray.
dispositive portion of the decision to be executed; an execution With regard to this case, RTC Pampanga ruled in favour of
is void if it is in excess of and beyond the original judgment or
Moses.
award. The settled general principle is that a writ of execution
must conform strictly to every essential particular of the After that, Moses sold the subject land to Spouses Bustos.
judgment promulgated, and may not vary the terms of the However, Spouses Viray, buyers of Lucios share of property,
judgment it seeks to enforce, nor may it go beyond the terms of filed with MCTC an action for unlawful detainer against
the judgment sought to be executed. Spouses Bustos, buyers of Moses, who were in actual
possession as lessees of the husband Trinidad of the subject
However, it is equally settled that possession is an essential
land.
attribute of ownership. Where the ownership of a parcel of land
was decreed in the judgment, the delivery of the possession of The MCTC ruled in favour of Spouses Viray. Subsequently, the
the land should be considered included in the decision, it trial court issued writs of execution and demolition, but were
appearing that the defeated partys claim to the possession stayed when Spouses Bustos filed with RTC Pampanga a
thereof is based on his claim of ownership. Furthermore, petition for certiorari, prohibition, and injunction. But, RTC
adjudication of ownership would include the delivery of Pampanga dismissed the petition.

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The Spouses Bustos appealed the decision of RTC to CA. Also, From P. Burgos St., as the point of reference, on the left side,
Lucio Fajardo appealed. the row of houses will be as follows: That of defendants
Cristino and Brigido Custodio, then that of Lito and Maria
On the consolidated petition, CA rendered decision declaring Cristina Santos, and then of Ofelia Mabasa. On the right side is
Moses as the owner of the undivided share previously owned by that of defendant Rosalina Morato and then a Septic Tank. As
Manuela Fajardo. an access to P. Burgos St. from Mabasa's property, there are 2
Issue: WON petitioners could be ejected from what is now their passageways. The first passageway is approx 1meter wide and
own land. is about 20m distant from Mabasa's to P. Burgos. The second
passage is about 3m width and length; it is about 26m. In
Held: No. passing thru the passageway, a less than a meter wide path
through the septic tank and with 5-6 meters in length has to be
The issue of possession is intertwined with the issue of traversed.
ownership. In the unlawful detainer case, the Court of Appeals
affirmed the decision of the trial court as to possession on the When said property was purchased by Mabasa, there were
ground that the decision has become final and executory. This tenants occupying the premises and were acknowledged by
means that the petitioners may be evicted. Mabasa as tenants. However, one of the tenant vacated the
apartment and when Mabasa went to see the premises, he saw
In the accion reinvindicatoria, the Court of Appeals affirmed that there had been built an adobe fence in the first passageway
the ownership of petitioners over the subject land. Hence, the making it narrower in width. The fence was constructed by
court declared petitioners as the lawful owners of the land. Santoses along their property. Defendant Morato constructed
her adobe fence and even extended said fence in such a way that
The Supreme Court ruled that once a decision becomes final
the entire second passageway was enclosed. And it was then
and executory, it is the ministerial duty of the court to order its
that the remaining tenants of said apartment vacated the area.
execution, admits of certain exceptions as in cases of special
Santos testified that she constructed the fence because there was
and exceptional nature where it becomes imperative in the
an incident when her daughter was dragged by a bicycle. She
higher interest of justice to direct the suspension of its
also mentioned some other inconveniences that sometimes their
execution; whenever it is necessary to accomplish the aims of
doors and windows are being banged by the drunk tenants.
justice; or when certain facts and circumstances transpired after
the judgment became final which could render the execution of Mabasa filed an easement of right of way against the
the judgment unjust. defendants.
In the present case, the stay of execution is warranted by the TC: affirmed, ordered Custodios and Santoses to give Mabasa
fact that petitioners are now legal owners of the land in question permanent access ingress and egress, to the public street, but the
and are occupants thereof. To execute the judgment by ejecting TC ordered Mabasa to pay the defendants the sum of P8,000
petitioners from the land that they owned would certainly result as indemnity for the permanent use of the passageway.
in grave injustice. Besides, the issue of possession was rendered
moot when the court adjudicated ownership to the spouses CA: affirmed but modified the damages and ordered the
Bustos by virtue of a valid deed of sale. Defendants to pay Mabasa the damages.

Placing petitioners in possession of the land in question is the Issue: WON the act of building an adobe fence by the
necessary and logical consequence of the decision declaring defendants is unlawful and should give rise to an obligation to
them as the rightful owners of the property. One of the essential pay for the damages done.
attributes of ownership is possession. It follows that as owners
of the subject property, petitioners are entitled to possession of Held: No. The Court acknowledges that there was damage, but
the same. An owner who cannot exercise the seven (7) juses or there was no legal injury. The decision of the Trial Court was
attributes of ownership--the right to possess, to use and enjoy, reinstated.
to abuse or consume, to accessories, to dispose or alienate, to The act of petitioners in constructing a fence within their lot is a
recover or vindicate and to the fruits--is a crippled owner. valid exercise of their right as owners, hence not contrary to
morals, good customs or public policy. The law recognizes in
Sps. Custodio et. al. v CA, Mabasa
the owner the right to enjoy and dispose of a thing, without
Facts: The original plaintiff, Pacifico Mabasa, died during the other limitations than those established by law. It is within the
pendency of the case and was substituted by Ofelia Mabasa, his right of petitioners, as owners, to enclose and fence their
surviving spouse. property. Article 430 of the Civil Code provides that "(e)very
owner may enclose or fence his land or tenements by means of
Mabasa owns a parcel of land with a two-door apartment at the walls, ditches, live or dead hedges, or by any other means
interior of P. Burgos St., Palingon, Tipas, Taguig, Metro without detriment to servitudes constituted thereon."
Manila. They acquired the said property through a contract of
sale on September 1981. At the time of the construction of the fence, the lot was not
subject to any servitudes. There was no easement of way
existing in favor of private respondents, either by law or by
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contract. The fact that private respondents had no existing right obstacles to the free passage of the waters through the strip of
over the said passageway is confirmed by the very decision of land in Paraanan. Hence, this petition.
the trial court granting a compulsory right of way in their favor
after payment of just compensation. It was only that decision ISSUE: Whether or not the land of Meneses is subject to
which gave private respondents the right to use the said easement.
passageway after payment of the compensation and imposed a HELD: Yes. According to article 530 of the Civil Code, an
corresponding duty on petitioners not to interfere in the exercise easement is charge imposed upon one estate for the benefit of
of said right. another estate belonging to a different owner, and the realty in
Hence, prior to said decision, petitioners had an absolute right favor of which the easement is established is called the
over their property and their act of fencing and enclosing the dominant estate, and the one charged with it the servient estate.
same was an act which they may lawfully perform in the The lands of Paraanan being the lower are subject to the
employment and exercise of said right. To repeat, whatever easement of receiving and giving passage to the waters
injury or damage may have been sustained by private proceeding from the higher lands and the lake of Calalaran. As
respondents by reason of the rightful use of the said land by stated in Article 552 of the Civil Code:
petitioners is damnum absque injuria. Lower estates must receive the waters which naturally
A person has a right to the natural use and enjoyment of his own and without the intervention of man descend from the
property, according to his pleasure, for all the purposes to which higher estates, as well as the stone or earth which they
such property is usually applied. As a general rule, therefore, carry with them.
there is no cause of action for acts done by one person upon his Neither may the owner of the lower estates construct
own property in a lawful and proper manner, although such acts works preventing this easement, nor the one of the
incidentally cause damage or an unavoidable loss to another, as higher estate works increasing the burden.
such damage or loss is damnum absque injuria. When the
owner of property makes use thereof in the general and ordinary Although Article 388 (Article 430 na ngayon) of the Civil Code
manner in which the property is used, such as fencing or authorizes every owner to enclose his estate by means of walls,
enclosing the same as in this case, nobody can complain of ditches fences or any other device, but his right is limited by the
having been injured, because the inconvenience arising from easement imposed upon his estate. In the case at bar, Meneses
said use can be considered as a mere consequence of might have constructed the works necessary to make and
community life. maintain a fish pond within his own land, but he was always
under the strict and necessary obligation to respect the statutory
NICOLAS LUNOD, ET. AL. vs. HIGINO MENESES easement of waters charged upon his property, and had no right
to close the passage and outlet of the waters flowing from the
FACTS: Nicolas Lunod, Juan de la Vega, Evaristo Rodriguez,
lands of the plaintiffs and the lake of Calalaran into the Taliptip
Fernando Marcelo, Esteban Villena, Benito Litao, Ventura
River.
Hernandez, and Casimiro Pantanilla (plaintiff, for brevity) filed
a complaint against Higino Meneses (defendant, for brevity). It Hence, Meneses was ordered to remove and destroy the
was found that Meneses, without any right or reason, converted obstacles he built so that the water will flow freely to Lunods
his land in Paraanan into a fishpond and by means of a dam and plantation.
a bamboo net, prevented the free passage of the water through
said place into the Taliptip River, that in consequence the lands ANDAMO v. IAC
of Lunod became flooded and damaged by the stagnant waters,
there being no outlet except through the land in Paraanan. That FACTS: Petitioner spouses Emmanuel and Natividad Andamo
the construction of such fishpond was prejudicial to Lunod are the owners of a parcel of land adjacent to that of private
since they incurred damages and losses to their rice plantations. respondent, Missionaries of Our Lady of La Salette, Inc., a
They therefore asked that judgment be entered against the religious corporation.
defendant, declaring that the said tract of land in Paraanan is
Within the land of respondent corporation, waterpaths and
subject to a statutory easement permitting the flow of water
contrivances, including an artificial lake, were constructed,
from the property of the plaintiffs, and that, without prejudice to
which allegedly inundated and eroded petitioners' land, caused a
the issuing of a preliminary injunction, the defendant be ordered
young man to drown, damaged petitioners' crops and plants,
to remove and destroy the obstructions that impede the passage
washed away costly fences, endangered the lives of petitioners
of the waters through Paraanan. On his defense, the defendant
and their laborers during rainy and stormy seasons, and exposed
alleged that no statutory easement existed nor could exist in
plants and other improvements to destruction.
favor of the lands described in the complaint.
Petitioners initially filed a criminal complaint for destruction by
The court entered judgment declaring that the plaintiffs were
means of inundation. Petitioners filed a civil action for damages
entitled to a decision in their favor, and sentenced the defendant
with prayer for the issuance of a writ of preliminary injunction
to remove the dam placed on the east of the Paraanan passage
before the same court.
on the side of the Taliptip River opposite the old dam in the
barrio of Bambang, as well as to remove and destroy the
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ISSUE WON a corporation, which has built through its agents, petitioners, were guilty of negligence. This event then was not
waterpaths, water conductors and contrivances within its land, occasioned exclusively by an act of God or force majeure; a
thereby causing inundation and damage to an adjacent land, can human factor - negligence or imprudence - had intervened. The
be held civilly liable for damages. effect then of the force majeure in question may be deemed to
have, even if only partly, resulted from the participation of man.
HELD: YES. Article 431 of the Civil Code provides that the Thus, the whole occurrence was thereby humanized, as it were,
owner of a thing cannot make use thereof in such a manner as to and removed from the rules applicable to acts of God.
injure the rights of a third person. SIC UTERE TUO UT
ALIENUM NON LAEDAS. Moreover, adjoining landowners Civil Code impose natural easement on lower estates (in this
have mutual and reciprocal duties which require that each must case, property of Lat).
use his own land in a reasonable manner so as not to infringe
upon the rights and interests of others. Although the Court Art. 637. Lower estates are obliged to receive the waters which
recognizes the right of an owner to build structures on his land, naturally and without the intervention of man descend from the
such structures must be so constructed and maintained using all higher estates, as well as the stones or earth which they carry
reasonable care so that they cannot be dangerous to adjoining with them.
landowners and can withstand the usual and expected forces of The owner of the lower estate cannot construct works which
nature. If the structures cause injury or damage to an adjoining will impede this easement; neither can the owner of the higher
landowner or a third person, the latter can claim indemnification estate make works which will increase the burden.
for the injury or damage suffered.
A similar provision is found in the Water Code of the
In this case, the respondent failed to observe reasonable care in Philippines (P.D. No.1067), which provides:
the construction and preservation of its waterpaths and artificial
lakes which inundated the adjacent land of petitioner, caused Art. 50. Lower estates are obliged to receive the water which
death and damage to properties of others. It was therefore, naturally and without the intervention of man flow from the
injurious to third persons. Respondent shall be liable to pay for higher estates, as well as the stone or earth which they carry
the damages to petitioners. with them.

REMMAN ENT. V. CA - G.R. No. 125018 April 6, 2000 The owner of the lower estate cannot construct works which
will impede this natural flow, unless he provides an alternative
FACTS: Remman Enterprises, Inc. and Crispin Lat are method of drainage; neither can the owner of the higher estate
adjoining landowners. The land of Lat is agricultural while make works which will increase this natural flow.
Remmans land is partly devoted to its piggery business.
Remmans land is one and a half meter higher in elevation than As worded, the two (2) aforecited provisions impose a natural
that of Lat. Lat noticed that Remmans waste disposal lagoon easement upon the lower estate to receive the waters which
was already overflowing (partly because of rain) and inundating naturally and without the intervention of man descend from
one-fourth of his land. A year after almost one hectare or Lats higher states. However, where the waters which flow from a
plantation was already inundated with water containing pig higher state are those which are artificially collected in man-
manure. He filed a complaint for damages with preliminary made lagoons, any damage occasioned thereby entitles the
mandatory injunction. Remman denied the claims of Lat and owner of the lower or servient estate to compensation.
averred that measures such as construction of additional lagoons
were already adopted to contain waste water. Trial court ruled In this case, Remman constructed man-made lagoons, where the
in favor of Lat. CA affirmed. water flowing to Lats property comes from. Any damage
occasioned by this construction entitles Lat to damages.
ISSUE: Whether or not Remman Ent. is liable for damages
NATIONAL POWER CORPORATION VS IBRAHIM
HELD: YES. Petition denied.
Facts: Ibrahim and his co-heirs claimed that they were owners
Negligence was clearly established. Remman failed to monitor of several parcels of land. Sometime in 1978, NAPOCOR,
the increases in the level of water in the lagoons before, during, through alleged stealth and without respondents knowledge and
and after heavy rains; it also failed to augment the existing prior consent, took possession of the sub-terrain area of their
lagoons prior to the incident, notwithstanding the fact that at the lands and constructed therein underground tunnels. The
time of the flooding, the piggery had grown to a capacity of existence of the tunnels was only discovered sometime in July
11,000 heads, and considering that it was reasonably forseeable 1992 by respondents. . The tunnels were apparently being used
that the existing waste disposal facilities were no longer by NAPOCOR in siphoning the water of Lake Lanao and in the
adequate to accomodate the increasing volume of waste matters operation of NAPOCORs other projects. One of the
in such a big farm. respondents requested the Marawi City Water District for a
permit to construct and/or install a motorized deep well in one
Remman contend that the damages were due to a fortuitous aprt of their land but his request was turned down because the
event. Accordingly, petitioners cannot be heard to invoke the construction of the deep well would cause danger to lives and
act of God or force majeure to escape liability for the loss or property. Respondents demanded that NAPOCOR pay damages
damage sustained by private respondents since they, the
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and vacate the sub-terrain portion of their lands but the latter sub-lessees of the Bulaong Group, the municipal officials of
refused to vacate much less pay damages. Baliuag cancelled the long standing leases of the Bulaong
Group and declared the persons comprising the Mercado Group
Issue: Whether or not NAPOCOR is liable for damages to as the rightful lessees of the stalls in question, in substitution of
the respondents the former.
Held: YES. Art. 435 of the Civil Code state that the owner of a The municipal authorities justified the cancellation of the leases
parcel of land is the owner of its surface and of everything of the Bulaong Group by invoking the provisions of Municipal
under it, and he can construct thereon any works or make any Ordinance No. 14 which prohibited the sub-leasing of stalls by
plantations and excavations which he may deem proper, without the lessees thereof.
detriment to servitudes and subject to special laws and
ordinances. Thus, the ownership of land extends to the surface The members of the Bulaong Group sued. They filed several
as well as to the subsoil under. The trial court found that individual complaints with the Court of First Instance (CFI)
respondents could have dug upon their property motorized deep seeking recovery of their stalls from the Mercado Group as well
wells but were prevented from doing so by the authorities as damages. Their theory was anchored on their claimed
precisely because of the construction and existence of the ownership of the stalls constructed by them at their own
tunnels underneath the surface of their property. Respondents, expense, and their resulting right, as such owners, to sub-lease
therefore, still had a legal interest in the sub-terrain portion the stalls, and necessarily, to recover them from any person
insofar as they could have excavated the same for the withholding possession thereof from them.
construction of the deep well. The fact that they could not was
appreciated by the RTC as proof that the tunnels interfered with CFI Judge rendered a decision rejecting the claim of the
respondents enjoyment of their property and deprived them of Municipality of Baliuag that it had automatically acquired
its full use and enjoyment. ownership of the new stalls constructed after the old stalls had
been razed by fire, declaring the members of the Bulaong Group
Moreover, petitioners argument that the landowners right to be builders in good faith, entitled to retain possession of the
extends to the sub-soil insofar as necessary for their practical stalls respectively put up by them until and unless indemnified
interests serves only to further weaken its case. The theory for the value thereof. The decision also declared that the
would limit the right to the sub-soil upon the economic utility Bulaong and Mercado Groups had executed the sub-letting
which such area offers to the surface owners. Presumably, the agreements with full awareness that they were thereby violating
landowners right extends to such height or depth where it is Ordinance No. 14; they were thus in pari delicto, and hence had
possible for them to obtain some benefit or enjoyment, and it is no cause of action one against the other and no right to recover
extinguished beyond such limit as there would be no more whatever had been given or demand performance of anything
interest protected by law. undertaken. The judgment therefore decreed the annulment of
the leases between the Municipality and the individuals
Petitioner also contends that the underground tunnels in this comprising the Mercado Group.
case constitute an easement upon the property of respondents
which does not involve any loss of title or possession.The ISSUE: WON the trial court erred in ruling that members of the
manner in which the easement was created by petitioner, Bulaong Group were builders in good faith and entitled to retain
however, violates the due process rights of respondents as it was possession of the stalls respectively put up by them.
without notice and indemnity to them and did not go through
proper expropriation proceedings. If the government takes HELD: Yes. Mercados group suggest that it was a mistake for
property without expropriation and devotes the property to the Trial Court to have accorded to the individuals of the
public use, after many years, the property owner may demand Bulaong Group the stalls and builders in good faith in
payment of just compensation in the event restoration of accordance with Article 526 of the Civil Code. They are correct.
possession is neither convenient nor feasible. Respondents, as It was indeed error for the Court to have so ruled.
the owners of the property thus expropriated, are entitled to a The members of this group were admittedly lessees of space in
just compensation which should be neither more nor less, the public market; they therefore could not, and in truth never
whenever it is possible to make the assessment, than the money did make the claim, that they were owners of any part of the
equivalent of said property land occupied by the market so that in respect of any new
structure put up by them thereon, they could be deemed builders
PAZ MERCADO v. CA
in good faith.
FACTS: Bulaong Group, had for many years been individual
lessees of stalls in the public market of Baliuag, Bulacan. The To be deemed a builder in good faith, it is essential that a
person assert title to the land on which he builds; i.e., that he be
market was destroyed by fire. The members of the Bulaong
a possessor in concept of owner, and that he be unaware "that
Group constructed new stalls therein at their expense; and they
there exists in his title or mode of acquisition any flaw which
thereafter paid rentals thereon to the Municipality of Baliuag.
invalidates it. It is such a builder in good faith who is given the
The members of the group sub-leased their individual stalls to right to retain the thing, even as against the real owner, until he
other persons, the Mercado Group. After the Mercado Group has been reimbursed in full not only for the necessary expenses
had been in possession of the market stalls for some months, as but also for useful expenses.
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Property Digest 2 - Lucky 9 and friends
On the other hand, unlike the builder in good faith, a lessee who WON the court may demand the petitioner to sell to private
"makes in good faith useful improvements which are suitable to respondents those portions of land occupied by the latter.
the use for which the lease is intended, without altering the form
or substance of the property leased," can only claim payment of Held:
"one-half of the value of the improvements" or, "should the No.
lessor refuse to reimburse said amount, ... remove the
improvements, even though the principal thing may suffer The ruling of the court violates the explicit provisions of Article
damage thereby." 448.

Ignao v. IAC Article 448 provides:

Facts: Art. 448. The owner of the land on which anything has been
built, sown or planted in good faith, shall have the right to
Petitioner Florencio Ignao and his uncles private respondents appropriate as his own the works, sowing or planting, after
Juan Ignao and Isidro Ignao were co-owners of a parcel of land payment of the indemnity provided for in articles 546 and 548,
with an area of 534 square meters. Pursuant to an action for or to oblige the one who built or planted to pay the price of the
partition filed by petitioner, the CFI Cavite rendered a decision land, and the one who sowed, the proper rent. However, the
directed the partition of the aforesaid land, alloting 133.5 square builder or planter cannot be obliged to buy the land if its value
meters or 2/8 thereof to private respondents Juan and Isidro, and is considerably more than that of the building or trees. In such
giving the remaining portion with a total area of 266.5 square case, he shall pay reasonable rent, if the owner of the land does
meters to petitioner Florencio. However, no actual partition was not choose to appropriate the building or trees after proper
ever effected. indemnity. The parties shall agree upon the terms of the lease
and in case of disagreement, the court shall fix the terms
Later on, petitioner instituted a complaint for recovery of
thereof.
possession of real property against private respondents Juan and
Isidro before CFI Cavite. He alleges that the area occupied by The law is clear and unambiguous when it confers the right of
the two (2) houses built by private respondents exceeded the choice upon the landowner and not upon the builder and the
133.5 square meters previously alloted to them by the trial courts.
court.
Thus, Petitioner Florencio Ignao is directed within thirty (30)
The lower court conducted an ocular inspection. It was found days from entry of judgment to exercise his option to either
that the houses of Juan and Isidro actually encroached upon a appropriate as his own the portions of the houses of Juan and
portion of the land belonging to Florencio. Upon agreement of Isidro Ignao occupying his land upon payment of indemnity in
the parties, the trial court ordered a licensed geodetic engineer accordance with Articles 546 and 548 of the Civil Code, or sell
to conduct a survey to determine the exact area occupied by the to private respondents the 101 square meters occupied by them
houses of private respondents. The survey subsequently at such price as may be agreed upon. Should the value of the
disclosed that the house of Juan occupied 42 square meters land exceed the value of the portions of the houses that private
while that of Isidro occupied 59 square meters of Florencio's respondents have erected thereon, private respondents may
land or a total of 101 square meters. choose not to buy the land but they must pay reasonable rent for
The lower court rendered decision in favour of private the use of the portion of petitioner's land as may be agreed upon
respondents stating that they are considered builders in good by the parties. In case of disagreement, the rate of rental and
other terms of the lease shall be determined by the trial court.
faith, hence, exempt them from damages. Furthermore, the trial
court stated that pursuant to Article 448 of the Civil Code, the Note (CO-OWNERSHIP): All the co-owners hold the property
owner of the land (Florencio) should have the choice to either in common dominion but at the same time each is an owner of a
appropriate that part of the house standing on his land after share which is abstract and undetermined until partition is
payment of indemnity or oblige the builders in good faith (Juan effected
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.
Thus, the lower court ordered petitioner to sell to private
respondents those portions of his land respectively occupied by
the latter.
As a result, petitioner appealed the case before IAC. However,
IAC affirmed the decision of CFI Cavite.
Issue:

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