February 1

Ownership Articles 427 to 439. Pp. 83 to 203 of Paras 2013.

ases !cont"#

1e1bers of the oncerne( iti/ens of Far1er=s Association> that they ha,e occupie( an( tille( their far1hol(in%s so1e twel,e to fifteen years prior to the pro1ul%ation of P.5. 3o. 27> that (urin% the first wee& of Au%ust 1983+ petitioner+ un(er a per1it fro1 the Office of the Pro,incial ;o,ernor of *i/al+ was allowe( to i1pro,e the ?aran%ay *oa( at $itio .narawan+ $an .si(ro+ Antipolo+ *i/al at its e:pense+ sub<ect to the con(ition that it sha% secure the nee(e( ri%ht of way fro1 the owners of the lot to be affecte(> that on Au%ust 14+ 1983 an( thereafter+ petitioner (epri,e( pri,ate respon(ents of their property without (ue process of law by# !1" forcibly re1o,in% an( (estroyin% the barbe( wire fence enclosin% their far1hol(in%s without notice> !2" bull(o/in% the rice+ corn fruit bearin% trees an( other crops of pri,ate respon(ents by 1eans of force+ ,iolence an( inti1i(ation+ in ,iolation of P.5. 1038 an( !3" trespassin%+ coercin% an( threatenin% to harass+ re1o,e an( e<ect pri,ate respon(ents fro1 their respecti,e far1hol(in%s in ,iolation of P.5. 3os. 316+ 483+ 814+ an( 1028. 1

German Management and Services v. CA, 177 SCRA 495

On 'anuary 7+1984+ the )unicipal 2rial ourt (is1isse( pri,ate respon(ents= co1plaint for forcible entry. 2 On appeal+ the *e%ional 2rial ourt of Antipolo+ *i/al+ ?ranch @AA. sustaine( the (is1issal by the )unicipal 2rial ourt. 3

$pouses ynthia uye%&en% 'ose an( )anuel *ene 'ose+ resi(ents of Pennsyl,ania+ Phila(elphia+ -$A are the owners of a parcel of lan( situate( in $itio .narawan+ $an .si(ro+ Antipolo+ *i/al+ with an area of 232+942 s0uare 1eters an( co,ere( by 2 2 3o. 40023 of the *e%ister of 5ee(s of the pro,ince of *i/al issue( on $epte1ber 11+ 1980 which cancele( 2 2 3o. 467627 28460. 2he lan( was ori%inally re%istere( on Au%ust 4+ 1948 in the Office of the *e%ister of 5ee(s of *i/al as O 2 3o. 19+ pursuant to a 9o1estea( Patent %rante( by the Presi(ent of the Philippines on 'uly 27+ 1948+ un(er Act 3o. 141.

Pri,ate respon(ents then file( a petition for re,iew with the ourt of Appeals. On 'uly 24+1986+ sai( court %a,e (ue course to their petition an( re,erse( the (ecisions of the )unicipal 2rial ourt an( the *e%ional 2rial ourt. 4

On February 26+ 1982+ the spouses 'ose e:ecute( a special power of attorney authori/in% petitioner ;er1an )ana%e1ent $er,ices to (e,elop their property co,ere( by 2 2 3o. 40023 into a resi(ential sub(i,ision. onse0uently+ petitioner on February 9+1983 obtaine( 5e,elop1ent Per1it 3o. 00424 fro1 the 9u1an $ettle1ents *e%ulatory o11ission for sai( (e,elop1ent. Fin(in% that part of the property was occupie( by pri,ate respon(ents an( twenty other persons+ petitioner a(,ise( the occupants to ,acate the pre1ises but the latter refuse(. 3e,ertheless+ petitioner procee(e( with the (e,elop1ent of the sub<ect property which inclu(e( the portions occupie( an( culti,ate( by pri,ate respon(ents.

2he Appellate ourt hel( that since pri,ate respon(ents were in actual possession of the property at the ti1e they were forcibly e<ecte( by petitioner+ pri,ate respon(ents ha,e a ri%ht to co11ence an action for forcible entry re%ar(less of the le%ality or ille%ality of possession. 4 Petitioner 1o,e( to reconsi(er but the sa1e was (enie( by the Appellate ourt in its resolution (ate( $epte1ber 26+ 1986. 6

9ence+ this recourse.

Pri,ate respon(ents file( an action for forcible entry a%ainst petitioner before the )unicipal 2rial ourt of Antipolo+ *i/al+ alle%in% that they are 1ountainsi(e far1ers of $itio .narawan+ $an .si(ro+ Antipolo+ *i/al an(

2he issue in this case is whether or not the ourt of Appeals (enie( (ue process to petitioner when it re,erse( the (ecision of the court a 0uo without %i,in% petitioner the opportunity to file its answer an( whether or not pri,ate respon(ents are entitle( to file a forcible entry case a%ainst petitioner. 7

Be affir1. 2he ourt of Appeals nee( not re0uire petitioner to file an answer for (ue process to e:ist. 2he co11ent file( by petitioner on February 26+ 1986 has sufficiently a((resse( the issues presente( in the petition for re,iew file( by pri,ate respon(ents before the ourt of Appeals. 9a,in% hear( both parties+ the Appellate ourt nee( not await or re0uire any other a((itional plea(in%. )oreo,er+ the fact that petitioner was hear( by the ourt of Appeals on its 1otion for reconsi(eration ne%ates any ,iolation of (ue process.

(octrine of self8help can only be e:ercise( at the ti1e of actual or threatene( (ispossession which is absent in the case at bar. Bhen possession has alrea(y been lost+ the owner 1ust resort to <u(icial process for the reco,ery of property. 2his is clear fro1 Article 436 of the i,il o(e which states+ C!."n no case 1ay possession be ac0uire( throu%h force or inti1i(ation as lon% as there is a possessor who ob<ects thereto. 9e who belie,es that he has an action or ri%ht to (epri,e another of the hol(in% of a thin%+ 1ust in,o&e the ai( of the co1petent court+ if the hol(er shoul( refuse to (eli,er the thin%.C

3otwithstan(in% petitioner=s clai1 that it was (uly authori/e( by the owners to (e,elop the sub<ect property+ pri,ate respon(ents+ as actual possessors+ can co11ence a forcible entry case a%ainst petitioner because ownership is not in issue. Forcible entry is 1erely a 0uietin% process an( ne,er (eter1ines the actual title to an estate. 2itle is not in,ol,e(. 8

B9D*DFO*D+ the ourt resol,e( to 5D3E the instant petition. 2he (ecision of the ourt of Appeals (ate( 'uly 24+1986 is hereby AFF.*)D5. osts a%ainst petitioner.

$O O*5D*D5.

.n the case at bar+ it is un(ispute( that at the ti1e petitioner entere( the property+ pri,ate respon(ents were alrea(y in possession thereof . 2here is no e,i(ence that the spouses 'ose were e,er in possession of the sub<ect property. On the contrary+ pri,ate respon(ents= peaceable possession was 1anifeste( by the fact that they e,en plante( rice+ corn an( fruit bearin% trees twel,e to fifteen years prior to petitioner=s act of (estroyin% their crops.

Caisip v. People, 3 SCRA 17

2his case is before -s upon petition of (efen(ants Feli: aisip+ .%nacio *o<ales an( Fe(erico Filla(elrey+ for re,iew on certiorari of a (ecision of the ourt of Appeals which affir1e( that of the ourt of First .nstance of ?atan%as+ con,ictin% the1 of the cri1e of ;ra,e oercion+ with which they are char%e(+ an( sentencin% each to four !4" 1onths an( one !1" (ay of arresto 1ayor an( to pay a fine of P200.00+ with subsi(iary i1prison1ent in case of insol,ency+ not to e:cee( one8thir( of the principal penalty+ as well as one8thir( of the costs.chanrobles,irtualawlibrarychanrobles ,irtual law library

Althou%h a(1itte(ly petitioner 1ay ,ali(ly clai1 ownership base( on the 1uni1ents of title it presente(+ such e,i(ence (oes not responsi,ely a((ress the issue of prior actual possession raise( in a forcible entry case. .t 1ust be state( that re%ar(less of the actual con(ition of the title to the property+ the party in peaceable 0uiet possession shall not be turne( out by a stron% han(+ ,iolence or terror. 9 2hus+ a party who can pro,e prior possession can reco,er such possession e,en a%ainst the owner hi1self. Bhate,er 1ay be the character of his prior possession+ if he has in his fa,or priority in ti1e+ he has the security that entitles hi1 to re1ain on the property until he is lawfully e<ecte( by a person ha,in% a better ri%ht by accion publiciana or accion rei,in(icatoria. 10

As set forth in the trial court=s (ecision+ the bac&%roun( of the present case is this#

?oth the )unicipal 2rial ourt an( the *e%ional 2rial ourt ha,e rationali/e( petitioner=s (rastic action of bull(o/in% an( (estroyin% the crops of pri,ate respon(ents on the basis of the (octrine of self8help enunciate( in Article 429 of the 3ew i,il o(e. 11 $uch <ustification is una,ailin% because the

2he co1plainant ;loria abala% is the wife of )arcelino ;ue,arra who culti,ate( a parcel of lan( &nown as @ot 1048A of 9acien(a Palico situate( in sitio ?ote8bote+ barrio 2a1pisao+ 3asu%bu+ ?atan%as. 2he sai( parcel of lan( use( to be tenante( by the (ecease( father of the co1plainant. 9acien(a Palico is owne( by *o:as y ia. an( a(1inistere( by Antonio hui(ian. 2he o,erseer of the sai( hacien(a is Feli: aisip+ one of the accuse( herein. D,en before the occurrence of the inci(ent presently in,ol,e(+ there ha( been a series of 1isun(erstan(in%s an( liti%ations in,ol,in% the co1plainant

an( her husban(+ on one han(+ an( the 1en of 9acien(a Palico on the other.chanrobles,irtualawlibrarychanrobles ,irtual law library

.t appears that on 5ece1ber 23+ 1947+ )arcelino ;ue,arra file( an action with the ourt of A%rarian *elations see&in% reco%nition as a lawful tenant of *o:as y ia. o,er lot 3o. 1048A of 9acien(a Palico. .n a (ecision (ate( February 22+ 1948+ the ourt of A%rarian *elations (eclare( it has no <uris(iction o,er the case+ inas1uch as ;ue,arra is not a tenant on the sai( parcel of lan(. An appeal was ta&en by ;ue,arra to the $upre1e ourt+ but the appeal was (is1isse( in a resolution (ate( April 10+ 1948.chanrobles,irtualawlibrarychanrobles ,irtual law library

On 'une 14+ 1949+ so1e trouble occurre( between the co1plainant an( aisip re%ar(in% the cuttin% of su%ar cane on @ot 1048A. 2he followin% (ay 'une 16+ 1949+ the co1plainant alle%e(ly a%ain entere( the pre1ises of @ot 1048A an( refuse( to be (ri,en out by Feli: aisip. 5ue to the afore1entione( inci(ents+ ;loria abala% was char%e( in the <ustice of the peace court of 3asu%bu+ ?atan%as+ with %ra,e coercion for the inci(ent of 'une 14+ 1949+ (oc&ete( in the sai( court as ri1inal ase 3o. 968 !D:hibit C3C"> an( with the cri1e of un<ust ,e:ation for the inci(ent of 'une 16+ 1949+ (oc&ete( in the sai( court as ri1inal ase 3o. 970. ?oth cases+ howe,er+ were file( only on 'une 24+ 1949.

On )ay 17+ 1948+ *o:as y ia. file( an action a%ainst )arcelino ;ue,arra in the <ustice of the peace court of 3asu%bu+ ?atan%as+ for forcible entry+ prayin% therein that ;ue,arra be e<ecte( fro1 the pre1ises of @ot 3o. 1048A. After (ue hearin%+ the sai( ourt in a (ecision (ate( )ay 2+ 1949 or(ere( ;ue,arra to ,acate the lot an( to pay (a1a%es an( accrue( rentals. A writ of e:ecution was issue( by 'ustice of the Peace *o(olfo A. astillo of 3asu%bu+ which was ser,e( on ;ue,arra on 'une 6+ 1949+ an( the return of which was 1a(e by 5eputy $heriff @eonar(o *. A0uino of this ourt on 'une 23+ 1949 !D:hibit C10C". 2he writ recites a1on% other thin%s that the possession of the lan( was (eli,ere( to the *o:as y ia. thru Feli: aisip+ the o,erseer+ an( ;ue,arra was %i,en twenty (ays fro1 'une 6+ 1949 within which to lea,e the pre1ises.

.n other wor(s+ these cri1inal cases+ 3os. 968 an( 970+ a%ainst ;loria abala%+ were file( ei%ht !8" (ays after the inci(ent in,ol,e( in the case at bar. .t is+ also+ noteworthy that both cases were 8 on 1otion of the prosecution+ file( after a rein,esti%ation thereof 8 pro,isionally (is1isse(+ on 3o,e1ber 8+ 1960+ by the ourt of First .nstance of ?atan%as+ upon the %roun( Cthat the e,i(ence of recor( ... are insufficient to pro,e the %uilt of the accuse( beyon( reasonable (oubt.C 2he (ecision of sai( court+ in the case at bar+ %oes on to say#

2he recor( before -s (oes not e:plain why sai( (ecision was e:ecute(. Accor(in% to the co1plainant+ her husban(=s counsel ha( appeale( fro1 sai( (ecision. 2he <ustice of the peace who ren(ere( it+ 9on. *o(olfo astillo+ sai( that there really ha( been an atte1pt to appeal+ which was not %i,en (ue course because the re%le1entary perio( therefor ha( e:pire(> that a 1otion to reconsi(er his or(er to this effect was (enie( by hi1> an( that a secon( 1otion for reconsi(eration was Cstill pen(in% consi(eration+C an( it was October 19+ 1949 when such testi1ony was %i,en.chanrobles,irtualawlibrarychanrobles ,irtual law library

.t further appears that (ue to the tenacious attitu(e of ;loria abala% to re1ain in the pre1ises+ aisip sou%ht the help of the chief of police of 3asu%bu who a(,ise( hi1 to see 5eputy $heriff A0uino about the 1atter. 2he latter+ howe,er+ infor1e( aisip that he coul( not act on the re0uest to e<ect ;loria abala% an( to stop her fro1 what she was (oin% without a proper court or(er. aisip then consulte( Antonio hui(ian+ the hacien(a a(1inistrator+ who+ in turn+ went to the chief of police an( re0ueste( for the (etail of police1en in sitio ?ote8bote. 2he chief of police+ actin% on sai( re0uest+ assi%ne( the accuse( .%nacio *o<ales an( Fe(erico Filla(elrey+ police ser%eant an( police corporal+ respecti,ely+ of the 3asu%bu Police Force+ to sitio ?ote8bote. 1chanrobles ,irtual law library

ontinuin% the narration of the antece(ent facts+ 9is 9onor+ the 2rial 'u(%e+ a((e(#

On 'une 17+ 1949+ at about 4#00 p.1.+ ;loria abala% was seen wee(in% the portion of @ot 1048A which was a ricefiel(. Appellant aisip approache( her an( ba(e her to lea,e+ but she refuse( to (o so+ alle%in% that she an( her husban( ha( the ri%ht to stay there an( that the crops thereon belon% to the1. $he ha,in% stuc& to this attitu(e+ e,en when he threatene( to call the police+ aisip went to his co8(efen(ants+ $%t. *o<ales an( pl. Filla(elrey+ both of the local police+ who were so1e (istance away+ an( brou%ht the1 with hi1. *o<ales tol( ;loria+ who was then in a s0uattin% position+ to stop wee(in%. As ;loria insiste( on her ri%ht to stay in sai( lot+ *o<ales %rabbe(

her ri%ht han( an(+ twistin% the sa1e+ wreste( therefro1 the trowel she was hol(in%. 2hereupon+ Filla(elrey hel( her left han( an(+ to%ether with *o<ales+ forcibly (ra%%e( her northwar( 8 towar(s a foreste( area+ where there was a banana plantation 8 as aisip stoo( nearby+ with a (rawn %un.chanrobles,irtualawlibrarychanrobles ,irtual law library

)arcelino ;ue,arra an( his wife+ ;loria abala%+ by the sheriff+ to ,acate @ot 1048A+ was ,ali( an( lawful> !3" in fin(in% that the ele1ents of the cri1e of %ra,e coercion are present in the case at bar> an( !4" in fin(in% appellants %uilty as char%e(. 2his pretense is clearly untenable.chanrobles,irtualawlibrarychanrobles ,irtual law library

.nas1uch as ;loria shoute( C.na &o poG .na &o poGC 2her nei%hbors+ @ibra(a 5ulutan+ followe(+ soon later+ by Francisca An(ino+ ca1e an( as&e( the police1en why they were (ra%%in% her. 2he police1en ha,in% answere( that they woul( ta&e ;loria to town which was on the west 8 Francisca An(ino plea(e( that ;loria be release(+ sayin% that+ if their purpose was as state( by the1+ she !;loria" woul( willin%ly %o with the1. ?y this ti1e+ ;loria ha( alrea(y been (ra%%e( about ei%ht 1eters an( her (ress+ as well as her blouse 3were torn. $he then a%ree( to procee( westwar( to the 1unicipal buil(in%+ an( as&e( to be allowe( to pass by her house+ within @ot 1048A+ in or(er to breast8fee( her nursin% infant+ but+ the re0uest was turne( (own. As they passe(+ soon later+ near the house of Hoilo *i,era+ hea( of the tenant or%ani/ation to which she was affiliate(+ in the barrio of a1achilihan+ ;loria calle( out for hi1+ whereupon+ he went (own the house an( acco1panie( the1 to the 1unicipal buil(in%. -pon arri,al thereat+ *o<ales an( Filla(elrey turne( her o,er to the police1an on (uty+ an( then (eparte(. After bein% interro%ate( by the chief of police+ ;loria was+ upon representations 1a(e by Hoilo *i,era+ release( an( allowe( to %o ho1e.chanrobles,irtualawlibrarychanrobles ,irtual law library

Art. 429 of our i,il

o(e+ rea(in%#

2he owner or lawful possessor of a thin% has the ri%ht to e:clu(e any person fro1 the en<oy1ent an( (isposal thereof. For this purpose+ he 1ay use such force as 1ay be reasonably necessary to repel or pre,ent an actual or threatene( unlawful physical in,asion or usurpation of his property.chanrobles,irtualawlibrarychanrobles ,irtual law library

2he fore%oin% is the prosecution=s ,ersion. 2hat of the (efense is to the effect that+ upon bein% as&e( by the police1en to stop wee(in% an( lea,e the pre1ises+ ;loria+ not only refuse( to (o so+ but+ also+ insulte( the1+ as well as aisip. Accor(in% to the (efense+ she was arreste( because of the cri1e of slan(er then co11itte( by her. Appellants *o<ales an( Filla(elrey+ 1oreo,er+ testifie( that+ as they were hea(in% towar(s the barrio of a1achilihan+ ;loria procee(e( to tear her clothes.chanrobles,irtualawlibrarychanrobles ,irtual law library

upon which appellants rely is ob,iously inapplicable to the case at bar+ for+ ha,in% been %i,en 20 (ays fro1 'une 6+ 1949+ within which to ,acate @ot 1048A+ co1plainant (i( not+ on 'une 17+ 1949 8 or within sai( perio( 8 in,a(e or usurp sai( lot. $he ha( 1erely re1aine( in possession thereof+ e,en thou%h the hacien(a owner 1ay ha,e beco1e its co8possessor. Appellants (i( not Crepel or pre,ent in actual or threatene( ... physical in,asion or usurpation.C 2hey e:pelle( ;loria fro1 a property of which she an( her husban( were in possession e,en before the action for forcible entry was file( a%ainst the1 on )ay 17+ 1948+ (espite the fact that the $heriff ha( e:plicitly authori/e( the1 to stay in sai( property up to 'une 26+ 1949+ an( ha( e:presse( the ,iew that he coul( not oust the1 therefro1 on 'une 17+ 1949+ without a <u(icial or(er therefor.

9is 9onor+ the 2rial 'u(%e+ accepte(+ howe,er+ the ,ersion of the prosecution an( foun( that of the (efense unworthy of cre(ence. 2he fin(in%s of fact of the ourt of Appeals+ which fully concurre( in this ,iew+ are Cfinal+C an( our authority to re,iew on certiorari its appeale( (ecision is li1ite( to 0uestions purely of law. 4Appellants 1aintain that the ourt of Appeals has erre(# !1" in not fin(in% their acts C<ustifie( un(er Article 429 of the 3ew i,il o(eC> !2" in hol(in% that the 208(ay perio( of %race %i,en to

.t is ur%e(+ that+ by wee(in% an( refusin% to lea,e @ot 1048A+ ;loria ha( co11itte( a cri1e in the presence of the police1en+ (espite the afore1entione( 208(ay perio(+ which+ appellants clai1+ the sheriff ha( no authority to %rant. 2his contention is 1anifestly untenable+ because# !1" sai( perio( was %rante( in the presence of the hacien(a owner=s representati,e+ appellant aisip+ who+ by not ob<ectin% thereto+ ha( i1plie(ly consente( to or ratifie( the act perfor1e( by the sheriff> !2" ;loria an( her husban( were thereby allowe( to re1ain+ an( ha(+ in fact+ re1aine(+ in possession of the pre1ises+ perhaps to%ether with the owner of the hacien(a or his representati,e+ aisip> !3" the act of re1o,in% wee(s fro1 the ricefiel( was beneficial to its owner an( to who1soe,er the crops belon%e(+ an(+ e,en if they ha( not authori/e( it+ (oes not constitute a cri1inal offense> an( !4" althou%h ;loria an( her husban( ha( been sentence( to ,acate the lan(+ the

<u(%1ent a%ainst the1 (i( not necessarily i1ply that they+ as the parties who ha( tille( it an( plante( thereon+ ha( no ri%hts+ of any &in( whatsoe,er+ in or to the stan(in% crops+ inas1uch as Cnecessary e:penses shall be refun(e( to e,ery possessor+C 4an( the cost of culti,ation+ pro(uction an( up&eep has been hel( to parta&e of the nature of necessary e:penses. 6chanrobles ,irtual law library

.t is+ accor(in%ly+ clear that appellants herein ha(+ by 1eans of ,iolence+ an( without le%al authority therefor+ pre,ente( the co1plainant fro1 C(oin% so1ethin% not prohibite( by law+C !wee(in% an( bein% in @ot 1048A"+ an( co1pelle( her Cto (o so1ethin% a%ainstC her will !stoppin% the wee(in% an( lea,in% sai( lot"+ Cwhether it be ri%ht or wron%+C thereby ta&in% the law into their han(s+ in ,iolation of Art. 286 of the *e,ise( Penal o(e. 7chanrobles ,irtual law library

.n the co11ission of the offense+ the a%%ra,atin% circu1stances of abuse of superior stren%th 10an( (isre%ar( of the respect (ue the offen(e( party+ by reason of her se:+ 11were present+ insofar as the three appellants herein are concerne(. As re%ar(s appellants *o<ales an( Filla(elrey+ there was the a((itional a%%ra,atin% circu1stance of ha,in% ta&en a(,anta%e of their positions as 1e1bers of the local police force. 9ence+ the penalty of i1prison1ent 1ete( out to appellants herein+ which is the 1ini1u1 of the 1a:i1u1 prescribe( in sai( Art. 286+ 12an( the fine i1pose( upon the1+ are in accor(ance with law.chanrobles,irtualawlibrarychanrobles ,irtual law library

B9D*DFO*D+ the (ecision appeale( fro1 is hereby affir1e(+ with costs a%ainst the (efen(ants8appellants. .t is so or(ere(.

Appellant aisip ar%ues that+ not ha,in% use( ,iolence a%ainst the co1plainin% witness+ he shoul( be ac0uitte( of the char%e. .n this connection+ 9is 9onor+ the 2rial 'u(%e+ correctly obser,e(#

*eyes+ '.?.@.+ )a&alintal+ Hal(i,ar+ astro+ Fernan(o+ 2eehan&ee an( ?arre(o+ ''.+ concur.chanrobles,irtualawlibrarychanrobles ,irtual law library

... Bhile it is true that the accuse( aisip (i( not lay han(s on the co1plainant+ unli&e the accuse( *o<ales an( Filla(elrey who were the ones who use( force a%ainst ;loria+ an( while the ourt is also incline( to (iscre(it the clai1 of the co1plainant that Feli: aisip (rew a %un (urin% the inci(ent+ it sufficiently appears fro1 the recor( that the 1oti,ation an( in(uce1ent for the coercion perpetrate( on the co1plainant ca1e fro1 the accuse( aisip. .t was his un(is%uise( an( particular purpose to pre,ent ;loria fro1 enterin% the lan( an( wor&in% on the sa1e. 9e was the one who first approache( ;loria with this ob<ecti,e in 1in(+ an( trie( to pre,ent her fro1 wee(in% the lan(. 9e ha( trie( to stop ;loria fro1 (oin% the sa1e act e,en the (ay pre,ious to the present inci(ent. .t was aisip who fetche( the police1en in or(er to acco1plish his purpose of pre,entin% ;loria fro1 wee(in% the lan( an( 1a&in% her lea,e the pre1ises. 2he police1en obeye( his bi((in%+ an( e,en when the sai( police1en were alrea(y o,er8assertin% their authority as peace officers+ aisip si1ply stoo( by without atte1ptin% to stop their abuses. 9e coul( be har(ly sai( to ha,e (isappro,e( an act which he hi1self in(uce( an( initiate(. 8chanrobles ,irtual law library

5i/on+ '.+ is on lea,e.chanrobles,irtualawlibrarychanrobles ,irtual law library

)a&asiar an( Filla1or+ ''.+ too& no part.

!eirs o" #encilao, Sr. v. CA, $%% SCRA 574

?etween two !2" sets of clai1ants of real property 8 those clai1in% ownership by ac0uisiti,e prescription+ an( those assertin% ownership on the basis of a (ee( of sale recor(e( in the certificate of title of the ,en(or as 1ort%a%ee an( hi%hest bi((er in a foreclosure sale 8 who has a better ri%htI

.n other wor(s+ there was co11unity of purpose between the police1en an( aisip+ so that the latter is %uilty of %ra,e coercion+ as a co8conspirator+ apart fro1 bein% a principal by in(uction. 9chanrobles ,irtual law library

On 12 February 1990 the heirs of @eopol(o Fencilao $r.+ represente( by their A(1inistrator Dlpi(io Fencilao+ file( with the *e%ional 2rial ourt of ?ohol a co1plaint for 0uietin% of title+ reco,ery of possession an(7or ownership+ accountin% an( (a1a%es with prayer for the issuance of writs of preli1inary prohibitory an( 1an(atory in<unction a%ainst the spouses $abas an( *uperta ;epala%o.J1K 2he co1plaint was subse0uently a1en(e( to

inclu(e an action for recon,eyance an( cancellation of title an( to i1plea( (efen(ant 5o1iciano ;epala%o.J2K

2he heirs of @eopol(o Fencilao $r. alle%e( that they were the absolute owners of a parcel of lan( situate( in a1bansa%+ $an .si(ro+ ?ohol+ with an area of 3+624 s0uare 1eters ha,in% inherite( the sa1e fro1 their father+ @eopol(o Fencilao $r.+ who (urin% his lifeti1e was in peaceful+ open+ notorious an( uninterrupte( possession an( en<oy1ent of the property in the concept of owner+ (eclare( the property for ta:ation purposes un(er 2a: 5eclaration 3o. 37 68344 an( reli%iously pai( the real estate ta:es. 9e li&ewise ha( the property consistently (eclare( as his own in other (ocu1ents+ e.%.+ those rele,ant to the 1987 o1prehensi,e A%rarian *efor1 Pro%ra1 ! A*P". After his (eath+ his heirs continue( to possess an( en<oy the property.

!c" 2he lot in 0uestion ha( been title( to (efen(ant $abas ;epala%o an( subse0uently title( to his son+ (efen(ant 5o1iciano ;epala%o+ un(er 2ransfer ertificate of 2itle 3o. 18621 by ,irtue of a (ee( of (onation e:ecute( on 24 October 1988 by $abas ;epala%o in fa,or of 5o1iciano ;epala%o> an(+ !(" As state( in the co11issioner=s report+ C.f the title( lot of 5o1iciano ;epala%o is plotte( in accor(ance with the technical (escription appearin% in the title+ it will be relocate( to 1ore than 219 &ilo1eters eastwar( away fro1 its suppose( actual location. 2his a1ounts to its non8 e:istence.CJ3K

2he ;epala%o spouses+ on the other han(+ (enie( all the 1aterial alle%ations in the co1plaint an( clai1e( that they were the re%istere( owners of a 4+9708 s0uare 1eter property locate( in an(un%ao alapo+ $an .si(ro+ ?ohol+ an( co,ere( by 2 2 3o. 16042+ pre,iously a portion of a 1+401+470 s0uare81eter lan( ori%inally owne( by a certain Pe(ro @uspo. 2he entire parcel of lan( was 1ort%a%e( by Pe(ro @uspo to the Philippine 3ational ?an& !P3?" as security for a loan. $ince @uspo faile( to pay the obli%ation upon 1aturity the 1ort%a%e was foreclose(. 2hereafter P3?+ the hi%hest bi((er in the foreclosure sale+ con,eye( the whole property to fifty8si: !46" ,en(ees a1on% who1 were the spouses $abas an( *uperta ;epala%o who ac0uire( the 4+970 s0uare81eter portion thereof. $ince then+ they ha( been the owner an( possessor of the lan( until they (onate( the sa1e in 1988 to their son 5o1iciano ;epala%o.

2he trial court then rule( in fa,or of the Fencilaos hol(in% that they ha( been in possession+ culti,ation an( en<oy1ent of the liti%ate( property for 1ore than thirty !30" years an( that the i1pro,e1ents therein were intro(uce( by the1 lon% before any title was e,er issue( to the ;epala%os. 2he lower court a((e( that there was a1ple e,i(ence showin% that the ;epala%os &new when they bou%ht the property fro1 P3? that the lan( ha( lon% been possesse( an( en<oye( in the concept of owners by the Fencilaos. 2hus+ while un(er or(inary circu1stances a certificate of title is in(efeasible+ it is not so when a person with prior &nowle(%e of the ownership an( possession of the lan( by another obtains title to it.

2he ;epala%os appeale( the (ecision of the trial court. After (ue consi(eration+ the ourt of Appeals re,erse( the trial court an( (eclare( the ;epala%os owners of the (ispute( property 8

2he trial court appointe( a co11issioner to sur,ey the liti%ate( property an( (eter1ine the areas clai1e( by both parties. 2he co11issioner reporte( that the area clai1e( by the Fencilaos was inclu(e( in the title( property of the ;epala%os. On the basis of the co11issioner=s report an( the other pieces of e,i(ence presente( by the parties+ the trial court foun( the followin%# !a" 2he property clai1e( by the ;epala%os consiste( of 4+970 s0uare 1eters+ while that of the Fencilaos co,ere( an area of 22+401.48 s0uare 1eters as in(icate( in the sur,ey plan sub1itte( by Dn%r. 'esus 9. $ar1iento+ the court appointe( co11issioner> !b" .nsofar as the sur,ey plan an( report sub1itte( by Dn%r. $ar1iento were concerne(+ these in(ubitably establishe( the fact that the Fencilaos owne( the e:cess area of 16+431.48 s0uare 1eters which was clearly outsi(e the area clai1e( by the ;epala%os>

D,i(ently+ (efen(ant8appellants spouses ;epala%o were purchasers in %oo( faith an( for ,alue. 2hey ac0uire( their share in the property fro1 the Philippine 3ational ?an& !P3?" which was the re%istere( owner. D,en assu1in% they ha( &nowle(%e of the plaintiff8appellees= possession of the sai( property at the ti1e of the purchase+ it was P3? which was the re%istere( owner of the property. 2he title was transferre( to the ban& after the foreclosure sale of the property 1ort%a%e( by the pre,ious re%istere( owner+ Pe(ro @uspo. 2hus where the certificate of title is in the na1e of the ,en(or when the lan( is sol(+ the ,en(ee for ,alue has the ri%ht to rely on what appears on the certificate of title. 2he rule that all persons (ealin% with property co,ere( by 2orrens ertificate of 2itle are not re0uire( to %o beyon( what appears on the face of the title is well8settle(.

;rantin% that plaintiff8appellees were possessors of the property for a lon% ti1e+ they ne,er raise( ob<ections to the transactions affectin% the lan(.

2here was no action 1a(e or any protest recor(e( with the *e%ister of 5ee(s.

of the property for which ta:es ha,e been pai(.J10K $tate( (ifferently+ ta: (eclarations an( ta: receipts are only pri1a facie e,i(ence of ownership or possession.

5efen(ant8appellants= clai1 of ownership was e,i(ence( by certificates of title issue( in their na1es. A 2orrens ertificate of 2itle is the best e,i(ence of ownership of a re%istere( lan(. As a%ainst the alle%ations of plaintiff8 appellees+ (efen(ant8appellants are the ones entitle( to the property. 5efen(ant8appellants= ownership of the property was e,i(ence( by a certificate of title while plaintiff8appellees relie( 1erely on ta: (eclaration. 2orrens title is %enerally a conclusi,e e,i(ence of the ownership of the lan( referre( to therein. 5efen(ant8appellants ac0uire( the lan( in a foreclosure sale an( there was no e,i(ence to show that plaintiff8appellees were (efrau(e( when the property was 1ort%a%e( an( then sol( : : : : J4K

2he 1otion for reconsi(eration by the Fencilaos ha,in% been (enie(J4K they file( the instant petition for re,iew.

?ut assu1in% e: %ratia ar%u1enti that petitioners ha( in(ee( ac0uire( the lan( they were clai1in% by prescription+ there li&ewise e:ists a serious (oubt on the precise i(entity of the (ispute( property. Bhat petitioners clai1e( in their co1plaint was a parcel of lan( locate( in a1bansa%+ $an .si(ro+ ?ohol+ with an area of 3+624 s0uare 1eters.J11K 2his clearly (iffers fro1 the piece of lan( re%istere( in the na1e of the ;epala%os+ which is @ot 3o. A873 of the $ub(i,ision Plan !@* " Ps(860448+ @* *ec. 3o. 984241+ an( locate( in an(un%ao alapo+ $an .si(ro+ ?ohol+ with an area of 4+970 s0uare 1eters.J12K D,en the co11issioner=s report faile( to clarify the (ifference in the area an( location of the property clai1e(. .n or(er that an action to reco,er ownership of real property 1ay prosper+ the person who clai1s that he has a better ri%ht to it 1ust pro,e not only his ownership of the sa1e but also satisfactorily pro,e the i(entity thereof.J13K

.n awar(in% the (ispute( lan( to petitioners+ the trial court erroneously foun( that petitioners ha( been in possession an( en<oy1ent of the property for 1ore than thirty !30" years. .t shoul( be note( that the lan( in (ispute is a re%istere( lan( place( un(er the operation of the 2orrens syste1 way bac& in 1949+ or 1ore than thirty !30" years before petitioners institute( the present action in the court a 0uo+ an( for which Ori%inal ertificate of 2itle 3o. 400 was issue(.J6K 2he rule is well8settle( that prescription (oes not run a%ainst re%istere( lan(. 2hus+ un(er $ec. 47 of P5 1429+ otherwise &nown as the Property *e%istration 5ecree+ it is specifically pro,i(e( that Cno title to re%istere( lan( in (ero%ation of that of the re%istere( owner shall be ac0uire( by prescription or a(,erse possession.C A title+ once re%istere(+ cannot be (efeate( e,en by a(,erse+ open an( notorious possession. 2he certificate of title issue( is an absolute an( in(efeasible e,i(ence of ownership of the property in fa,or of the person whose na1e appears therein. .t is bin(in% an( conclusi,e upon the whole worl(.J7K All persons 1ust ta&e notice an( no one can plea( i%norance of the re%istration.J8K

As a %eneral rule+ where the certificate of title is in the na1e of the ,en(or when the lan( is sol(+ the ,en(ee for ,alue has the ri%ht to rely on what appears on the face of the title.J14K 9e is un(er no obli%ation to loo& beyon( the certificate an( in,esti%ate the title of the ,en(or appearin% on the face of the certificate. ?y way of e:ception+ the ,en(ee is re0uire( to 1a&e the necessary in0uiries if there is anythin% in the certificate of title which in(icates any clou( or ,ice in the ownership of the property.J14K Otherwise+ his 1ere refusal to belie,e that such (efect e:ists+ or his willful closin% of his eyes to the possibility of the e:istence of a (efect in his ,en(or=s title+ will not 1a&e hi1 an innocent purchaser for ,alue if it afterwar(s (e,elops that the title was in fact (efecti,e+ an( it appears that he ha( such notice of the (efect as woul( ha,e le( to its (isco,ery ha( he acte( with that 1easure of precaution which 1ay reasonably be re0uire( of a pru(ent 1an in a li&e situation.J16K

3either can the ta: (eclarations an( ta: receipts presente( by petitioners as e,i(ence of ownership pre,ail o,er respon(ents= certificate of title which+ to reiterate+ is an incontro,ertible proof of ownership. .t shoul( be stresse( that ta: (eclarations an( receipts (o not by the1sel,es conclusi,ely pro,e title to the lan(.J9K 2hey only constitute positi,e an( stron% in(ication that the ta:payer concerne( has 1a(e a clai1 either to the title or to the possession

Petitioners 1aintain that it is the e:ception+ not the %eneral rule+ which shoul( be applie( in this case. 2hey ar%ue that respon(ents ha( &nowle(%e of prior possession an( en<oy1ent by petitioners when they purchase( the property. 2hus+ they were not innocent purchasers for ,alue an( coul( not in,o&e the in(efeasibility of their title.

Be (o not a%ree. 2he e:ception conte1plates a situation wherein there e:ists a flaw in the title of the ,en(or an( the ,en(ee has &nowle(%e or at least ou%ht to ha,e &nown of such flaw at the ti1e he ac0uire( the property+ in which case+ he is not consi(ere( as an innocent purchaser for ,alue. .n the instant case+ we (iscern nothin% fro1 the recor(s showin% that the title of P3?+ the ,en(or+ was flawe(. Petitioners not only faile( to substantiate their clai1 of ac0uisiti,e prescription as basis of ownership but they also faile( to alle%e+ an( 1uch less a((uce+ any e,i(ence that there was a (efect in the title of P3?. .n the absence of such e,i(ence+ the presu1ption leans towar(s the ,ali(ity of the ,en(or=s title.

$O O*5D*D5.

5a,i(e+ 'r.+ ! hair1an"+ Fitu%+ Pan%aniban+ an( Luisu1bin%+ ''.+ concur.

&clarit v. CA, $33 SCRA $39

2herefore+ inas1uch as there was no flaw in the title of P3?+ pri,ate respon(ents ri%htly belie,e( that they coul( an( (i( ac0uire li&ewise a flawless title. .n(ee(+ as a result of the (ee( of con,eyance between P3? an( pri,ate respon(ents+ there was trans1ission of ownership an( the latter steppe( into the shoes of the for1er hence entitle( to all the (efenses a,ailable to P3?+ inclu(in% those arisin% fro1 the ac0uisition of the property in %oo( faith an( for ,alue. Petitioners see& the re,iew on certiorari of the (ecision of the ourt of Appeals pro1ul%ate( on $epte1ber 28+ 1990+ affir1in% with 1o(ification the (ecision of the *e%ional 2rial ourt of ?ohol+ ?ranch 2+ 2a%bilaran ity+ (is1issin% their co1plaint for 0uietin% of title with (a1a%es an( (eclarin% the (efen(ant !pri,ate respon(ent herein" the owner of the parcels of lan( sub<ects of contro,ersy.

Finally+ another consi(eration that 1ilitates hea,ily a%ainst the present petition is the unusual silence of petitioners while the ownership of the (ispute( lan( transferre( fro1 one person to another. 2here were at least three !3" transactions on recor( in,ol,in% the property# first+ the contract of 1ort%a%e between @uspo an( P3? whereby the property was use( as security for the loan contracte( by @uspo> secon(+ the foreclosure of 1ort%a%e upon the failure of @uspo to pay the loan an( the subse0uent sale of the property at public auction> an(+ thir(+ the sale of the property to fifty8 si: !46" ,en(ees+ a1on% who1 were the ;epala%o spouses. Dach of these transactions was re%istere( an( a correspon(in% transfer certificate issue( in fa,or of the new owner. Eet in all these+ petitioners ne,er institute( any action contestin% the sa1e nor re%istere( any ob<ection thereto> instea(+ they re1aine( silent. 2hus+ they are now estoppe( fro1 (enyin% the title of the present owner. 9a,in% faile( to assert their ri%hts+ if any+ o,er the property warrants the presu1ption that they ha,e either aban(one( the1 or (ecline( to assert the1. Or+ it coul( li&ewise be inferre( therefro1 that petitioners the1sel,es were not con,ince( in the ,ali(ity of their clai1.

.n 1943+ the late 'uan Oclarit+ petitioners= pre(ecessor8in8interest+ alle%e(ly purchase( fro1 )artin )acalos a parcel of unre%istere( lan( locate( in Antipolo+ ;arcia89ernan(e/+ ?ohol+ with no per1anent lan(1ar&s or boun(aries in consi(eration of the su1 of one hun(re( !P100.00" pesos. 2he (ee( of sale si1ply (escribe( the property as boun(e( on the north an( east by the property of 9er1ini%il(o ?a<a+ on the south by )ariano ;ales an( on the west by a broo&.

.n 1946+ Oclarit bou%ht fi,e 1ore parcels of lan( locate( in Antipolo an( -lbu<an+ also in ;arcia89ernan(e/+ ?ohol+ fro1 5al1acio ;ales in consi(eration of the su1 of si: hun(re( !P600.00" pesos. Parcel .F thereof is (escribe( as follows#

B9D*DFO*D+ the petition is 5D3.D5. 2he 5ecision of the ourt of Appeals of 31 'uly 1994 as well as its *esolution of 14 5ece1ber 1994 (enyin% reconsi(eration is AFF.*)D5. osts a%ainst petitioners.

A parcel of an irri%ate( rice an( coconut lan(s+ boun(e( on the 3O*29+ by the lan( of @eon )acalos> DA$2+ by the lan( of )ariano ;ales> $O-29+ by the lan( of Pablo ;ales+ an( on the BD$2+ by the lan( of $aturnino ;ales> containin% an area of 9 ares an( 28 centares+ 1ore or less+ without ,isible lan(1ar&s of the boun(aries of the sa1e+ co,ere( by 2a: 5eclaration 3o. *8 19914 now transferre( an( (eclare( un(er the na1e of the herein FD35DD+ '-A3 O @A*.2+ with the total assesse( ,alue of P30.00.

.n 1974+ the heirs of Oclarit file( an action for the 0uietin% of title an( (a1a%es a%ainst respon(ent ?alasabas before the then ourt of First .nstance of ?ohol+ (oc&ete( as i,il ase 3o. 3103. 2he co1plaint alle%e( that in 'anuary 1969+ pri,ate respon(ent entere( the properties sub<ect of the action. Failin% to wor& on the area plante( to palay+ pri,ate respon(ent cli1be( the coconut trees+ replace( the C'.O.C 1ar&in%s on the trees with CF.;.C+ representin% Felipa ;ales+ his 1other+ an( cause( to be recor(e( in the ca(astral sur,ey of the lan( the na1e of Felipa ;ales as clai1ant a%ainst 'uan Oclarit. 2he heirs of Oclarit consi(ere( the acts of pri,ate respon(ent as ha,in% cast a clou( of (oubt o,er their title to the property an( therefore (epri,e( the1 of the en<oy1ent of the fruits of the coconut trees. Petitioners further alle%e( that the late 'uan Oclarit+ fro1 the ti1e of the ac0uisition of sai( properties+ ha( e:ercise( (o1inion an( ownership thereon openly+ peacefully+ a(,ersely an( uninterrupte(ly. .t was also clai1e( that the (ecease( plante( coconut trees an( other crops on the property+ en<oye( their pro(uce an( pai( the realty ta:es on the lan( which was continue( by his heirs after his (eath.

)acula an( so1e (isintereste( persons. .n his report (ate( )ay 24+ 1979+ the co11issioner 1a(e the followin% fin(in%s an( obser,ations#

Bhen plaintiffs were as&e( the e:tent of their lan( un(er the ta: (eclaration 3o. 5813934+ they pointe( to the un(ersi%ne( that fi%ure in Anne: =A= which is e1brace( fro1 corners 1+ 2+ 3+ 4+ 4+ 6+ 7+ 8+ 9+ 10+ 11+ 12+ 13+ 14 bac& to 1 by a re( ball pen bro&en lines. 2he area of this is appro:i1ately 3+639 s0uare 1eters !.3639 ha.". 2he area of the ta: (eclaration 3o. 5813934 is .0928 ha. 2his Anne: =A=+ which is 1a(e an inte%ral part of this report has been trace( fro1 the file of the ?ureau of @an(s Office in 'a%na+ ?ohol. 2he personnel in that office infor1e( the un(ersi%ne( that no @ot nu1bers ha,e as yet been assi%ne( an( that the tra,erse is not yet co1pute( because it will be (one by .?). 2his lan( is partly cocal !on the northeastern portion" an( partly ricelan(. 2here are thirty !30" coconut trees 1ostly of which are 40 to 40 years ol(>

.n his answer+ respon(ent ?alasabas clai1s to ha,e actually an( lawfully possesse( the (ispute( parcels of lan( Csince ti1e i11e1orialC. Accor(in% to respon(ent+ the first parcel of lan( was owne( by his 1other+ Felipa ;ales+ by ,irtue of inheritance+ an( (eclare( in her na1e un(er 2a: 5eclaration 3o. 581120> while the secon( parcel of lan( was ac0uire( by hi1 fro1 his own 1other as e,i(ence( by a (ee( of absolute sale e:ecute( on )arch 20+ 1963 an( which he (eclare( in his na1e un(er 2a: 5eclaration 3o. 581006. .n a((ition+ respon(ent li&ewise alle%e( possession of the parcels of lan( openly+ peacefully+ a(,ersely an( continuously without (isturbance fro1 any party until he was 1oleste( by the heirs of Oclarit. .t was conten(e( that Oclarit hi1self surreptitiously (eclare( these lan(s for ta:ation purposes in his own na1e.

5efen(ant Hacarias ?alasabas pointe( the e:tent of his clai1 un(er the ta: (eclaration 3o. 581120 as that area in the ca(astral sur,ey. .n other wor(s he refer!re(" to his clai1s as that fi%ure in Anne: =A= e1brace( by corners 1+ a+ 2+ 3+ 4+ b+ c+ (+ e+ 11+ 12+ f+ 13+ 14 to 1 an( sha(e( by pencil (ia%onal lines an( which is title( =9*$. OF '-A3 O @A*.2 F$. FD@.PA ;A@D$= in the ca(astral sur,ey. 2his contains an area of 1+420 s0uare 1eters !.1420 ha."+ 1ore or less. 2he ta: (eclaration 3o. 581120 has an area of .44010 ha.>

.n the course of the procee(in%s+ the trial court appointe( 2eoti1o ?or<a+ 5eputy Pro,incial Assessor of ?ohol+ as co11issioner for the purpose of (eter1inin% whether the lan(s (escribe( in the co1plaint an( co,ere( by 2a: 5eclarations 3os. 5813934 an( 5813926 o,erlappe( with any of the lan(s (escribe( in the (efen(ant=s affir1ati,e an( special (efenses an( co,ere( by 2a: 5eclarations 3os. 581120 an( 581006. .n 1978+ the court8 appointe( co11issioner con(ucte( a relocation sur,ey an( an ocular inspection of the properties in contro,ersy in the presence of the heirs of Oclarit+ their counsel+ respon(ent ?alasabas+ a police1an+ an( a(<oinin% owners Procopio Oclarit+ ;alicana '. Pa%aran+ )a:i1a )acula+ Felipe

Plaintiffs an( (efen(ants both clai1e( the sa1e parcel of lan( on the western portion of Anne: =A= an( which is title( =F*A3 .$ A )A A@O$ F$. HA A*.A$ ?A@A$A?A$= in the ca(astral sur,ey as that which is represente( by their ta: (eclaration 3os. 5813926 an( 581006+ respecti,ely. 2his parcel which is e1brace( by corners A+ ?+ + 5+ D+ F+ ;+ 9+ .+ '+ M to A contains an area of 3+098 s0uare 1eters !.3098 ha."+ 1ore or less. 2he ta: (eclaration 3o. 5813926 in the na1e of 'uan Oclarit contains an area of . 0204 ha. an( the ta: (eclaration 3o. 581006 of (efen(ant has an area of . 8147 ha. 2here are appro:i1ately 200 coconut trees 1any of which are still non8bearin%. 2he contour of this lot is %enerally hilly. !*ollo+ p. 39"

.n its (ecision+ the lower court 1a(e the followin% fin(in%s# the heirs of Oclarit an( ?alasabas are layin% clai1 o,er the sa1e parcels of lan(> 5al1acio ;ales+ who sol( to Oclarit the parcel of lan( co,ere( by 2a: 5eclaration 3o. 13934+ was an uncle of ?alasabas= 1other+ Felipa ;ales> )artin )acalos+ the ,en(or of the lan( co,ere( by 2a: 5eclaration 3o. 13926+ was the cousin

of ?alasabas= %ran(1other+ ;uiller1a ;ales> the area bein% clai1e( by the heirs of Oclarit is+ per co11issioner=s report+ appro:i1ately 3+639 s0uare 1eters !.3639 ha." while 2a: 5eclaration 3o. 13934 shows that it is only 928 s0uare 1eters !.0928 ha." an( the area of the secon( parcel per co11issioner=s report is appro:i1ately 3+098 s0uare 1eters !.3098 ha." while that reflecte( in 2a: 5eclaration 3o. 13926 is only 204 s0uare 1eters !.0204 ha.".

$O O*5D*D5.

On appeal+ respon(ent court rule( that petitioners faile( to pro,e either le%al or e0uitable title to the two parcels of lan( which are necessary in an action for 0uietin% of title. Petitioners= clai1 of ownership was base( principally on ta: (eclarations which+ howe,er+ are not conclusi,e e,i(ence of ownership.

Fro1 these fin(in%s+ the lower court e:presse( its surprise as to the si/e of the area bein% clai1e( by the heirs of Oclarit accor(in% to the co11issioner=s report in co1parison with the areas shown in 2a: 5eclarations 3os. 13934 an( 13926. Bhile reco%ni/in% that areas state( in ta: (eclarations are not Cappro:i1ately e:act+C the lower court nonetheless consi(ere( the (iscrepancies between the actual areas bein% clai1e( an( those shown in the ta: (eclarations as Ctoo ob,ious to be ta&en with e:cuse.C )oreo,er+ it (oubte( the cre(ibility of petitioners for their failure to e:plain why the a(<oinin% owners na1e( in their clai1 are (ifferent fro1 the a(<oinin% owners foun( by the co11issioner. Further1ore+ if petitioners were in(ee( the real owners of the two parcels of lan(+ they woul( ha,e ta&en steps for the correction of the s1aller areas state( in the ta: (eclarations. onclu(in% that petitioners were clai1in% 1uch bi%%er parcels than what their e,i(ence can support un(er <ustifiable circu1stances+ the trial court thus (ispose( of the case as follows#

9owe,er+ the ourt of Appeals (isa%ree( with the trial court=s (eclaration that pri,ate respon(ent is the owner of the two parcels of lan( an( such ownership shoul( be reco%ni/e( by petitioners. .t consi(ere( such conclusion of the lower court as Cbereft of any con,incin% e,i(enceC because ta: receipts+ ta: (eclarations an( sur,ey plans are not conclusi,e an( in(isputable bases of ownership. Accor(in%ly+ it (ispose( of the appeal in the followin% tenor#

B9D*DFO*D+ in ,iew of the fore%oin%+ the (ecision of the ourt a 0uo (is1issin% the plaintiffs= co1plaint is hereby AFF.*)D5. 2he portions thereof (eclarin% the (efen(ant as the owner of the lots co,ere( by 2a: 5eclarations 3os. 581120 an( 581006+ respecti,ely+ an( or(erin% the plaintiffs to pay the (efen(ant attorney=s fee of PN400.00+ liti%ation e:penses of PN400.00 an( costs of the procee(in%s are hereby *DFD*$D5 an( $D2 A$.5D. Bithout pronounce1ent as to cost.

B9D*DFO*D+ fin(in% a prepon(erance of e,i(ence in fa,or of the (efen(ant+ <u(%1ent is hereby ren(ere(# $O O*5D*D5. !*ollo+ p. 40" 1 5is1issin% the co1plaint> 2heir 1otion for reconsi(eration of sai( (ecision ha,in% been (enie(+ the heirs of Oclarit institute( the instant petition. Pri,ate respon(ent (i( not appeal the abo,e (isposition.

2 5eclarin% the (efen(ant as the owner of the lots co,ere( by 2a: 5eclarations 3os. 581120 an( 581006 with area of .4010 hectare an( .8147 hectare+ respecti,ely an( or(erin% the plaintiffs to reco%ni/e such ownership by the (efen(ant> an(

3 Or(erin% the plaintiffs to pay the (efen(ant attorney=s fee of P400.00 an( liti%ation e:penses of P400.00 an( to pay the costs of the procee(in%s.

2he petition is 1oore( pri1arily on the followin% contentions# !a" the filin% of i,il ase 3o. 3103 was the only le%al re1e(y a,ailable to petitioners a%ainst the C1alicious an( unwarrante( actuationsC of pri,ate respon(ent> !b" Oclarit=s un(isturbe( clai1 of ownership of the two parcels of lan( which he ac0uire( in 1943 an( 1946+ ha( spanne( 1ore than ten years until pri,ate respon(ent (isturbe( it in 1969> !c" the two parcels of lan( 1entione( by pri,ate respon(ent in his answer are Cforei%n an( alienC to the two parcels

which Oclarit bou%ht fro1 5al1acio ;ales an( )artin )acalos an( because these ,en(ors ha( been in possession of the property Cfro1 ti1e i11e1orialC+ the Cwaters of prescription ha,e set inC> !(" the ourt of Appeals faile( to appreciate the real worth of D:hibits C3C to CPC otherwise it woul( ha,e note( that petitioners= Cclear ownership o,er sai( two !2" parcels of lan( in liti%ation as the (escription foun( therein <ibe( 1ateriallyC with the a,er1ents in the co1plaint+ an( !e" the lower court+ in a (ecision in another case+ cite( !*a1os ,. ourt of Appeals 112 $ *A 443" hol(in% that ta: receipts are stron% e,i(ence of possession as no one in his ri%ht 1in( woul( pay realty ta:es year after year for property not in his actual possession.

any basis for clai1in% that pri,ate respon(ent cast a clou( of (oubt to their title o,er their two parcels of lan(.

Fro1 the abo,e sub1issions+ it is at once apparent that petitioners assail the factual fin(in%s of both courts below. 9owe,er+ there is no basis for consi(erin% this case as an e:ception to the %eneral rule that the factual fin(in%s of the ourt of Appeals are bin(in% on an( are not re,iewable by this ourt !Oporto ,. ourt of Appeals+ 208 $ *A 878 J1992K". A careful re,iew of the (ecisions below (o not show that both courts o,erloo&e( essential facts which+ if consi(ere(+ woul( ha,e chan%e( the outco1e of the case. )oreo,er+ the 1atter of %i,in% cre(ence to e,i(ence presente( is best a((resse( by the trial <u(%e who is in a better position than the appellate court to appreciate the wei%ht an( e,i(entiary ,alue of the testi1onies of witnesses who ha,e appeare( before hi1 !$apu8an ,. ourt of Appeals+ 214 $ *A 701 J1992K". .n ci,il cases+ the lower court 1ust lean towar(s a party who successfully presents prepon(erance of e,i(ence in his fa,or.

)ore+ the (ee( of sale wherein )artin )acalos con,eye( to Oclarit a parcel of lan( (i( not e,en in(icate with particularity the area of the lan( co,ere( thereby. 2his e:plains why they in(iscri1inately pointe( at boun(aries which are e,en beyon( what coul( ha,e been bou%ht by Oclarit. Althou%h it is true that what (efines a piece of lan( is not the area 1entione( in its (escription but the boun(aries therein lai( (own !F(a. (e 2an ,. .nter1e(iate Appellate ourt+ 213 $ *A 94 J1992K"+ in contro,ersial cases as in this case where there appears to be an o,erlappin% of boun(aries+ the actual si/e of the property %ains i1portance. 2hus+ the lower court correctly stresse( that it woul( ha,e (one petitioners so1e %oo( ha( they correctly specifie( e,en in their ta: (eclarations the areas of the lan( they were clai1in%. .t is well settle( that anyone who clai1s that he has a better ri%ht to the property+ 1ust pro,e both ownership an( i(entity of the sai( property !?eo ,. ourt of Appeals+ 200 $ *A 474 J1991K+ citin% Flores ,. .nter1e(iate Appellate ourt+ 178 $ *A 717 J1989K". An area (eli1ite( by boun(aries properly i(entifies a parcel of lan(.

.t is thus too late in the (ay for petitioners to clai1 that the parcels of lan( which Oclarit ha( bou%ht are CalienC or (ifferent fro1 the parcels which pri,ate respon(ent ha( alle%e(ly ac0uire( fro1 his 1other both by inheritance an( by purchase. 2his is clearly a factual issue which is beyon( the a1bit of this ourt=s <uris(iction.

Bith re%ar( to ta: (eclarations as bases for clai1 of ownership+ petitioners capitali/e on what was ob,iously an obiter in !*a1os ,. ourt of Appeals" !supra" that no one in his ri%ht 1in( woul( be continuously payin% ta:es for property that is not in his actual possession. On the contrary+ any person who clai1s ownership by ,irtue of ta: (eclarations 1ust also pro,e he is in actual possession of the property. 2hus+ proof that the property in,ol,e( ha( been (eclare( for ta:ation purposes fro1 1908 to 1944+ (i( not constitute proof of possession+ nor is it proof of ownership in the absence of the clai1ant=s actual possession of sai( property !5e @una ,. ourt of Appeals+ 212 $ *A 276 J1992K".

.t was precisely for the purpose of pointin% out with particularity the parcels of lan( in,ol,e( that the lower court appointe( a co11issioner whose fin(in%s 1ay be a(opte( in toto by the trial court !$ee# Apurillo ,. ;arciano+ 28 $ *A 1044". 9a( the petitioners been in possession of soli( e,i(ence that the parcels of lan( they are clai1in% are CalienC or Cforei%nC to those (eclare( by pri,ate respon(ent as his+ they shoul( ha,e 0uestione( the co11issioner=s report which was base( on the relocation sur,ey an( ocular inspection which were con(ucte( in their presence. )oreo,er+ petitioners= clai1 that their property is (ifferent fro1 those of pri,ate respon(ent=s is in(ee( antithetical to their filin% of the co1plaint for 0uietin% of title 8 there woul( not ha,e been

.n the sa1e ,ein+ ta: receipts an( (eclarations of ownership for ta:ation purposes beco1e stron% e,i(ence of ownership ac0uire( by prescription when acco1panie( by proof of actual possession of the property !2abuena ,. ourt of Appeals+ 196 $ *A 640 J1991K> 5irector of @an(s ,. .nter1e(iate Appellate ourt+ 209 $ *A 214 J1992K".

As earlier state(+ pri,ate respon(ent (i( not appeal fro1 the a(,erse (ecision of the appellate court. Eet+ respon(ent ,entures to i1plore this ourt to nullify an( re,erse the (ecretal portion of the (ecision sub<ect of this

petition an( to (eclare hi1 the owner of the lots co,ere( by his 2a: 5eclarations 3os. 581120 an( 581006. 2his cannot be le%ally (one.

$ettle( is the rule that a party is barre( fro1 assailin% the correctness of a <u(%1ent not appeale( fro1 by hi1. An appellee 1ay only 1a&e counter state1ent of errors to sustain the <u(%1ent on other %roun(s but not to a((uce ar%u1ents which woul( otherwise 1o(ify or re,erse the sa1e+ for in such case+ an appeal 1ust ha,e been seasonably file( !.to%on8$uyoc )ines ,. 3@* + 117 $ *A 423 J1982K an( cases cite( therein". 2here bein% no appeal ta&en by pri,ate respon(ent fro1 the a(,erse <u(%1ent of respon(ent court+ the (ecision has beco1e final as a%ainst hi1 an( can no lon%er be re,iewe(+ 1uch less re,erse(+ by this ourt. 2hat respon(ent 1ay ha,e been in possession of the (ispute( properties since 1964 is of no 1o1ent. 2his ourt is not a ca(astral court before which respon(ent can see& confir1ation of title.

On Au%ust 4+ 1988+ pri,ate respon(ents brou%ht an action for reco,ery of possession+ accountin% an( (a1a%es a%ainst petitioners in the *e%ional 2rial ourt of 2a%bilaran ity. 2hey alle%e(J1K that in the 1900=s+ their %ran(father+ *oberto utan(a+ owne( two parcels of lan( in ?ohol. One ha( an area of 31.0929 hectares an( was co,ere( by 2a: 5eclaration 3o. 1246+ J2K while the other was 7.0924 hectares an( was co,ere( by 2a: 5eclaration 3o. 1247.J3K ?oth ta: (eclarations were in *oberto utan(a=s na1e. -pon *oberto utan(a=s (eath+ these lan(s were inherite( by his chil(ren+ na1ely# 5o0ue+ 5ie%o+ Pe(ro+ An(res+ an( Anastacia+ all surna1e( utan(a. D:cept for 5o0ue who staye( in ?ohol an( a(1inistere( the lan(s+ all of *oberto utan(a=s chil(ren establishe( resi(ence in @eyte. .n 1987+ they returne( to ?ohol to personally wor& the inherite( lan(s. 2heir plan+ howe,er+ was frustrate( as petitioners+ who were occupyin% the lan(s+ refuse( to lea,e. Pri,ate respon(ent thus praye( that each be (eclare( owner of 174 of the sub<ect real properties an( that petitioners be or(ere( to return to the1 sai( properties.

B9D*DFO*D+ the petition is hereby 5D3.D5 for lac& of 1erit.

$O O*5D*D5.

Feliciano+ *o1ero+ )elo an( Fitu%+ ''.+ concur.

C'tanda v. !eirs o" Ro(erto C'tanda, 335 SCRA 41%

.n (ue ti1e+ petitioners file( their answers. One was prepare( by the iti/en=s @e%al Assistance Office+ while the other one+ which was the one actually consi(ere( (urin% the trial+ was prepare( by the ?ureau of @e%al Assistance of the 5epart1ent of A%rarian *efor1. onten(in% that pri,ate respon(ents ha( no cause of action+ petitioners (enie( that pri,ate respon(ents= pre(ecessor8in8interest+ *oberto utan(a+ was the ori%inal owner of the lan(s in 0uestion. .nstea(+ they clai1e( that the owner was their uncle an( pre(ecessor8in8interest+ Anastacio utan(a. .t was alle%e( that Anastacio utan(a (ie( without chil(ren an( that the real properties in 0uestion were inherite( by his brothers an( sisters whose chil(ren are the present petitioners. lai1in% a better ri%ht to possess the sub<ect properties+ petitioners alle%e( that while they occupie( the shares which their parents inherite( fro1 Anastacio utan(a+ so1e of the1 also wor&e( as tenants culti,atin% the lan(s of their co8petitioners. 2hey file( a counterclai1 in which they sou%ht the reco,ery of (a1a%es fro1 pri,ate respon(ents.J4K

2his is a petition for re,iew of the (ecision of the ourt of Appeals (ate( )arch 31+ 1992 in .A.8;.*. F 3o. 24446+ insofar as it re,erses the (ecision of the *e%ional 2rial ourt+ ?ranch 1+ 2a%bilaran ity (eclarin% petitioners as the true an( lawful owners of the sub<ect lan(s.

2he bac&%roun( of this case is as follows#

On $epte1ber 28+ 1989+ the trial court ren(ere( its (ecisionJ4K (eclarin% petitioners to ha,e ac0uire( the ownership of the sub<ect properties throu%h prescription an( (is1issin% pri,ate respon(ents= co1plaint. 2he court or(ere( pri,ate respon(ents to ,acate the properties an( re1o,e whate,er i1pro,e1ents they 1ay ha,e 1a(e+ to restore petitioners in possession of the lan(s+ an( to cease fro1 layin% further a(,erse clai1s o,er the lan(s. As basis for its rulin%+ the trial court 1a(e the followin% fin(in%s#

.n the assess1ent of the e,i(ence of the parties the court fin(s the e,i(ence of the (efen(ants prepon(erant an( ha( establishe( their case a%ainst plaintiffs+ a1on% the 1ost outstan(in% facts are as follows#

8. 2hat+ Anastacio utan(a=s ri%ht o,er the lan( an( succee(e( by (efen(ants since 1933 has beyon( any clou( of (oubt been sufficiently establishe(.J6K

1. D,en plaintiffs (ocu1ent !D:hibit C C" ,isayan written testa1ent7state1ent of Luirico ?ecauan (ate( February 24+ 1934+ it a(1itte( that before 1934 Anastacio utan(a ha( been in the possession of the lan( in 0uestion>

Pri,ate respon(ents appeale( to the ourt of Appeals. On )arch 31+ 1992+ the appellate court ren(ere( a (ecisionJ7K which+ while affir1in% the (is1issal of the case a%ainst petitioners+ nonetheless (eclare( that there was no sufficient e,i(ence that they were the owners of the properties. .t state(#

2. ;er,acio utan(a a(1itte( that the (efen(ants thru their pre(ecessor8in8 interest Anastacio utan(a ha( s0uatte( on the lan( since 1933 an( since then because his father *oberto utan(a+ the alle%e( ori%inal owner of the lan( ha( transferre( resi(ence in @eyte+ the lan( was with the (efen(ants. Althou%h+ he ca1e bac& in 1949+ he an( $ofronio only clai1e( bac& the lan( in 1987>

9owe,er+ this ourt fin(s that the trial court has e:cee(e( its <uris(iction in (eclarin% (efen(ants8appellees to be the true an( lawful owners of the lan( in 0uestion there bein% no sufficient e,i(ence on recor( that they ha,e been in open+ continuous+ e:clusi,e an( notorious possession an( occupation of the lan( un(er a bona fi(e clai1 of ownership for the perio( re0uire( by law as to ac0uire ownership thereof by prescription.J8K

3. 2hat+ it is beyon( (oubt that the (efen(ants ha,e lon% been in possession an( culti,ation of the lan( as owners whose possession if tac&e( with Anastacio utan(a since 1933 up to the present has been for 1ore than 44 years>

4. 2hat+ 2a: 5eclaration 3o. 10434 of Anastacio utan(a fro1 who1 the (efen(ants ha,e inherite( the lan( is (ate( as far bac& as 1933 an( continuously until the present when (ifferent ta: (eclarations were issue( in the na1es of the (efen(ants>

?oth parties 1o,e( for reconsi(eration of the appellate court=s (ecision. On February 26+ 1993+ the ourt of Appeals (enie( their 1otions for lac& of 1erit. 3o further action was ta&en by pri,ate respon(ents so that the (ecision of the appellate court affir1in% the (is1issal of their action for reco,ery of possession+ accountin% an( (a1a%es beca1e final. On the other han(+ petitioners brou%ht the instant petition for re,iew+ insofar as the ourt of Appeals rule( that no sufficient e,i(ence e:iste( in the recor(s to establish their ownership of the lan(s.

4. 2hat+ (efen(ants= continuous possession+ occupation an( culti,ation of the lan( is not rebutte(+ refute( by con,incin%+ sufficient e,i(ence by the plaintiffs whose clai1 is hi%hly nebulous an( unsatisfactory>

6. 2hat+ e,en assu1in% the plaintiffs ha,e the ri%ht o,er the lan( in 0uestion+ the fact that they ha,e slept JonK their ri%ht since 1933 up to 1987 by failin% to institute an action to reco,er its ownership an( possession+ plaintiffs are clearly %uilty of laches>

2he sole issue for resolution in this petition is thus whether petitioners presente( sufficient e,i(ence to pro,e their ownership of the lan(s in 0uestion. Petitioners conten( that# !1" the fin(in%s of fact of the ourt of Appeals shoul( not be bin(in% upon this ourt as they are in (irect contra(iction to that of the trial court>J9K !2" the (ecision of the ourt of Appeals (oes not cite any reason for re,ersin% the trial court=s fin(in%s of fact>J10K !3" while a%ricultural tenancy relations e:ist between the1 an( the owners of the lan(+ they were also owners of the shares inherite( by their parents fro1 Anastacio utan(a>J11K an( !4" as foun( by the trial court+ petitioners an( their pre(ecessors ha,e been in possession of the lan(s since 1933 an( ha,e conse0uently ac0uire( the sa1e throu%h ac0uisiti,e prescription.J12K

2he petition is 1eritorious.

First. Bhile both the ourt of Appeals an( the trial court hel( that pri,ate respon(ents= action for reco,ery of possession !accion publiciana" was alrea(y barre(+ it appears that they relie( upon (ifferent %roun(s. For the trial court+ the %roun( was e:tincti,e prescription. Para%raph no. 7 of its fin(in%s plainly states that O

?ase( on this (istinction+ we hol( that prescription+ not laches+ is the proper %roun( for hol(in% pri,ate respon(ent=s action to be barre(. Art. 1106 of the i,il o(e pro,i(es that by prescription+ one ac0uires ownership an( other real ri%hts throu%h the lapse of ti1e+ in the 1anner an( un(er the con(itions lai( (own by law. .n the sa1e way+ ri%hts an( actions are lost by prescription. 2here are thus two &in(s of prescription# !1" the ac0uisition of a ri%ht by the lapse of ti1e+ or ac0uisiti,e prescription> an( !2" the loss of a ri%ht of action by the lapse of ti1e+ or e:tincti,e prescription.

7. onse0uent to laches+ plaintiffs= ri%ht to the lan( ha,in% allowe( the (efen(ants to possess+ culti,ate an( clai1 as owners since 1933 up to 1987+ their ri%hts if any are lost by e:tincti,e prescription an(+ therefore+ (efen(ants ha,e ac0uire( the ri%hts o,er the parcels of lan( by ac0uisiti,e prescription. J13K

2he ourt of Appeals+ on the other han(+ hel( pri,ate respon(ents= action to be barre( by laches+ thus#

2he failure of plaintiff8appellants an( their pre(ecessors8in8interest to assert their clai1 o,er the (ispute( properties fro1 the ti1e that Anastacio utan(a alle%e(ly usurpe( sai( lan(s in 1933 until the instant action was file( in 1988 88 a perio( of 44 years 88 constitutes laches an( bars this action to reco,er possession of sai( properties.J14K

Pri,ate respon(ents= action was an accion publiciana to reco,er the ri%ht of possession an( to be (eclare( owners of the sub<ect lan(s. 2heir co1plaint s0uarely put in issue the ownership of the lan(s in (ispute. .t 1ay thus be properly treate( as an accion rei,in(icatoria. As foun( by the ourt of Appeals an( by the trial court+ howe,er+ petitioners= pre(ecessor8in8interest+ Anastacio utan(a+ ac0uire( possession of sai( lan(s in 1933. On the other han(+ pri,ate respon(ents (i( not assert ownership o,er the lan(s until 1988 O 44 years later+ when they file( their present co1plaint for reco,ery of possession. .t is settle( that the re1e(ies of accion publiciana or accion rei,in(icatoria 1ust be a,aile( of within 10 years fro1 (ispossession. -n(er Art. 444!4" of the i,il o(e+ the real ri%ht of possession is lost after the lapse of 10 years.J16K .n ru/ ,. ourt of Appeals+J17K in which an action for reco,ery of possession an( ownership of lan(s was brou%ht only after 26 years ha( elapse(+ this ourt rule(#

.n )aneclan% ,. ?aun+J14K this ourt (istin%uishe( prescription fro1 laches as follows#

An( secon(ly+ whether Be consi(er the co1plaint of pri,ate respon(ents to reco,er possession of the property in 0uestion as accion publiciana or accion rei,in(icatoria+ the sa1e has prescribe( after the lapse of ten years. After pri,ate respon(ents ha( aban(one( for 26 years the property which is unre%istere( lan(+ the law as well as <ustice an( e0uity will not allow the1 Cto lie in wait an( sprin% as in an a1bushC to (islo(%e an( (ispossess petitioners who (urin% sai( perio( 1a(e an( constructe( resi(ences+ buil(in%s an( other ,aluable i1pro,e1ents thereon+ an( en<oyin% the fruits therefro1.

. . . Bhile prescription is concerne( with the fact of (elay+ laches is concerne( with the effect of (elay. Prescription is a 1atter of ti1e> laches is principally a 0uestion of ine0uity of per1ittin% a clai1 to be enforce(+ this ine0uity bein% foun(e( on so1e chan%e in the con(ition of the property or the relation of the parties. Prescription is statutory> laches is not. @aches applies in e0uity+ whereas prescription applies at law. Prescription is base( on fi:e( ti1e+ laches is not.

9ence+ insofar as petitioners are concerne(+ pri,ate respon(ents= cause of action was barre(+ not by laches+ but by e:tincti,e prescription+ re%ar(less of whether their co1plaint is consi(ere( as an accion publiciana or an accion rei,in(icatoria. As re%ar(s the pri,ate respon(ents who (i( not appeal fro1 the rulin% of the ourt of Appeals+ this 0uestion is now final.

$econ(. As alrea(y state(+ the ourt of Appeals re,erse( the trial court=s rulin% that petitioners ha( ac0uire( the lan(s by prescription on the %roun( that there was no sufficient e,i(ence to pro,e that petitioners ha( been in open+ continuous an( a(,erse possession of the lan(s. 2here is+ howe,er+ nothin% in the e,i(ence to support this fin(in% of the appellate court. 2o the contrary+ the e,i(ence in the recor(+ both (ocu1entary an( testi1onial+ shows# !1" that their co11on ancestor was the late 5o0ue utan(a+ son of Dusta0uio utan(a an( *ufina Atup>J18K !2" that 5o0ue utan(a ha( se,eral chil(ren+ na1ely+ Anastacio+ $aturnino+ Dsperi(ion+ Pe(ro+ 9onorio+ ;er1an+ Fortunata+ Dusta0uia+ an( Ponciana>J19K !3" that+ in his lifeti1e+ 5o0ue utan(a ac0uire( a parcel of a%ricultural lan( consistin% of 31.0929 hectares+ which was (eclare( un(er 2a: 5eclaration 3o. 6983J20K in the na1e of his el(est chil(+ Anastacio> !4" that Anastacio+ who ha( no chil(ren+ re1aine( in possession of sai( lan( fro1 1933 until 1968 when he e:ecute( a (ee( of e:tra<u(icial settle1ent of estate which a(<u(icate( an( partitione( sai( parcel of lan( a1on% his brothers an( sisters>J21K !4" that after 1968+ Anastacio=s brothers an( sisters wor&e( on the lan(+ as shown by se,eral ta: (eclarationsJ22K an( subse0uently+ their chil(ren an( successors+ herein petitioners+ re1aine( in actual an( peaceful possession of sai( lan( until 1988 when pri,ate respon(ents file( their action to reco,er possession of the lan(> !6" that (urin% such ti1e+ petitioners 5o1inica+ $ebastian+ $otero+ 'anuario an( 3icanor were culti,atin% the share of their father while wor&in% as a%ricultural tenants on the shares of their uncles 9onorio an( ;er1an utan(a>J23K an( !7" that petitioners ;abina+ rispin an( lau(io utan(a are the chil(ren an( heirs of 9onorio utan(a wor&in% on their father=s share while petitioners Florencio an( 2rini(a( utan(a are the chil(ren an( heirs of ;er1an an( Dsperi(ion utan(a+ respecti,ely.J24K

2his contention of the petitioners is i1presse( with truth an( 1erit as the sa1e is borne out by the recor(s an( the transcript thereof which Be ha,e pre,iously (iscusse(. Be+ therefore+ fin( that the rulin% of the respon(ent court (atin% petitioner=s a(,erse possession to the year 1943 is contrary to the a(1ission of the pri,ate respon(ents thru counsel+ an( since petitioners= possession of the property in 0uestion co11ence( way bac& in 1938 which was at the ti1e of the ol( i,il o(e was still in force+ the prescripti,e perio( is %o,erne( un(er $ection 41 of the o(e of i,il Proce(ure because Article 1116 of the 3ew i,il o(e pro,i(es that CPrescription alrea(y runnin% before the effecti,ity of this o(e !Au%ust 30+ 1940" shall be %o,erne( by laws pre,iously in force.C $ection 41 of the . .P. states#

$ec. 41. 2itle to lan( by prescription. 88 2en years of actual a(,erse possession by any person clai1in% to be the owner for that ti1e of any lan( or interest in lan(+ uninterrupte(ly+ continuously for ten years by occupancy+ (escent+ %rants or otherwise+ in whate,er way such occupancy 1ay ha,e co11ence( or continue(+ shall ,est in e,ery actual possessor of such lan( a full co1plete title+ sa,in% to the persons un(er (isabilities the ri%hts+ secure( by the ne:t section.J26K

-n(er the o(e of i,il Proce(ure+ therefore+ ten years of actual a(,erse possession was re0uire(+ re%ar(less of how such occupancy 1ay ha,e co11ence( or continue(+ before possession ripene( into full an( co1plete title o,er the lan(. Applyin% this to the present case+ by 1943+ ten years after his possession of the sub<ect parcel of lan( ha( be%un+ Anastacio utan(a beca1e owner of the lan( in 0uestion throu%h ac0uisiti,e prescription.

2he fore%oin% sufficiently establish that Anastacio utan(a was in possession of the lan( co,ere( by 2a: 5eclaration 3o. 6983+ which has an area of 31.0929 hectares+ fro1 1933 up to 1968+ or a perio( of 34 years. $uch possession appears to be a(,erse+ continuous an( in the concept of an owner because Anastacio utan(a culti,ate( the lan(+ thereby+ perfor1in% an act of ownership o,er it. .t is to be note( that Anastacio=s possession be%an un(er the for1er i,il o(e. 2his fact brin%s this case s0uarely un(er the rulin% in ru/ ,. ourt of Appeals+J24K in which a(,erse possession of a parcel of unre%istere( lan( starte( in 1938 while the co1plaint for reco,ery of possession was file( only in 1964+ after 26 years. 2he trial court (is1isse( the co1plaint an( (eclare( the a(,erse possessors as owners of the lan(. 2he ourt of Appeals+ howe,er+ re,erse( the trial court. On appeal+ this ourt in turn re,erse( the appellate court. Be hel( that O

2hir(. 2he ourt of Appeals li1ite( its re,iew of the e,i(ence to the issue of ac0uisiti,e prescription. Petitioners+ howe,er+ sub1itte( e,i(ence to pro,e that they were heirs of Anastacio utan(a=s brothers an( sisters+ e,en as so1e of the1 were also wor&in% as tenants for their co8petitioners. Particularly co1pellin% is the 1968 5ee( of D:tra<u(icial $ettle1ent of *eal Dstate e:ecute( by Anastacio utan(a which pertinently states that#

B9D*DA$+ A3A$2A .O -2A35A+ sin%le+ 90 years of a%e+ with no co11on8law wife+ ille%iti1ate chil(ren or otherwise+ throu%h his own will (esires to a(<u(icate an( partition his three !3" parcels of lan( to his brothers an( sisters or le%al heirs+ (eclare( un(er 2a: 5ec. 3os. *82484> *82486> an( *86983 situate( at a1a1bu%an+ -bay+ ?ohol an( $a%uisinhan+ 2rini(a(+ ?ohol+ respecti,ely+ which are (escribe( an( boun(e( as follows#

....

with respect to the sai( se,en8hectare lan(+ the rulin% of the ourt of Appeals that there is no sufficient e,i(ence as to its ownership 1ust be affir1e(.

2a: 5eclaration 3o. 6983+ situate( at $a%uisinhan+ 2rini(a(+ ?ohol+ with an area of 31.0929 hectares 1ore or less# ?oun(e( on the 3orth by 'usto O%ayon P cree&> or Dast+ by $a%uinsihan ree&> on $outh+ by Pablo Dbaoc+ ;raciano Dbaoc+ 5ios(a(o Dbaoc+ ;a,iro )u1ar> an( on Best by Pablo Dbaoc+ )ateo 3uera+ 5o1in%a 3uera> with i1pro,e1ents of 14 %roups of ba1boos.

B9D*DFO*D+ the (ecision of the ourt of Appeals is set asi(e an( another one is ren(ere( (eclarin% petitioners to be true an( lawful owners of that parcel of lan( co,ere( by 2a: 5eclaration 3o. 6983 of the 2a: Assessor=s Office of $a%uisinhan+ 2rini(a(+ ?ohol+ with an area of 31.0929 hectares. 2he co1plaint file( by respon(ents is (is1isse(.

$O O*5D*D5. .... ?ellosillo+ ! hair1an"+ Luisu1bin%+ ?uena+ an( 5e @eon+ 'r.+ ''.+ concur. B9D*DA$+ the brothers+ sisters an( heirs of sai( Anastacio utan(a+ throu%h his will an( ,oluntary (ee(+ 1utually a%ree to accept this e:tra<u(icial partition 1a(e by sai( Anastacio utan(a for the benefit of sai( brothers+ sisters+ an( heirs of sa1e.

Sps. )'is Cr'* v. Sps. Ale+ando ,ernando, Sr., G.R. -o. 14547., 9 /ecem(er $..5

As Anastacio utan(a ha( ac0uire( ownership of sai( parcel of lan( throu%h the lapse of the perio( re0uire( by law+ he coul( ,ali(ly a(<u(icate an( partition it a1on% his brothers an( sisters who were his only heirs. Petitioners+ in turn+ as chil(ren of Anastacio=s brothers an( sisters+ ac0uire( ownership of the sub<ect lan( not throu%h prescription but throu%h here(itary succession.

of the ourt of Appeals ! A" in A8;.*. F 3o. 61247+ (is1issin% petitioners= appeal an( affir1in% the (ecision of the *e%ional 2rial ourt !*2 " of )alolos+ ?ulacan+ ?ranch 79+ in i,il ase 3o. 8778)894.

2he antece(ent facts are as follows#

?ut while we fin( sufficient e,i(ence of ownership with respect to that parcel with an area of 31.0929 hectares co,ere( by 2a: 5eclaration 3o. 6983+ we fin( no si1ilar e,i(ence to support the fin(in% of the trial court that Anastacio utan(a was also the owner of the other parcel of lan( consistin% of se,en hectares. Petitioner Florencio utan(a hi1self a(1itte( that he an( the other petitioners were only clai1in% the 318hectare lan(. 9is testi1ony is as follows#

)oreo,er+ the alle%e( ta: (eclaration in 9onorio utan(a=s na1e co,erin% the se,en8hectare lan( was ne,er presente( in e,i(ence. For these reasons+

@uis F. ru/ an( Ai(a ru/ !petitioners" are occupants of the front portion of a 7108s0uare 1eter property locate( in $to. risto+ ?aliua%+ ?ulacan. On October 21+ 1994+ spouses Ale<an(ro Fernan(o+ $r. an( *ita Fernan(o !respon(ents" file( before the *2 a co1plaint for accion publiciana a%ainst petitioners+ (e1an(in% the latter to ,acate the pre1ises an( to pay the a1ount of P400.00 a 1onth as reasonable rental for the use thereof. *espon(ents alle%e( in their co1plaint that# !1" they are owners of the property+ ha,in% bou%ht the sa1e fro1 the spouses lo(ual(o an( 2eresita ;lorioso !;loriosos" per 5ee( of $ale (ate( )arch 9+ 1987> !2" prior to their ac0uisition of the property+ the ;loriosos offere( to sell to petitioners the rear portion of the property but the transaction (i( not 1ateriali/e (ue to petitioners= failure to e:ercise their option> !3" the offer to sell is e1bo(ie( in

a Masun(uan (ate( Au%ust 6+ 1983 e:ecute( before the ?aran%ay aptain> !4" (ue to petitioners= failure to buy the allotte( portion+ respon(ents bou%ht the whole property fro1 the ;loriosos> an( !4" (espite repeate( (e1an(s+ petitioners refuse( to ,acate the property.J2K

this ourt an( e,ery 1onth thereafter until they ,acate the sub<ect pre1ises an( to pay the costs of suit.

$O O*5D*D5.J4K Petitioners file( a )otion to 5is1iss but the *2 (is1isse( it for lac& of 1erit in its Or(er (ate( )arch 6+ 1994.J3K Petitioners then file( their Answer settin% forth the affir1ati,e (efenses that# !1" the Masun(uan is a perfecte( contract of sale> !2" the a%ree1ent has alrea(y been Cpartially consu11ate(C as they alrea(y relocate( their house fro1 the rear portion of the lot to the front portion that was sol( to the1> !3" )rs. ;lorioso pre,ente( the co1plete consu11ation of the sale when she refuse( to ha,e the e:act boun(aries of the lot bou%ht by petitioners sur,eye(+ an( the e:istin% sur,ey was 1a(e without their &nowle(%e an( participation> an( !4" respon(ents are buyers in ba( faith ha,in% bou%ht that portion of the lot occupie( by the1 !petitioners" with full &nowle(%e of the prior sale to the1 by the ;loriosos.J4K Petitioners appeale( the *2 (ecision but it was affir1e( by the 5ecision (ate( October 3+ 2000. A per its

the present petition raisin% the followin% issues#

1. Bhether the 9onorable ourt of Appeals co11itte( an error of law in hol(in% that the A%ree1ent !Masun(uan" between the parties was a C1ere offer to sell+C an( not a perfecte( C ontract of Purchase an( $aleCI

After (ue procee(in%s+ the *2 ren(ere( a 5ecision on April 3+ 1998 in fa,or of respon(ents. 2he (ecretal portion of the (ecision pro,i(es#

2. Bhether the 9onorable ourt of Appeals co11itte( an error of law in not hol(in% that where the parties clearly %a,e the petitioners a perio( of ti1e within which to pay the price+ but (i( not fi: sai( perio(+ the re1e(y of the ,en(ors is to as& the ourt to fi: the perio( for the pay1ent of the price+ an( not an Caccion publicianaCI

P*D).$D$ O3$.5D*D5+ the herein plaintiffs was able to pro,e by prepon(erance of e,i(ence the case of accion publiciana+ a%ainst the (efen(ants an( <u(%1ent is hereby ren(ere( as follows#

3. Bhether the 9onorable ourt of Appeals co11itte( an error of law in not or(erin% respon(ents to at least (eli,er the Cbac& portionC of the lot in 0uestion upon pay1ent of the a%ree( price thereof by petitioners+ assu1in% that the *e%ional 2rial ourt was correct in fin(in% that the sub<ect 1atter of the sale was sai( Cbac& portionC+ an( not the CfrontC portion of the propertyI

1. Or(erin% (efen(ants an( all persons clai1in% un(er the1 to ,acate placefully !sic" the pre1ises in 0uestion an( to re1o,e their house therefore !sic">

4. Bhether the 9onorable ourt of Appeals co11itte( an error of law in affir1in% the (ecision of the trial court or(erin% the petitioners+ who are possessors in %oo( faith+ to pay rentals for the portion of the lot possesse( by the1IJ6K 2he *2 (welt on the issue of which portion was bein% sol( by the ;loriosos to petitioners+ fin(in% that it was the rear portion an( not the front portion that

2. Or(erin% (efen(ants to pay plaintiff the su1 of P400.00 as reasonable rental per 1onth be%innin% October 21+ 1994 when the case was file( before

was bein% sol(> while the A construe( the Masun(uan as a 1ere contract to sell an( (ue to petitioners= failure to pay the purchase price+ the ;loriosos were not obli%e( to (eli,er to the1 !petitioners" the portion bein% sol(.

Petitioners+ howe,er+ insist that the a%ree1ent was a perfecte( contract of sale+ an( their failure to pay the purchase price is i11aterial. 2hey also conten( that respon(ents ha,e no cause of action a%ainst the1+ as the obli%ation set in the Masun(uan (i( not set a perio(+ conse0uently+ there is no breach of any obli%ation by petitioners.

-n(er Article 1448 of the i,il o(e+ a contract of sale is a contract by which one of the contractin% parties obli%ates hi1self to transfer the ownership an( to (eli,er a (eter1inate thin%+ an( the other to pay therefor a price certain in 1oney or its e0ui,alent. Article 1474 of the o(e further pro,i(es that the contract of sale is perfecte( at the 1o1ent there is 1eetin% of the 1in(s upon the thin% which is the ob<ect of the contract an( upon the price. Fro1 that 1o1ent the parties 1ay reciprocally (e1an( perfor1ance sub<ect to the pro,isions of the law %o,ernin% the for1 of contracts.

2he resolution of the issues in this case principally is (epen(ent on the interpretation of the Masun(uan (ate( Au%ust 6+ 1983 e:ecute( by petitioners an( the ;loriosos. 2he Masun(uan pro,i(e( the followin% pertinent stipulations#

a. 3a pu1aya% an% 1%a 1aysu1bon% !referrin% to the ;loriosos" na pa%bilhan an% 1%a ipina%su1bon% !referrin% to petitioners" na baha%i n% lupa at an% ipa%bibili ay 1ay su&at na 213 1etron% parisu&at hu1i%it &u1ulan% sa hala%an% P40.00 bawat 1etron% parisu&at>

.n a contract of sale+ the title to the property passes to the ,en(ee upon the (eli,ery of the thin% sol(+ as (istin%uishe( fro1 a contract to sell where ownership is+ by a%ree1ent+ reser,e( in the ,en(or an( is not to pass to the ,en(ee until full pay1ent of the purchase price.J8K Otherwise state(+ in a contract of sale+ the ,en(or loses ownership o,er the property an( cannot reco,er it until an( unless the contract is resol,e( or rescin(e(> whereas+ in a contract to sell+ title is retaine( by the ,en(or until full pay1ent of the price. .n the latter contract+ pay1ent of the price is a positi,e suspensi,e con(ition+ failure of which is not a breach but an e,ent that pre,ents the obli%ation of the ,en(or to con,ey title fro1 beco1in% effecti,e.

b. 3a sa titulon% papapanau%in an% 1a%i%in% &abuuan% su&at na 1auu&ol sa 1%a ipina%susu1bon% ay 223 1etron% parisu&at at an% 10 1etro nito ay bilan% &aloob n% 1%a 1aysu1bon% sa 1%a .pina%susu1bon% na baha%i n% ri%ht of way> c. 3a an% ri%ht of way ay 1ay luwan% na 1.74 1eters 1a%1ula sa (aan% @ope/ 'aena patun%o sa li&uran n% lote na pa%tatayuan n% bahay n% 1%a .pina%susu1bon% na &anyan% bibilhin> (. 3a an% %u%ol sa pa%papasu&at at pa%papanao% n% titulo ay pa%hahatian n% 1a%&abilan% pani% na an% pani% ay 1a%bibi%ay n% hala%an% hin(i &u&ulan%in% sa hala%an% ti%8AAPA2 3A 5AA3; P.$O !P400.00"> e. 3a an% ipina%susu1bon% ay tiya&an% ililipat an% bahay sa baha%in% &anilan% nabili o 1abibili sa buwan n% Dnero 31+ 1984>J7K !D1phasis supplie("

2he Masun(uan pro,i(es for the followin% ter1s an( con(itions# !a" that the ;loriosos a%ree( to sell to petitioners a portion of the property with an area of 213 1eters at the price of P40.00 per s0uare 1eter> !b" that in the title that will be cause( to be issue(+ the a%%re%ate area is 223 s0uare 1eters with 10 1eters thereof ser,in% as ri%ht of way> !c" that the ri%ht of way shall ha,e a wi(th of 1.74 1eters fro1 @ope/ 'aena roa( %oin% towar(s the bac& of the lot where petitioners will buil( their house on the portion of the lot that they will buy> !(" that the e:penses for the sur,ey an( for the issuance of the title will be (i,i(e( between the parties with each party %i,in% an a1ount of no less than P400.00> an( !e" that petitioners will (efinitely relocate their house to the portion they bou%ht or will buy by 'anuary 31+ 1984.

2he fore%oin% ter1s an( con(itions show that it is a contract to sell an( not a contract of sale. For one+ the conspicuous absence of a (efinite 1anner of pay1ent of the purchase price in the a%ree1ent confir1s the conclusion that it is a contract to sell. 2his is because the 1anner of pay1ent of the purchase price is an essential ele1ent before a ,ali( an( bin(in% contract of sale can e:ist.J9K Althou%h the i,il o(e (oes not e:pressly state that the 1in(s of the parties 1ust also 1eet on the ter1s or 1anner of pay1ent of the price+ the sa1e is nee(e(+ otherwise there is no sale.J10K As hel( in

2oyota $haw+ .nc. ,s. ourt of Appeals+J11K a (efinite a%ree1ent on the 1anner of pay1ent of the price is an essential ele1ent in the for1ation of a bin(in% an( enforceable contract of sale.

2he Masun(uan (oes not establish any (efinite a%ree1ent between the parties concernin% the ter1s of pay1ent. Bhat it 1erely pro,i(es is the purchase price for the 2138s0uare 1eter property at P40.00 per s0uare 1eter.

Petitioners faile( to abi(e by the e:press con(ition that they shoul( relocate to the rear portion of the property bein% bou%ht by 'anuary 31+ 1984. .n(ee(+ the Masun(uan (iscloses that it is the rear portion that was bein% sol( by the ;loriosos+ an( not the front portion as petitioners stubbornly clai1. 2his is e,i(ent fro1 the pro,isions establishin% a ri%ht of way fro1 @ope/ 'aena roa( %oin% towar(s the bac& of the lot+ an( re0uirin% the1 to relocate their house to the portion bein% sol( by 'anuary 31+ 1984. Petitioners are presently occupyin% the front portion of the property. Bhy the nee( for a ri%ht of way an( for petitioners to relocate if the front portion on which their house stan(s is the portion bein% sol(I

For another+ the telltale pro,ision in the Masun(uan that# C3a pu1aya% an% 1%a 1aysu1bon% na pa%bilhan an% 1%a ipina%su1bon% na baha%i n% lupa at an% ipa%bibili ay 1ay su&at na 213 1etron% parisu&at hu1i%it &u1ulan% sa hala%an% P40.00 bawat 1etron% parisu&at+C si1ply 1eans that the ;loriosos only a%ree( to sell a portion of the property an( that the portion to be sol( 1easures 213 s0uare 1eters. Another si%nificant pro,ision is that which rea(s# C3a an% ipina%susu1bon% ay tiya&an% ililipat an% bahay sa baha%in% &anilan% nabili o 1abibili sa buwan n% Dnero 31+ 1984.C 2he fore%oin% in(icates that a contract of sale is yet to be consu11ate( an( ownership of the property re1aine( in the ;loriosos. Otherwise+ why woul( the alternati,e ter1 C1abibiliC be use( if in(ee( the property ha( alrea(y been sol( to petitioners.

2his con(ition is a suspensi,e con(ition nonco1pliance of which pre,ente( the ;loriosos fro1 procee(in% with the sale an( ulti1ately transferrin% title to petitioners> an( the Masun(uan fro1 ha,in% obli%atory force.J14K .t is establishe( by e,i(ence that the petitioners (i( not transfer their house locate( in the front portion of the sub<ect property to the rear portion which+ un(er the Masun(uan+ they inten(e( to buy. 2hus+ no obli%ation arose on the part of the ;loriosos to consi(er the sub<ect property as ha,in% been sol( to petitioners because the latter=s non8fulfill1ent of the suspensi,e con(ition ren(ere( the contract to sell ineffecti,e an( unperfecte(.

.n a((ition+ the absence of any for1al (ee( of con,eyance is a stron% in(ication that the parties (i( not inten( i11e(iate transfer of ownership.J12K

Petitioners a(1it that they ha,e not pai( a sin%le centa,o to the ;loriosos. 9owe,er+ petitioners ar%ue that their nonpay1ent of the purchase price was (ue to the fact that there is yet to be a sur,ey 1a(e of the property. ?ut e,i(ence shows+ an( petitioners (o not (ispute+ that as early as Au%ust 12+ 1983+ or si: (ays after the e:ecution of the Masun(uan+ a sur,ey has alrea(y been 1a(e an( the property was sub(i,i(e( into @ot 3os. 4648?81 !front portion" an( 4648?82 !rear portion"+ with @ot 3o. 4648?82 1easurin% 223 s0uare 1eters as the portion to be bou%ht by petitioners.

3or1ally+ in a contract to sell+ the pay1ent of the purchase price is the positi,e suspensi,e con(ition upon which the transfer of ownership (epen(s. J13K 2he parties+ howe,er+ are not prohibite( fro1 stipulatin% other lawful con(itions that 1ust be fulfille( in or(er for the contract to be con,erte( fro1 a contract to sell or at the 1ost an e:ecutory sale into an e:ecute( one.J14K

.n the present case+ asi(e fro1 the pay1ent of the purchase price+ there e:iste( another suspensi,e con(ition+ i.e.# that petitioners will relocate their house to the portion they bou%ht or will buy by 'anuary 31+ 1984.

Petitioners 0uestion the sur,ey 1a(e+ assertin% that it is a Ctable sur,eyC 1a(e without their &nowle(%e an( participation. .t shoul( be pointe( out that the Masun(uan 1erely pro,i(es that the e:penses for the sur,ey will be (i,i(e( between the1 an( that each party shoul( %i,e an a1ount of no less than P400.00. 3owhere is it state( that the sur,ey is a con(ition prece(ent for the pay1ent of the purchase price.

Petitioners further clai1 that respon(ents ha,e no cause of action a%ainst the1 because their obli%ation to pay the purchase price (i( not yet arise+ as the a%ree1ent (i( not pro,i(e for a perio( within which to pay the purchase

price. 2hey ar%ue that respon(ents shoul( ha,e file( an action for specific perfor1ance or <u(icial rescission before they can a,ail of accion publiciana.

2here is also no 1erit to petitioners= contention that respon(ents are buyers in ba( faith. As e:plaine( in oronel ,s. ourt of Appeals#

3otably+ petitioners ne,er raise( these ar%u1ents (urin% the procee(in%s before the *2 . $uffice it to say that issues raise( for the first ti1e on appeal an( not raise( ti1ely in the procee(in%s in the lower court are barre( by estoppel.J16K )atters+ theories or ar%u1ents not brou%ht out in the ori%inal procee(in%s cannot be consi(ere( on re,iew or appeal where they are raise( for the first ti1e. 2o consi(er the alle%e( facts an( ar%u1ents raise( belate(ly woul( a1ount to tra1plin% on the basic principles of fair play+ <ustice an( (ue process.J17K

.n a contract to sell+ there bein% no pre,ious sale of the property+ a thir( person buyin% such property (espite the fulfill1ent of the suspensi,e con(ition such as the full pay1ent of the purchase price+ for instance+ cannot be (ee1e( a buyer in ba( faith an( the prospecti,e buyer cannot see& the relief of recon,eyance of the property. 2here is no (ouble sale in such case. 2itle to the property will transfer to the buyer after re%istration because there is no (efect in the owner8seller=s title per se+ but the latter+ of course+ 1ay be sue( for (a1a%es by the inten(in% buyer.J21K !D1phasis supplie("

)oreo,er+ it woul( be inutile for respon(ents to first petition the court to fi: a perio( for the perfor1ance of the contract. .n the first place+ respon(ents are not parties to the Masun(uan between petitioners an( the ;loriosos+ an( they ha,e no stan(in% whatsoe,er to see& such recourse. .n the secon( place+ such recourse properly pertains to petitioners. .t was they who shoul( ha,e sou%ht the court=s intercession. .f petitioners belie,e( that they ha,e an actionable contract for the sale of the property+ pru(ence an( co11on sense (ictate that they shoul( ha,e sou%ht its enforce1ent forthwith. .nstea(+ petitioners while( away their ti1e.

A person who occupies the lan( of another at the latter=s forbearance or per1ission without any contract between the1 is necessarily boun( by an i1plie( pro1ise that he will ,acate upon (e1an(.J22K

onsi(erin% that petitioners= continue( possession of the property has alrea(y been ren(ere( unlawful+ they are boun( to pay reasonable rental for the use an( occupation thereof+ which in this case was appropriately pe%%e( by the *2 at P400.00 per 1onth be%innin% October 21+ 1994 when respon(ents file( the case a%ainst the1 until they ,acate the pre1ises.

Further1ore+ there is no nee( for a <u(icial rescission of the Masun(uan for the si1ple reason that the obli%ation of the ;loriosos to transfer the property to petitioners has not yet arisen. 2here can be no rescission of an obli%ation that is none:istent+ consi(erin% that the suspensi,e con(itions therefor ha,e not yet happene(.J18K

Finally+ petitioners see& co1pensation for the ,alue of the i1pro,e1ents intro(uce( on the property. A%ain+ this is the first ti1e that they are raisin% this point. As such+ petitioners are now barre( fro1 see&in% such relief.J23K

9ence+ petitioners ha,e no superior ri%ht of ownership or possession to spea& of. 2heir occupation of the property was 1erely throu%h the tolerance of the owners. D,i(ence on recor( shows that petitioners an( their pre(ecessors were able to li,e an( buil( their house on the property throu%h the per1ission an( &in(ness of the pre,ious owner+ Pe(ro 9ipolito+ who was their relati,e+J19K an( subse0uently+ 2eresita ;lorioso+ who is also their relati,e. 2hey ha,e no title or+ at the ,ery least+ a contract of lease o,er the property. ?ase( as it was on 1ere tolerance+ petitioners= possession coul( neither ripen into ownership nor operate to bar any action by respon(ents to reco,er absolute possession thereof.J20K

B9D*DFO*D+ the petition is 5D3.D5. 2he 5ecision of the ourt of Appeals (ate( October 3+ 2000 in A8;.*. F 3o. 61247 is AFF.*)D5.

Accession Articles 440 to 474. *ea( pp. 204 to 297 of Paras 2013.

ases#

Accession .n(ustrial

(ays of the 1onth the rent is (ue> an( the lease shall co11ence on the (ay that this (ecision shall ha,e beco1e final.

Fro1 the fore%oin% <u(%1ent+ neither party appeal so that+ ff it were a ,ali( <u(%1ent+ it woul( ha,e or(inarily lapse( into finality+ but e,en then+ 5DP*A (i( not accept pay1ent of rentals so that 5-)@AO (eposite( such rentals with the )unicipal ourt.

/epra v. /'mlao, 13 SCRA 475

2his is an appeal fro1 the Or(er of the for1er ourt of First .nstance of .loilo to the then ourt of Appeals+ which the latter certifie( to this instance as in,ol,in% pure 0uestions of law On 'uly 14+1974+ 5DP*A file( a o1plaint for Luietin% of 2itle a%ainst 5-)@AO before the then ourt of First .nstance of .loilo+ ?ranch .F !2rial ourt"+ in,ol,in% the ,ery sa1e 34 s0uare 1eters+ which was the bone of contention in the )unicipal ourt. 5-)@AO+ in his Answer+ a(1itte( the encroach1ent but alle%e(+ in the 1ain+ that the present suit is barre( by res <u(icata by ,irtue of the 5ecision of the )unicipal ourt+ which ha( beco1e final an( e:ecutory.

Plaintiff8appellee+ Francisco 5epra+ is the owner of a parcel of lan( re%istere( un(er 2ransfer ertificate of 2itle 3o. 23087+ &nown as @ot 3o. 684+ situate( in the 1unicipality of 5u1an%as+ .loilo+ with an area of appro:i1ately 8+870 s0uare 1eters. A%ustin 5u1lao+ (efen(ant8appellant+ owns an a(<oinin% lot+ (esi%nate( as @ot 3o. 683+ with an appro:i1ate area of 231 s0. 1s.

$o1eti1e in 1972+ when 5-)@AO constructe( his house on his lot+ the &itchen thereof ha( encroache( on an area of thirty four !34" s0uare 1eters of 5DP*A=s property+ After the encroach1ent was (isco,ere( in a relocation sur,ey of 5DP*A=s lot 1a(e on 3o,e1ber 2+1972+ his 1other+ ?eatri/ 5epra after writin% a (e1an( letter as&in% 5-)@AO to 1o,e bac& fro1 his encroach1ent+ file( an action for -nlawful 5etainer on February 6+1973 a%ainst 5-)@AO in the )unicipal ourt of of 5u1an%as+ (oc&ete( as i,il ase 3o 1+ $ai( co1plaint was later a1en(e( to inclu(e 5DP*A as a party plain. plaintiff.

After the case ha( been set for pre8trial+ the parties sub1itte( a 'oint )otion for 'u(%1ent base( on the $tipulation of Facts attache( thereto. Pre1ise( thereon+ the 2rial ourt on October 31+ 1974+ issue( the assaile( Or(er+ (ecreein%#

B9D*DFO*D+ the ourt fin(s an( so hol(s that the thirty four !34" s0uare 1eters sub<ect of this liti%ation is part an( parcel of @ot 684 of the a(astral $ur,ey of 5u1an%as of which the plaintiff is owner as e,i(ence( by 2ransfer ertificate of 2itle 3o. 3087 an( such plaintiff is entitle( to possess the sa1e.

Bithout pronounce1ent as to costs. After trial+ the )unicipal ourt foun( that 5-)@AO was a buil(er in %oo( faith+ an( applyin% Article 448 of the i,il o(e+ ren(ere( <u(%1ent on $epte1ber 29+ 1973+ the (ispositi,e portion of which rea(s#

$O O*5D*D5.

Or(erin% that a force( lease is create( between the parties with the plaintiffs+ as lessors+ an( the (efen(ants as lessees+ o,er the (ispute( portion with an area of thirty four !34" s0uare 1eters+ the rent to be pai( is fi,e !P4.00" pesos a 1onth+ payable by the lessee to the lessors within the first fi,e !4"

*ebuttin% the ar%u1ent of res <u(icata relie( upon by 5-)@AO+ 5DP*A clai1s that the 5ecision of the )unicipal ourt was null an( ,oi( ab initio because its <uris(iction is li1ite( to the sole issue of possession+ whereas

(ecisions affectin% lease+ which is an encu1brance on real property+ 1ay only be ren(ere( by ourts of First .nstance.

Cbuil(er in %oo( faithC un(er Article 448+ a Cpossessor in %oo( faithC un(er Article 426 an( a Clan(owner in %oo( faith= un(er Article 448.

A((ressin% out sel,es to the issue of ,ali(ity of the 5ecision of the )unicipal ourt+ we hol( the sa1e to be null an( ,oi(. 2he <u(%1ent in a (etainer case is effecti,e in respect of possession only !$ec. 7+ *ule 70+ *ules of ourt". 1 2he )unicipal ourt o,er8steppe( its boun(s when it i1pose( upon the parties a situation of Cforce( leaseC+ which li&e Cforce( co8ownershipC is not fa,ore( in law. Further1ore+ a lease is an interest in real property+ <uris(iction o,er which belon%s to ourts of First .nstance !now *e%ional 2rial ourts" !$ec. 44!b"+ 'u(iciary Act of 1948> 2 $ec. 19 !2" ?atas Pa1bansa ?l%. 129". 3 $ince the )unicipal ourt+ acte( without <uris(iction+ its 5ecision was null an( ,oi( an( cannot operate as res <u(icata to the sub<ect co1plaint for Luetin% of 2itle. ?esi(es+ e,en if the 5ecision were ,ali(+ the rule on res <u(icata woul( not apply (ue to (ifference in cause of action. .n the )unicipal ourt+ the cause of action was the (epri,ation of possession+ while in the action to 0uiet title+ the cause of action was base( on ownership. Further1ore+ $ec. 7+ *ule 70 of the *ules of ourt e:plicitly pro,i(es that <u(%1ent in a (etainer case Cshall not bar an action between the sa1e parties respectin% title to the lan(. C 4

.n re%ar(s to buil(ers in %oo( faith+ Article 448 of the

i,il

o(e pro,i(es#

A*2. 448. 2he owner of the lan( on which anythin% has been built sown or plante( in %oo( faith+

shall ha,e the ri%ht

to appropriate as his own the wor&s+ sowin% or plantin%+ after pay1ent of the in(e1nity pro,i(e( for in articles 446 an( 448+ or

to obli%e the one who built or plante( to pay the price of the lan(+ an( the one who sowe(+ the proper rent.

once(e( in the $tipulation of Facts between the parties is that 5-)@AO was a buil(er in %oo( faith. 2hus+

8. 2hat the sub<ect 1atter in the unlawful (etainer case+ i,il ase 3o. 1+ before the )unicipal ourt of 5u1an%as+ .loilo in,ol,es the sa1e sub<ect 1atter in the present case+ the 2hirty8four !34" s0uare 1eters portion of lan( an( built thereon in %oo( faith is a portion of (efen(ant=s &itchen an( has been in the possession of the (efen(ant since 1942 continuously up to the present> ... !D1phasis ours"

9owe,er+ the buil(er or planter cannot be obli%e( to buy the lan( if its ,alue is consi(erably 1ore than that of the buil(in% or trees. .n such case+ he shall pay reasonable rent+ if the owner of the lan( (oes not choose to appropriate the buil(in% or trees after proper in(e1nity. 2he parties shall a%ree upon the ter1s of the lease an( in case of (isa%ree1ent+ the court shall fi: the ter1s thereof !Para%raphin% supplie("

onsistent with the principle that our ourt syste1+ li&e any other+ 1ust be a (ispute resol,in% 1echanis1+ we accor( le%al effect to the a%ree1ent of the parties+ within the conte:t of their 1utual concession an( stipulation. 2hey ha,e+ thereby+ chosen a le%al for1ula to resol,e their (ispute to appeal ply to 5-)@AO the ri%hts of a Cbuil(er in %oo( faithC an( to 5DP*A those of a Clan(owner in %oo( faithC as prescribe( in Article 448. 9ence+ we shall refrain fro1 further e:a1inin% whether the factual situations of 5-)@AO an( 5DP*A confor1 to the <uri(ical positions respecti,ely (efine( by law+ for a

Pursuant to the fore%oin% pro,ision+ 5DP*A has the option either to pay for the encroachin% part of 5-)@AO=s &itchen+ or to sell the encroache( 34 s0uare 1eters of his lot to 5-)@AO. 9e cannot refuse to pay for the encroachin% part of the buil(in%+ an( to sell the encroache( part of his lan(+ 4 as he ha( 1anifeste( before the )unicipal ourt. ?ut that 1anifestation is not bin(in% because it was 1a(e in a ,oi( procee(in%.

9owe,er+ the %oo( faith of 5-)@AO is part of the $tipulation of Facts in the ourt of First .nstance. .t was thus error for the 2rial ourt to ha,e rule( that 5DP*A is Centitle( to possession+C without 1ore+ of the (ispute( portion

i1plyin% thereby that he is entitle( to ha,e the &itchen re1o,e(. 9e is entitle( to such re1o,al only when+ after ha,in% chosen to sell his encroache( lan(+ 5-)@AO fails to pay for the sa1e. 6 .n this case+ 5-)@AO ha( e:presse( his willin%ness to pay for the lan(+ but 5DP*A refuse( to sell.

As will be seen+ the Article fa,ors the owner of the lan(+ by %i,in% hi1 one of the two options 1entione( in the Article. $o1e co11entators ha,e 0uestione( the preference in fa,or of the owner of the lan(+ but )anresa=s opinion is that the Article is <ust an( fair.

2he owner of the buil(in% erecte( in %oo( faith on a lan( owne( by another+ is entitle( to retain the possession of the lan( until he is pai( the ,alue of his buil(in%+ un(er article 443 !now Article 446". 2he owner of the lan(+ upon the other han(+ has the option+ un(er article 361 !now Article 448"+ either to pay for the buil(in% or to sell his lan( to the owner of the buil(in%. ?ut he cannot as respon(ents here (i( refuse both to pay for the buil(in% an( to sell the lan( an( co1pel the owner of the buil(in% to re1o,e it fro1 the lan( where it erecte(. 9e is entitle( to such re1otion only when+ after ha,in% chosen to sell his lan(. the other party fails to pay for the sa1e !italics ours".

Be hol(+ therefore+ that the or(er of 'u(%e 3ati,i(a( co1pellin% (efen(ants8 petitioners to re1o,e their buil(in%s fro1 the lan( belon%in% to plaintiffs8 respon(ents only because the latter chose neither to pay for such buil(in%s nor to sell the lan(+ is null an( ,oi(+ for it a1en(s substantially the <u(%1ent sou%ht to be e:ecute( an( is. further1ore+ offensi,e to articles 361 !now Article 448" an( 443 !now Article 446" of the i,il o(e. !.%nacio ,s. 9ilario+ 76 Phil. 604+ 608J1946K".

. . . es <usta la faculta( 0ue el co(i%o (a al (ueno (el suelo en el articulo 361+ en el caso (e e(ificacion o plantacionI Al%unos co1entaristas la conceptuan in<usta+ y co1o un e:traor(inario pri,ile%io en fa,or (e la propie(a( territorial. Dntien(en 0ue i1pone el o(i%o una pena al posee(or (e buena fe y co1o a(,ierte uno (e los co1entaristas alu(i(os =no se ,e claro el por 0ue (e tal pena . . . al obli%ar al 0ue obro (e buena fe a 0ue(arse con el e(ificio o plantacion+ pre,io el pa%o (el terreno 0ue ocupa+ por0ue si bien es ,er(a( 0ue cuan(o e(ifico o planto (e1ostro con este hecho+ 0ue 0ueria para si el e(ificio o plantio ta1bien lo es 0ue el 0ue e(ifico o planto (e buena fe lo hi/o en la erronea inteli%encia (e creerse (ueno (el terreno Posible es 0ue+ (e saber lo contrario+ y (e tener noticia (e 0ue habia 0ue co1prar y pa%ar el terreno+ no se hubiera (eci(i(o a plantar ni a e(ificar. @a ley obli%an(ole a hacerlo fuer/a su ,olunta(+ y la fuer/a por un hecho inocente (e 0ue no (ebe ser responsable=. Asi po(ra suce(er pero la reali(a( es 0ue con ese hecho ,oluntario+ aun0ue sea inocente+ se ha enri0ueci(o torticera1ente con per<uicio (e otro a 0uien es <usto in(e1ni/arle+

Dn nuestra opinion+ el o(i%o ha resuelto el conflicto (e la 1anera 1as <usta y e0uitati,a y respetan(o en lo possible el principio 0ue para la accesion se establece en el art. 348. 7

A wor( anent the philosophy behin( Article 448 of the

i,il ro(e. Our own o(e o11ission 1ust ha,e ta&en account of the ob<ections to Article 361 of the $panish i,il o(e. 9ence+ the o11ission pro,i(e( a 1o(ification thereof+ an( Article 448 of our o(e has been 1a(e to pro,i(e#

2he ori%inal pro,ision was foun( in Article 361 of the $panish which pro,i(e(#

i,il

o(e>

A*2. 361. 2he owner of lan( on which anythin% has been built+ sown or plante( in %oo( faith+ shall ha,e the ri%ht to appropriate as his own the wor&+ sowin% or plantin%+ after the pay1ent of the in(e1nity state( in Articles 443 an( 444+ or to obli%e the one who built or plante( to pay the price of the lan(+ an( the one who sowe(+ the proper rent.

A*2. 448. 2he owner of the lan( on which anythin% has been built+ sown or plante( in %oo( faith+ shall ha,e the ri%ht to appropriate as his own the wor&s+ sowin% or plantin%+ after pay1ent of the in(e1nity pro,i(e( for in articles 446 an( 448+ or to obli%e the one who built or plante( to pay the price of the lan(+ an( the one who sowe(+ the proper rent. 9owe,er+ the buil(er or planter cannot be obli%e( to buy the lan( if its ,alue is consi(erably 1ore than that of the buil(in% or trees. .n such case+ he shall pay reasonable rent+ if the owner of the lan( (oes not choose to appropriate the buil(in% or trees after proper in(e1nity. 2he parties shall a%ree upon the ter1s of the lease an( in case of (isa%ree1ent+ the court shall fi: the ter1s thereof.

A((itional benefits were e:ten(e( to the buil(er but the lan(owner retaine( his options.

c" the increase in ,alue !Cplus ,alueC" which the sai( area of 34 s0uare 1eters 1ay ha,e ac0uire( by reason thereof+ an(

2he fairness of the rules in Article 448 has also been e:plaine( as follows#

(" whether the ,alue of sai( area of lan( is consi(erably 1ore than that of the &itchen built thereon.

Bhere the buil(er+ planter or sower has acte( in %oo( faith+ a conflict of ri%hts arises between the owners+ an( it beco1es necessary to protect the owner of the i1pro,e1ents without causin% in<ustice to the owner of the lan(. .n ,iew of the i1practicability of creatin% a state of force( co8ownership+ the law has pro,i(e( a <ust solution by %i,in% the owner of the lan( the option to ac0uire the i1pro,e1ents after pay1ent of the proper in(e1nity+ or to obli%e the buil(er or planter to pay for the lan( an( the sower to pay for the proper rent. .t is the owner of the lan( who is authori/e( to e:ercise the option+ because his ri%ht is ol(er+ an( because+ by the principle of accession+ he is entitle( to the ownership of the accessory thin%. !3 )anresa 213> ?ernar(o ,s. ?ataclan+ 37 Off. ;a/. 1382> o 2ao ,s. han hico+ ;.*. 3o. 49167+ April 30+ 1949> Article applie(# see abral+ et al ,s. .bane/ J$. .K 42 Off. ;a/. 217> )arfori ,s. Felasco+ J .A.K 42 Off. ;a/. 2040". 8

2. After sai( a1ounts shall ha,e been (eter1ine( by co1petent e,i(ence+ the *e%ional+ 2rial ourt shall ren(er <u(%1ent+ as follows#

a" 2he trial ourt shall %rant 5DP*A a perio( of fifteen !14" (ays within which to e:ercise his option un(er the law !Article 448+ i,il o(e"+ whether to appropriate the &itchen as his own by payin% to 5-)@AO either the a1ount of tile e:penses spent by 5-)@AO f or the buil(in% of the &itchen+ or the increase in ,alue !Cplus ,alueC" which the sai( area of 34 s0uare 1eters 1ay ha,e ac0uire( by reason thereof+ or to obli%e 5-)@AO to pay the price of sai( area. 2he a1ounts to be respecti,ely pai( by 5-)@AO an( 5DP*A+ in accor(ance with the option thus e:ercise( by written notice of the other party an( to the ourt+ shall be pai( by the obli%or within fifteen !14" (ays fro1 such notice of the option by ten(erin% the a1ount to the ourt in fa,or of the party entitle( to recei,e it>

B9D*DFO*D+ the <u(%1ent of the trial ourt is hereby set asi(e+ an( this case is hereby or(ere( re1an(e( to the *e%ional 2rial ourt of .loilo for further procee(in%s consistent with Articles 448 an( 446 of the i,il o(e+ as follows#

1. 2he trial ourt shall (eter1ine

a" the present fair price of 5DP*A=s 34 s0uare 1eter area of lan(>

b" the a1ount of the e:penses spent by 5-)@AO for the buil(in% of the &itchen>

b" 2he trial ourt shall further or(er that if 5DP*A e:ercises the option to obli%e 5-)@AO to pay the price of the lan( but the latter re<ects such purchase because+ as foun( by the trial ourt+ the ,alue of the lan( is consi(erably 1ore than that of the &itchen+ 5-)@AO shall %i,e written notice of such re<ection to 5DP*A an( to the ourt within fifteen !14" (ays fro1 notice of 5DP*A=s option to sell the lan(. .n that e,ent+ the parties shall be %i,en a perio( of fifteen !14" (ays fro1 such notice of re<ection within which to a%ree upon the ter1s of the lease+ an( %i,e the ourt for1al written notice of such a%ree1ent an( its pro,isos. .f no a%ree1ent is reache( by the parties+ the trial ourt+ within fifteen !14" (ays fro1 an( after the ter1ination of the sai( perio( fi:e( for ne%otiation+ shall then fi: the ter1s of the lease+ pro,i(e( that the 1onthly rental to be fi:e( by the ourt shall not be less than 2en Pesos !P10.00" per 1onth+ payable within the first fi,e !4" (ays of each calen(ar 1onth. 2he perio( for the force( lease shall not be 1ore than two !2" years+ counte( fro1 the finality of the <u(%1ent+ consi(erin% the lon% perio( of ti1e since 1942 that 5-)@AO has occupie( the sub<ect area. 2he rental thus fi:e( shall be increase( by ten percent !10Q" for the secon( year of the force( lease. 5-)@AO shall not 1a&e any further constructions or i1pro,e1ents on the &itchen. -pon e:piration of the two8year perio(+ or

upon (efault by 5-)@AO in the pay1ent of rentals for two !2" consecuti,e 1onths+ 5DP*A shall be entitle( to ter1inate the force( lease+ to reco,er his lan(+ an( to ha,e the &itchen re1o,e( by 5-)@AO or at the latter=s e:pense. 2he rentals herein pro,i(e( shall be ten(ere( by 5-)@AO to the ourt for pay1ent to 5DP*A+ an( such ten(er shall constitute e,i(ence of whether or not co1pliance was 1a(e within the perio( fi:e( by the ourt.

Forcible Dntry an( 5etainer

c" .n any e,ent+ 5-)@AO shall pay 5DP*A an a1ount co1pute( at 2en Pesos !P10.00" per 1onth as reasonable co1pensation for the occupancy of 5DP*A=s lan( for the perio( counte( fro1 1942+ the year 5-)@AO occupie( the sub<ect area+ up to the co11ence1ent (ate of the force( lease referre( to in the prece(in% para%raph>

C$ec. 7. 'u(%1ent conclusi,e only on possession> not conclusi,e in actions in,ol,in% title or ownership. 2he <u(%1ent ren(ere( in an action for forcible entry or (etainer shall be effecti,e with respect to the possession only an( in no wise bin( the title or affect the ownership of the lan( or buil(in%. $uch <u(%1ent shall not bar an action between the sa1e parties respectin% title to the lan( or buil(in%+ nor shall it be hel( conclusi,e of the facts therein foun( in a case between the sa1e parties upon a (ifferent cause of action not in,ol,in% possession.C

(" 2he perio(s to be fi:e( by the trial ourt in its Precision shall be ine:ten(ible+ an( upon failure of the party obli%e( to ten(er to the trial ourt the a1ount (ue to the obli%ee+ the party entitle( to such pay1ent shall be entitle( to an or(er of e:ecution for the enforce1ent of pay1ent of the a1ount (ue an( for co1pliance with such other acts as 1ay be re0uire( by the prestation (ue the obli%ee.

2 C$ec. 44. Ori%inal <uris(iction. ...

!b" .n all ci,il actions which in,ol,e the title to+ or possession of real property+ or any interest therein+ or the le%ality of any ta:+ i1pose or assess1ent+ e:cept actions of forcible entry into an( (etainer on lan(s or buil(in%s+ ori%inal <uris(iction of which is conferre( by this Act upon city an( 1unicipal courts> C

3o costs+ 3 C$ec. 19. 'uris(iction in ci,il ease ... $O O*5D*D5. !2" .n all ci,il actions which in,ol,e the title to+ or possession of+ real property+ or any interest therein+ e:cept actions for forcible entry into an( unlawful (etainer of lan(s or buil(in%s+ ori%inal <uris(iction o,er which is conferre( upon )etropolitan 2rial ourts+ )unicipal 2rial ourts+ an( )unicipal ircuit 2rial ourts>

2eehan&ee+ Act%. concur.

.'.+ Plana+ *elo,a+ 5e la Fuente an( Ala1pay+ ''.+

;utierre/+ 'r.+ R '.+ too& no part. $ar1iento ,. A%ana+ 129 $ *A 122 Footnotes 2his Petition for certiorari 0uestions a )arch 29+ 1979 5ecision ren(ere( by the then ourt of First .nstance of Pasay ity. 2he 5ecision was one 1a(e on 1e1oran(a+ pursuant to the pro,isions of *A 6031+ an( it 1o(ifie(+ on October 17+ 1977+ a <u(%1ent of the then )unicipal ourt of Parana0ue+ *i/al+ in an D<ect1ent suit institute( by herein petitioner @eonila

1 C*ule 70

$A*).D32O a%ainst pri,ate respon(ents+ the spouses D*3D$2O Falentino an( *ebecca @oren/o. For the facts+ therefore+ we ha,e to loo& to the e,i(ence presente( by the parties at the ori%inal le,el.

Be a%ree that D*3D$2O an( wife were buil(ers in %oo( faith in ,iew of the peculiar circu1stances un(er which they ha( constructe( the *D$.5D32.A@ 9O-$D. As far as they &new+ the @A35 was owne( by D*3D$2O=s 1other8 in8law who+ ha,in% state( they coul( buil( on the property+ coul( reasonably be e:pecte( to later on %i,e the1 the @A35.

.t appears that while D*3D$2O was still courtin% his wife+ the latter=s 1other ha( tol( hi1 the couple coul( buil( a *D$.5D32.A@ 9O-$D on a lot of 144 s0. 1s.+ bein% @ot 5 of a sub(i,ision in Parana0ue !the @A35+ for short". .n 1967+ D*3D$2O (i( construct a *D$.5D32.A@ 9O-$D on the @A35 at a cost of P8+000.00 to P10+000.00. .t was probably assu1e( that the wife=s 1other was the owner of the @A35 an( that+ e,entually+ it woul( so1ehow be transferre( to the spouses.

.n re%ar(s to buil(ers in %oo( faith+ Article 448 of the UVh0wWU

o(e pro,i(es#tST.

A*2. 448. 2he owner of the lan( on which anythin% has been built+ sown or plante( in %oo( faith+

.t subse0uently turne( out that the @A35 ha( been title( in the na1e of )r. P )rs. 'ose . $anto+ 'r. who+ on $epte1ber 7 + 1974+ sol( the sa1e to petitioner $A*).D32O. 2he followin% 'anuary 6+ 1974+ $A*).D32O as&e( D*3D$2O an( wife to ,acate an(+ on April 21+ 1974+ file( an D<ect1ent suit a%ainst the1. .n the e,i(entiary hearin%s before the )unicipal ourt+ $A*).D32O sub1itte( the (ee( of sale of the @A35 in her fa,or+ which showe( the price to be P14+000.00. On the other han(+ D*3D$2O testifie( that the then cost of the *D$.5D32.A@ 9O-$D woul( be fro1 P30+000.00 to P40+000.00. 2he fi%ures were not 0uestione( by $A*).D32O.

shall ha,e the ri%ht

to appropriate as his own the wor&s+ sowin% or plantin%+ after pay1ent of the in(e1nity pro,i(e( for in articles 446 an( 448+ or

2he )unicipal ourt foun( that pri,ate respon(ents ha( built the *D$.5D32.A@ 9O-$D in %oo( faith+ an(+ (isre%ar(in% the testi1ony of D*3D$2O+ that it ha( a ,alue of P20+000.00. .t then or(ere( D*3D$2O an( wife to ,acate the @A35 after $A*).D32O has pai( the1 the 1entione( su1 of P20+000.00.

to obli%e the one who built or plante( to pay the price of the lan(+ an( the one who sowe(+ the proper rent.

2he D<ect1ent suit was ele,ate( to the ourt of First .nstance of Pasay where+ after the sub1ission of 1e1oran(a+ sai( ourt ren(ere( a 1o(ifyin% 5ecision un(er Article 448 of the i,il o(e. $A*).D32O was re0uire(+ within 60 (ays+ to e:ercise the option to rei1burse D*3D$2O an( wife the su1 of 40+000.00 as the ,alue of the *D$.5D32.A@ 9O-$D+ or the option to allow the1 to purchase the @A35 for P24+000.00. $A*).D32O (i( not e:ercise any of the two options within the in(icate( perio(+ an( D*3D$2O was then allowe( to (eposit the su1 of P24+000.00 with the ourt as the purchase price for the @A35. 2his is the hub of the contro,ersy. $A*).D32O then institute( the instant certiorari procee(in%s.

9owe,er+ the buil(er or planter cannot be obli%e( to buy the lan( if its ,alue is consi(erably 1ore than that of the buil(in% or trees. .n such case+ he shall pay reasonable rent+ if the owner of the lan( (oes not choose to appropriate the buil(in% or trees after proper in(e1nity. 2he parties shall a%ree upon the ter1s of the lease an( in case of (isa%ree1ent+ the court shall fi: the ter1s thereof. !Para%raphin% supplie("

2he ,alue of the @A35+ purchase( for P14+000.00 on $epte1ber 7+ 1974+ coul( not ha,e been ,ery 1uch 1ore than that a1ount (urin% the followin% 'anuary when D*3D$2O an( wife were as&e( to ,acate. 9owe,er+ D*3D$2O an( wife ha,e not 0uestione( the P24+000.00 ,aluation (eter1ine( by the ourt of First .nstance.

.n re%ar(s to the ,aluation of the *D$.5D32.A@ 9O-$D+ the only e,i(ence presente( was the testi1ony of D*3D$2O that its worth at the ti1e of the trial shoul( be fro1 P30+000.00 to P40+000.00. 2he )unicipal ourt chose to assess its ,alue at P20+000.00+ or below the 1ini1u1 testifie( by D*3D$2O+ while the ourt of First .nstance chose the 1a:i1u1 of P40+000.00. .n the latter case+ it cannot be sai( that the ourt of First .nstance ha( abuse( its (iscretion.

$O O*5D*D5.1XwphY1.TZt

-'g'id v. CA, 45$ SCRA $43

2his is a petition for re,iew on certiorari of the 5ecisionJ1K (ate( )ay 21+ 2001+ of the ourt of Appeals in A8;.*. F 3o. 64294+ which 1o(ifie( the Or(er (ate( 'uly 31+ 1998 of the *e%ional 2rial ourt !*2 " of Lue/on ity+ ?ranch 101 in i,il ase 3o. L841470. 2he trial court or(ere( the (efen(ants+ a1on% the1 petitioner herein 'uan 3u%ui(+ to pay respon(ent herein Pe(ro P. Pecson+ the su1 of P1+344+000 as rei1burse1ent of unreali/e( inco1e for the perio( be%innin% 3o,e1ber 22+ 1993 to 5ece1ber 1997. 2he appellate court+ howe,er+ re(uce( the trial court=s awar( in fa,or of Pecson fro1 the sai( P1+344+000 to P280+000. D0ually assaile( by the petitioners is the appellate court=s *esolutionJ2K (ate( 'anuary 10+ 2002+ (enyin% the 1otion for reconsi(eration.

2he challen%e( (ecision of respon(ent ourt+ base( on ,aluations of P24+000.00 for the @A35 an( P40+000.00 for the *D$.5D32.A@ 9O-$D+ cannot be ,iewe( as not supporte( by the e,i(ence. 2he pro,ision for the e:ercise by petitioner $A*).D32O of either the option to in(e1nify pri,ate respon(ents in the a1ount of P40+000.00+ or the option to allow pri,ate respon(ents to purchase the @A35 at P24+000.00+ in our opinion+ was a correct (ecision.tST.UVh0wWU

2he owner of the buil(in% erecte( in %oo( faith on a lan( owne( by another+ is entitle( to retain the possession of the lan( until he is pai( the ,alue of his buil(in%+ un(er article 443 !now Article 446". 2he owner+ of the lan(. upon+ the other han(+ has the option+ un(er article 361 !now Article 448"+ either to pay for the buil(in% or to sell his lan( to the owner of the buil(in%. ?ut he cannot+ as respon(ents here (i(+ refuse both to pay for the buil(in% an( to sell the lan( an( co1pel the owner of the buil(in% to re1o,e it fro1 the lan( where it is erecte(. 9e is entitle( to such re1otion only when+ after ha,in% chosen to sell his lan(+ the other party fails to pay for the sa1e. !D1phasis ours"

.t 1ay be recalle( that relate(ly in our 5ecision (ate( )ay 26+ 1994+ in ;.*. 3o. 114814+ entitle( Pecson ,. ourt of Appeals+ we set asi(e the (ecision of the ourt of Appeals in A8;.*. $P 3o. 32679 an( the Or(er (ate( 3o,e1ber 14+ 1993+ of the *2 of Lue/on ity+ ?ranch 101 an( re1an(e( the case to the trial court for the (eter1ination of the current 1ar&et ,alue of the four8(oor two8storey apart1ent buil(in% on the 2468s0uare 1eter co11ercial lot.

2he antece(ent facts in this case are as follows#

Be hol(+ therefore+ that the or(er of 'u(%e 3ati,i(a( co1pellin% (efen(ants8 petitioners to re1o,e their buil(in%s fro1 the lan( belon%in% to plaintiffs8 respon(ents only because the latter chose neither to pay for such buil(in%s nor to sell the lan(+ is null an( ,oi(+ for it a1en(s substantially the <u(%1ent sou%ht to be e:ecute( an( is+ further1ore+ offensi,e to articles 361 !now Article 448" an( 443 !now Article 446" of the i,il o(e. !.%nacio ,s. 9ilario+ 76 Phil. 604+ 608 J1946K".

Pe(ro P. Pecson owne( a co11ercial lot locate( at 27 Ma1ias *oa(+ Lue/on ity+ on which he built a four8(oor two8storey apart1ent buil(in%. For failure to pay realty ta:es+ the lot was sol( at public auction by the ity 2reasurer of Lue/on ity to )a1erto 3epo1uceno+ who in turn sol( it for P103+000 to the spouses 'uan an( Drlin(a 3u%ui(.

B9D*DFO*D+ the Petition for ertiorari is hereby or(ere( (is1isse(+ without pronounce1ent as to costs.

Pecson challen%e( the ,ali(ity of the auction sale before the *2 of Lue/on ity in i,il ase 3o. L841470. .n its 5ecision+J3K (ate( February 8+ 1989+ the *2 uphel( the spouses= title but (eclare( that the four8(oor two8storey apart1ent buil(in% was not inclu(e( in the auction sale.J4K 2his was affir1e( in toto by the ourt of Appeals an( thereafter by this ourt+ in its 5ecisionJ4K (ate( )ay 24+ 1993+ in ;.*. 3o. 104360 entitle( Pecson ,. ourt of Appeals.

On 'une 23+ 1993+ by ,irtue of the Dntry of 'u(%1ent of the aforesai( (ecision in ;.*. 3o. 104360+ the 3u%ui(s beca1e the unconteste( owners of the 2468s0uare 1eter co11ercial lot.

possession of pri,ate respon(ents+ the 0uest of petitioner that he be restore( in possession of the pre1ises is ren(ere( 1oot an( aca(e1ic+ althou%h it is but fair an( <ust that pri,ate respon(ents pay petitioner the construction cost of P43+000.00> an( that petitioner be or(ere( to account for any an( all fruits of the i1pro,e1ents recei,e( by hi1 startin% on 'une 23+ 1993+ with the a1ount of P43+000.00 to be offset therefro1.

As a result+ the 3u%ui( spouses 1o,e( for (eli,ery of possession of the lot an( the apart1ent buil(in%.

.2 .$ $O O*5D*D5.J11K J-n(erscorin% supplie(.K

.n its Or(erJ6K of 3o,e1ber 14+ 1993+ the trial court+ relyin% upon Article 446J7K of the i,il o(e+ rule( that the $pouses 3u%ui( were to rei1burse Pecson for his construction cost of P43+000+ followin% which+ the spouses 3u%ui( were entitle( to i11e(iate issuance of a writ of possession o,er the lot an( i1pro,e1ents. .n the sa1e or(er the *2 also (irecte( Pecson to pay the sa1e a1ount of 1onthly rentals to the 3u%ui(s as pai( by the tenants occupyin% the apart1ent units or P21+000 per 1onth fro1 'une 23+ 1993+ an( allowe( the offset of the a1ount of P43+000 (ue fro1 the 3u%ui(s a%ainst the a1ount of rents collecte( by Pecson fro1 'une 23+ 1993 to $epte1ber 23+ 1993 fro1 the tenants of the apart1ent.J8K

Frustrate( by this turn of e,ents+ Pecson file( a petition for re,iew (oc&ete( as ;.*. 3o. 114814 before this ourt.

On )ay 26+ 1994+ the ourt han(e( (own the (ecision in ;.*. 3o 114814+ to wit#

B9D*DFO*D+ the (ecision of the ourt of Appeals in A8;.*. $P 3o. 32679 an( the Or(er of 14 3o,e1ber 1993 of the *e%ional 2rial ourt+ ?ranch 101+ Lue/on ity in i,il ase 3o. L841470 are hereby $D2 A$.5D.

Pecson (uly 1o,e( for reconsi(eration+ but on 3o,e1ber 8+ 1993+ the *2 issue( a Brit of Possession+J9K (irectin% the (eputy sheriff to put the spouses 3u%ui( in possession of the sub<ect property with all the i1pro,e1ents thereon an( to e<ect all the occupants therein.

A%%rie,e(+ Pecson then file( a special ci,il action for certiorari an( prohibition (oc&ete( as A8;.*. $P 3o. 32679 with the ourt of Appeals.

2he case is hereby re1an(e( to the trial court for it to (eter1ine the current 1ar&et ,alue of the apart1ent buil(in% on the lot. For this purpose+ the parties shall be allowe( to a((uce e,i(ence on the current 1ar&et ,alue of the apart1ent buil(in%. 2he ,alue so (eter1ine( shall be forthwith pai( by the pri,ate respon(ents J$pouses 'uan an( Drlin(a 3u%ui(K to the petitioner JPe(ro PecsonK otherwise the petitioner shall be restore( to the possession of the apart1ent buil(in% until pay1ent of the re0uire( in(e1nity.

.n its (ecision of 'une 7+ 1994+ the appellate court+ relyin% upon Article 448J10K of the i,il o(e+ affir1e( the or(er of pay1ent of construction costs but ren(ere( the issue of possession 1oot on appeal+ thus#

3o costs.

$O O*5D*D5.J12K JD1phasis supplie(.K B9D*DFO*D+ while it appears that pri,ate respon(ents Jspouses 3u%ui(K ha,e not yet in(e1nifie( petitioner JPecsonK with the cost of the i1pro,e1ents+ since Anne: . shows that the 5eputy $heriff has enforce( the Brit of Possession an( the pre1ises ha,e been turne( o,er to the

.n so rulin%+ this ourt pointe( out that# !1" Article 448 of the i,il o(e is not apposite to the case at bar where the owner of the lan( is the buil(er+ sower+

or planter who then later lost ownership of the lan( by sale+ but 1ay+ howe,er+ be applie( by analo%y> !2" the current 1ar&et ,alue of the i1pro,e1ents shoul( be 1a(e as the basis of rei1burse1ent> !3" Pecson was entitle( to retain ownership of the buil(in% an(+ necessarily+ the inco1e therefro1> !4" the ourt of Appeals erre( not only in uphol(in% the trial court=s (eter1ination of the in(e1nity+ but also in or(erin% Pecson to account for the rentals of the apart1ent buil(in% fro1 'une 23+ 1993 to $epte1ber 23+ 1993.

$O O*5D*D5.J14K

On 5ece1ber 1997+ after payin% the sai( P100+000 balance to Pe(ro Pecson the spouses 3u%ui( praye( for the closure an( ter1ination of the case+ as well as the cancellation of the notice of lis pen(ens on the title of the property on the %roun( that Pe(ro Pecson=s clai1 for rentals was (e,oi( of factual an( le%al bases.J16K

On the basis of this ourt=s (ecision in ;.*. 3o. 114814+ Pecson file( a )otion to *estore Possession an( a )otion to *en(er Accountin%+ prayin% respecti,ely for restoration of his possession o,er the sub<ect 2468s0uare 1eter co11ercial lot an( for the spouses 3u%ui( to be (irecte( to ren(er an accountin% un(er oath+ of the inco1e (eri,e( fro1 the sub<ect four8(oor apart1ent fro1 3o,e1ber 22+ 1993 until possession of the sa1e was restore( to hi1.

After con(uctin% a hearin%+ the lower court issue( an Or(er (ate( 'uly 31+ 1998+ (irectin% the spouses to pay the su1 of P1+344+000 as rei1burse1ent of the unreali/e( inco1e of Pecson for the perio( be%innin% 3o,e1ber 22+ 1993 up to 5ece1ber 1997. 2he su1 was base( on the co1putation of P28+00071onth rentals of the four8(oor apart1ent+ thus#

.n an Or(erJ13K (ate( 'anuary 26+ 1996+ the *2 (enie( the )otion to *estore Possession to the plaintiff a,errin% that the current 1ar&et ,alue of the buil(in% shoul( first be (eter1ine(. Pen(in% the sai( (eter1ination+ the resolution of the )otion for Accountin% was li&ewise hel( in abeyance.

Bith the sub1ission of the parties= assess1ent an( the reports of the sub<ect realty+ an( the reports of the Lue/on ity Assessor+ as well as the 1e1bers of the (uly constitute( assess1ent co11ittee+ the trial court issue( the followin% Or(erJ14K (ate( October 7+ 1997+ to wit#

2he ourt fin(s plaintiff=s 1otion ,ali( an( 1eritorious. 2he (ecision of the $upre1e ourt in the aforesai( case JPecson ,s. ourt of Appeals+ 244 $ *A 407K which set asi(e the Or(er of this ourt of 3o,e1ber 14+ 1993 has in effect uphel( plaintiff=s ri%ht of possession of the buil(in% for as lon% as he is not fully pai( the ,alue thereof. .t follows+ as (eclare( by the $upre1e ourt in sai( (ecision that the plaintiff is entitle( to the inco1e (eri,e( therefro1+ thus 8

. . .

On 3o,e1ber 21+ 1996+ the parties 1anifeste( that they ha,e arri,e( at a co1pro1ise a%ree1ent that the ,alue of the sai( i1pro,e1ent7buil(in% is P400+000.00 2he ourt notes that the plaintiff has alrea(y recei,e( P300+000.00. 9owe,er+ when (efen(ant was rea(y to pay the balance of P100+000.00+ the plaintiff now insists that there shoul( be a rental to be pai( by (efen(ants. Bhether or not this shoul( be pai( by (efen(ants+ inci(ent is hereby sche(ule( for hearin% on 3o,e1ber 12+ 1997 at 8#30 a.1.

*ecor(s show that the plaintiff was (ispossesse( of the pre1ises on 3o,e1ber 22+ 1993 an( that he was fully pai( the ,alue of his buil(in% in 5ece1ber 1997. 2herefore+ he is entitle( to the inco1e thereof be%innin% on 3o,e1ber 22+ 1993+ the ti1e he was (ispossesse(+ up to the ti1e of sai( full pay1ent+ in 5ece1ber 1997+ or a total of 48 1onths.

)eanti1e+ (efen(ants are (irecte( to pay plaintiff the balance of P100+000.00.

2he only 0uestion left is the (eter1ination of inco1e of the four units of apart1ents per 1onth. ?ut as correctly pointe( out by plaintiff+ the (efen(ants ha,e the1sel,es sub1itte( their affi(a,its attestin% that the inco1e (eri,e( fro1 three of the four units of the apart1ent buil(in% is

P21+000.00 or P7+000.00 each per 1onth+ or P28+000.00 per 1onth for the whole four units. 9ence+ at P28+000.00 per 1onth+ 1ultiplie( by 48 1onths+ plaintiff is entitle( to be pai( by (efen(ants the a1ount of P1+344+000.00.J17K

2he 3u%ui( spouses file( a 1otion for reconsi(eration but this was (enie( for lac& of 1erit.J18K

2he 3u%ui( couple then appeale( the trial court=s rulin% to the ourt of Appeals+ their action (oc&ete( as A8;.*. F 3o. 64294.

.n the ourt of Appeals+ the or(er appeale( fro1 in A8;.*. F 3o. 64294+ was 1o(ifie(. 2he A re(uce( the rentals fro1 P1+344+000 to P280+000 in fa,or of the appellee.J19K 2he sai( a1ount represents accrue( rentals fro1 the (eter1ination of the current 1ar&et ,alue on 'anuary 31+ 1997J20K until its full pay1ent on 5ece1ber 12+ 1997.

3ow herein respon(ent+ Pecson+ (isa%rees with herein petitioners= contention. 9e ar%ues that petitioners are wron% in clai1in% that inas1uch as his clai1 for rentals was not (eter1ine( in the (ispositi,e portion of the (ecision in ;.*. 3o. 114814+ it coul( not be the sub<ect of e:ecution. 9e points out that in 1o,in% for an accountin%+ all he as&e( was that the ,alue of the fruits of the property (urin% the perio( he was (ispossesse( be accounte( for+ since this ourt e:plicitly reco%ni/e( in ;.*. 3o. 114814+ he was entitle( to the property. 9e points out that this ourt rule( that CJtKhe petitioner JPecsonK not ha,in% been so pai(+ he was entitle( to retain ownership of the buil(in% an(+ necessarily+ the inco1e therefro1.CJ22K .n other wor(s+ says respon(ent+ accountin% was necessary. For accor(in%ly+ he was entitle( to rental inco1e fro1 the property. 2his shoul( be %i,en effect. 2he ourt coul( ha,e ,ery well specifically inclu(e( rent !as fruit or inco1e of the property"+ but coul( not ha,e (one so at the ti1e the ourt pronounce( <u(%1ent because its ,alue ha( yet to be (eter1ine(+ accor(in% to hi1. A((itionally+ he faults the appellate court for 1o(ifyin% the or(er of the *2 + thus (efeatin% his ri%ht as a buil(er in %oo( faith entitle( to rental fro1 the perio( of his (ispossession to full pay1ent of the price of his i1pro,e1ents+ which spans fro1 3o,e1ber 22+ 1993 to 5ece1ber 1997+ or a perio( of 1ore than four years.

9ence+ petitioners state the sole assi%n1ent of error now before us as follows#

29D O-*2 OF APPDA@$ D**D5 .3 9O@5.3; PD2.2.O3D*$ @.A?@D 2O PAE *D32 OFD* A35 A?OFD 29D -**D32 )A*MD2 FA@-D OF 29D .)P*OFD)D32 B9D3 $- 9 BA$ 3O2 P*OF.5D5 FO* .3 29D 5.$PO$.2.FD PO*2.O3 OF 29D $-P*D)D O-*2=$ *-@.3; .3 ;.*. 3o. 114814.

.t is not (ispute( that the construction of the four8(oor two8storey apart1ent+ sub<ect of this (ispute+ was un(erta&en at the ti1e when Pecson was still the owner of the lot. Bhen the 3u%ui(s beca1e the unconteste( owner of the lot on 'une 23+ 1993+ by ,irtue of entry of <u(%1ent of the ourt=s (ecision+ (ate( )ay 24+ 1993+ in ;.*. 3o. 104360+ the apart1ent buil(in% was alrea(y in e:istence an( occupie( by tenants. .n its (ecision (ate( )ay 26+ 1994 in ;.*. 3o. 114814+ the ourt (eclare( the ri%hts an( obli%ations of the liti%ants in accor(ance with Articles 448 an( 446 of the i,il o(e. 2hese pro,isions of the o(e are (irectly applicable to the instant case.

Petitioners call our attention to the fact that after reachin% an a%ree( price of P400+000 for the i1pro,e1ents+ they only 1a(e a partial pay1ent of P300+000. 2hus+ they conten( that their failure to pay the full price for the i1pro,e1ents will+ at 1ost+ entitle respon(ent to be restore( to possession+ but not to collect any rentals. Petitioners insist that this is the proper interpretation of the (ispositi,e portion of the (ecision in ;.*. 3o. 114814+ which states in part that CJtKhe ,alue so (eter1ine( shall be forthwith pai( by the pri,ate respon(ents J$pouses 'uan an( Drlin(a 3u%ui(K to the petitioner JPe(ro PecsonK otherwise the petitioner shall be restore( to the possession of the apart1ent buil(in% until pay1ent of the re0uire( in(e1nity.CJ21K

-n(er Article 448+ the lan(owner is %i,en the option+ either to appropriate the i1pro,e1ent as his own upon pay1ent of the proper a1ount of in(e1nity or to sell the lan( to the possessor in %oo( faith. *elate(ly+ Article 446 pro,i(es that a buil(er in %oo( faith is entitle( to full rei1burse1ent for all the necessary an( useful e:penses incurre(> it also %i,es hi1 ri%ht of retention until full rei1burse1ent is 1a(e.

Bhile the law ai1s to concentrate in one person the ownership of the lan( an( the i1pro,e1ents thereon in ,iew of the i1practicability of creatin% a state of force( co8ownership+J23K it %uar(s a%ainst un<ust enrich1ent insofar as the %oo(8faith buil(er=s i1pro,e1ents are concerne(. 2he ri%ht of retention is consi(ere( as one of the 1easures (e,ise( by the law for the protection of buil(ers in %oo( faith. .ts ob<ect is to %uarantee full an( pro1pt rei1burse1ent as it per1its the actual possessor to re1ain in possession while he has not been rei1burse( !by the person who (efeate( hi1 in the case for possession of the property" for those necessary e:penses an( useful i1pro,e1ents 1a(e by hi1 on the thin% possesse(.J24K Accor(in%ly+ a buil(er in %oo( faith cannot be co1pelle( to pay rentals (urin% the perio( of retentionJ24K nor be (isturbe( in his possession by or(erin% hi1 to ,acate. .n a((ition+ as in this case+ the owner of the lan( is prohibite( fro1 offsettin% or co1pensatin% the necessary an( useful e:penses with the fruits recei,e( by the buil(er8possessor in %oo( faith. Otherwise+ the security pro,i(e( by law woul( be i1paire(. 2his is so because the ri%ht to the e:penses an( the ri%ht to the fruits both pertain to the possessor+ 1a&in% co1pensation <uri(ically i1possible> an( one cannot be use( to re(uce the other.J26K

2he te:t of the (ecision in ;.*. 3o. 114814 e:pressly e:e1pte( Pecson fro1 liability to pay rentals+ for we foun( that the ourt of Appeals erre( not only in uphol(in% the trial court=s (eter1ination of the in(e1nity+ but also in or(erin% hi1 to account for the rentals of the apart1ent buil(in% fro1 'une 23+ 1993 to $epte1ber 23+ 1993+ the perio( fro1 entry of <u(%1ent until Pecson=s (ispossession. As pointe( out by Pecson+ the (ispositi,e portion of our (ecision in ;.*. 3o. 114814 nee( not specifically inclu(e the inco1e (eri,e( fro1 the i1pro,e1ent in or(er to entitle hi1+ as a buil(er in %oo( faith+ to such inco1e. 2he ri%ht of retention+ which entitles the buil(er in %oo( faith to the possession as well as the inco1e (eri,e( therefro1+ is alrea(y pro,i(e( for un(er Article 446 of the i,il o(e.

As we earlier hel(+ since petitioners opte( to appropriate the i1pro,e1ent for the1sel,es as early as 'une 1993+ when they applie( for a writ of e:ecution (espite &nowle(%e that the auction sale (i( not inclu(e the apart1ent buil(in%+ they coul( not benefit fro1 the lot=s i1pro,e1ent+ until they rei1burse( the i1pro,er in full+ base( on the current 1ar&et ,alue of the property.

;i,en the circu1stances of the instant case where the buil(er in %oo( faith has been clearly (enie( his ri%ht of retention for al1ost half a (eca(e+ we fin( that the increase( awar( of rentals by the *2 was reasonable an( e0uitable. 2he petitioners ha( reape( all the benefits fro1 the i1pro,e1ent intro(uce( by the respon(ent (urin% sai( perio(+ without payin% any a1ount to the latter as rei1burse1ent for his construction costs an( e:penses. 2hey shoul( account an( pay for such benefits.

Be nee( not belabor now the appellate court=s reco%nition of herein respon(ent=s entitle1ent to rentals fro1 the (ate of the (eter1ination of the current 1ar&et ,alue until its full pay1ent. *espon(ent is clearly entitle( to pay1ent by ,irtue of his ri%ht of retention o,er the sai( i1pro,e1ent.

5espite the ourt=s reco%nition of Pecson=s ri%ht of ownership o,er the apart1ent buil(in%+ the petitioners still insiste( on (ispossessin% Pecson by filin% for a Brit of Possession to co,er both the lot an( the buil(in%. learly+ this resulte( in a ,iolation of respon(ent=s ri%ht of retention. Borse+ petitioners too& a(,anta%e of the situation to benefit fro1 the hi%hly ,alue(+ inco1e8yiel(in%+ four8unit apart1ent buil(in% by collectin% rentals thereon+ before they pai( for the cost of the apart1ent buil(in%. .t was only four years later that they finally pai( its full ,alue to the respon(ent.

Petitioners= interpretation of our hol(in% in ;.*. 3o. 114814 has neither factual nor le%al basis. 2he (ecision of )ay 26+ 1994+ shoul( be construe( in connection with the le%al principles which for1 the basis of the (ecision+ %ui(e( by the precept that <u(%1ents are to ha,e a reasonable inten(1ent to (o <ustice an( a,oi( wron%.J27K

B9D*DFO*D+ the instant petition is 5D3.D5 for lac& of 1erit. 2he 5ecision (ate( )ay 21+ 2001 of the ourt of Appeals in A8;.*. F 3o. 64294 is $D2 A$.5D an( the Or(er (ate( 'uly 31+ 1998+ of the *e%ional 2rial ourt+ ?ranch 101+ Lue/on ity+ in i,il ase 3o. L841470 or(erin% the herein petitioners+ $pouses 'uan an( Drlin(a 3u%ui(+ to account for the rental inco1e of the four8(oor two8storey apart1ent buil(in% fro1 3o,e1ber 1993 until 5ece1ber 1997+ in the a1ount of P1+344+000+ co1pute( on the basis of 2wenty8ei%ht 2housan( !P28+000.00" pesos 1onthly+ for a perio( of 48 1onths+ is hereby *D.3$2A2D5. -ntil fully pai(+ sai( a1ount of rentals shoul( bear the le%al rate of interest set at si: percent !6Q" per annu1 co1pute( fro1 the (ate of *2 <u(%1ent. .f any portion thereof shall thereafter re1ain unpai(+ (espite notice of finality of this ourt=s <u(%1ent+ sai( re1ainin% unpai( a1ount shall bear the rate of interest set at twel,e

percent !12Q" per annu1 co1pute( fro1 the (ate of sai( notice. a%ainst petitioners.

osts

$O O*5D*D5.

was si%ne( by petitioner 'ose )arcel D. Panlilio in his official capacity as $enior D:ecuti,e Fice Presi(ent of the PF9. an( by hair1an Alberto A. @i1 of the 3ayon% Pilipino Foun(ation. 2hey a%ree( to the renewal of the contract for another 24 years+ or until 2021. -n(er the new a%ree1ent+ petitioner PF9. was boun( to pay the 1onthly rental on a per s0uare 1eter basis at the rate of P20.00 per s0uare 1eter+ which shall be sub<ect to an increase of 20Q at the en( of e,ery 38year perio(. At the ti1e of the renewal of the lease contract+ the 1onthly rental a1ounte( to P724+780.00.

5a,i(e+ 'r.+ concur.

.'.+ ! hair1an"+ Enares8$antia%o+

arpio+ an( A/cuna+ ''.+ ?e%innin% 'anuary 2001+ petitioners (efaulte( in the pay1ent of their 1onthly rental. *espon(ent repeate(ly (e1an(e( petitioners to pay the arrears an( ,acate the pre1ises. 2he last (e1an( letter was sent on )arch 26+ 2001.

S'lo ng -a0on v. -a0ong ,ilipino, G.R. 17.9$3, 1an. $., $..9

*esolution+J2K re,ersin% the 3o,e1ber 29+ 2002 5ecisionJ3K of the *e%ional 2rial ourt !*2 " of Pasay ity in i,il ase 3o. 0280133. 2he *2 1o(ifie( the 5ecisionJ4K of the )etropolitan 2rial ourt !)e2 " of Pasay ity which rule( a%ainst petitioners an( or(ere( the1 to ,acate the pre1ises an( pay their arrears. 2he *2 (eclare( petitioners as buil(ers in %oo( faith an( uphel( their ri%ht to in(e1nity.

On $epte1ber 4+ 2001+ respon(ent file( a co1plaint for unlawful (etainer before the )e2 of Pasay ity. 2he co1plaint was (oc&ete( as i,il ase 3o. 708801. *espon(ent co1pute( the arrears of petitioners in the a1ount of twenty8si: 1illion one hun(re( ei%hty8three thousan( two hun(re( twenty8 fi,e pesos an( fourteen centa,os !P26+183+224.14"+ as of 'uly 31+ 2001.

2he facts are as follows# On February 26+ 2002+ the )e2 ren(ere( its (ecision in fa,or of respon(ent. .t rule(+ thus# *espon(ent 3ayon% Pilipino Foun(ation+ a %o,ern1ent8owne( an( controlle( corporation+ is the owner of a parcel of lan( in Pasay ity+ &nown as the 3ayon% Pilipino o1ple:. Petitioner Philippine Filla%e 9otel+ .nc. !PF9."+ for1erly calle( $ulo sa 3ayon+ .nc.+ is a (o1estic corporation (uly or%ani/e( an( e:istin% un(er Philippine laws. Petitioner 'ose )arcel D. Panlilio is its $enior D:ecuti,e Fice Presi(ent.

On 'une 1+ 1974+ respon(ent lease( a portion of the 3ayon% Pilipino o1ple:+ consistin% of 36+289 s0uare 1eters+ to petitioner $ulo sa 3ayon+ .nc. for the construction an( operation of a hotel buil(in%+ to be &nown as the Philippine Filla%e 9otel. 2he lease was for an initial perio( of 21 years+ or until )ay 1996. .t is renewable for a perio( of 24 years un(er the sa1e ter1s an( con(itions upon (ue notice in writin% to respon(ent of the intention to renew at least 6 1onths before its e:piration. 2hus+ on )arch 7+ 1994+ petitioners sent respon(ent a letter notifyin% the latter of their intention to renew the contract for another 24 years. On 'uly 4+ 1994+ the parties e:ecute( a Foluntary A((en(u1 to the @ease A%ree1ent. 2he a((en(u1

. . . . 2he court is con,ince( by the e,i(ence that in(ee(+ (efen(ants (efaulte( in the pay1ent of their rentals. .t is basic that the lessee is obli%e( to pay the price of the lease accor(in% to the ter1s stipulate( !Art. 1647+ i,il o(e". -pon the failure of the lessee to pay the stipulate( rentals+ the lessor 1ay e<ect !sic" an( treat the lease as rescin(e( an( sue to e<ect the lessee ! . F(aJ.K 5e Pa1intuan ,. 2i%lao+ 43 Phil. 1". For non8pay1ent of rentals+ the lessor 1ay rescin( the lease+ reco,er the bac& rentals an( reco,er possession of the lease( pre1ises. . .

:::

. . . . .1pro,e1ents 1a(e by a lessee such as the (efen(ants herein on lease( pre1ises are not ,ali( reasons for their retention thereof. 2he

$upre1e ourt has occasion to a((ress a si1ilar issue in which it rule( that# C2he fact that petitioners alle%e(ly 1a(e repairs on the pre1ises in 0uestion is not a reason for the1 to retain the possession of the pre1ises. 2here is no pro,ision of law which %rants the lessee a ri%ht of retention o,er the lease( pre1ises on that %roun(. Article 448 of the i,il o(e+ in relation to Article 446+ which pro,i(es for full rei1burse1ent of useful i1pro,e1ents an( retention of the pre1ises until rei1burse1ent is 1a(e+ applies only to a possessor in %oo( faith+ i.e.+ one who buil(s on a lan( in the belief that he is the owner thereof. 2his ri%ht of retention (oes not apply to a 1ere lessee+ li&e the petitioners+ otherwise+ it woul( always be in his power to Ci1pro,eC his lan(lor( out of the latter=s property !'ose @. hua an( o $io Dn% ,s. ourt of Appeals an( *a1on .barra+ ;.*. 3o. 109840+ 'anuary 21+ 1999".C

2BD32E F.FD PD$O$ A35 147100 !P26+183+224.14" incurre( as of 'uly 31+ 2001>

3. PAE plaintiff the su1 of $DFD3 9-35*D5 2BD32E F.FD 29O-$A35 $DFD3 9-35*D5 D.;92E PD$O$ !P724+780.00" per 1onth startin% fro1 Au%ust 2001 an( e,ery 1onth thereafter by way of reasonable co1pensation for the use an( occupation of the pre1ises>

4. PAE plaintiff the su1 of F.F2E 29O-$A35 PD$O$ !P40+000.00" by way of attorney=s feesJ> an(K

Althou%h the ontract of @ease stipulates that the buil(in% an( all the i1pro,e1ents in the lease( pre1ises belon% to the (efen(ants herein+ such will not (efeat the ri%ht of the plaintiff to its property as the (efen(ants faile( to pay their rentals in ,iolation of the ter1s of the contract. At 1ost+ (efen(ants can only in,o&e JtheirK ri%ht un(er Article 1678 of the 3ew i,il o(e which %rants the1 the ri%ht to be rei1burse( one8half of the ,alue of the buil(in% upon the ter1ination of the lease+ or+ in the alternati,e+ to re1o,e the i1pro,e1ents if the lessor refuses to 1a&e rei1burse1ent.

4.

PAE the costs of suit.

2he co1plaint a%ainst (efen(ant 'ose )arcel D. Panlilio is hereby (is1isse( for lac& of cause of action. 2he sai( (efen(ant=s counterclai1 howe,er is li&ewise (is1isse( as the co1plaint (oes not appear to be fri,olous or 1aliciously institute(.

$O O*5D*D5.J4K 2he (ispositi,e portion of the (ecision rea(s as follows# Petitioners appeale( to the *2 hel( that# B9D*DFO*D+ pre1ises consi(ere(+ <u(%1ent is hereby ren(ere( in fa,or of 3ayon% Pilipino Foun(ation+ an( a%ainst the (efen(ant Philippine Filla%e 9otel+ .ncJ.K+ an( all persons clai1in% ri%hts un(er it+ or(erin% the latter to# which 1o(ifie( the rulin% of the )e2 . .t

1. FA A2D the sub<ect pre1ises an( surren(er possession thereof to plaintiff>

2. PAE plaintiff its rental arreara%es in the su1 of 2BD32E $.A ).@@.O3 O3D 9-35*D5 D.;92E 29*DD 29O-$A35 2BO 9-35*D5

. . . it is clear an( un(ispute( that appellants8lessees were e:pressly re0uire( to construct a first8class hotel with co1plete facilities. 2he appellants were also une0ui,ocally (eclare( in the @ease A%ree1ent as the owner of the i1pro,e1ents so constructe(. 2hey were e,en e:plicitly allowe( to use the i1pro,e1ents an( buil(in% as security or collateral on loans an( cre(it acco11o(ations that the @essee 1ay secure for the purpose of financin% the construction of the buil(in% an( other i1pro,e1ents !$ection 2> pars. CAC to C?+C @ease A%ree1ent". )oreo,er+ a ti1e fra1e was setforth !sic" with respect to the (uration of the lease initially for 21 years an( renewable for another 24 years in or(er to enable the appellants8lessees to recoup their

hu%e 1oney in,est1ents relati,e to the construction an( 1aintenance of the i1pro,e1ents.

B9D*DFO*D+ an( in ,iew of the fore%oin%+ <u(%1ent is hereby ren(ere( 1o(ifyin% the (ecision of JtheK )2 + ?ranch 44 of Pasay ity ren(ere( on February 26+ 2002 as follows#

::: 1. Or(erin% plaintiff8appellee to sub1it within thirty !30" (ays fro1 receipt of a copy of this (ecision a written 1anifestation of the option or choice it selecte(+ i.e.+ to appropriate the i1pro,e1ents upon pay1ent of proper in(e1nity or co1pulsory sale of the lan( whereon the hotel buil(in% of PF9. an( relate( i1pro,e1ents or facilities were erecte(>

onsi(erin% therefore+ the ele1ents of per1anency of the construction an( substantial ,alue of the i1pro,e1ents as well as the un(isputeJ(K ownership o,er the lan( i1pro,e1ents+ these+ i11ensely en%en(er the application of Art. 448 of the i,il o(e. 2he only re1ainin% an( 1ost crucial issue to be resol,e( is whether or not the appellants as buil(ers ha,e acte( in %oo( faith in or(er for Art. 448 in relation to Art. 446 of the i,il o(e 1ay apply with respect to their ri%hts o,er i1pro,e1ents.

:::

2. 5irectin% the plaintiff8appellee to (esist an(7or refrain fro1 (oin% acts in the furtherance or e:ercise of its ri%hts an( (e1olition a%ainst appellants unless an( after ha,in% selecte( the option of co1pulsory sale an( appellants faile( to pay Jan(K purchase the lan( within a reasonable ti1e or at such ti1e as this court will (irect>

. . . it is un(eniable that the i1pro,e1ent of the hotel buil(in% of appellants !sic" PF9. was constructe( with the written consent an( &nowle(%e of appellee. .n fact+ it was precisely the pri1ary purpose for which they entere( into an a%ree1ent. 2hus+ it coul( not be (enie( that appellants were buil(ers in %oo( faith.

3. Or(erin% (efen(ants8appellants to pay plaintiff8appellee JtheirK arrears in rent incurre( as of 'uly 31+ 2001 in the a1ount of P26+183+224.14>

4. Or(erin% (efen(ants8appellants to pay to plaintiff8appellee the unpai( 1onthly rentals for the use an( occupation of the pre1ises pen(in% this appeal fro1 'uly to 3o,e1ber 2002 only at P724+780.00 per 1onth>

Accor(in%ly+ an( pursuant to Article 448 in relation to Art. 446 of the i,il o(e+ plaintiff8appellee has the sole option or choice+ either to appropriate the buil(in%+ upon pay1ent of proper in(e1nity consonant to Art. 446 or co1pel the appellants to purchase the lan( whereon the buil(in% was erecte(. -ntil such ti1e that plaintiff8appellee has electe( an option or choice+ it has no ri%ht of re1o,al or (e1olition a%ainst appellants unless after ha,in% selecte( a co1pulsory sale+ appellants fail to pay for the lan( !.%nacio ,s. 9ilario> 76 Phil. 604". 2his+ howe,er+ is without pre<u(ice fro1 the parties a%reein% to a(<ust their ri%hts in so1e other way as they 1ay 1utually (ee1 fit an( proper.

4. 2he fourth an( fifth (irecti,es in the (ispositi,e portion of the trial court=s (ecision inclu(in% that the last para%raph thereof ')D Panlilio=s co1plaint is hereby affir1e(>

6. 2he parties are (irecte( to a(<ust their respecti,e ri%hts in the interest of <ustice as they 1ay (ee1 fit an( proper if necessary.

2he (ispositi,e portion of the (ecision of the *2

rea(s as follows#

$O O*5D*D5.J6K

*espon(ent appeale( to the A which hel( that the *2 erroneously applie( the rules on accession+ as foun( in Articles 448 an( 446 of the i,il o(e when it hel( that petitioners were buil(ers in %oo( faith an(+ thus+ ha,e the ri%ht to in(e1nity. 2he A hel(#

?-.@5D*$ .3 ;OO5 FA.29 OFD* 29D $-?$2A32.A@ A35 FA@-A?@D .)P*OFD)D32$ B9. 9 29DE 9A5 .32*O5- D5 O3 29D $-?'D 2 P*OPD*2E+ 29-$ O)PD@@.3; 29D APP@. A2.O3 OF A*2. @D 448 OF 29D .F.@ O5D .3 *D@A2.O3 2O A*2. @D 446 OF 29D $A)D O5D+ .3$2DA5 OF A*2. @D 1678 OF 29D .F.@ O5D.

?y an( lar%e+ respon(ents are a(1itte(ly 1ere lessees of the sub<ect pre1ises an( as such+ cannot ,ali(ly clai1 that they are buil(ers in %oo( faith in or(er to solicit the application of Articles 448 an( 446 of the i,il o(e in their fa,or. As it is+ it is %larin% error on the part of the *2 to apply the aforesai( le%al pro,isions on the supposition that the i1pro,e1ents+ which are of substantial ,alue+ ha( been intro(uce( on the lease( pre1ises with the per1ission of the petitioner. 2o %rant the respon(ents the ri%ht of retention an( rei1burse1ent as buil(ers in %oo( faith 1erely because of the ,aluable an( substantial i1pro,e1ents that they intro(uce( to the lease( pre1ises plainly contra,enes the law an( settle( <urispru(ential (octrines an( woul(+ as state(+ allow the lessee to easily Ci1pro,eC the lessor out of its property.

..

29D 9O3O*A?@D O-*2 OF APPDA@$ O)).22D5 A $D*.O-$ *DFD*$.?@D D**O* B9D3 .2 5.$*D;A*5D5 29D FA 2 29A2 29D @DA$D O32*A 2 ;OFD*3$ 29D *D@A2.O3$9.P OF 29D PA*2.D$ A35 O3$DL-D32@E 29D PA*2.D$ )AE ?D O3$.5D*D5 2O 9AFD .)P@.D5@E BA.FD5 29D APP@. A2.O3 OF A*2. @D 1678 OF 29D .F.@ O5D 2O 29D .3$2A32 A$D.

... . . . . .ntro(uction of ,aluable i1pro,e1ents on the lease( pre1ises (oes not strip the petitioner of its ri%ht to a,ail of recourses un(er the law an( the lease contract itself in case of breach thereof. 3either (oes it (epri,e the petitioner of its ri%ht un(er Article 1678 to e:ercise its option to ac0uire the i1pro,e1ents or to let the respon(ents re1o,e the sa1e.

Petitioners= )otion for *econsi(eration was (enie(.

A$$-).3; A*;-D35O 29A2 29D PD2.2.O3D*$ A*D 3O2 ?-.@5D*$ .3 ;OO5 FA.29+ 29D 9O3O*A?@D O-*2 OF APPDA@$ O)).22D5 A ;*AFD *DFD*$.?@D D**O* B9D3 .2 OFD*@OOMD5 29D FA 2 29A2 *D$PO35D32 A@$O A 2D5 .3 ?A5 FA.29 B9D3 .2 5.5 3O2 9O3O* A35 .3$2DA5 ?*DA 9D5 29D @DA$D O32*A 2 ?D2BDD3 29D PA*2.D$+ 29-$ ?O29 PA*2.D$ A 2D5 A$ .F 29DE A*D .3 ;OO5 FA.29.

9ence+ this appeal.J7K

.F

Petitioners assi%n the followin% errors#

29D 9O3O*A?@D O-*2 OF APPDA@$ O)).22D5 A ;*AFD *DFD*$.?@D D**O* .3 3O2 9O@5.3; 29A2 PD2.2.O3D*$ BD*D

2O $A3 2.O3 29D APP@. A2.O3 OF A*2. @D 1678 OF 29D .F.@ O5D .3$2DA5 OF A*2. @D 448 OF 29D .F.@ O5D .3 *D@A2.O3 2O A*2. @D 446 OF 29D $A)D O5D BO-@5 3O2 O3@E B*DAM 9AFO A35 A-$D $-?$2A32.A@ .3'-*E 2O 29D *.;92$ A35 .32D*D$2$ OF PD2.2.O3D* P9.@.PP.3D F.@@A;D 9O2D@+ .3 . B9.@D *D$PO35D32 3AEO3; P.@.P.3O FO-35A2.O3+ .3 O)PA*.$O3 29D*D2O+ BO-@5 $-FFD* O3@E $@.;92 O* .3 O3$DL-D32.A@ .3'-*E O* @O$$+ ?-2 A@$O BO-@5 O3$2.2-2D -3'-$2

D3*. 9)D32 O3 29D PA*2 OF *D$PO35D32 A2 ;*DA2 DAPD3$D A35 ;*AFD P*D'-5. D OF PD2.2.O3D*$.

29D 9O3O*A?@D O-*2 OF APPDA@$ O)).22D5 A ;*AFD *DFD*$.?@D D**O* .3 3O2 9O@5.3; 29A2 29D O-*2$ A L-O 5.5 3O2 A L-.*D '-*.$5. 2.O3 OFD* 29D -3@ABF-@ 5D2A.3D* A$D FO* 3O38 O)P@.A3 D B.29 '-*.$5. 2.O3A@ *DL-.*D)D32$ 5-D 2O 29D A?$D3 D OF A 3O2. D 2O FA A2D -PO3 PD2.2.O3D*$.J8K

.n the case at bar+ the lan%ua%e of the (e1an( letter is plain an( si1ple# respon(ent (e1an(e( pay1ent of the rental arrears a1ountin% to P26+183+224.14 within ten (ays fro1 receipt by petitioners+ or respon(ent will be constraine( to file an appropriate le%al action a%ainst petitioners to reco,er the sai( a1ount. 2he (e1an( letter further state( that respon(ent will possess the lease( pre1ises in case of petitioners= failure to pay the rental arrears within ten (ays. 2hus+ it is clear that the (e1an( letter is inten(e( as a notice to petitioners to pay the rental arrears+ an( a notice to ,acate the pre1ises in case of failure of petitioners to perfor1 their obli%ation to pay.

First+ we settle the issue of <uris(iction. Petitioners ar%ue that the )e2 (i( not ac0uire <uris(iction to hear an( (eci(e the e<ect1ent case because they ne,er recei,e( any (e1an( fro1 respon(ent to pay rentals an( ,acate the pre1ises+ since such (e1an( is a <uris(ictional re0uisite. Be reiterate the rulin% of the )e2 + *2 an( A. ontrary to the clai1 of petitioners+ (ocu1entary e,i(ence pro,e( that a (e1an( letter (ate( )arch 26+ 2001 was sent by respon(ent throu%h re%istere( 1ail to petitioners+ re0uestin% the1 Cto pay the rental arrears or else it will be constraine( to file the appropriate le%al action an( possess the lease( pre1ises.C

$econ(+ we resol,e the 1ain issue of whether the rules on accession+ as foun( in Articles 448 an( 446 of the i,il o(e+ apply to the instant case.

Article 448 an( Article 446 pro,i(e#

Further+ petitioners= ar%u1ent that the (e1an( letter is Cina(e0uateC because it containe( no (e1an( to ,acate the lease( pre1ises (oes not persua(e. Be ha,e rule( that#

Art. 448. 2he owner of the lan( on which anythin% has been built+ sown or plante( in %oo( faith+ shall ha,e the ri%ht to appropriate as his own the wor&s+ sowin% or plantin%+ after pay1ent of the in(e1nity pro,i(e( for in Articles 446 an( 448+ or to obli%e the one who built or plante( to pay the price of the lan(+ an( the one who sowe(+ the proper rent. 9owe,er+ the buil(er or planter cannot be obli%e( to buy the lan( if its ,alue is consi(erably 1ore than that of the buil(in% or trees. .n such case+ he shall pay reasonable rent+ if the owner of the lan( (oes not choose to appropriate the buil(in% or trees after proper in(e1nity. 2he parties shall a%ree upon the ter1s of the lease an( in case of (isa%ree1ent+ the court shall fi: the ter1s thereof.

. . . . 2he wor( C,acateC is not a talis1anic wor( that 1ust be e1ploye( in all notices. 2he alternati,es in this case are clear cut. 2he tenants 1ust pay rentals which are fi:e( an( which beca1e payable in the past+ failin% which they 1ust 1o,e out. 2here can be no other interpretation of the notice %i,en to the1. 9ence+ when the petitioners (e1an(e( that either he pays P18+000 in fi,e (ays or a case of e<ect1ent woul( be file( a%ainst hi1+ he was place( on notice to 1o,e out if he (oes not pay. 2here was+ in effect+ a notice or (e1an( to ,acate.J9K

Art. 446. 3ecessary e:penses shall be refun(e( to e,ery possessor> but only the possessor in %oo( faith 1ay retain the thin% until he has been rei1burse( therefor.

-seful e:penses shall be refun(e( only to the possessor in %oo( faith with the sa1e ri%ht of retention+ the person who has (efeate( hi1 in the possession ha,in% the option of refun(in% the a1ount of the e:penses or of payin% the increase in ,alue which the thin% 1ay ha,e ac0uire( by reason thereof.

Be uphol( the rulin% of the

A.

Bith re%ar( to orna1ental e:penses+ the lessee shall not be entitle( to any rei1burse1ent+ but he 1ay re1o,e the orna1ental ob<ects+ pro,i(e( no (a1a%e is cause( to the principal thin%+ an( the lessor (oes not choose to retain the1 by payin% their ,alue at the ti1e the lease is e:tin%uishe(. i,il @aw+ e:plains#

2he late $enator Arturo ). 2olentino+ a lea(in% e:pert in

2his article JArticle 448K is 1anifestly inten(e( to apply only to a case where one buil(s+ plants+ or sows on lan( in which he belie,es hi1self to ha,e a clai1 of title+J10K an( not to lan(s where the only interest of the buil(er+ planter or sower is that of a hol(er+ such as a tenant.J11K

-n(er Article 1678+ the lessor has the option of payin% one8half of the ,alue of the i1pro,e1ents which the lessee 1a(e in %oo( faith+ which are suitable for the use for which the lease is inten(e(+ an( which ha,e not altere( the for1 an( substance of the lan(. On the other han(+ the lessee 1ay re1o,e the i1pro,e1ents shoul( the lessor refuse to rei1burse.

.n the case at bar+ petitioners ha,e no a(,erse clai1 or title to the lan(. .n fact+ as lessees+ they reco%ni/e that the respon(ent is the owner of the lan(. Bhat petitioners insist is that because of the i1pro,e1ents+ which are of substantial ,alue+ that they ha,e intro(uce( on the lease( pre1ises with the per1ission of respon(ent+ they shoul( be consi(ere( buil(ers in %oo( faith who ha,e the ri%ht to retain possession of the property until rei1burse1ent by respon(ent.

Be affir1 the rulin% of the A that intro(uction of ,aluable i1pro,e1ents on the lease( pre1ises (oes not %i,e the petitioners the ri%ht of retention an( rei1burse1ent which ri%htfully belon%s to a buil(er in %oo( faith. Otherwise+ such a situation woul( allow the lessee to easily Ci1pro,eC the lessor out of its property. Be reiterate the (octrine that a lessee is neither a buil(er in %oo( faith nor in ba( faithJ12K that woul( call for the application of Articles 448 an( 446 of the i,il o(e. 9is ri%hts are %o,erne( by Article 1678 of the i,il o(e+ which rea(s#

Petitioners ar%ue that to apply Article 1678 to their case woul( result to sheer in<ustice+ as it woul( a1ount to %i,in% away the hotel an( its other structures at ,irtually bar%ain prices. 2hey alle%e that the ,alue of the hotel an( its appurtenant facilities a1ounts to 1ore than two billion pesos+ while the 1onetary clai1 of respon(ent a%ainst the1 only a1ounts to a little 1ore than twenty si:81illion pesos. 2hus+ they conten( that it is the lease contract that %o,erns the relationship of the parties+ an( conse0uently+ the parties 1ay be consi(ere( to ha,e i1plie(ly wai,e( the application of Article 1678.

Be cannot sustain this line of ar%u1ent by petitioners. ?asic is the (octrine that laws are (ee1e( incorporate( in each an( e,ery contract. D:istin% laws always for1 part of any contract. Further+ the lease contract in the case at bar shows no special &in( of a%ree1ent between the parties as to how to procee( in cases of (efault or breach of the contract. Petitioners 1aintain that the lease contract contains a (efault pro,ision which (oes not %i,e respon(ent the ri%ht to appropriate the i1pro,e1ents nor e,ict petitioners in cases of cancellation or ter1ination of the contract (ue to (efault or breach of its ter1s. 2hey cite para%raph 10 of the lease contract+ which pro,i(es that#

Art. 1678. .f the lessee 1a&es+ in %oo( faith+ useful i1pro,e1ents which are suitable to the use for which the lease is inten(e(+ without alterin% the for1 or substance of the property lease(+ the lessor upon the ter1ination of the lease shall pay the lessee one8half of the ,alue of the i1pro,e1ents at that ti1e. $houl( the lessor refuse to rei1burse sai( a1ount+ the lessee 1ay re1o,e the i1pro,e1ents+ e,en thou%h the principal thin% 1ay suffer (a1a%e thereby. 9e shall not+ howe,er+ cause any 1ore i1pair1ent upon the property lease( than is necessary.

10. 5DFA-@2. 8 . . . 5efault shall auto1atically ta&e place upon the failure of the @D$$DD to pay or perfor1 its obli%ation (urin% the ti1e fi:e( herein for such obli%ations without necessity of (e1an(+ or+ if no ti1e is fi:e(+ after 90 (ays fro1 the receipt of notice or (e1an( fro1 the @D$$O*. . .

.n case of cancellation or ter1ination of this contract (ue to the (efault or breach of its ter1s+ the @D$$DD will pay all reasonable attorney=s fees+ costs an( e:penses of liti%ation that 1ay be incurre( by the @D$$O* in enforcin% its ri%hts un(er this contract or any of its pro,isions+ as well as all unpai( rents+ fees+ char%es+ ta:es+ assess1ent an( others which the @D$$O* 1ay be entitle( to.

October 1983 to the pri,ate respon(ents+ the spouses 'uan 3u%ui( an( Drlin(a 2an83u%ui(+ for one hun(re( three thousan( pesos !P103+000.00".

Petitioners assert that respon(ent co11itte( a breach of the lease contract when it file( the e<ect1ent suit a%ainst the1. 9owe,er+ we fin( nothin% in the abo,e 0uote( pro,ision that prohibits respon(ent to procee( the way it (i( in enforcin% its ri%hts as lessor. .t can ri%htfully file for e<ect1ent to e,ict petitioners+ as it (i( before the court a 0uo.

2he petitioner challen%e( the ,ali(ity of the auction sale in i,il ase 3o. L8 41470 before the *2 of Lue/on ity. .n its (ecision of 8 February 1989+ the *2 (is1isse( the co1plaint+ but as to the pri,ate respon(ents= clai1 that the sale inclu(e( the apart1ent buil(in%+ it hel( that the issue concernin% it was Cnot a sub<ect of the . . . liti%ation.C .n resol,in% the pri,ate respon(ents= 1otion to reconsi(er this issue+ the trial court hel( that there was no le%al basis for the contention that the apart1ent buil(in% was inclu(e( in the sale. 3

.3 F.DB B9D*DOF+ petitioners= appeal is 5D3.D5. 2he October 4+ 2004 5ecision of the ourt of Appeals in A8;.*. $P 3o. 74631 an( its 5ece1ber 22+ 2004 *esolution are AFF.*)D5. osts a%ainst petitioners.

?oth parties then appeale( the (ecision to the ourt of Appeals. 2he case was (oc&ete( as A8;.*. F 3o. 2931. .n its (ecision of 30 April 1992+ 4 the ourt of Appeals affir1e( in toto the assaile( (ecision. .t also a%ree( with the trial court that the apart1ent buil(in% was not inclu(e( in the auction sale of the co11ercial lot. 2hus#

$O O*5D*D5.

Pecson v. CA, $44 SCRA 4.7

2his petition for re,iew on certiorari see&s to set asi(e the (ecision 1 of the ourt of Appeals in A8;.*. $P 3o. 32679 affir1in% in part the or(er 2 of the *e%ional 2rial ourt !*2 " of Lue/on ity+ ?ranch 101+ in i,il ase 3o. L8 41470.

2he factual an( proce(ural antece(ents of this case as %athere( fro1 the recor( are as follows#

Petitioner Pe(ro P. Pecson was the owner of a co11ercial lot locate( in Ma1ias $treet+ Lue/on ity+ on which he built a four8(oor two8storey apart1ent buil(in%. For his failure to pay realty ta:es a1ountin% to twel,e thousan( pesos !P12+000.00"+ the lot was sol( at public auction by the city 2reasurer of Lue/on ity to )a1erto 3epo1uceno who in turn sol( it on 12

.n(ee(+ e:a1inin% the recor( we are fully con,ince( that it was only the lan( 8 without the apart1ent buil(in% 8 which was sol( at the auction sale+ for plaintiff=s failure to pay the ta:es (ue thereon. 2hus+ in the ertificate of $ale of 5elin0uent Property 2o Purchaser !D:h. M+ p. 342+ *ecor(" the property sub<ect of the auction sale at which )a1erto 3epo1uceno was the purchaser is referre( to as @ot 3o. 218A+ ?loc& 3o. M834+ at Ma1ias+ ?aran%ay PiTahan+ with an area of 246.3 s0. 1.+ with no 1ention whatsoe,er+ of the buil(in% thereon. 2he sa1e (escription of the sub<ect property appears in the Final 3otice 2o D:ercise 2he *i%ht of *e(e1ption !o,er sub<ect property" (ate( $epte1ber 14+ 1981 !D:h. @+ p. 343+ *ecor(" an( in the Final ?ill of $ale o,er the sa1e property (ate( April 19+ 1982 !D:h. P+ p. 347+ *ecor(". 3ee(less to say+ as it was only the lan( without any buil(in% which 3epo1uceno ha( ac0uire( at the auction sale+ it was also only that lan( without any buil(in% which he coul( ha,e le%ally sol( to the 3u%ui(s. Ferily+ in the 5ee( of Absolute $ale of *e%istere( @an( e:ecute( by )a1erto 3epo1uceno in fa,or of the 3u%ui(s on October 24+ 1983 !D:h. -+ p. 366+ *ecor(" it clearly appears that the property sub<ect of the sale for P103+000.00 was only the parcel of lan(+ @ot 218A+ ?l&. M834 containin% an area of 246.3 s0. 1eters+ without any 1ention of any i1pro,e1ent+ 1uch less any buil(in% thereon. !e1phases supplie("

2he petition to re,iew the sai( (ecision was subse0uently (enie( by this ourt. 4 Dntry of <u(%1ent was 1a(e on 23 'une 1993. 6

23+ 1993+ the rents collecte( by plaintiff a1ountin% to 1ore than P43+000.00 fro1 tenants shoul( be offset fro1 the rents (ue to the lot which accor(in% to 1o,ant=s affi(a,it is 1ore than P21+000.00 a 1onth.

On 3o,e1ber 1993+ the pri,ate respon(ents file( with the trial court a 1otion for (eli,ery of possession of the lot an( the apart1ent buil(in%+ citin% article 446 of the i,il o(e. 7 Actin% thereon+ the trial court issue( on 14 3o,e1ber 1993 the challen%e( or(er 8 which rea(s as follows#

B9D*DFO*D+ fin(in% 1erit in the )otion+ the ourt hereby %rants the followin% prayer that#

1. 2he 1o,ant shall rei1burse plaintiff the construction cost of P43+000.00. $ub1itte( for resolution before this ourt is an uncontro,erte( JsicK for the 5eli,ery of Possession file( by (efen(ants Drlin(a 2an+ 'uan 3u%ui(+ et al. consi(erin% that (espite personal ser,ice of the Or(er for plaintiff to file within fi,e !4" (ays his opposition to sai( 1otion+ he (i( not file any.

2. 2he pay1ent of P43+000.00 as rei1burse1ent for the construction cost+ 1o,ant 'uan 3u%ui( is hereby entitle( to i11e(iate issuance of a writ of possession o,er the @ot an( i1pro,e1ents thereon.

.n support of (efen(ant=s 1otion+ 1o,ant cites the law in point as Article 446 of the i,il o(e . . .

)o,ant a%rees to co1ply with the pro,isions of the law consi(erin% that plaintiff is a buil(er in %oo( faith an( he has in fact+ opte( to pay the cost of the construction spent by plaintiff. Fro1 the co1plaint itself the plaintiff state( that the construction cost of the apart1ent is 1uch 1ore than the lot+ which apart1ent he constructe( at a cost of P43+000.00 in 1964 !par. 8 co1plaint". 2his a1ount of P43+000.00 is what the 1o,ant is suppose( to pay un(er the law before a writ of possession placin% hi1 in possession of both the lot an( apart1ent woul( be issue(.

3. 2he 1o,ant ha,in% been (eclare( as the unconteste( owner of the @ot in 0uestion as per Dntry of 'u(%1ent of the $upre1e ourt (ate( 'une 23+ 1993+ the plaintiff shoul( pay rent to the 1o,ant of no less than P21+000.00 per 1onth fro1 sai( (ate as this is the ,ery sa1e a1ount pai( 1onthly by the tenants occupyin% the lot.

4. 2he a1ount of P43+000.00 (ue fro1 the 1o,ant is hereby offset a%ainst the a1ount of rents collecte( by the plaintiff fro1 'une 23+ 1993+ to $epte1ber 23+ 1993.

9owe,er+ the co1plaint alle%es in para%raph 9 that three (oors of the apart1ent are bein% lease(. 2his is further confir1e( by the affi(a,it of the 1o,ant presente( in support of the 1otion that sai( three (oors are bein% lease( at a rental of P7+000.00 a 1onth each. 2he 1o,ant further alle%es in his sai( affi(a,it that the present co11ercial ,alue of the lot is P10+000.00 per s0uare 1eter or P2+400+000.00 an( the reasonable rental ,alue of sai( lot is no less than P21+000.00 per 1onth.

$O O*5D*D5.

2he petitioner 1o,e( for the reconsi(eration of the or(er but it was not acte( upon by the trial court. .nstea(+ on 18 3o,e1ber 1993+ it issue( a writ of possession (irectin% the (eputy sheriff Cto place sai( 1o,ant 'uan 3u%ui( in possession of sub<ect property locate( at 3o. 79 Ma1ias *oa(+ Lue/on ity+ with all the i1pro,e1ents thereon an( to e<ect therefro1 all occupants therein+ their a%ents+ assi%nees+ heirs an( representati,es.C 9

2he (ecision ha,in% beco1e final as per Dntry of 'u(%1ent (ate( 'une 23+ 1993 an( fro1 this (ate on+ bein% the unconteste( owner of the property+ the rents shoul( be pai( to hi1 instea( of the plaintiff collectin% the1. Fro1 'une

2he petitioner then file( with the ourt of Appeals a special ci,il action for certiorari an( prohibition assailin% the or(er of 14 3o,e1ber 1993+ which was (oc&ete( as A8;.*. $P 3o. 32679. 10 .n its (ecision of 7 'une 1994+ the ourt of Appeals affir1e( in part the or(er of the trial court citin% Article 448 of the i,il o(e. .n (isposin% of the issues+ it state(#

respon(ents pay petitioner the construction cost of P43+000.00> an( that petitioner be or(ere( to account for any an( all fruits of the i1pro,e1ents recei,e( by hi1 startin% on 'une 23+ 1993+ with the a1ount of P43+000.00 to be offset therefro1.

.2 .$ $O O*5D*D5. 11 As earlier pointe( out+ pri,ate respon(ent opte( to appropriate the i1pro,e1ent intro(uce( by petitioner on the sub<ect lot+ %i,in% rise to the ri%ht of petitioner to be rei1burse( of the cost of constructin% sai( apart1ent buil(in%+ in accor(ance with Article 446 of the . . . i,il o(e+ an( of the ri%ht to retain the i1pro,e1ents until he is rei1burse( of the cost of the i1pro,e1ents+ because+ basically+ the ri%ht to retain the i1pro,e1ent while the correspon(in% in(e1nity is not pai( i1plies the tenancy or possession in fact of the lan( on which they are built . . . J2 2O@D32.3O+ .F.@ O5D OF 29D P9.@.PP.3D$ !1992" p. 112K. Bith the facts e:tant an( the settle( principle as %ui(es+ we a%ree with petitioner that respon(ent <u(%e erre( in or(erin% that Cthe 1o,ant ha,in% been (eclare( as the unconteste( owner of the lot in 0uestion as per Dntry of 'u(%1ent of the $upre1e ourt (ate( 'une 23+ 1993+ the plaintiff shoul( pay rent to the 1o,ant of no less than P21+000 per 1onth fro1 sai( (ate as this is the ,ery sa1e a1ount pai( 1onthly by the tenants occupyin% the lot.

A%%rie,e( by the petition.

ourt of Appeals= (ecision+ the petitioner file( the instant

2he parties a%ree that the petitioner was a buil(er in %oo( faith of the apart1ent buil(in% on the theory that he constructe( it at the ti1e when he was still the owner of the lot+ an( that the &ey issue in this case is the application of Articles 448 an( 446 of the i,il o(e.

2he trial court an( the ourt of Appeals+ as well as the parties+ concerne( the1sel,es with the application of Articles 448 an( 446 of the i,il o(e. 2hese articles rea( as follows#

Be+ howe,er+ a%ree with the fin(in% of respon(ent <u(%e that the a1ount of P43+000.00 earlier a(1itte( as the cost of constructin% the apart1ent buil(in% can be offset fro1 the a1ount of rents collecte( by petitioner fro1 'une 23+ 1993 up to $epte1ber 23+ 1993 which was fi:e( at P7+000.00 per 1onth for each of the three (oors. Our un(erlyin% reason is that (urin% the perio( of retention+ petitioner as such possessor an( recei,in% the fruits fro1 the property+ is obli%e( to account for such fruits+ so that the a1ount thereof 1ay be (e(ucte( fro1 the a1ount of in(e1nity to be pai( to hi1 by the owner of the lan(+ in line with )en(o/a ,s. 5e ;u/1an+ 42 Phil. 164 . . . .

2he ourt of Appeals then rule( as follows#

Art. 448. 2he owner of the lan( on which anythin% has been built+ sown or plante( in %oo( faith+ shall ha,e the ri%ht to appropriate as his own the wor&s+ sowin% or plantin%+ after pay1ent of the in(e1nity pro,i(e( for in articles 446 an( 448+ or to obli%e the one who built or plante( to pay the price of the lan(+ an( the one who sowe(+ the proper rent. 9owe,er+ the buil(er or planter cannot be obli%e( to buy the lan( if its ,alue is consi(erably 1ore than that of the buil(in% or trees. .n such case+ he shall pay reasonable rent+ if the owner of the lan( (oes not choose to appropriate the buil(in% or trees after proper in(e1nity. 2he parties shall a%ree upon the ter1s of the lease an( in case of (isa%ree1ent+ the court shall fi: the ter1s thereof. !361a"

B9D*DFO*D+ while it appears that pri,ate respon(ents ha,e not yet in(e1nifie( petitioner with the cost of the i1pro,e1ents+ since Anne: . shows that the 5eputy $heriff has enforce( the Brit of Possession an( the pre1ises ha,e been turne( o,er to the possession of pri,ate respon(ents+ the 0uest of petitioner that he be restore( in possession of the pre1ises is ren(ere( 1oot an( aca(e1ic+ althou%h it is but fair an( <ust that pri,ate

::: ::: :::

Art. 446. 3ecessary e:penses shall be refun(e( to e,ery possessor> but only the possessor in %oo( faith 1ay retain the thin% until he has been rei1burse( therefor.

courts below+ in the 1ain a%ree that Articles 448 an( 446 of the i,il o(e are applicable an( in(e1nity for the i1pro,e1ents 1ay be pai( althou%h they (iffer as to the basis of the in(e1nity.

-seful e:penses shall be refun(e( only to the possessor in %oo( faith with the sa1e ri%ht of retention+ the person who has (efeate( hi1 in the possession ha,in% the option of refun(in% the a1ount of the e:penses or of payin% the increase in ,alue which the thin% 1ay ha,e ac0uire( by reason thereof. !443a"

?y its clear lan%ua%e+ Article 448 refers to a lan( whose ownership is clai1e( by two or 1ore parties+ one of who1 has built so1e wor&s+ or sown or plante( so1ethin%. 2he buil(in%+ sowin% or plantin% 1ay ha,e been 1a(e in %oo( faith or in ba( faith. 2he rule on %oo( faith lai( (own in Article 426 of the i,il o(e shall be applie( in (eter1inin% whether a buil(er+ sower or planter ha( acte( in %oo( faith. 12

Article 448 (oes not apply to a case where the owner of the lan( is the buil(er+ sower+ or planter who then later loses ownership of the lan( by sale or (onation. 2his ourt sai( so in oleon%co ,s. *e%ala(o# 13

Article 446 (oes not specifically state how the ,alue of the useful i1pro,e1ents shoul( be (eter1ine(. 2he respon(ent court an( the pri,ate respon(ents espouse the belief that the cost of construction of the apart1ent buil(in% in 1964+ an( not its current 1ar&et ,alue+ is sufficient rei1burse1ent for necessary an( useful i1pro,e1ents 1a(e by the petitioner. 2his position is+ howe,er+ not in consonance with pre,ious rulin%s of this ourt in si1ilar cases. .n 'a,ier ,s. oncepcion+ 'r.+ 14 this ourt pe%%e( the ,alue of the useful i1pro,e1ents consistin% of ,arious fruits+ ba1boos+ a house an( ca1arin 1a(e of stron% 1aterial base( on the 1ar&et ,alue of the sai( i1pro,e1ents. .n $ar1iento ,s. A%ana+ 14 (espite the fin(in% that the useful i1pro,e1ent+ a resi(ential house+ was built in 1967 at a cost of between ei%ht thousan( pesos !P8+000.00" to ten thousan( pesos!P10+000.00"+ the lan(owner was or(ere( to rei1burse the buil(er in the a1ount of forty thousan( pesos !P40+000.00"+ the ,alue of the house at the ti1e of the trial. .n the sa1e way+ the lan(owner was re0uire( to pay the Cpresent ,alueC of the house+ a useful i1pro,e1ent+ in the case of 5e ;u/1an ,s. 5e la Fuente+ 16 cite( by the petitioner.

Article 361 of the ol( i,il o(e is not applicable in this case+ for *e%ala(o constructe( the house on his own lan( before he sol( sai( lan( to oleon%co. Article 361 applies only in cases where a person constructs a buil(in% on the lan( of another in %oo( or in ba( faith+ as the case 1ay be. .t (oes not apply to a case where a person constructs a buil(in% on his own lan(+ for then there can be no 0uestion as to %oo( or ba( faith on the part of the buil(er.

Dlsewise state(+ where the true owner hi1self is the buil(er of wor&s on his own lan(+ the issue of %oo( faith or ba( faith is entirely irrele,ant.

2he ob<ecti,e of Article 446 of the i,il o(e is to a(1inister <ustice between the parties in,ol,e(. .n this re%ar(+ this ourt ha( lon% a%o state( in *i,era ,s. *o1an atholic Archbishop of )anila 17 that the sai( pro,ision was for1ulate( in tryin% to a(<ust the ri%hts of the owner an( possessor in %oo( faith of a piece of lan(+ to a(1inister co1plete <ustice to both of the1 in such a way as neither one nor the other 1ay enrich hi1self of that which (oes not belon% to hi1. ;ui(e( by this precept+ it is therefore the current 1ar&et ,alue of the i1pro,e1ents which shoul( be 1a(e the basis of rei1burse1ent. A contrary rulin% woul( un<ustly enrich the pri,ate respon(ents who woul( otherwise be allowe( to ac0uire a hi%hly ,alue( inco1e8yiel(in% four8unit apart1ent buil(in% for a 1easly a1ount. onse0uently+ the parties shoul( therefore be allowe( to a((uce e,i(ence on the present 1ar&et ,alue of the apart1ent buil(in% upon which the trial court shoul( base its fin(in% as to the a1ount of rei1burse1ent to be pai( by the lan(owner.

2hus in strict point of law+ Article 448 is not apposite to the case at bar. 3e,ertheless+ we belie,e that the pro,ision therein on in(e1nity 1ay be applie( by analo%y consi(erin% that the pri1ary intent of Article 448 is to a,oi( a state of force( co8ownership an( that the parties+ inclu(in% the two

2he trial court also erre( in or(erin% the petitioner to pay 1onthly rentals e0ual to the a%%re%ate rentals pai( by the lessees of the apart1ent buil(in%. $ince the pri,ate respon(ents ha,e opte( to appropriate the apart1ent buil(in%+ the petitioner is thus entitle( to the possession an( en<oy1ent of the

apart1ent buil(in%+ until he is pai( the proper in(e1nity+ as well as of the portion of the lot where the buil(in% has been constructe(. 2his is so because the ri%ht to retain the i1pro,e1ents while the correspon(in% in(e1nity is not pai( i1plies the tenancy or possession in fact of the lan( on which it is built+ plante( or sown. 18 2he petitioner not ha,in% been so pai(+ he was entitle( to retain ownership of the buil(in% an(+ necessarily+ the inco1e therefro1.

2his is the 1ain 0uestion raise( by the petition for re,iew on certiorari assailin% the *esolutionJ1K of the ourt of Appeals+ $i:th 5i,ision+J2K (ate( )arch 24+ 1992+ in A8;.*. $P 3o. 26843 (enyin% (ue course to petitioner=s appeal an( affir1in% the (ecision of the *e%ional 2rial ourt of Pasi% in i,il ase 3o. 61004+ which in turn affir1e( the (ecision of the )etropolitan 2rial ourt of $an 'uan+ )etro )anila+ ?ranch 48.

2he Facts .t follows+ too+ that the ourt of Appeals erre( not only in uphol(in% the trial court=s (eter1ination of the in(e1nity+ but also in or(erin% the petitioner to account for the rentals of the apart1ent buil(in% fro1 23 'une 1993 to 23 $epte1ber 1993.

On 'anuary 22+ 1986+ petitioners *afael an( A,elina ?enite/ purchase( a 3038s0uare81eter parcel of lan( with i1pro,e1ent fro1 the a,ite 5e,elop1ent ?an&+ co,ere( by 2ransfer ertificate of 2itle 3o. 41961 !now+ 2 2 3o. 44864".

B9D*DFO*D+ the (ecision of the ourt of Appeals in A8;.*. $P 3o. 32679 an( the Or(er of 14 3o,e1ber 1993 of the *e%ional 2rial ourt+ ?ranch 101+ Lue/on ity in i,il ase 3o. L841470 are hereby $D2 A$.5D.

2he case is hereby re1an(e( to the trial court for it to (eter1ine the current 1ar&et ,alue of the apart1ent buil(in% on the lot. For this purpose+ the parties shall be allowe( to a((uce e,i(ence on the current 1ar&et ,alue of the apart1ent buil(in%. 2he ,alue so (eter1ine( shall be forthwith pai( by the pri,ate respon(ents to the petitioner otherwise the petitioner shall be restore( to the possession of the apart1ent buil(in% until pay1ent of the re0uire( in(e1nity.

$ubse0uently+ pri,ate respon(ents *enato an( Dli/abeth )acapa%al bou%ht a 3618s0uare81eter lot co,ere( by 2 2 3o. 40144. On $epte1ber 18+ 1986+ they file( i,il ase 3o. 43834 with the *e%ional 2rial ourt of Pasi%+ ?ranch 147 a%ainst petitioners for the reco,ery of possession of an encroache( portion of the lot they purchase(. 2he parties were able to reach a co1pro1ise in which pri,ate respon(ents sol( the encroache( portion to petitioners at the ac0uisition cost of One 2housan( Pesos !P1+000.00" per s0uare 1eter.

3o costs.

$O O*5D*D5.

On 'uly 17+ 1989+ pri,ate respon(ents purchase( still another property+ a 284.70 s0uare81eter8lot co,ere( by 2 2 3o. 32498*+ a(<acent to that of petitioners. After a relocation sur,ey was con(ucte(+ pri,ate respon(ents (isco,ere( that so1e 46.40 s0uare 1eters of their property was occupie( by petitioners= house. 5espite ,erbal an( written (e1an(s+ petitioners refuse( to ,acate. A last notice to ,acate was sent to petitioners on October 26+ 1989.

Spo'ses 2enite* v. CA, $

SCRA $4$

)ay possession of a lot encroache( upon by a part of another=s house be reco,ere( in an action for e<ect1entI

On 'anuary 18+ 1990+ pri,ate respon(ents file( with the )etropolitan 2rial ourt of $an 'uan+ ?ranch 48+ i,il ase 3o. 61004 for e<ect1ent a%ainst petitioners. 2he )e2 of $an 'uan (eci(e( in fa,or of the for1er+ with the followin% (isposition#J3K

CB9D*DFO*D+ in ,iew of all the fore%oin%+ <u(%1ent is hereby ren(ere( for the plaintiffs an( a%ainst the (efen(ants or(erin% the1 an( all persons clai1in% ri%hts un(er the1 to ,acate an( surren(er possession of the sub<ect pre1ises to the plaintiffs as well as to pay the followin%#

On further appeal+ the respon(ent ourt foun( no 1erit in petitioners= plea. .n a *esolution (ate( )arch 24+ 1992+ the $i:th 5i,ision of sai( ourt foun( the petition to be a 1ere rehash of the issues an( ar%u1ents presente( before the lower courts. .t rule( in part that#J7K

1. 2he a1ount of P930.00 a 1onth startin% 'uly 17+ 1989 until they finally ,acate the sub<ect pre1ises>

C3" Petitioners were fully aware that part of their house encroache( on their nei%hbor=s property+ while respon(ents beca1e aware of it only after purchasin% sai( property. Petitioners cannot clai1 %oo( faith as a%ainst the respon(ents.

2.

2he a1ount of P4+000.00 for an( as attorney=s fees> an( C4" $ince petitioners are not buil(ers in %oo( faith+ they cannot (e1an( that respon(ents sell the (ispute( portion> what the law pro,i(es is that the buil(ers in ba( faith can be or(ere( to (is1antle sai( structure at their own e:pense. .n the interi1 perio( that petitioners= structure re1ains+ they shoul( pay reasonable rent until they re1o,e the structure.C

3.

ost of suit.C

On appeal+ the *e%ional 2rial ourt of Pasi%+ ?ranch 167+ affir1e( sai( (ecision.J4K 2he *2 sai(#J4K 2he (ispositi,e portion thereof rea(s#J8K C2he contro,ersy in this case is not an encroach1ent or o,erlappin% of two !2" a(<acent properties owne( by the parties. .t is a case where a part of the house of the (efen(ants is constructe( on a portion of the property of the plaintiffs. $o that as new owner of the real property+ who has a ri%ht to the full en<oy1ent an( possession of the entire parcel co,ere( by 2ransfer ertificate of 2itle 3o. 41961+ plaintiffs ha,e the ri%ht to (e1an( that (efen(ants re1o,e the portion of the house stan(in% on plaintiff=s realty. . . .C

CFor reasons in(icate(+ Be fin( the appeal without 1erit an( (eny it (ue course+ with costs a%ainst the petitioners.

$O O*5D*D5.C

2he (ispositi,e portion thereof rea(s#J6K

9ence+ this petition.

CB9D*DFO*D+ fin(in% no re,ersible error in the (ecision appeale( fro1+ it bein% 1ore consistent with the facts an( the law applicable+ the sa1e is hereby AFF.*)D5 in toto. osts a%ainst the (efen(ant8appellants.

2he .ssues

$O O*5D*D5.C

2he 1ain issue is whether the possession of the portion of the pri,ate respon(ents= lan( encroache( by petitioners= house can be reco,ere( throu%h an action of e<ect1ent+ not accion publiciana. orollarily+ petitioners 0uestion !a" the ,ali(ity of the i1position of CrentalC for the occupancy of the encroache( portion+ !b" the (enial of their clai1e( pre8e1pti,e ri%ht to purchase the encroache( portion of the pri,ate respon(ents= lan(+ an( !c" the

propriety of a factual re,iew of the petitioners.

A=s fin(in% of ba( faith on the part of

pri,ate respon(ents file( the e<ect1ent suit a%ainst petitioners on 'anuary 18+ 1990 or within one !1" year fro1 the last (e1an(.

.n a nutshell+ petitioners insist that the )e2 ha( no <uris(iction o,er the case at bar because its real nature is accion publiciana or reco,ery of possession+ not unlawful (etainer. .t is not forcible entry because pri,ate respon(ents (i( not ha,e prior possession of the conteste( property as petitioners possesse( it ahea( of pri,ate respon(ents. .t is not unlawful (etainer because petitioners were not the pri,ate respon(ents= tenants nor ,en(ee unlawfully withhol(in% possession thereof. $ai( court also has no <uris(iction to i1pose pay1ent of CrentalsC as there is no lessor8lessee relationship between the parties. 2hey pray for a re,iew of the factual fin(in% of ba( faith+ insistin% that the facts uphol( their position. 5ue to their alle%e( %oo( faith+ they clai1 the pre8e1pti,e ri%ht to purchase the liti%ate( portion as a 1atter of course. Finally+ they insist that the awar( of attorney=s fees is unwarrante( as pri,ate respon(ents alle%e(ly ha( &nowle(%e of the encroach1ent prior to their ac0uisition of sai( lan(.

Pri,ate respon(ents= cause of action sprin%s fro1 $ec. 1+ *ule 70 of the *e,ise( *ules of ourt+ which pro,i(es#

Pri,ate respon(ents counter that petitioners are estoppe( fro1 0uestionin% the <uris(iction of the )e2 after they ,oluntarily participate( in the trial on the 1erits an( lost> that there is no law %i,in% petitioners the option to buy the encroache( property> an( that petitioners acte( in ba( faith because they wai,e( in their (ee( of sale the usual seller=s warranty as to the absence of any an( all liens an( encu1brances on the property+ thereby i1plyin% they ha( &nowle(%e of the encroach1ent at the ti1e of purchase .

C$ection 1. Bho 1ay institute procee(in%s+ an( when 88 $ub<ect to the pro,isions of the ne:t succee(in% section+ a person (epri,e( of the possession of any lan( or buil(in% by force+ inti1i(ation+ threat+ strate%y+ or stealth+ or a lan(lor(+ ,en(or+ ,en(ee+ or other person a%ainst who1 the possession of any lan( or buil(in% is unlawfully withhel( after the e:piration or ter1ination of the ri%ht to hol( possession+ by ,irtue of any contract+ e:press or i1plie(+ or the le%al representati,es or assi%ns of any such lan(lor(+ ,en(or+ ,en(ee+ or other person+ 1ay+ at any ti1e within one !1" year after such unlawful (epri,ation or withhol(in% of possession+ brin% an action in the proper inferior court a%ainst the person or persons unlawfully withhol(in% or (epri,in% of possession+ or any person or persons clai1in% un(er the1+ for the restitution of such possession+ to%ether with (a1a%es an( costs. . . .C

2he ourt=s *ulin%

2he petition lac&s 1erit an( shoul( be (enie(.

2hat petitioners occupie( the lan( prior to pri,ate respon(ents= purchase thereof (oes not ne%ate the latter=s case for e<ect1ent. Prior possession is not always a con(ition sine 0ua non in e<ect1ent.J9K 2his is one of the (istinctions between forcible entry an( unlawful (etainer. .n forcible entry+ the plaintiff is (epri,e( of physical possession of his lan( or buil(in% by 1eans of force+ inti1i(ation+ threat+ strate%y or stealth> thus+ he 1ust alle%e an( pro,e prior possession. ?ut in unlawful (etainer+ the (efen(ant unlawfully withhol(s possession after the e:piration or ter1ination of his ri%ht thereto un(er any contract+ e:press or i1plie(. .n such a case+ prior physical possession is not re0uire(. J10K

First .ssue# )e2

9as 'uris(iction

2he <uris(ictional re0uire1ents for e<ect1ent+ as borne out by the facts+ are# after con(uctin% a relocation sur,ey+ pri,ate respon(ents (isco,ere( that a portion of their lan( was encroache( by petitioners= house> notices to ,acate were sent to petitioners+ the last one bein% (ate( October 26+ 1989> an(

Possession can also be ac0uire(+ not only by 1aterial occupation+ but also by the fact that a thin% is sub<ect to the action of one=s will or by the proper acts an( le%al for1alities establishe( for ac0uirin% such ri%ht.J11K Possession of lan( can be ac0uire( upon the e:ecution of the (ee( of sale thereof by its ,en(or. Actual or physical occupation is not always necessary.

.n the case before us+ consi(erin% that pri,ate respon(ents are unlawfully (epri,e( of possession of the encroache( lan( an( that the action for the reco,ery of possession thereof was 1a(e within the one8 year re%le1entary perio(+ e<ect1ent is the proper re1e(y.J12K 2he )e2 of $an 'uan ha( <uris(iction.

.n a((ition+ after ,oluntarily sub1ittin% the1sel,es to its procee(in%s+ petitioners are estoppe( fro1 assailin% the <uris(iction of the )e2 .J13K 2his ourt will not allow petitioners to attac& the <uris(iction of the trial court after recei,in% a (ecision a(,erse to their position.

2he option is to sell+ not to buy+ an( it is the lan(owner=s choice. 3ot e,en a (eclaration of the buil(er+ planter+ or sower=s ba( faith shifts this option to hi1 per Article 440 of the i,il o(e.J18K 2his a(,anta%e in Article 448 is accor(e( the lan(owner because Chis ri%ht is ol(er+ an( because+ by the principle of accession+ he is entitle( to the ownership of the accessory thin%.CJ19K 2here can be no pre8e1pti,e ri%ht to buy e,en as a co1pro1ise+ as this prero%ati,e belon%s solely to the lan(owner. 3o co1pulsion can be le%ally force( on hi1+ contrary to what petitioners as&s fro1 this ourt. $uch an or(er woul( certainly be in,ali( an( ille%al. 2hus+ the lower courts were correct in re<ectin% the petitioners= offer to buy the encroache( lan(.

Fourth .ssue# A *e,iew of Factual Fin(in%s .s -nwarrante( $econ( .ssue# o1pensation For Occupancy Petitioners as& this ourt to re,iew the alle%e( error of the respon(ent ourt in appreciatin% ba( faith on their part. Accor(in% to the1+ this is contra(ictory to the fact that pri,ate respon(ents ac0uire( their lot an( (isco,ere( the encroach1ent after petitioners bou%ht their house. After careful (eliberation on this issue+ this ourt fin(s this petition for re,iew ina(e0uate as it faile( to show con,incin%ly a re,ersible error on the part of the respon(ent ourt in this re%ar(. 2hus+ for ,ery %oo( reasons+ this ourt has consistently an( e1phatically (eclare( that re,iew of the factual fin(in%s of the ourt of Appeals is not a function that is nor1ally un(erta&en in petitions for re,iew un(er *ule 44 of the *ules of ourt. $uch fin(in%s+ as a %eneral rule+ are bin(in% an( conclusi,e.J20K 2he <uris(iction of this ourt is li1ite( to re,iewin% errors of law unless there is a showin% that the fin(in%s co1plaine( of are totally (e,oi( of support in the recor(s or that they are so %larin%ly erroneous as to constitute re,ersible error.J21K

Petitioners erroneously construe( the or(er of the )e2 to pay pri,ate respon(ents 3ine 9un(re( 2hirty Pesos !P930.00" a 1onth startin% 'uly 17+ 1989 until they !petitioners" finally ,acate the sub<ect pre1ises as CrentalsC. 2echnically+ such awar( is not rental+ but (a1a%es. 5a1a%es are reco,erable in e<ect1ent cases un(er $ection 8+ *ule 70 of the *e,ise( *ules of ourt.J14K 2hese (a1a%es arise fro1 the loss of the use an( occupation of the property+ an( not the (a1a%es which pri,ate respon(ents 1ay ha,e suffere( but which ha,e no (irect relation to their loss of 1aterial possession.J14K 5a1a%es in the conte:t of $ection 8+ *ule 70 is li1ite( to CrentC or Cfair rental ,alueC for the use an( occupation of the property.J16K

2here is no 0uestion that petitioners benefite( fro1 their occupation of a portion of pri,ate respon(ents= property. $uch benefit <ustifies the awar( of the (a1a%es of this &in(. 3e1o cu1 alterius+ (etri1enti locupletari potest. 3o one shall enrich hi1self at the e:pense of another.

D,en respon(ent ourt has ta&en note of the ina(e0uacy of the petition before it+ as it wryly sai(#J22K

2hir( .ssue# Option 2o $ell ?elon%s 2o Owner

C2he Petition for *e,iew is not certainly a 1anifestation of clarity nor an e:a1ple of a well8or%ani/e( su11ation of petitioners= cause of action. . . . . .

Article 448 of the i,il o(eJ17K is une0ui,ocal that the option to sell the lan( on which another in %oo( faith buil(s+ plants or sows on+ belon%s to the lan(owner.

:::

:::

:::

A careful scrutiny of the abo,e issues (iscloses that they are 1ere repetitions in a rehashe( for1 of the sa1e issues with the sa1e supportin% ar%u1ents raise( by petitioners when they appeale( fro1 the (ecision of the !)e2 " to the *2 . : : :.C

3ec4nogas P4il. #. CA, $ % SCRA 5

2he parties in this case are owners of a(<oinin% lots in ParaTa0ue+ )etro )anila. .t was (isco,ere( in a sur,ey that a portion of a buil(in% of petitioner+ which was presu1ably constructe( by its pre(ecessor8in8interest+ encroache( on a portion of the lot owne( by pri,ate respon(ent. Bhat are the ri%hts an( obli%ations of the partiesI .s petitioner consi(ere( a buil(er in ba( faith because+ as hel( by respon(ent ourt+ he is Cpresu1e( to &now the 1etes an( boun(s of his property as (escribe( in his certificate of titleCI 5oes petitioner succee( into the %oo( faith or ba( faith of his pre(ecessor8in8 interest which presu1ably constructe( the buil(in%I

2his petition is no (ifferent. Be share the fore%oin% senti1ents of the respon(ent ourt. .n essence+ respon(ent ourt 1erely affir1e( the (ecision of the )e2 . 2he ourt of Appeal=s fin(in% of petitioners= ba( faith (i( not alter nor affect the )e2 =s (isposition. Petitioners want this ourt to (eclare the1 in %oo( faith an( to (eter1ine their ri%hts un(er Article 448+ i,il o(e. 9owe,er+ the 1ere fact that they bou%ht their property ahea( of the pri,ate respon(ents (oes not establish this point. 3or (oes it pro,e that petitioners ha( no &nowle(%e of the encroach1ent when they purchase( their property. *eliance on the presu1ption in Article 426 of the o(e is 1isplace( in ,iew of the (eclaration of the respon(ent ourt that petitioners are not buil(ers in %oo( faith.

2hese are the 0uestions raise( in the petition for re,iew of the 5ecisionJ1K (ate( Au%ust 28+ 1992+ in A8;.*. F 3o. 28293 of respon(ent ourtJ2K where the (isposition rea(s#J3K

Bhat petitioners presente( are 1ere alle%ations an( ar%u1ents+ without sufficient e,i(ence to support the1. As such+ we ha,e no %roun( to (epart fro1 the %eneral rule a%ainst factual re,iew.

CB9D*DFO*D+ pre1ises consi(ere(+ the 5ecision of the *e%ional 2rial ourt is hereby re,erse( an( set asi(e an( another one entere( 8

1. 5is1issin% the co1plaint for lac& of cause of action> .n su1+ the petition has not shown co%ent reasons an( sufficient %roun(s to re,erse the unani1ous rulin% of the three lower courts. 2he )e2 + *2 an( the ourt of Appeals were all in a%ree1ent in sustainin% pri,ate respon(ents= ri%hts. An( we uphol( the1.

2. Or(erin% 2ecno%as to pay the su1 of P2+000.00 per 1onth as reasonable rental fro1 October 4+ 1979 until appellee ,acates the lan(>

3. 2o re1o,e the structures an( surroun(in% walls on the encroache( area> B9D*DFO*D+ the petition is 5D3.D5. 2he assaile( *esolution is hereby AFF.*)D5.

4. Or(erin% appellee to pay the ,alue of the lan( occupie( by the two8storey buil(in%>

$O O*5D*D5. 4. Or(erin% appellee to pay the su1 of P20+000.00 for an( as attorney=s fees> 3ar,asa+ .'.+ ! hair1an"+ 5a,i(e+ 'r.+ )elo+ an( Francisco+ ''.+ concur. 6. osts a%ainst appellee.C

Actin% on the 1otions for reconsi(eration of both petitioner an( pri,ate respon(ent+ respon(ent ourt or(ere( the (eletion of para%raph 4 of the (ispositi,e portion in an A1en(e( 5ecision (ate( February 9+ 1993+ as follows#J4K

CB9D*DFO*D+ pre1ises consi(ere(+ our (ecision of Au%ust 28+ 1992 is hereby 1o(ifie( (eletin% para%raph 4 of the (ispositi,e portion of our (ecision which rea(s#

=4. Or(erin% appellee to pay the ,alue of the lan( occupie( by the two8 storey buil(in%.=

2he 1otion for reconsi(eration of appellee is hereby 5D3.D5 for lac& of 1erit.C

2he fore%oin% A1en(e( 5ecision is also challen%e( in the instant petition.

2he Facts

ParaTa0ue+ @* !;@*O" *ec. 3o. 19644 co,ere( by 2ransfer ertificate of 2itle 3o. 279838+ of the *e%istry of 5ee(s for the Pro,ince of *i/al> that sai( lan( which a(<oins plaintiff=s lan( was purchase( by (efen(ant fro1 a certain Dnrile Antonio also in 1970> that in 1971+ (efen(ant purchase( another lot also a(<oinin% plaintiff=s lan( fro1 a certain )i%uel *o(ri%ue/ an( the sa1e was re%istere( in (efen(ant=s na1e un(er 2ransfer ertificate of 2itle 3o. 31390+ of the *e%istry of 5ee(s for the Pro,ince of *i/al> that portions of the buil(in%s an( wall bou%ht by plaintiff to%ether with the lan( fro1 Pari/ .n(ustries are occupyin% a portion of (efen(ant=s a(<oinin% lan(> that upon learnin% of the encroach1ent or occupation by its buil(in%s an( wall of a portion of (efen(ant=s lan(+ plaintiff offere( to buy fro1 (efen(ant that particular portion of (efen(ant=s lan( occupie( by portions of its buil(in%s an( wall with an area of 770 s0uare 1eters+ 1ore or less+ but (efen(ant+ howe,er+ refuse( the offer. .n 1973+ the parties entere( into a pri,ate a%ree1ent before a certain ol. *osales in )alacaTan%+ wherein plaintiff a%ree( to (e1olish the wall at the bac& portion of its lan( thus %i,in% to (efen(ant possession of a portion of his lan( pre,iously enclose( by plaintiff=s wall> that (efen(ant later file( a co1plaint before the office of )unicipal Dn%ineer of ParaTa0ue+ )etro )anila as well as before the Office of the Pro,incial Fiscal of *i/al a%ainst plaintiff in connection with the encroach1ent or occupation by plaintiff=s buil(in%s an( walls of a portion of its lan( but sai( co1plaint (i( not prosper> that (efen(ant (u% or cause( to be (u% a canal alon% plaintiff=s wall+ a portion of which collapse( in 'une+ 1980+ an( le( to the filin% by plaintiff of the supple1ental co1plaint in the abo,e8entitle( case an( a separate cri1inal co1plaint for 1alicious 1ischief a%ainst (efen(ant an( his wife which ulti1ately resulte( into the con,iction in court of (efen(ant=s wife for the cri1e of 1alicious 1ischief> that while trial of the case was in pro%ress+ plaintiff file( in ourt a for1al proposal for settle1ent of the case but sai( proposal+ howe,er+ was i%nore( by (efen(ant.C

2he facts are not (ispute(. *espon(ent fin(in%s of the trial court+ as follows#J4K

ourt 1erely repro(uce( the factual After trial on the 1erits+ the *e%ional 2rial ourtJ6K of Pasay ity+ ?ranch 117+ in i,il ase 3o. PL876318P+ ren(ere( a (ecision (ate( 5ece1ber 4+ 1989 in fa,or of petitioner who was the plaintiff therein. 2he (ispositi,e portion rea(s#J7K

C2hat plaintiff !herein petitioner" which is a corporation (uly or%ani/e( an( e:istin% un(er an( by ,irtue of Philippine laws is the re%istere( owner of a parcel of lan( situate( in ?arrio $an 5ionisio+ ParaTa0ue+ )etro )anila &nown as @ot 43318A !shoul( be 44318A" of @ot 4431 of the a(astral $ur,ey of ParaTa0ue+ )etro )anila+ co,ere( by 2ransfer ertificate of 2itle 3o. 409316 of the *e%istry of 5ee(s of the Pro,ince of *i/al> that sai( lan( was purchase( by plaintiff fro1 Pari/ .n(ustries+ .nc. in 1970+ to%ether with all the buil(in%s an( i1pro,e1ents inclu(in% the wall e:istin% thereon> that the (efen(ant !herein pri,ate respon(ent" is the re%istere( owner of a parcel of lan( &nown as @ot 3o. 44318? of @ot 4431 of the a(astral $ur,ey of

CB9D*DFO*D+ <u(%1ent is hereby ren(ere( in fa,or of plaintiff an( a%ainst (efen(ant an( or(erin% the latter to sell to plaintiff that portion of lan( owne( by hi1 an( occupie( by portions of plaintiff=s buil(in%s an( wall at the price of P2+000.00 per s0uare 1eter an( to pay the for1er#

1. 2he su1 of P44+000.00 to co1pensate for the losses in 1aterials an( properties incurre( by plaintiff throu%h thie,ery as a result of the (estruction of its wall>

! "

2. 2he su1 of P7+400.00 as an( by way of attorney=s fees> an(

3. 2he costs of this suit.C

Appeal was (uly interpose( with respon(ent ourt+ which as pre,iously state(+ re,erse( an( set asi(e the (ecision of the *e%ional 2rial ourt an( ren(ere( the assaile( 5ecision an( A1en(e( 5ecision. 9ence+ this recourse un(er *ule 44 of the *ules of ourt.

Bhether or not the respon(ent ourt of Appeals erre( in or(erin% the re1o,al of the =structures an( surroun(in% walls on the encroache( area= an( in with(rawin% its earlier rulin% in its Au%ust 28+ 1992 (ecision for the petitioner =to pay for the ,alue of the lan( occupie(= by the buil(in%+ only because the pri,ate respon(ent has =1anifeste( its choice to (e1olish= it (espite the absence of co1pulsory sale where the buil(er fails to pay for the lan(+ an( which =choice= pri,ate respon(ent (eliberately (elete( fro1 its $epte1ber 1+ 1980 answer to the supple81ental co1plaint in the *e%ional 2rial ourt.C

.n its )e1oran(u1+ petitioner poses the followin% issues# 2he .ssues CA 2he petition raises the followin% issues#J8K 2he ti1e when to (eter1ine the %oo( faith of the buil(er un(er Article 448 of the 3ew i,il o(e+ is rec&one( (urin% the perio( when it was actually bein% built> an( in a case where no e,i(ence was presente( nor intro(uce( as to the %oo( faith or ba( faith of the buil(er at that ti1e+ as in this case+ he 1ust be presu1e( to be a =buil(er in %oo( faith+= since =ba( faith cannot be presu1e(.=J9K

C!A"

Bhether or not the respon(ent ourt of Appeals erre( in hol(in% the petitioner a buil(er in ba( faith because it is =presu1e( to &now the 1etes an( boun(s of his property.=

?.

!?"

Bhether or not the respon(ent ourt of Appeals erre( when it use( the a1icable settle1ent between the petitioner an( the pri,ate respon(ent+ where both parties a%ree( to the (e1olition of the rear portion of the fence+ as estoppel a1ountin% to reco%nition by petitioner of respon(ent=s ri%ht o,er his property inclu(in% the portions of the lan( where the other structures an( the buil(in% stan(+ which were not inclu(e( in the settle1ent.

.n a specific =boun(ary o,erlap situation= which in,ol,es a buil(er in %oo( faith+ as in this case+ it is now well settle( that the lot owner+ who buil(s on the a(<acent lot is not char%e( with =constructi,e notice= of the technical 1etes an( boun(s containe( in their torrens titles to (eter1ine the e:act an( precise e:tent of his boun(ary peri1eter.J10K

2he respon(ent court=s citation of the twin cases of 2uason P o. ,. @u1anlan an( 2uason P o. ,. )acalin(on% is not the =<u(icial authority= for a boun(ary (ispute situation between a(<acent torrens title( lot owners+ as the facts of the present case (o not fall within nor s0uare with the in,ol,e( principle of a (issi1ilar case.J11K

Pri,ate respon(ent+ on the other han(+ ar%ues that the petition is Csufferin% fro1 the followin% flaws#J14K

1. .t (i( not %i,e the e:act citations of cases (eci(e( by the 9onorable $upre1e ourt that alle%e(ly contra(icts the rulin% of the 9on. ourt of Appeals base( on the (octrine lai( (own in 2uason ,s. @u1anlan case citin% also 2uason ,s. )acalin(on% case !$upra".

5. 2. Assu1in% that the (octrine in the alle%e( o 2ao ,s. hico case is contra(ictory to the (octrine in 2uason ,s. @u1anlan an( 2uason ,s. )acalin(on%+ the two cases bein% 1ore current+ the sa1e shoul( pre,ail.C

Luite contrary to respon(ent -y=s reasonin%+ petitioner 2ecno%as continues to be a buil(er in %oo( faith+ e,en if it subse0uently built7repaire( the walls7other per1anent structures thereon while the case a 0uo was pen(in% an( e,en while respon(ent sent the petitioner 1any letters7file( cases thereon.J12K

5. !D."

2he a1icable settle1ent between the parties shoul( be interprete( as a contract an( enforce( only in accor(ance with its e:plicit ter1s+ an( not o,er an( beyon( that a%ree( upon> because the courts (o not ha,e the power to create a contract nor e:pan( its scope.J13K

Further+ pri,ate respon(ent conten(s that the followin% Cun1ista&ablyC point to the ba( faith of petitioner# !1" pri,ate respon(ent=s purchase of the two lots+ Cwas ahea( of the purchase by petitioner of the buil(in% an( lot fro1 Pari/ .n(ustriesC> !2" the (eclaration of the ;eneral )ana%er of 2ecno%as that the sale between petitioner an( Pari/ .n(ustries Cwas not re%istere(C because of so1e proble1s with hina ?an&in% orporation> an( !3" the 5ee( of $ale in fa,or of petitioner was re%istere( in its na1e only in Cthe 1onth of )ay 1973.CJ16K

2he ourt=s *ulin%

D. !F."

2he petition shoul( be %rante(.

As a %eneral rule+ althou%h the lan(owner has the option to choose between# !1" =buyin% the buil(in% built in %oo( faith=+ or !2" =sellin% the portion of his lan( on which stan(s the buil(in%= un(er Article 448 of the i,il o(e> the first option is not absolute+ because an e:ception thereto+ once it woul( be i1practical for the lan(owner to choose to e:ercise the first alternati,e+ i.e. buy that portion of the house stan(in% on his lan(+ for the whole buil(in% 1i%ht be ren(ere( useless. 2he wor&able solution is for hi1 to select the secon( alternati,e+ na1ely+ to sell to the buil(er that part of his lan( on which was constructe( a portion of the house.CJ14K

;oo( Faith or ?a( Faith

*espon(ent ourt+ citin% the cases of '. ). 2uason P o.+ .nc. ,s. F(a. (e @u1anlanJ17K an( '. ). 2uason P o.+ .nc. ,s. )acalin(on%+J18K rule( that petitioner Ccannot be consi(ere( in %oo( faithC because as a lan( owner+ it is Cpresu1e( to &now the 1etes an( boun(s of his own property+ specially if the sa1e are reflecte( in a properly issue( certificate of title. One who erroneously buil(s on the a(<oinin% lot shoul( be consi(ere( a buil(er in

!b"a( !f"aith+ there bein% presu1pti,e &nowle(%e of the 2orrens title+ the area+ an( the e:tent of the boun(aries.CJ19K

Be (isa%ree with respon(ent ourt. 2he two cases it relie( upon (o not support its 1ain pronounce1ent that a re%istere( owner of lan( has presu1pti,e &nowle(%e of the 1etes an( boun(s of its own lan(+ an( is therefore in ba( faith if he 1ista&enly buil(s on an a(<oinin% lan(. Asi(e fro1 the fact that those cases ha( factual 1oorin%s ra(ically (ifferent fro1 those obtainin% here+ there is nothin% in those cases which woul( su%%est+ howe,er re1otely+ that ba( faith is i1putable to a re%istere( owner of lan( when a part of his buil(in% encroaches upon a nei%hbor=s lan(+ si1ply because he is suppose(ly presu1e( to &now the boun(aries of his lan( as (escribe( in his certificate of title. 3o such (octrinal state1ent coul( ha,e been 1a(e in those cases because such issue was not before the $upre1e ourt. Luite the contrary+ we ha,e re<ecte( such a theory in o 2ao ,s. hico+J20K where we hel( that unless one is ,erse( in the science of sur,eyin%+ Cno one can (eter1ine the precise e:tent or location of his property by 1erely e:a1inin% his paper title.C

*ecall that the encroach1ent in the present case was cause( by a ,ery sli%ht (e,iation of the erecte( wall !as fence" which was suppose( to run in a strai%ht line fro1 point 9 to point 1 of petitioner=s lot. .t was an error which+ in the conte:t of the atten(ant facts+ was consistent with %oo( faith. onse0uently+ the buil(er+ if sue( by the a%%rie,e( lan(owner for reco,ery of possession+ coul( ha,e in,o&e( the pro,isions of Art. 448 of the i,il o(e+ which rea(s#

C2he owner of the lan( on which anythin% has been built+ sown or plante( in %oo( faith+ shall ha,e the ri%ht to appropriate as his own the wor&s+ sowin% or plantin%+ after pay1ent of the in(e1nity pro,i(e( for in articles 446 an( 448+ or to obli%e the one who built or plante( to pay the price of the lan(+ an( the one who sowe(+ the proper rent. 9owe,er+ the buil(er or planter cannot be obli%e( to buy the lan( if its ,alue is consi(erably 1ore than that of the buil(in% or trees. .n such case+ he shall pay reasonable rent+ if the owner of the lan( (oes not choose to appropriate the buil(in% or trees after proper in(e1nity. 2he parties shall a%ree upon the ter1s of the lease an( in case of (isa%ree1ent+ the court shall fi: the ter1s thereof.C

2here is no 0uestion that when petitioner purchase( the lan( fro1 Pari/ .n(ustries+ the buil(in%s an( other structures were alrea(y in e:istence. 2he recor( is not clear as to who actually built those structures+ but it 1ay well be assu1e( that petitioner=s pre(ecessor8in8interest+ Pari/ .n(ustries+ (i( so. Article 427 of the i,il o(e presu1es %oo( faith+ an( since no proof e:ists to show that the encroach1ent o,er a narrow+ nee(le8shape( portion of pri,ate respon(ent=s lan( was (one in ba( faith by the buil(er of the encroachin% structures+ the latter shoul( be presu1e( to ha,e built the1 in %oo( faith.J21K .t is presu1e( that possession continues to be en<oye( in the sa1e character in which it was ac0uire(+ until the contrary is pro,e(.J22K ;oo( faith consists in the belief of the buil(er that the lan( he is buil(in% on is his+ an( his i%norance of any (efect or flaw in his title.J23K 9ence+ such %oo( faith+ by law+ passe( on to Pari/=s successor+ petitioner in this case. Further+ C!w"here one (eri,es title to property fro1 another+ the act+ (eclaration+ or o1ission of the latter+ while hol(in% the title+ in relation to the property+ is e,i(ence a%ainst the for1er.CJ24K An( possession ac0uire( in %oo( faith (oes not lose this character e:cept in case an( fro1 the 1o1ent facts e:ist which show that the possessor is not unaware that he possesses the thin% i1properly or wron%fully.J24K 2he %oo( faith ceases fro1 the 1o1ent (efects in the title are 1a(e &nown to the possessor+ by e:traneous e,i(ence or by suit for reco,ery of the property by the true owner.J26K

2he ob,ious benefit to the buil(er un(er this article is that+ instea( of bein% outri%htly e<ecte( fro1 the lan(+ he can co1pel the lan(owner to 1a&e a choice between the two options# !1" to appropriate the buil(in% by payin% the in(e1nity re0uire( by law+ or !2" sell the lan( to the buil(er. 2he lan(owner cannot refuse to e:ercise either option an( co1pel instea( the owner of the buil(in% to re1o,e it fro1 the lan(.J27K

2he 0uestion+ howe,er+ is whether the sa1e benefit can be in,o&e( by petitioner who+ as earlier state(+ is not the buil(er of the offen(in% structures but possesses the1 as buyer.

Be answer such 0uestion in the affir1ati,e.

.n the first place+ there is no sufficient showin% that petitioner was aware of the encroach1ent at the ti1e it ac0uire( the property fro1 Pari/ .n(ustries. Be a%ree with the trial court that ,arious factors in e,i(ence a(e0uately show petitioner=s lac& of awareness thereof. .n any case+ contrary proof has not o,erthrown the presu1ption of %oo( faith un(er Article 427 of the i,il o(e+ as alrea(y state(+ ta&en to%ether with the (isputable presu1ptions of

the law on e,i(ence. 2hese presu1ptions state+ un(er $ection 3 !a" of *ule 131 of the *ules of ourt+ that the person is innocent of a cri1e or wron%> an( un(er $ection 3 !ff" of *ule 131+ that the law has been obeye(. .n fact+ pri,ate respon(ent D(uar(o -y hi1self was unaware of such intrusion into his property until after 1971 when he hire( a sur,eyor+ followin% his purchase of another a(<oinin% lot+ to sur,ey all his newly ac0uire( lots. -pon bein% apprise( of the encroach1ent+ petitioner i11e(iately offere( to buy the area occupie( by its buil(in% 88 a species of con(uct consistent with %oo( faith.

2hat the fence which ser,e!s" as a wall housin% the electroplatin% 1achineries shall not be (e1olishe( in the 1ean ti1e which portion shall be sub<ect to ne%otiation by herein parties.C

.n the secon( place+ upon (eli,ery of the property by Pari/ .n(ustries+ as seller+ to the petitioner+ as buyer+ the latter ac0uire( ownership of the property. onse0uently an( as earlier (iscusse(+ petitioner is (ee1e( to ha,e steppe( into the shoes of the seller in re%ar( to all ri%hts of ownership o,er the i11o,able sol(+ inclu(in% the ri%ht to co1pel the pri,ate respon(ent to e:ercise either of the two options pro,i(e( un(er Article 448 of the i,il o(e.

Fro1 the fore%oin%+ it is clear that petitioner a%ree( only to the (e1olition of a portion of the wall separatin% the a(<oinin% properties of the parties 88 i.e. Cup to the bac& of the buil(in% housin% the 1achineries.C ?ut that portion of the fence which ser,e( as the wall housin% the electroplatin% 1achineries was not to be (e1olishe(. *ather+ it was to Cbe sub<ect to ne%otiation by herein parties.C 2he settle1ent 1ay ha,e reco%ni/e( the ownership of pri,ate respon(ent but such a(1ission cannot be e0uate( with ba( faith. Petitioner was only tryin% to a,oi( a liti%ation+ one reason for enterin% into an a1icable settle1ent.

As was rule( in Os1eTa ,s.

o11ission on Au(it+J30K

Dstoppel

*espon(ent ourt rule( that the a1icable settle1ent entere( into between petitioner an( pri,ate respon(ent estops the for1er fro1 0uestionin% the pri,ate respon(ent=s Cri%htC o,er the (ispute( property. .t hel( that by un(erta&in% to (e1olish the fence un(er sai( settle1ent+ petitioner reco%ni/e( pri,ate respon(ent=s ri%ht o,er the property+ an( Ccannot later on co1pelC pri,ate respon(ent Cto sell to it the lan( sinceC pri,ate respon(ent Cis un(er no obli%ation to sell.CJ28K

CA co1pro1ise is a bilateral act or transaction that is e:pressly ac&nowle(%e( as a <uri(ical a%ree1ent by the i,il o(e an( is therein (ealt with in so1e (etail. [A co1pro1ise+= (eclares Article 2208 of sai( o(e+ [is a contract whereby the parties+ by 1a&in% reciprocal concessions+ a,oi( a liti%ation or put an en( to one alrea(y co11ence(.=

:::

:::

:::

Be (o not a%ree. Petitioner cannot be hel( in estoppel for enterin% into the a1icable settle1ent+ the pertinent portions of which rea(#J29K

2he i,il o(e not only (efines an( authori/es co1pro1ises+ it in fact encoura%es the1 in ci,il actions. Art. 2029 states that [2he ourt shall en(ea,or to persua(e the liti%ants in a ci,il case to a%ree upon so1e fair co1pro1ise.= : : :.C

C2hat the parties hereto ha,e a%ree( that the rear portion of the fence that separates the property of the co1plainant an( respon(ent shall be (e1olishe( up to the bac& of the buil(in% housin% the 1achineries which (e1olision !sic" shall be un(erta&en by the co1plainant at anyti1e.

.n the conte:t of the establishe( facts+ we hol( that petitioner (i( not lose its ri%hts un(er Article 448 of the i,il o(e on the basis 1erely of the fact that so1e years after ac0uirin% the property in %oo( faith+ it learne( about 88 an( aptly reco%ni/e( 88 the ri%ht of pri,ate respon(ent to a portion of the lan( occupie( by its buil(in%. 2he super,enin% awareness of the encroach1ent by petitioner (oes not 1ilitate a%ainst its ri%ht to clai1 the status of a buil(er in %oo( faith. .n fact+ a <u(icious rea(in% of sai( Article 448 will rea(ily show

that the lan(owner=s e:ercise of his option can only ta&e place after the buil(er shall ha,e co1e to &now of the intrusion 88 in short+ when both parties shall ha,e beco1e aware of it. Only then will the occasion for e:ercisin% the option arise+ for it is only then that both parties will ha,e been aware that a proble1 e:ists in re%ar( to their property ri%hts.

options are li1ite( to# !1" appropriatin% the encroachin% portion of petitioner=s buil(in% after pay1ent of proper in(e1nity+ or !2" obli%in% the latter to buy the lot occupie( by the structure. 9e cannot e:ercise a re1e(y of his own li&in%.

Options of Pri,ate *espon(ent

Bhat then is the applicable pro,ision in this case which pri,ate respon(ent 1ay in,o&e as his re1e(y# Article 448 or Article 440J31K of the i,il o(eI

.n ,iew of the %oo( faith of both petitioner an( pri,ate respon(ent+ their ri%hts an( obli%ations are to be %o,erne( by Art. 448. 2he essential fairness of this co(al pro,ision has been pointe( out by )1e. 'ustice A1eurfina )elencio8 9errera+ citin% )anresa an( applicable prece(ents+ in the case of 5epra ,s. 5u1lao+J32K to wit#

3either is petitioner=s prayer that pri,ate respon(ent be or(ere( to sell the lan(J34K the proper re1e(y. Bhile that was (ubbe( as the C1ore wor&able solutionC in ;rana an( 2orralba ,s. 2he ourt of Appeals+ et al.+J34K it was not the relief %rante( in that case as the lan(owners were (irecte( to e:ercise Cwithin 30 (ays fro1 this (ecision their option to either buy the portion of the petitioners= house on their lan( or sell to sai( petitioners the portion of their lan( on which it stan(s.CJ36K )oreo,er+ in ;rana an( 2orralba+ the area in,ol,e( was only 87 s0uare 1eters while this case in,ol,es 420 s0uare 1etersJ37K. .n line with the case of 5epra ,s. 5u1lao+J38K this case will ha,e to be re1an(e( to the trial court for further procee(in%s to fully i1ple1ent the 1an(ate of Art. 448. .t is a rule of proce(ure for the $upre1e ourt to stri,e to settle the entire contro,ersy in a sin%le procee(in% lea,in% no root or branch to bear the see(s of future liti%ation.J39K

CBhere the buil(er+ planter or sower has acte( in %oo( faith+ a conflict of ri%hts arises between the owners+ an( it beco1es necessary to protect the owner of the i1pro,e1ents without causin% in<ustice to the owner of the lan(. .n ,iew of the i1practicality of creatin% a state of force( co8ownership+ the law has pro,i(e( a <ust solution by %i,in% the owner of the lan( the option to ac0uire the i1pro,e1ents after pay1ent of the proper in(e1nity+ or to obli%e the buil(er or planter to pay for the lan( an( the sower to pay the proper rent. .t is the owner of the lan( who is authori/e( to e:ercise the option+ because his ri%ht is ol(er+ an( because+ by the principle of accession+ he is entitle( to the ownership of the accessory thin%. !3 )anresa 213> ?ernar(o ,s. ?ataclan+ 37 Off. ;a/. 1382> o 2ao ,s. han hico+ ;. *. 3o. 49167+ April 30+ 1949> Article applie(> see abral+ et al. ,s. .bane/ J$. .K 42 Off. ;a/. 217> )arfori ,s. Felasco+ J .A.K 42 Off. ;a/. 2040".C

Petitioner+ howe,er+ 1ust also pay the rent for the property occupie( by its buil(in% as prescribe( by respon(ent ourt fro1 October 4+ 1979+ but only up to the (ate pri,ate respon(ent ser,es notice of its option upon petitioner an( the trial court> that is+ if such option is for pri,ate respon(ent to appropriate the encroachin% structure. .n such e,ent+ petitioner woul( ha,e a ri%ht of retention which ne%ates the obli%ation to pay rent.J40K 2he rent shoul( howe,er continue if the option chosen is co1pulsory sale+ but only up to the actual transfer of ownership.

2he awar( of attorney=s fees by respon(ent ourt a%ainst petitioner is unwarrante( since the action appears to ha,e been file( in %oo( faith. ?esi(es+ there shoul( be no penalty on the ri%ht to liti%ate.J41K

2he pri,ate respon(ent=s insistence on the re1o,al of the encroachin% structures as the proper re1e(y+ which respon(ent ourt sustaine( in its assaile( 5ecisions+ is thus le%ally flawe(. 2his is not one of the re1e(ies bestowe( upon hi1 by law. .t woul( be a,ailable only if an( when he chooses to co1pel the petitioner to buy the lan( at a reasonable price but the latter fails to pay such price.J33K 2his has not ta&en place. 9ence+ his

B9D*DFO*D+ pre1ises consi(ere(+ the petition is hereby ;*A32D5 an( the assaile( 5ecision an( the A1en(e( 5ecision are *DFD*$D5 an( $D2 A$.5D. .n accor(ance with the case of 5epra ,s. 5u1lao+J42K this case is *D)A35D5 to the *e%ional 2rial ourt of Pasay ity+ ?ranch 117+ for further procee(in%s consistent with Articles 448 an( 446 J43K of the i,il o(e+ as follows#

2he trial court shall (eter1ine#

a" the present fair price of pri,ate respon(ent=s 420 s0uare81eter area of lan(>

b" the increase in ,alue !Cplus ,alueC" which the sai( area of 420 s0uare 1eters 1ay ha,e ac0uire( by reason of the e:istence of the portion of the buil(in% on the area>

c"

the fair 1ar&et ,alue of the encroachin% portion of the buil(in%> an(

(" whether the ,alue of sai( area of lan( is consi(erably 1ore than the fair 1ar&et ,alue of the portion of the buil(in% thereon.

to a%ree upon the ter1s of the lease+ an( %i,e the trial court for1al written notice of the a%ree1ent an( its pro,isos. .f no a%ree1ent is reache( by the parties+ the trial court+ within fifteen !14" (ays fro1 an( after the ter1ination of the sai( perio( fi:e( for ne%otiation+ shall then fi: the ter1s of the lease pro,i(e( that the 1onthly rental to be fi:e( by the ourt shall not be less than two thousan( pesos !P2+000.00" per 1onth+ payable within the first fi,e !4" (ays of each calen(ar 1onth. 2he perio( for the force( lease shall not be 1ore than two !2" years+ counte( fro1 the finality of the <u(%1ent+ consi(erin% the lon% perio( of ti1e since 1970 that petitioner has occupie( the sub<ect area. 2he rental thus fi:e( shall be increase( by ten percent !10Q" for the secon( year of the force( lease. Petitioner shall not 1a&e any further constructions or i1pro,e1ents on the buil(in%. -pon e:piration of the two8year perio(+ or upon (efault by petitioner in the pay1ent of rentals for two !2" consecuti,e 1onths+ pri,ate respon(ent shall be entitle( to ter1inate the force( lease+ to reco,er his lan(+ an( to ha,e the portion of the buil(in% re1o,e( by petitioner or at latter=s e:pense. 2he rentals herein pro,i(e( shall be ten(ere( by petitioner to the trial court for pay1ent to pri,ate respon(ent+ an( such ten(er shall constitute e,i(ence of whether or not co1pliance was 1a(e within the perio( fi:e( by the sai( court.

2. After sai( a1ounts shall ha,e been (eter1ine( by co1petent e,i(ence+ the re%ional trial court shall ren(er <u(%1ent as follows#

a" 2he pri,ate respon(ent shall be %rante( a perio( of fifteen !14" (ays within which to e:ercise his option un(er the law !Article 448+ i,il o(e"+ whether to appropriate the portion of the buil(in% as his own by payin% to petitioner its fair 1ar&et ,alue+ or to obli%e petitioner to pay the price of sai( area. 2he a1ounts to be respecti,ely pai( by petitioner an( pri,ate respon(ent+ in accor(ance with the option thus e:ercise( by written notice of the other party an( to the court+ shall be pai( by the obli%or within fifteen !14" (ays fro1 such notice of the option by ten(erin% the a1ount to the trial court in fa,or of the party entitle( to recei,e it>

c" .n any e,ent+ petitioner shall pay pri,ate respon(ent an a1ount co1pute( at two thousan( pesos !P2+000.00" per 1onth as reasonable co1pensation for the occupancy of pri,ate respon(ent=s lan( for the perio( counte( fro1 October 4+ 1979+ up to the (ate pri,ate respon(ent ser,es notice of its option to appropriate the encroachin% structures+ otherwise up to the actual transfer of ownership to petitioner or+ in case a force( lease has to be i1pose(+ up to the co11ence1ent (ate of the force( lease referre( to in the prece(in% para%raph>

(" 2he perio(s to be fi:e( by the trial court in its (ecision shall be non8 e:ten(ible+ an( upon failure of the party obli%e( to ten(er to the trial court the a1ount (ue to the obli%ee+ the party entitle( to such pay1ent shall be entitle( to an or(er of e:ecution for the enforce1ent of pay1ent of the a1ount (ue an( for co1pliance with such other acts as 1ay be re0uire( by the prestation (ue the obli%ee.

b" .f pri,ate respon(ent e:ercises the option to obli%e petitioner to pay the price of the lan( but the latter re<ects such purchase because+ as foun( by the trial court+ the ,alue of the lan( is consi(erably 1ore than that of the portion of the buil(in%+ petitioner shall %i,e written notice of such re<ection to pri,ate respon(ent an( to the trial court within fifteen !14" (ays fro1 notice of pri,ate respon(ent=s option to sell the lan(. .n that e,ent+ the parties shall be %i,en a perio( of fifteen !14" (ays fro1 such notice of re<ection within which

3o costs.

$O O*5D*D5.

3ar,asa+

.'.+ ! hair1an"+ 5a,i(e+ 'r.+ )elo+ an( Francisco+ ''.+ concur.

On October 7+ 1977+ the respon(ent <u(%e issue( the (ispute( or(er+ to wit#

Manoto5 Realit0 v. 3ecson, 1 4 SCRA 5%7

.n a co1plaint file( by the petitioner for reco,ery of possession an( (a1a%es a%ainst the pri,ate respon(ent+ the then ourt of First .nstance of )anila ren(ere( <u(%1ent+ the (ispositi,e portion of which pro,i(es inter alia#

B9D*DFO*D+ <u(%1ent is hereby ren(ere(#

Actin% on the 1otion for appro,al of plaintiffs e:ercise of option an( for satisfaction of <u(%1ent file( by the plaintiff+ an( the opposition thereto interpose( by the (efen(ant+ both throu%h counsels+ an( after a <u(icious re,iew of all the facts an( circu1stances obtainin% in this case+ in the li%ht of statutory pro,isions !Art. 6+ 3ew i,il o(e" an( <urispru(ential (octrines !Fi(e+ ?enares ,. apitol $ub(i,ision+ .nc.+ @87330 !3o,. 29+ 1960"+ an( consi(erin% further the (efiniti,e rulin% of our $upre1e 2ribunal in the case of 'ose . ristobal ,. Ale<an(ro )elchor+ ;.*. 3o. @843203 pro1ul%ate( on 'uly 29+ 1977+ wherein the ourt says#

::: ::: :::

::: ::: :::

C2his ourt+ applyin% the principle of e0uity+ nee( not be boun( to a ri%i( application of the law but rather its action shoul( confor1 to the con(itions or e:i%encies of a %i,en proble1 or situation in or(er to %rant relief that it will ser,e the en(s of <ustice.C

!c" .n i,il ase 3o. 72872+ (eclarin% the (efen(ant 3ilo )a(lan%awa as a buil(er or possessor in %oo( faith> or(erin% the plaintiff to reco%ni/e the ri%ht of sai( (efen(ant to re1ain in @ot 3o. 344+ ?loc& 1+ of the lara 2a1buntin% $ub(i,ision until after he shall ha,e been rei1burse( by the plaintiff the su1 of P7+400.00+ without pronounce1ent as to costs. !p. 24+ *ollo"

::: ::: :::

3ot satisfie( with the trial court=s (ecision+ the petitioner appeale( to the ourt of Appeals an( upon affir1ance by the latter of the (ecision below+ the petitioner ele,ate( its case to this ourt.

the ourt is of the consi(ere( ,iew that un(er the peculiar circu1stances which super,ene( after the institution of this case+ li&e+ for instance+ the intro(uction of certain 1a<or repairs of an( other substantial i1pro,e1ents on the contro,erte( property+ the instant 1otion of the plaintiff is not well8 ta&en an( therefore not le%ally proper an( tenable.

On 'uly 13+ 1977+ we issue( a resolution (ate( 'uly 11+ 1977 (enyin% the petitioner=s petition for lac& of 1erit. 9ence+ on Au%ust 4+ 1977+ the petitioner file( with the trial court+ presi(e( o,er by respon(ent 'u(%e 'ose 9. 2ecson+ a 1otion for the appro,al of petitioner=s e:ercise of option an( for satisfaction of <u(%1ent+ prayin% that the court issue an or(er# a" appro,in% the e:ercise of petitioner=s option to appropriate the i1pro,e1ents intro(uce( by the pri,ate respon(ent on the property> b" thereafter+ pri,ate respon(ent be or(ere( to (eli,er possession of the property in 0uestion to the petitioner.

B9D*DFO*D+ an( for lac& of 1erit+ the instant 1otion for appro,al of the plaintiff=s fai8rn of option an( for satisfaction of <u(%1ent shoul( be+ as hereby it is+ (enie(. !pp. 44846+ *ollo"

After a (enial of its 1otion for reconsi(eration+ the petitioner file( the present petition for 1an(a1us alle%in% that the respon(ent <u(%e co11itte( %ra,e abuse of (iscretion in (enyin% his 1otion to e:ercise option an( for e:ecution of <u(%1ent on the %roun(s that un(er Articles 448 an( 446 of the i,il o(e+ the e:ercise of option belon%s to the owner of the property+ who is the

petitioner herein+ an( that upon finality of <u(%1ent+ the pre,ailin% party is entitle(+ as a 1atter of ri%ht+ to its e:ecution which is only a 1inisterial act on the part of the respon(ent <u(%e.

Be fin( 1erit in these ar%u1ents.

On April 14+ 1978+ the pri,ate respon(ent file( his co11ent on the petition alle%in% that the sa1e has alrea(y beco1e 1oot an( aca(e1ic for two reasons# first+ fire %utte( not only the house of the pri,ate respon(ent but the 1a<ority of the houses in 2a1buntin% Dstate> an( secon(+ as a result of the sai( fire+ the then First @a(y an( )etro )anila ;o,ernor .1el(a *. )arcos has place( the (ispute( area un(er her Honal .1pro,e1ent Pro<ect+ thereby allowin% the ,icti1s of the fire to put up new structures on the pre1ises+ so that the willin%ness an( rea(iness of the petitioner to e:ercise the alle%e( option can no lon%er be e:ercise( since the sub<ect81atter thereof has been e:tin%uishe( by the fire. Further1ore+ the Presi(ent of the Philippines has alrea(y issue( a Presi(ential 5ecree for the e:propriation of certain estates in )etro )anila inclu(in% the 2a1buntin% Dstate. 2herefore+ the beneficient an( hu1anitarian purpose of the Honal .1pro,e1ent Pro<ect an( the e:propriation procee(in% woul( be (efeate( if petitioner is allowe( to e:ercise an option which woul( result in the e<ect1ent of the pri,ate respon(ent.

Bhen the (ecision of the trial court beca1e final an( e:ecutory+ it beca1e incu1bent upon the respon(ent <u(%e to issue the necessary writ for the e:ecution of the sa1e. 2here is+ therefore+ no basis for the respon(ent <u(%e to (eny the petitioner=s 1otion to a,ail of its option to approriate the i1pro,e1ents 1a(e on its property.

.n the case of 5uenas ,. )an(i !141 $ *A 430+ 444"+ we sai(#

::: ::: :::

On 5ece1ber 28+ 1980+ Presi(ential 5ecree !P.5." 3o. 1669 was issue( pro,i(in% for the e:propriation of the 2a1buntin% Dstate. 9owe,er+ this (ecree was challen%e( before this ourt in ;.*. 3o+ 44166 entitle( 2he CDlisa *. )anoto&+ et al. ,. 3ational 9ousin% Authority+ et al.C 9ence+ we (eci(e( to hol( the (ecision on this petition pen(in% the resolution of the abo,e entitle( case.

...@i&ewise settle( is the rule that after a <u(%1ent has beco1e final+ no a((itions can be 1a(e thereto+ an( nothin% can be (one therewith e:cept its e:ecution+ otherwise there woul( be no en( to le%al processes. !Fabular ,. ourt of Appeals+ 11 9 $ *A 329"

On )ay 21+ 1987+ the ourt ren(ere( a (ecision in the Dlisa )anoto& case !)anoto& ,. 3ational 9ousin% Authority+ 140 $ *A 89" rulin% that P.5. 1669 is unconstitutional for bein% ,iolati,e of the (ue process clause. 2hus+ since the present petition has not been ren(ere( 1oot an( aca(e1ic by the (ecision in sai( case+ we will now (eci(e on its 1erits.

3either can the respon(ent <u(%e (eny the issuance of a writ of e:ecution because the pri,ate respon(ent was a(<u(%e( a buil(er in %oo( faith or on the %roun( of Cpeculiar circu1stances which super,ene( after the institution of this case+ li&e+ for instance+ the intro(uction of certain 1a<or repairs of an( other substantial i1pro,e1ents...C because the option %i,en by law either to retain the pre1ises an( pay for the i1pro,e1ents thereon or to sell the sai( pre1ises to the buil(er in %oo( faith belon%s to the owner of the property. As we ha,e in Lue1el ,. Olaes !1 $ *A 1149+1163"#

::: ::: ::: As state( earlier+ the petitioner ar%ues that since the <u(%1ent of the trial court has alrea(y beco1e final+ it is entitle( to the e:ecution of the sa1e an( that 1oreo,er+ since the house of the pri,ate respon(ent was %utte( by fire+ the e:ecution of the (ecision woul( now in,ol,e the (eli,ery of possession of the (ispute( area by the pri,ate respon(ent to the petitioner.

...2he plaintiffs clai1 that their secon( cause of action is base( on Article 448 in connection with Art. 446+ of the new i,il o(e. A cursory rea(in% of these pro,isions+ howe,er+ will show that they are not applicable to plaintiff=s case. -n(er Article 448+ the ri%ht to appropriate the wor&s or i1pro,e1ents or to

obli%e the one who built or plante( to pay the price of the lan(= belon%s to the owner of the lan(. 2he only ri%ht %i,en to the buil(er in %oo( faith is the ri%ht to rei1burse1ent for the i1pro,e1ents> the buil(er+ cannot co1pel the owner of the lan( to sell such lan( to the for1er. ...

2hus+ the repairs an( i1pro,e1ents intro(uce( by the sai( respon(ents after the co1plaint was file( cannot be consi(ere( to ha,e been built in %oo( faith+ 1uch less+ <ustify the (enial of the petitioner=s fai8rn of option.

A%ain+ in the recent case of Pa/ )erca(o+ et al. ,. 9on. ourt of Appeals+ et al.+ !;.*. 3o. @8 44001+ 'une 10+ 1988"+ we sai(#

$ince the i1pro,e1ents ha,e been %utte( by fire+ an( therefore+ the basis for pri,ate respon(ent=s ri%ht to retain the pre1ises has alrea(y been e:tin%uishe( without the fault of the petitioner+ there is no other recourse for the pri,ate respon(ent but to ,acate the pre1ises an( (eli,er the sa1e to herein petitioner.

... 2o be (ee1e( a buil(er in %oo( faith+ it is essential that a person assert title to the lan( on which he buil(s> i.e.+ that he be a possessor in concept of owner !Art. 424+ i,il o(e> @ope/+ .nc. ,. Phil. Dastern 2ra(in% o.+ .nc.+ 98 Phil. 348" an( that he be unaware =that there e:ists in his title or 1o(e of ac0uisition any flaw which in,ali(ates it.= !Art. 426+ i,il o(e> ;rana(os ,. )onton+ 86 Phil. 42> Arriola ,. ;o1e/ (e la $erna+ 14 Phil. 627> $ee also )anoto& *ealty+ .nc. ,. .A.+ 134 $ *A 329+ citin% ara1 ,. @aureta+ 103 $ *A 7" .t is such a buil(er in %oo( faith who is %i,en the 1i%ht to retain the thin%+ e,en as a%ainst the real owner+ until he has been rei1burse( in full not only for the necessary e:penses but also for useful e:penses. !Art. 446+ i,il o(e> Policarpio ,. A.+ 129 $ *A 41> $ar1iento ,. A%ana+ 129 $ *A 1221> cf+ Lueto ,. .A.+ 122 $ *A 206" ...

B9D*DFO*D+ .3 F.DB OF 29D FO*D;O.3;+ the petition is ;*A32D5 an( the respon(ent <u(%e is hereby or(ere( to i11e(iately issue a writ of e:ecution or(erin% the pri,ate respon(ent to ,acate the (ispute( pre1ises an( (eli,er possession of the sa1e to the petitioner.

$O O*5D*D5.

Fernan+ Further1ore+ the pri,ate respon(ent=s %oo( faith cease( after the filin% of the co1plaint below by the petitioner. .n the case of )in(anao Aca(e1y+ .nc. ,. Eap !13 $ *A 190+196"+ we rule(#

.'.+ Feliciano+ ?i(in an( ortos+ ''.+ concur.

?allatan ,. ::: ::: :::

A+ 304 $ *A 34

...Althou%h the ba( faith of one party neutrali/es that of the other an( hence as between the1sel,es their ri%hts woul( be as if both of the1 ha( acte( in %oo( faith at the ti1e of the transaction+ this le%al fiction of Eap=s %oo( faith cease( when the co1plaint a%ainst hi1 was file(+ an( conse0uently the court=s (eclaration of liability for the rents thereafter is correct an( proper . A possessor in %oo( faith is entitle( to the fruits only so lon% as his possession is not le%ally interrupte(+ an( such interruption ta&es place upon ser,ice of <u(icial su11ons !Arts. 444 an( 1123+ i,il o(e".

2his is a petition for re,iew on certiorari of the (ecision of the ourt of Appeals (ate( )arch 24+ 1996 in A8;.*. F 3o. 32472 entitle( CD(en ?allatan+ et. al.+ plaintiffs8appellees ,. ;on/alo ;o an( Binston ;o+ appellants an( thir(8party plaintiffs8appellants ,. @i hin% Eao+ et.al.+ thir(8 party (efen(ants.CJ1K

2he instant case arose fro1 a (ispute o,er forty8two !42" s0uare 1eters of resi(ential lan( belon%in% to petitioners. 2he parties herein are owners of a(<acent lots locate( at ?loc& 3o. 3+ Poinsettia $treet+ Araneta -ni,ersity Filla%e+ )alabon+ )etro )anila. @ot 3o. 24+ 414 s0uare 1eters in area+ is re%istere( in the na1e of petitioners D(en ?allatan an( spouses ?etty )artine/ an( hon% hy @in%.J2K @ots 3os. 24 an( 26+ with an area of 414 an( 313 s0uare 1eters respecti,ely+ are re%istere( in the na1e of

respon(ent ;on/alo ;o+ $r.J3K On @ot 3o. 24+ respon(ent Binston ;o+ son of ;on/alo ;o+ $r.+ constructe( his house. A(<acent to @ot 3o. 26 is @ot 3o. 27+ 417 s0uare 1eters in area+ an( is re%istere( in the na1e of respon(ent @i hin% Eao.J4K

On the basis of this sur,ey+ on 'une 10+ 1984+ petitioner ?allatan 1a(e a written (e1an( on respon(ents ;o to re1o,e an( (is1antle their i1pro,e1ents on @ot 3o. 24. *espon(ents ;o refuse(. 2he parties+ inclu(in% @i hin% Eao+ howe,er+ 1et se,eral ti1es to reach an a%ree1ent on the 1atter.

.n 1984+ petitioner ?allatan constructe( her house on @ot 3o. 24. 5urin% the construction+ she notice( that the concrete fence an( si(e pathway of the a(<oinin% house of respon(ent Binston ;o encroache( on the entire len%th of the eastern si(e of her property.J4K 9er buil(in% contractor infor1e( her that the area of her lot was actually less than that (escribe( in the title. Forthwith+ ?allatan infor1e( respon(ent ;o of this (iscrepancy an( his encroach1ent on her property. *espon(ent ;o+ howe,er+ clai1e( that his house+ inclu(in% its fence an( pathway+ were built within the para1eters of his father=s lot> an( that this lot was sur,eye( by Dn%ineer 'ose Lue((in%+ the authori/e( sur,eyor of the Araneta .nstitute of A%riculture !A.A"+ the owner8(e,eloper of the sub(i,ision pro<ect.

Failin% to a%ree a1icably+ petitioner ?allatan brou%ht the issue before the baran%ay. *espon(ents ;o (i( not appear. 2hus+ on April 1+ 1986+ petitioner ?allatan institute( a%ainst respon(ents ;o i,il ase 3o. 7728)3 for reco,ery of possession before the *e%ional 2rial ourt+ )alabon+ ?ranch 169. 2he ;o=s file( their CAnswer with 2hir(8Party o1plaintC i1plea(in% as thir(8party (efen(ants respon(ents @i hin% Eao+ the A.A an( Dn%ineer Lue((in%.

Petitioner ?allatan calle( the attention of the A.A to the (iscrepancy of the lan( area in her title an( the actual lan( area recei,e( fro1 the1. 2he A.A authori/e( another sur,ey of the lan( by Dn%ineer 'ose 3. Lue((in%.

.n a report (ate( February 28+ 1984+ Dn%ineer Lue((in% foun( that the lot area of petitioner ?allatan was less by a few 1eters an( that of respon(ent @i hin% Eao+ which was three lots away+ increase( by two !2" 1eters. Dn%ineer Lue((in% (eclare( that he 1a(e a ,erification sur,ey of @ots 3os. 24 an( 26 of respon(ents ;o in 1983 an( alle%e(ly foun( the boun(aries to ha,e been in their proper position. 9e+ howe,er+ coul( not e:plain the re(uction in ?allatan=s area since he was not present at the ti1e respon(ents ;o constructe( their boun(ary walls.J6K

On Au%ust 23+ 1990+ the trial court (eci(e( in fa,or of petitioners. .t or(ere( the ;o=s to ,acate the sub<ect portion of @ot 3o. 24+ (e1olish their i1pro,e1ents an( pay petitioner ?allatan actual (a1a%es+ attorney=s fees an( the costs of the suit. .t (is1isse( the thir(8party co1plaint a%ainst# !1" A.A after fin(in% that the lots sol( to the parties were in accor(ance with the technical (escription an( ,erification plan co,ere( by their respecti,e titles> !2" 'ose 3. Lue((in%+ there bein% no pri,ity of relation between hi1 an( respon(ents ;o an( his erroneous sur,ey ha,in% been 1a(e at the instance of A.A+ not the parties> an( !3" @i hin% Eao for failure to pro,e that he co11itte( any wron% in the sub<ect encroach1ent.J8K 2he court 1a(e the followin% (isposition#

CB9D*DFO*D+ <u(%1ent is hereby ren(ere( in fa,or of the plaintiffs an( a%ainst the (efen(ants+ or(erin% the latter#

On 'une 2+ 1984+ Dn%ineer Lue((in% 1a(e a thir( relocation sur,ey upon re0uest of the parties. 9e foun( that @ot 3o. 24 lost appro:i1ately 24 s0uare 1eters on its eastern boun(ary+ that @ot 3o. 24+ althou%h foun( to ha,e encroache( on @ot 3o. 24+ (i( not lose nor %ain any area> that @ot 3o. 26 lost so1e three !3" s0uare 1eters which+ howe,er+ were %aine( by @ot 3o. 27 on its western boun(ary.J7K .n short+ @ots 3os. 24+ 26 an( 27 1o,e( westwar( to the eastern boun(ary of @ot 3o. 24.

1. 2o (e1olish an( re1o,e all i1pro,e1ents e:istin% an( encroachin% on plaintiff=s lot>

2. 2o clear+ ,acate an( (eli,er possession of the encroache( area to the plaintiffs>

3. 2o pay plaintiffs <ointly an( se,erally the followin%#

a"

P7+800.00 for the e:penses pai( to the sur,eyors>

1" 5efen(ants8appellants are hereby or(ere( to pay plaintiffs8appellees the reasonable ,alue of the forty8two !42" s0uare 1eters of their lot at the ti1e of its ta&in%>

b"

P4+000.00 for plaintiffs= transportation> 2" 2hir(8party (efen(ant @i hin% Eao is hereby or(ere( to pay (efen(ants8 appellants the reasonable ,alue of the thirty8se,en !37" s0uare 1eters of the latter=s lot at the ti1e of its ta&in%> an(

4. 2o pay plaintiffs+ <ointly an( se,erally+ attorney=s fees e0ui,alent to 24Q of the current 1ar&et ,alue of the sub<ect 1atter in liti%ation at the ti1e of e:ecution> an(

4. 2o pay the costs of suit.

3" 2hir(8party (efen(ant 'ose 3. Lue((in% is hereby or(ere( to pay to (efen(ants8appellants the a1ount of P4+000.00. as attorney=s fees.

2he thir(8party co1plaint file( by thir(8party plaintiff ;on/alo ;o an( Binston ;o a%ainst thir(8party (efen(ants Araneta .nstitute of A%riculture+ 'ose 3. Lue((in% an( @i hin% Eao is hereby 5.$).$$D5+ without pronounce1ent as to costs.

@D2 29D *D O*5 of the case be re1an(e( to the *e%ional 2rial ourt of )alabon for further procee(in%s an( reception of e,i(ence for the (eter1ination of the reasonable ,alue of @ots 3os. 24 an( 26.

$O O*5D*D5.CJ9K $O O*5D*D5.C 9ence+ this petition. Petitioners alle%e that# *espon(ents ;o appeale(. On )arch 24+ 1996+ the ourt of Appeals 1o(ifie( the (ecision of the trial court. .t affir1e( the (is1issal of the thir(8 party co1plaint a%ainst the A.A but reinstate( the co1plaint a%ainst @i hin% Eao an( 'ose Lue((in%. .nstea( of or(erin% respon(ents ;o to (e1olish their i1pro,e1ents on the sub<ect lan(+ the appellate court or(ere( the1 to pay petitioner ?allatan+ an( respon(ent @i hin% Eao to pay respon(ents ;o+ a reasonable a1ount for that portion of the lot which they encroache(+ the ,alue to be fi:e( at the ti1e of ta&in%. .t also or(ere( 'ose Lue((in% to pay respon(ents ;o attorney=s fees of P4+000.00 for his erroneous sur,ey. 2he (ispositi,e portion of the (ecision rea(s#

C*D$PO35D32 O-*2 OF APPDA@$ D**D5 O3 L-D$2.O3$ OF @AB A35 ;*AFD@E A?-$D5 .2$ 5.$ *D2.O3 A)O-32.3; 2O @A M OF '-*.$5. 2.O3 B9D3#

CB9D*DFO*D+ pre1ises consi(ere(+ the (ecision appeale( fro1 is hereby AFF.*)D5 insofar as the (is1issal of the thir(8party co1plaint a%ainst Araneta .nstitute of A%riculture is concerne( but 1o(ifie( in all other aspects as follows#

1. .2 APP@.D5 DL-.2E O* DL-.2A?@D $O@-2.O3$ 2O 29D .3$2A32 A$D .3 -22D* 5.$*D;A*5 A35 .3 F.O@A2.O3 O* ;*O$$ .;3O*A3 D OF DA.$2.3; @AB$ A35 '-*.$P*-5D3 D FD$2.3; ?A$. P*OPD*2E *.;92$ 2O 9D*D.3 PD2.2.O3D*$. *D$PO35D32 O-*2 9A$ 3O POBD* 2O APP@E7-$D DL-.2E .3 29D P*D$D3 D OF DA.$2.3; @AB$ 2O 29D O32*A*E.

2. -35D* 29D ;-.$D OF APP@E.3; DL-.2E ?-2 .3 DFFD 2 A FD*E APPA*D32 PA*2.A@.2E A35 FAFO* 2O *D$PO35D32$ ;O+ .2 O*5D*D5 PAE)D32 OF 29D D3 *OA 9D5 A*DA A2 29D FA@-D A2 29D 2.)D OF .2$ 2AM.3; A35 3O2 29D FA@-D A2 29D 2.)D OF PAE)D32+ 29D*D?E D3*. 9.3; 29D ;O=$ ?-2 5DP*.F.3; PD2.2.O3D*$ OF 29D F*-.2$ O* .3 *DA$D .3 FA@-D OF 29D.* P*OPD*2E 2O B9. 9 29DE A*D D32.2@D5 -35D* 29D @AB A$ 29D *D;.$2D*D5 OB3D*$ B.29 2O**D3$ 2.2@D .3 29D.* 3A)D$.

fee thereon shall constitute a lien on the <u(%1ent awar(.J16K 2he sa1e rule also applies to thir(8party clai1s an( other si1ilar plea(in%s.J17K

.n the case at bar+ the thir(8party co1plaint file( by respon(ents ;o was incorporate( in their answer to the co1plaint. 2he thir(8party co1plaint sou%ht the sa1e re1e(y as the principal co1plaint but a((e( a prayer for attorney=s fees an( costs without specifyin% their a1ounts+ thus#

3. B9D3 .2 5.5 3O2 5.$).$$ 29D 29.*58PA*2E O)P@A.32 5-D 2O 3O38PAE)D32 OF A3E F.@.3; O* 5O MD2 FDD.

CO3 29D 29.*5 PA*2E O)P@A.32

4. B9D3 .2 5D3.D5 PD2.2.O3D*$ 29D *D OFD*E OF 29D 3D D$$A*E DAPD3$D$ .3 P*O2D 2.3; 29D.* *.;92$ .3 29.$ A$D.CJ10K

1. 2hat su11ons be issue( a%ainst 2hir(8Party 5efen(ants Araneta .nstitute of A%riculture+ 'ose 3. Lue((in% an( @i hin% Eao>

Petitioners 0uestion the a(1ission by respon(ent ourt of Appeals of the thir(8party co1plaint by respon(ents ;o a%ainst the A.A+ 'ose Lue((in% an( @i hin% Eao. Petitioners clai1 that the thir(8party co1plaint shoul( not ha,e been consi(ere( by the ourt of Appeals for lac& of <uris(iction (ue to thir(8 party plaintiffs= failure to pay the (oc&et an( filin% fees before the trial court.

2. 2hat after hearin%+ they be sentence( to in(e1nify the 2hir(8Party Plaintiffs for whate,er is a(<u(%e( a%ainst the latter in fa,or of the Plaintiffs>

3. 2hat 2hir(8Party 5efen(ants be or(ere( to pay attorney=s fees as 1ay be pro,e( (urin% trial>

2he thir(8party co1plaint in the instant case arose fro1 the co1plaint of petitioners a%ainst respon(ents ;o. 2he co1plaint file( was for accion publiciana+ i.e.+ the reco,ery of possession of real property which is a real action. 2he rule in this <uris(iction is that when an action is file( in court+ the co1plaint 1ust be acco1panie( by the pay1ent of the re0uisite (oc&et an( filin% fees.J11K .n real actions+ the (oc&et an( filin% fees are base( on the ,alue of the property an( the a1ount of (a1a%es clai1e(+ if any.J12K .f the co1plaint is file( but the fees are not pai( at the ti1e of filin%+ the court ac0uires <uris(iction upon full pay1ent of the fees within a reasonable ti1e as the court 1ay %rant+ barrin% prescription.J13K Bhere the fees prescribe( for the real action ha,e been pai( but the fees of certain relate( (a1a%es are not+ the court+ althou%h ha,in% <uris(iction o,er the real action+ 1ay not ha,e ac0uire( <uris(iction o,er the acco1panyin% clai1 for (a1a%es.J14K Accor(in%ly+ the court 1ay e:pun%e those clai1s for (a1a%es+ or allow+ on 1otion+ a reasonable ti1e for a1en(1ent of the co1plaint so as to alle%e the precise a1ount of (a1a%es an( accept pay1ent of the re0uisite le%al fees.J14K .f there are unspecifie( clai1s+ the (eter1ination of which 1ay arise after the filin% of the co1plaint or si1ilar plea(in%+ the a((itional filin%

4. 2hat 2hir(8Party 5efen(ants be or(ere( to pay the costs.

Other <ust an( e0uitable reliefs are also praye( for.CJ18K

2he Answer with 2hir(8Party o1plaint was a(1itte( by the trial court without the re0uisite pay1ent of filin% fees+ particularly on the ;o=s prayer for (a1a%es.J19K 2he trial court (i( not awar( the ;o=s any (a1a%es. .t (is1isse( the thir(8party co1plaint. 2he ourt of Appeals+ howe,er+ %rante( the thir(8party co1plaint in part by or(erin% thir(8party (efen(ant 'ose 3. Lue((in% to pay the ;o=s the su1 of P4+000.00 as attorney=s fees.

ontrary to petitioners= clai1+ the ourt of Appeals (i( not err in awar(in% (a1a%es (espite the ;o=s failure to specify the a1ount praye( for an( pay the correspon(in% a((itional filin% fees thereon. 2he clai1 for attorney=s fees refers to (a1a%es arisin% after the filin% of the co1plaint a%ainst the ;o=s. 2he a((itional filin% fee on this clai1 is (ee1e( to constitute a lien on the <u(%1ent awar(.J20K

Article 448 of the

i,il

o(e pro,i(es#

2he ourt of Appeals foun( that the sub<ect portion is actually forty8two !42" s0uare 1eters in area+ not forty8fi,e !44"+ as initially foun( by the trial court> that this forty8two !42" s0uare 1eter portion is on the entire eastern si(e of @ot 3o. 24 belon%in% to petitioners> that on this sai( portion is foun( the concrete fence an( pathway that e:ten(s fro1 respon(ent Binston ;o=s house on a(<acent @ot 3o. 24> that inclusi,e of the sub<ect portion+ respon(ents ;o (i( not %ain nor lose any portion of @ots 3os. 24 an( 26> that instea(+ @ot 3o. 27+ on which respon(ent @i hin% Eao built his house+ encroache( on the lan( of respon(ents ;o+ %ainin% in the process thirty8 se,en !37" s0uare 1eters of the latter=s lan(.J21K

CArt. 448. 2he owner of the lan( on which anythin% has been built+ sown or plante( in %oo( faith+ shall ha,e the ri%ht to appropriate as his own the wor&s+ sowin% or plantin%+ after pay1ent of the in(e1nity pro,i(e( for in Articles 446 an( 448+J27K or to obli%e the one who built or plante( to pay the price of the lan(+ an( the one who sowe( the proper rent. 9owe,er+ the buil(er or planter cannot be obli%e( to buy the lan( if its ,alue is consi(erably 1ore than that of the buil(in% or trees. .n such case+ he shall pay reasonable rent+ if the owner of the lan( (oes not choose to appropriate the buil(in% or trees after proper in(e1nity. 2he parties shall a%ree upon the ter1s of the lease an( in case of (isa%ree1ent+ the court shall fi: the ter1s thereof.C

Be hol( that the ourt of Appeals correctly (is1isse( the thir(8party co1plaint a%ainst A.A. 2he clai1 that the (iscrepancy in the lot areas was (ue to A.A=s fault was not pro,e(. 2he appellate court+ howe,er+ foun( that it was the erroneous sur,ey by Dn%ineer Lue((in% that tri%%ere( these (iscrepancies. An( it was this sur,ey that respon(ent Binston ;o relie( upon in constructin% his house on his father=s lan(. 9e built his house in the belief that it was entirely within the para1eters of his father=s lan(. .n short+ respon(ents ;o ha( no &nowle(%e that they encroache( on petitioners= lot. 2hey are (ee1e( buil(ers in %oo( faithJ22K until the ti1e petitioner ?allatan infor1e( the1 of their encroach1ent on her property.J23K

2he owner of the lan( on which anythin% has been built+ sown or plante( in %oo( faith shall ha,e the ri%ht to appropriate as his own the buil(in%+ plantin% or sowin%+ after pay1ent to the buil(er+ planter or sower of the necessary an( useful e:penses+ an( in the proper case+ e:penses for pure lu:ury or 1ere pleasure. 2he owner of the lan( 1ay also obli%e the buil(er+ planter or sower to purchase an( pay the price of the lan(. .f the owner chooses to sell his lan(+ the buil(er+ planter or sower 1ust purchase the lan(+ otherwise the owner 1ay re1o,e the i1pro,e1ents thereon. 2he buil(er+ planter or sower+ howe,er+ is not obli%e( to purchase the lan( if its ,alue is consi(erably 1ore than the buil(in%+ plantin% or sowin%. .n such case+ the buil(er+ planter or sower 1ust pay rent to the owner of the lan(. .f the parties cannot co1e to ter1s o,er the con(itions of the lease+ the court 1ust fi: the ter1s thereof. 2he ri%ht to choose between appropriatin% the i1pro,e1ent or sellin% the lan( on which the i1pro,e1ent stan(s to the buil(er+ planter or sower+ is %i,en to the owner of the lan(.J28K

*espon(ent @i hin% Eao built his house on his lot before any of the other parties (i(.J24K 9e constructe( his house in 1982+ respon(ents ;o in 1983+ an( petitioners in 1984.J24K 2here is no e,i(ence+ 1uch less+ any alle%ation that respon(ent @i hin% Eao was aware that when he built his house he &new that a portion thereof encroache( on respon(ents ;o=s a(<oinin% lan(. ;oo( faith is always presu1e(+ an( upon hi1 who alle%es ba( faith on the part of a possessor rests the bur(en of proof.J26K

Article 448 has been applie( to i1pro,e1ents or portions of i1pro,e1ents built by 1ista&en belief on lan( belon%in% to the a(<oinin% owner.J29K 2he facts of the instant case are si1ilar to those in abral ,. .bane/+J30K to wit#

All the parties are presu1e( to ha,e acte( in %oo( faith. 2heir ri%hts 1ust+ therefore+ be (eter1ine( in accor(ance with the appropriate pro,isions of the i,il o(e on property.

CJPKlaintiffs ;eroni1a Habala an( her husban( 'ustino ?ernar(o+ constructe( their house in the belief that it was entirely within the area of their own lan( without &nowin% at that ti1e that part of their house was occupyin% a 148 s0uare 1eter portion of the a(<oinin% lot belon%in% to the (efen(ants+ an( that the (efen(ants ?ernar(o ). abral an( )a1erta ). abral were

li&ewise unaware of the fact that a portion of plaintiff=s house was e:ten(in% an( occupyin% a portion of their lot with an area of 14 s0uare 1eters. 2he parties ca1e to &now of the fact that part of the plaintiff=s house was occupyin% part of (efen(ant=s lan( when the construction of plaintiff=s house was about to be finishe(+ after a relocation of the 1onu1ents of the two properties ha( been 1a(e by the -.$. Ar1y throu%h the ?ureau of @an(s+ accor(in% to their =$tipulation of Facts+= (ate( Au%ust 17+ 1941.

parties 1ust co1e to an a%ree1ent as to the con(itions of the lease+ an( shoul( they fail to (o so+ then the court shall fi: the sa1e.CJ33K

On the basis of these facts+ we hel( that#

C2he ourt+ therefore+ conclu(es that the plaintiffs are buil(ers in %oo( faith an( the relati,e ri%hts of the (efen(ant )a1erta abral as owner of the lan( an( of the plaintiffs as owners of the buil(in% is %o,erne( by Article 361 of the i,il o(e ! o 2ao ,. 'oa0uin han hico+ 46 Off. ;a/.4414". Article 361 of the ol( i,il o(e has been repro(uce( with an a((itional pro,ision in Article 448 of the new i,il o(e+ appro,e( 'une 18+ 1949.CJ31K

.n li%ht of these rulin%s+ petitioners+ as owners of @ot 3o. 24+ 1ay choose to purchase the i1pro,e1ent 1a(e by respon(ents ;o on their lan(+ or sell to respon(ents ;o the sub<ect portion. .f buyin% the i1pro,e1ent is i1practical as it 1ay ren(er the ;o=s house useless+ then petitioners 1ay sell to respon(ents ;o that portion of @ot 3o. 24 on which their i1pro,e1ent stan(s. .f the ;o=s are unwillin% or unable to buy the lot+ then they 1ust ,acate the lan( an(+ until they ,acate+ they 1ust pay rent to petitioners. Petitioners+ howe,er+ cannot co1pel respon(ents ;o to buy the lan( if its ,alue is consi(erably 1ore than the portion of their house constructe( thereon. .f the ,alue of the lan( is 1uch 1ore than the ;o=s i1pro,e1ent+ then respon(ents ;o 1ust pay reasonable rent. .f they (o not a%ree on the ter1s of the lease+ then they 1ay %o to court to fi: the sa1e.

$i1ilarly+ in ;rana an( 2orralba ,.

ourt of Appeals+J32K we hel( that#

CAlthou%h without any le%al an( ,ali( clai1 o,er the lan( in 0uestion+ petitioners+ howe,er+ were foun( by the ourt of Appeals to ha,e constructe( a portion of their house thereon in %oo( faith. -n(er Article 361 of the ol( i,il o(e !Article 448 of the new"+ the owner of the lan( on which anythin% has been built in %oo( faith shall ha,e the ri%ht to appropriate as his own the buil(in%+ after pay1ent to the buil(er of necessary or useful e:penses+ an( in the proper case+ e:penses for pure lu:ury or 1ere pleasure+ or to obli%e the buil(er to pay the price of the lan(. *espon(ents+ as owners of the lan(+ ha,e therefore the choice of either appropriatin% the portion of petitioners= house which is on their lan( upon pay1ent of the proper in(e1nity to petitioners+ or sellin% to petitioners that part of their lan( on which stan(s the i1pro,e1ent. .t 1ay here be pointe( out that it woul( be i1practical for respon(ents to choose to e:ercise the first alternati,e+ i.e.+ buy that portion of the house stan(in% on their lan(+ for in that e,ent the whole buil(in% 1i%ht be ren(ere( useless. 2he 1ore wor&able solution+ it woul( see1+ is for respon(ents to sell to petitioners that part of their lan( on which was constructe( a portion of the latter=s house. .f petitioners are unwillin% or unable to buy+ then they 1ust ,acate the lan( an( 1ust pay rentals until they (o so. Of course+ respon(ents cannot obli%e petitioners to buy the lan( if its ,alue is consi(erably 1ore than that of the afore1entione( portion of the house. .f such be the case+ then petitioners 1ust pay reasonable rent. 2he

.n the e,ent that petitioners elect to sell to respon(ents ;o the sub<ect portion of their lot+ the price 1ust be fi:e( at the pre,ailin% 1ar&et ,alue at the ti1e of pay1ent. 2he ourt of Appeals erre( in fi:in% the price at the ti1e of ta&in%+ which is the ti1e the i1pro,e1ents were built on the lan(. 2he ti1e of ta&in% is (eter1inati,e of <ust co1pensation in e:propriation procee(in%s. 2he instant case is not for e:propriation. .t is not a ta&in% by the state of pri,ate property for a public purpose upon pay1ent of <ust co1pensation. 2his is a case of an owner who has been payin% real estate ta:es on his lan( but has been (epri,e( of the use of a portion of this lan( for years. .t is but fair an( <ust to fi: co1pensation at the ti1e of pay1ent.J34K

Article 448 an( the sa1e con(itions abo,estate( also apply to respon(ents ;o as owners an( possessors of their lan( an( respon(ent @i hin% Eao as buil(er of the i1pro,e1ent that encroache( on thirty8se,en !37" s0uare 1eters of respon(ents ;o=s lan(.

.3 F.DB B9D*DOF+ the (ecision of respon(ent 1o(ifie( as follows#

ourt of Appeals is

!1" Petitioners are or(ere( to e:ercise within thirty !30" (ays fro1 finality of this (ecision their option to either buy the portion of respon(ents ;o=s i1pro,e1ent on their @ot 3o. 24+ or sell to sai( respon(ents the portion of

their lan( on which the i1pro,e1ent stan(s. .f petitioners elect to sell the lan( or buy the i1pro,e1ent+ the purchase price 1ust be at the pre,ailin% 1ar&et price at the ti1e of pay1ent. .f buyin% the i1pro,e1ent will ren(er respon(ents ;o=s house useless+ then petitioners shoul( sell the encroache( portion of their lan( to respon(ents ;o. .f petitioners choose to sell the lan( but respon(ents ;o are unwillin% or unable to buy+ then the latter 1ust ,acate the sub<ect portion an( pay reasonable rent fro1 the ti1e petitioners 1a(e their choice up to the ti1e they actually ,acate the pre1ises. ?ut if the ,alue of the lan( is consi(erably 1ore than the ,alue of the i1pro,e1ent+ then respon(ents ;o 1ay elect to lease the lan(+ in which case the parties shall a%ree upon the ter1s of the lease. $houl( they fail to a%ree on sai( ter1s+ the court of ori%in is (irecte( to fi: the ter1s of the lease.

Geminiano v. CA, $59 SCRA 344

2his petition for re,iew on certiorari has its ori%ins in i,il ase 3o. 9214 of ?ranch 3 of the )unicipal 2rial ourt in ities !)2 " in 5a%upan ity for unlawful (etainer an( (a1a%es. 2he petitioners as& the ourt to set asi(e the (ecision of the ourt of Appeals affir1in% the (ecision of ?ranch 40 of the *e%ional 2rial ourt !*2 " of 5a%upan ity+ which+ in turn+ re,erse( the )2 > or(ere( the petitioners to rei1burse the pri,ate respon(ents the ,alue of the house in 0uestion an( other i1pro,e1ents> an( allowe( the latter to retain the pre1ises until rei1burse1ent was 1a(e.

Fro1 the 1o1ent petitioners shall ha,e e:ercise( their option+ respon(ents ;o shall pay reasonable 1onthly rent up to the ti1e the parties a%ree on the ter1s of the lease or until the court fi:es such ter1s.

!2" *espon(ents ;o are li&ewise (irecte( to e:ercise their ri%hts as owners of @ots 3os. 24 an( 26+ ,is8a8,is respon(ent @i hin% Eao as buil(er of the i1pro,e1ent that encroache( on thirty se,en !37" s0uare 1eters of respon(ents ;o=s lan( in accor(ance with para%raph one abo,e1entione(.

!3" 2he 5ecision of the ourt of Appeals or(erin% Dn%ineer Lue((in%+ as thir(8party (efen(ant+ to pay attorney=s fees of P4+000.00 to respon(ents ;o is affir1e(. 2he a((itional filin% fee on the (a1a%es constitutes a lien on this awar(.

.t appears that @ot 3o. 37648?81 containin% an area of 314 s0uare 1eters was ori%inally owne( by the petitioners= 1other+ Paulina A1a(o ,(a. (e ;e1iniano. On a 128s0uare81eter portion of that lot stoo( the petitioners= unfinishe( bun%alow+ which the petitioners sol( in 3o,e1ber 1978 to the pri,ate respon(ents for the su1 of P6+000.00+ with an alle%e( pro1ise to sell to the latter that portion of the lot occupie( by the house. $ubse0uently+ the petitioners= 1other e:ecute( a contract of lease o,er a 126 s0uare81eter portion of the lot+ inclu(in% that portion on which the house stoo(+ in fa,or of the pri,ate respon(ents for P40.00 per 1onth for a perio( of se,en years co11encin% on 14 3o,e1ber 1978.J1K 2he pri,ate respon(ents then intro(uce( a((itional i1pro,e1ents an( re%istere( the house in their na1es. After the e:piration of the lease contract in 3o,e1ber 1984+ howe,er+ the petitioners= 1other refuse( to accept the 1onthly rentals.

!4" 2he 5ecision of the ourt of Appeals (is1issin% the thir(8party co1plaint a%ainst Araneta .nstitute of A%riculture is affir1e(.

.t turne( out that the lot in 0uestion was the sub<ect of a suit+ which resulte( in its ac0uisition by one )aria @ee in 1972. .n 1982+ @ee sol( the lot to @ily $alce(o+ who in turn sol( it in 1984 to the spouses A%ustin an( Dster 5ionisio.

$O O*5D*D5.

On 14 February 1992+ the 5ionisio spouses e:ecute( a 5ee( of Luitclai1 o,er the sai( property in fa,or of the petitioners.J2K As such+ the lot was re%istere( in the latter=s na1es.J3K

?ellosillo+ ! hair1an"+ )en(o/a+ Luisu1bin%+ an( ?uena+ ''.+ concur.

On 9 February 1993+ the petitioners sent+ ,ia re%istere( 1ail+ a letter a((resse( to pri,ate respon(ent )ary 3icolas (e1an(in% that she ,acate the pre1ises an( pay the rentals in arrears within twenty (ays fro1 notice.J4K

-pon failure of the pri,ate respon(ents to hee( the (e1an(+ the petitioners file( with the )2 of 5a%upan ity a co1plaint for unlawful (etainer an( (a1a%es.

On the thir( issue+ the court (ee1e( as conclusi,e the pri,ate respon(ents= alle%ation that the ,alue of the house an( i1pro,e1ents was P180+000.00+ there bein% no contro,ertin% e,i(ence presente(.

5urin% the pre8trial conference+ the parties a%ree( to confine the issues to# !1" whether there was an i1plie( renewal of the lease which e:pire( in 3o,e1ber 1984> !2" whether the lessees were buil(ers in %oo( faith an( entitle( to rei1burse1ent of the ,alue of the house an( i1pro,e1ents> an( !3" the ,alue of the house.

2he trial court thus or(ere( the pri,ate respon(ents to ,acate the pre1ises+ pay the petitioners P40.00 a 1onth as reasonable co1pensation for their stay thereon fro1 the filin% of the co1plaint on 14 April 1993 until they ,acate(+ an( to pay the su1 of P1+000.00 as attorney=s fees+ plus costs.J4K

2he parties then sub1itte( their respecti,e position papers an( the case was hear( un(er the *ule on $u11ary Proce(ure.

On the first issue+ the court hel( that since the petitioners= 1other was no lon%er the owner of the lot in 0uestion at the ti1e the lease contract was e:ecute( in 1978+ in ,iew of its ac0uisition by )aria @ee as early as 1972+ there was no lease to spea& of+ 1uch less+ a renewal thereof. An( e,en if the lease le%ally e:iste(+ its i1plie( renewal was not for the perio( stipulate( in the ori%inal contract+ but only on a 1onth8to81onth basis pursuant to Article 1687 of the i,il o(e. 2he refusal of the petitioners= 1other to accept the rentals startin% 'anuary 1986 was then a clear in(ication of her (esire to ter1inate the 1onthly lease. As re%ar(s the petitioners= alle%e( faile( pro1ise to sell to the pri,ate respon(ents the lot occupie( by the house+ the court hel( that such shoul( be liti%ate( in a proper case before the proper foru1+ not an e<ect1ent case where the only issue was physical possession of the property.

On appeal by the pri,ate respon(ents+ the *2 of 5a%upan ity re,erse( the trial court=s (ecision an( ren(ere( a new <u(%1ent# !1" or(erin% the petitioners to rei1burse the pri,ate respon(ents for the ,alue of the house an( i1pro,e1ents in the a1ount of P180+000.00 an( to pay the latter P10+000.00 as attorney=s fees an( P2+000.00 as liti%ation e:penses> an( !2" allowin% the pri,ate respon(ents to re1ain in possession of the pre1ises until they were fully rei1burse( for the ,alue of the house.J6K .t rule( that since the pri,ate respon(ents were assure( by the petitioners that the lot they lease( woul( e,entually be sol( to the1+ they coul( be consi(ere( buil(ers in %oo( faith+ an( as such+ were entitle( to rei1burse1ent of the ,alue of the house an( i1pro,e1ents with the ri%ht of retention until rei1burse1ent ha( been 1a(e.

On appeal+ this ti1e by the petitioners+ the ourt of Appeals affir1e( the (ecision of the *2 J7K an( (enie(J8K the petitioners= 1otion for reconsi(eration. 9ence+ the present petition.

2he court resol,e( the secon( issue in the ne%ati,e+ hol(in% that Articles 448 an( 446 of the i,il o(e+ which allow possessors in %oo( faith to reco,er the ,alue of i1pro,e1ents an( retain the pre1ises until rei1burse(+ (i( not apply to lessees li&e the pri,ate respon(ents+ because the latter &new that their occupation of the pre1ises woul( continue only (urin% the life of the lease. ?esi(es+ the ri%hts of the pri,ate respon(ents were specifically %o,erne( by Article 1678+ which allows rei1burse1ent of up to one8half of the ,alue of the useful i1pro,e1ents+ or re1o,al of the i1pro,e1ents shoul( the lessor refuse to rei1burse.

2he ourt is confronte( with the issue of which pro,ision of law %o,erns the case at bench# Article 448 or Article 1678 of the i,il o(eI 2he sai( articles rea( as follows#

Art. 448. 2he owner of the lan( on which anythin% has been built+ sown or plante( in %oo( faith+ shall ha,e the ri%ht to appropriate as his own the wor&s+ sowin% or plantin%+ after pay1ent of the in(e1nity pro,i(e( for in articles 446 an( 448+ or to obli%e the one who built or plante( to pay the price of the lan(+ an( the one who sowe(+ the proper rent. 9owe,er+ the buil(er or planter cannot be obli%e( to buy the lan( if its ,alue is consi(erably 1ore than that of the buil(in% or trees. .n such case+ he shall pay reasonable rent+ if the owner of the lan( (oes not choose to appropriate the buil(in% or trees

after proper in(e1nity. 2he parties shall a%ree upon the ter1s of the lease an( in case of (isa%ree1ent+ the court shall fi: the ter1s thereof.

::: :::

:::

.n this case+ both parties a(1it that the lan( in 0uestion was ori%inally owne( by the petitioners= 1other. 2he lan( was alle%e(ly ac0uire( later by one )aria @ee by ,irtue of an e:tra<u(icial foreclosure of 1ort%a%e. @ee+ howe,er+ ne,er sou%ht a writ of possession in or(er that she %ain possession of the property in 0uestion.J12K 2he petitioners= 1other therefore re1aine( in possession of the lot.

Art. 1678. .f the lessee 1a&es+ in %oo( faith+ useful i1pro,e1ents which are suitable to the use for which the lease is inten(e(+ without alterin% the for1 or substance of the property lease(+ the lessor upon the ter1ination of the lease shall pay the lessee one8half of the ,alue of the i1pro,e1ents at that ti1e. $houl( the lessor refuse to rei1burse sai( a1ount+ the lessee 1ay re1o,e the i1pro,e1ents+ e,en thou%h the principal thin% 1ay suffer (a1a%e thereby. 9e shall not+ howe,er+ cause any 1ore i1pair1ent upon the property lease( than is necessary.

Bith re%ar( to orna1ental e:penses+ the lessee shall not be entitle( to any rei1burse1ent+ but he 1ay re1o,e the orna1ental ob<ects+ pro,i(e( no (a1a%e is cause( to the principal thin%+ an( the lessor (oes not choose to retain the1 by payin% their ,alue at the ti1e the lease is e:tin%uishe(.

.t is un(ispute( that the pri,ate respon(ents ca1e into possession of a 126 s0uare81eter portion of the sai( lot by ,irtue of a contract of lease e:ecute( by the petitioners= 1other in their fa,or. 2he <uri(ical relation between the petitioners= 1other as lessor+ an( the pri,ate respon(ents as lessees+ is therefore well8establishe(+ an( carries with it a reco%nition of the lessor=s title.J13K 2he pri,ate respon(ents+ as lessees who ha( un(isturbe( possession for the entire ter1 un(er the lease+ are then estoppe( to (eny their lan(lor(=s title+ or to assert a better title not only in the1sel,es+ but also in so1e thir( person while they re1ain in possession of the lease( pre1ises an( until they surren(er possession to the lan(lor(.J14K 2his estoppel applies e,en thou%h the lessor ha( no title at the ti1e the relation of lessor an( lessee was create(+J14K an( 1ay be asserte( not only by the ori%inal lessor+ but also by those who succee( to his title.J16K

2he cru: of the sai( issue then is whether the pri,ate respon(ents are buil(ers in %oo( faith or 1ere lessees.

?ein% 1ere lessees+ the pri,ate respon(ents &new that their occupation of the pre1ises woul( continue only for the life of the lease. Plainly+ they cannot be consi(ere( as possessors nor buil(ers in %oo( faith.J17K

2he pri,ate respon(ents clai1 they are buil(ers in %oo( faith+ hence+ Article 448 of the i,il o(e shoul( apply. 2hey rely on the lac& of title of the petitioners= 1other at the ti1e of the e:ecution of the contract of lease+ as well as the alle%e( assurance 1a(e by the petitioners that the lot on which the house stoo( woul( be sol( to the1.

.n a plethora of cases+J18K this ourt has hel( that Article 448 of the i,il o(e+ in relation to Article 446 of the sa1e o(e+ which allows full rei1burse1ent of useful i1pro,e1ents an( retention of the pre1ises until rei1burse1ent is 1a(e+ applies only to a possessor in %oo( faith+ i.e.+ one who buil(s on lan( with the belief that he is the owner thereof. .t (oes not apply where one=s only interest is that of a lessee un(er a rental contract> otherwise+ it woul( always be in the power of the tenant to Ci1pro,eC his lan(lor( out of his property.

.t has been sai( that while the ri%ht to let property is an inci(ent of title an( possession+ a person 1ay be a lessor an( occupy the position of a lan(lor( to the tenant althou%h he is not the owner of the pre1ises let.J9K After all+ ownership of the property is not bein% transferre(+J10K only the te1porary use an( en<oy1ent thereof.J11K

Anent the alle%e( pro1ise of the petitioners to sell the lot occupie( by the pri,ate respon(ents= house+ the sa1e was not substantiate( by con,incin% e,i(ence. 3either the (ee( of sale o,er the house nor the contract of lease containe( an option in fa,or of the respon(ent spouses to purchase the sai( lot. An( e,en if the petitioners in(ee( pro1ise( to sell+ it woul( not 1a&e the pri,ate respon(ents possessors or buil(ers in %oo( faith so as to be co,ere(

by the pro,isions of Article 448 of the i,il o(e. 2he latter cannot raise the 1ere e:pectancy of ownership of the afore1entione( lot because the alle%e( pro1ise to sell was not fulfille( nor its e:istence e,en pro,en. 2he first thin% that the pri,ate respon(ents shoul( ha,e (one was to re(uce the alle%e( pro1ise into writin%+ because un(er Article 1403 of the i,il o(e+ an a%ree1ent for the sale of real property or an interest therein is unenforceable+ unless so1e note or 1e1oran(u1 thereof be pro(uce(. 3ot ha,in% ta&en any steps in or(er that the alle%e( pro1ise to sell 1ay be enforce(+ the pri,ate respon(ents cannot ban& on that pro1ise an( profess any clai1 nor color of title o,er the lot in 0uestion.

$O O*5D*D5.

3ar,asa+

.'.+ ! hair1an"+ )elo+ Francisco+ an( Pan%aniban+ ''.+ concur.

$pouses (el a1po ,. Obesia+ 160 $ *A Facts#

2here is no nee( to apply by analo%y the pro,isions of Article 448 on in(e1nity as was (one in Pecson ,s. ourt of Appeals+J19K because the situation sou%ht to be a,oi(e( an( which woul( <ustify the application of that pro,ision+ is not present in this case. $uffice it to say+ Ca state of force( co8 ownershipC woul( not be create( between the petitioners an( the pri,ate respon(ents. For+ as correctly pointe( out by the petitioners+ the ri%hts of the pri,ate respon(ents as lessees are %o,erne( by Article 1678 of the i,il o(e which allows rei1burse1ent to the e:tent of one8half of the ,alue of the useful i1pro,e1ents.

.t 1ust be stresse(+ howe,er+ that the ri%ht to in(e1nity un(er Article 1678 of the i,il o(e arises only if the lessor opts to appropriate the i1pro,e1ents. $ince the petitioners refuse( to e:ercise that option+J20K the pri,ate respon(ents cannot co1pel the1 to rei1burse the one8half ,alue of the house an( i1pro,e1ents. 3either can they retain the pre1ises until rei1burse1ent is 1a(e. 2he pri,ate respon(ents= sole ri%ht then is to re1o,e the i1pro,e1ents without causin% any 1ore i1pair1ent upon the property lease( than is necessary.J21K

2his case in,ol,es a parcel of lan(+ situate( at the corner of F. Flores an( a,an $treets+ ebu ity. An action for partition was file( by plaintiffs in the F. of ebu. Plaintiffs an( (efen(ants are co8owners pro in(i,iso of this lot in the proportion of an( 173 share each+ respecti,ely. 2he trial court appointe( a co11issioner in accor(ance with the a%ree1ent of the parties. +the .( co11issioner con(ucte( a sur,ey+ prepare( a s&etch plan an( sub1itte( a report to the trial court on )ay 29+ 1976+ reco11en(in% that the property be (i,i(e( into two lots# @ot 11618A with an area of 30 s0uare 1eters for plaintiffs an( @ot 3o. 11618? with an area of 14 s0uare 1eters for the (efen(ants. 2he houses of plaintiffs an( (efen(ants were sur,eye( an( shown on the s&etch plan. 2he house of (efen(ants occupie( the portion with an area of 4 s0uare 1eters of @ot 11618A of plaintiffs. 2he parties 1anifeste( their confor1ity to the report an( as&e( the trial court to finally settle an( a(<u(icate who a1on% the parties shoul( ta&e possession of the 4 s0uare 1eters of the lan( in 0uestion.

.ssue# Bhether or 3ot Article 448 of the i,il o(e is applicable to a buil(er in %oo( faith when the property in,ol,e( is owne( in co11on.

B9D*DFO*D+ <u(%1ent is hereby ren(ere( ;*A32.3; the instant petition> *DFD*$.3; an( $D22.3; A$.5D the (ecision of the ourt of Appeals of 27 'anuary 1994 in A8;.*. $P 3o. 34337> an( *D.3$2A2.3; the (ecision of ?ranch 3 of the )unicipal 2rial ourt in ities of 5a%upan ity in i,il ase 3o. 9214 entitle( CFe(erico ;e1iniano+ et al. ,s. 5o1ina(or 3icolas+ et al.C

9el(# Bhen the co8ownership is ter1inate( by the partition an( it appears that the house of (efen(ants o,erlaps or occupies a portion of 4 s0uare 1eters of the lan( pertainin% to plaintiffs which the (efen(ants ob,iously built in %oo( faith+ then the pro,isions of Article 448 of the new i,il o(e shoul( apply. )anresa an( 3a,arro A1an(i a%ree that the sai( pro,ision of the i,il o(e 1ay apply e,en when there was co8ownership if %oo( faith has been establishe(. Applyin% the aforesai( pro,ision of the i,il o(e+ the plaintiffs ha,e the ri%ht to appropriate sai( portion of the house of (efen(ants upon pay1ent of in(e1nity to (efen(ants as pro,i(e( for in Article 446 of the i,il o(e.

osts a%ainst the pri,ate respon(ents.

Otherwise+ the plaintiffs 1ay obli%e the (efen(ants to pay the price of the lan( occupie( by their house. 9owe,er+ if the price as&e( for is consi(erably 1uch 1ore than the ,alue of the portion of the house of (efen(ants built thereon+ then the latter cannot be obli%e( to buy the lan(. 2he (efen(ants shall then pay the reasonable rent to the plaintiff upon such ter1s an( con(itions that they 1ay a%ree. .n case of (isa%ree1ent+ the trial court shall fi: the ter1s thereof. Of course+ (efen(ants 1ay (e1olish or re1o,e the sai( portion of their house+ at their own e:pense+ if they so (eci(e.

On Au%ust 16+ 1994+ petitioners (isco,ere( that a house was bein% constructe( on their lot+ without their &nowle(%e an( consent+ by respon(ent )i%uel astelltort ! astelltort".J4K

Article 448 of the 3ew i,il

o(e pro,i(es as follows#

.t turne( out that respon(ents astelltort an( his wife 'u(ith ha( purchase( a lot+ @ot 16 of the sa1e $ub(i,ision Plan+ fro1 respon(ent @ina @ope/8 Fille%as !@ina" throu%h her son8attorney8in8fact *ene Fille%as !Fille%as" but that after a sur,ey thereof by %eo(etic en%ineer Au%usto *i,era+ he pointe( to @ot 17 as the @ot 16 the astelltorts purchase(.

Art. 448. 2he owner of the lan( on which anythin% has been built+ sown+ or plante( in %oo( faith+ shall ha,e the ri%ht to appropriate as his own the wor&s+ sowin% or plantin%+ after pay1ent of the in(e1nity pro,i(e( for in articles 446 an( 448+ or to obli%e the one who built or plante( to pay the price of the lan(+ an( the one who sowe(+ the proper rent. 9owe,er+ the buil(er or planter cannot be obli%e( to buy the lan( if its ,alue is consi(erably 1ore than that of the buil(in% or trees. .n such case+ he shall pay reasonable rent+ if the owner of the lan( (oes not choose to appropriate the buil(in% or trees after proper in(e1nity. 2he parties shall a%ree upon the ter1s of the lease an( in case of (isa%ree1ent+ the court shall fi: the ter1s thereof.

*osales+ et al. ,.

astellfort+ et al.+ 4 October 2004

3e%otiations for the settle1ent of the case thus be%an+ with Fille%as offerin% a lar%er lot near petitioners= lot in the sa1e sub(i,ision as a replace1ent thereof.J6K .n the alternati,e+ Fille%as propose( to pay the purchase price of petitioners= lot with le%al interest.J7K ?oth proposals were+ howe,er+ re<ecte( by petitionersJ8K whose counsel+ by letterJ9K of Au%ust 24+ 1994+ (irecte( astelltort to stop the construction of an( (e1olish his house an( any other structure he 1ay ha,e built thereon+ an( (esist fro1 enterin% the lot.

of Appeals ! A" in A ;.*. F 3o. 64046 an( see&s to reinstate the April 21+ 1999 5ecisionJ3K of the *e%ional 2rial ourt !*2 " of ala1ba+ @a%una+ ?ranch 34 in i,il ase 3o. 22298948 .

$pouses8petitioners *o(olfo F. *osales an( @ily *os0ueta8*osales !petitioners" are the re%istere( owners of a parcel of lan( with an area of appro:i1ately 314 s0uare 1eters+ co,ere( by 2ransfer ertificate of 2itle !2 2" 3o. 36846J4K an( (esi%nate( as @ot 17+ ?loc& 1 of $ub(i,ision Plan @* Ps(844244 situate( in @os ?aTos+ @a%una.

Petitioners subse0uently file( on $epte1ber 1+ 1994 a co1plaintJ10K for reco,ery of possession an( (a1a%es with prayer for the issuance of a restrainin% or(er an( preli1inary in<unction a%ainst spouses8respon(ents )i%uel an( 'u(ith astelltort before the *2 of ala1ba+ @a%una+ (oc&ete( as i,il ase 3o. 22298948 .

2o the co1plaint+ the astelltorts clai1e( in their Answer with ounterclai1J11K that they were buil(ers in %oo( faith.

@ina+ represente( by her son8attorney8in8fact Fille%as+ soon file( a )otion for .nter,entionJ12K before the *2 which was %rante( by Or(erJ13K of 5ece1ber 19+ 1994.

.n her Answer to the co1plaint+J14K @ina alle%e( that the astelltorts acte( in %oo( faith in constructin% the house on petitioners= lot as they in fact consulte( her before co11encin% any construction thereon+ they ha,in% relie( on the technical (escription of the lot sol( to the1+ @ot 16+ which was ,erifie( by her officially (esi%nate( %eo(etic en%ineer.

falsehoo( as the ontract to $ell itself in(icates the ci,il status of sai( Dli/abeth Eson ru/ to be sin%le.

D,en if we are to conce(e that (efen(ants built their house in %oo( faith on account of the representation of attorney8in8fact *ene Fille%as+ their failure to co1ply with the re0uire1ents of the 3ational ?uil(in% o(e+ particularly the procure1ent of a buil(in% per1it+ staine( such %oo( faith an( belief.

3e,ertheless+ @ina propose( to %i,e petitioners a lot containin% an area of 436 s0uare 1eters to%ether with the house an( (uple: structure built thereon or+ if petitioners choose+ to encu1ber the 436 s0uare 1eter lot as collateral Cto %et i11e(iate cashC throu%h a financin% sche1e in or(er to co1pensate the1 for the lot in 0uestion.J14K

Fro1 any an( all in(ications+ this (eliberate breach is an un1iti%ate( 1anifestation of ba( faith. An( fro1 the e,i(ence thus a((uce(+ we hol( that (efen(ants an( the inter,enor were e0ually %uilty of ne%li%ence which le( to the construction of the (efen(ants= house on plaintiffs= property an( therefore <ointly an( se,erally liable for all the (a1a%es suffere( by the plaintiffs.J16K !-n(erscorin% supplie("

2he (ispositi,e portion of the trial court=s 5ecision rea(s+ 0uote( ,erbati1#

*ulin% out %oo( faith+ the *2 + by 5ecision of April 21+ 1999+ foun( for petitioners in this wise#

A O*5.3;@E+ in ,iew of all the fore%oin%+ <u(%1ent is hereby ren(ere( in fa,or of plaintiffs an( a%ainst the (efen(ants+ or(erin% the latter to surren(er the possession of the property co,ere( by 2 2 3o. 36846 of the *e%ister of 5ee(s of @a%una inclu(in% any an( all i1pro,e1ents built thereon to the plaintiffs.

.n the instant case+ there is no well8foun(e( belief of ownership by the (efen(ants of the lan( upon which they built their house. 2he title or 1o(e of ac0uisition upon which they base( their belief of such ownership ste11e( fro1 a ontract to $ell !D:hibit CPC" of which they were not e,en parties+ the (esi%nate( buyer bein% Dli/abeth Eson ru/ an( the sale e,en sub<ecte( to the <u(icial reconstitution of the title. An( by their own actions+ particularly (efen(ant )i%uel astelltort+ (efen(ants betraye( this ,ery belief in their ownership when reali/in% the inutility of anchorin% their ownership on the basis of the ontract of $ale+ (efen(ant )i%uel astelltort in his testi1ony (eclare( Dli/abeth Eson ru/ as his wife !tsn+ pp. 788+ )arch 24+ 1998" (espite an a(1ission in their answer that they are the spouses na1e( as (efen(ants !tsn+ p. 8+ 'anuary 12+ 1998" an( which (eclaration is an utter

5efen(ants an( inter,enors are li&ewise <ointly an( se,erally (irecte( to pay to plaintiffs the followin% (a1a%es#

a" 2BO 29O-$A35 !P2+000.00" PD$O$ per 1onth fro1 February 1994 by way of reasonable co1pensation for the use of plaintiffs= property until the surren(er of the sa1e>

b" (a1a%es>

F.F2E 29O-$A35 !P40+000.00" PD$O$ by way of 1oral

c" (a1a%es>

29.*2E 29O-$A35 !P30+000.00" PD$O$ as e:e1plary

(" 2BD32E 29O-$A35 !P20+000.00" PD$O$ as attorney=s fees an( cost of suit.

2. to or(er the appellees to e:ercise their option un(er the law !Article 448+ i,il o(e"+ whether to appropriate the house as their own by payin% to the appellants the a1ount of the e:penses spent for the house as (eter1ine( by the court a 0uo in accor(ance with the li1itations as aforestate( or to obli%e the appellants to pay the price of the lan(.

2he counterclai1 interpose( by the (efen(ants in their responsi,e plea(in% is hereby (is1isse( for lac& of 1erit.

*espon(ents thereupon file( their respecti,e appeals with the

A.

.n case the appellees e:ercise the option to obli%e the appellants to pay the price of the lan( but the latter re<ect such purchase because+ as foun( by the court+ the ,alue of the lan( is consi(erably 1ore than that of the house+ the court shall or(er the parties to a%ree upon the ter1s of a force( lease+ an( %i,e the court a 0uo a for1al written notice of such a%ree1ent an( its pro,isos. .f no a%ree1ent is reache( by the parties+ the court a 0uo shall then fi: the ter1s of the force( lease+ pro,i(e( that the 1onthly rental to be fi:e( by the ourt shall not be less that 2wo 2housan( Pesos !P2+000.00" per 1onth+ payable within the first fi,e !4" (ays of each calen(ar 1onth an( the perio( thereof shall not be 1ore than two !2" years+ counte( fro1 the finality of the <u(%1ent.

Petitioner *o(olfo *osales+ in the 1eanti1e+ (ie( on 5ece1ber 7+ 2001. 9is heirs *o(olfo+ 'r.+ *o1eo Allan+ @illian *ho(ora+ *oy Fictor+ *o%er @yle an( Ale:an(er 3icolai+ all surna1e( *osales+ file( their AppearanceJ18K as his substitute.

?y 5ecision of October 2+ 2002+ the A %rante( the appeal an( set asi(e the April 21+ 1999 *2 5ecision. 2he (ispositi,e portion of the 5ecision rea(s+ 0uote( ,erbati1#

-pon the e:piration of the force( lease+ or upon (efault by the appellants in the pay1ent of rentals for two !2" consecuti,e 1onths+ the appellees shall be entitle( to ter1inate the force( lease+ to reco,er their lan(+ an( to ha,e the i1pro,e1ent re1o,e( by the appellants at the latter=s e:pense. 2he rentals herein pro,i(e( shall be ten(ere( by the appellants to the court for pay1ent to the appellees+ an( such ten(er shall constitute e,i(ence of whether or not co1pliance was 1a(e within the perio( fi:e( by the court.

B9D*DFO*D+ pre1ises consi(ere(+ the instant appeal is hereby ;*A32D5 an( the assaile( (ecision of the court a 0uo *DFD*$D5 A35 $D2 A$.5D. .n accor(ance with the cases of 2echno%as Philippines )anufacturin% orp. ,s. ourt of Appeals an( 5epra ,s. 5u1lao+ applyin% Article 448 of the i,il o(e+ this case is *D)A35D5 to the *e%ional 2rial ourt of ala1ba+ @a%una+ ?ranch 34+ for further procee(in%s+ as follows#

.n any e,ent+ the appellants shall pay the appellees the a1ount of 2wo 2housan( Pesos !P2+000.00" as reasonable co1pensation for their occupancy of the encroache( property fro1 the ti1e sai( appellants= %oo( faith cease !sic" to e:ist until such ti1e the possession of the property is (eli,ere( to the appellees sub<ect to the rei1burse1ent of the aforesai( e:penses in fa,or of the appellants or until such ti1e the pay1ent of the purchase price of the sai( lot be 1a(e by the appellants in fa,or of the appellees in case the latter opt for the co1pulsory sale of the sa1e.

1. to (eter1ine the present fair price of appellees= 314 s0uare 1eter area of lan( an( the a1ount of the e:penses actually spent by the appellants for buil(in% the house as of 21 Au%ust 1994+ which is the ti1e they were notifie( of appellees= ri%htful clai1 o,er @ot 17.

.n re,ersin% the trial court+ the A hel(#

: : : A perusal of the recor(s rea(ily re,eals that sai( court instea( relie( on fli1sy+ if not i11aterial+ alle%ations of the appellees+ which ha,e no (irect bearin% in the (eter1ination of whether the appellants are buil(ers in ba( faith.

For one+ the pi,otal issue to be resol,e( in this case+ i.e. whether appellant )i%uel is a buil(er in %oo( faith+ was i%nore( by the court a 0uo. 2he instant case (oes not in any way concern the personal an( property relations of spouses8appellants an( Dli/abeth Eson ru/ which is an alto%ether (ifferent 1atter that can be ,entilate( by the concerne( parties throu%h the institution of a proper action. ::: 2he court a 0uo shoul( ha,e focuse( on the issue of whether appellant )i%uel built+ in %oo( faith+ the sub<ect house without notice of the a(,erse clai1 of the appellees an( un(er the honest belief that the lot which he use( in the construction belon%s to hi1. :::

::: As it is+ appellant )i%uel relie( on the title which the inter,enor showe( to hi1 which+ si%nificantly+ has no annotation that woul( otherwise show a prior a(,erse clai1. 2hus+ as far as appellant )i%uel is concerne(+ his title o,er the sub<ect lot+ as well as the title of the inter,enor thereto+ is clean an( untainte( by an a(,erse clai1 or other irre%ularities.

.n hol(in% the appellants as buil(ers in ba( faith+ the court a 0uo (efie( law an( settle( <urispru(ence consi(erin% that the factual basis of its fin(in%s an( the incontro,ertible e,i(ence in support thereof pro,e that the appellant )i%uel+ in %oo( faith+ built the house on appellees= lan( without &nowle(%e of an a(,erse clai1 or any other irre%ularities that 1i%ht cast a (oubt as to the ,eracity of the assurance %i,en to hi1 by the inter,enor. 9a,in% been assure( by the inter,enor that the stone 1onu1ents were purposely place(+ albeit wron%fully+ by the lan( sur,eyor in sai( lan( to specifically i(entify the lot an( its inclusi,e boun(aries+ the appellants cannot be faulte( for ha,in% relie( on the e:pertise of the lan( sur,eyor who is 1ore e0uippe( an( e:perience( in the fiel( of lan( sur,eyin%. Althou%h un(er the 2orrens syste1 of lan( re%istration+ the appellant is presu1e( to ha,e &nowle(%e of the 1etes an( boun(s of the property with which he is (ealin%+ appellant howe,er+ consi(erin% that he is a lay1an not ,erse( in the technical (escription of his property+ cannot be faulte( in his reliance on the sur,ey plan that was (eli,ere( to hi1 by the inter,enor an( the stone 1onu1ents that were place( in the encroache( property.

For another+ the appellants= failure to secure a buil(in% per1it fro1 the )unicipal Dn%ineer=s Office on their construction on @ot 17 (oes not i1pin%e on the %oo( faith of the appellants. .n fact+ it can be tol( that a buil(in% per1it was actually file( by appellant )i%uel with respect to @ot 16 an( it was only (ue to the confusion an( 1isapprehension by the inter,enor of the e:act para1eters of the property which cause( appellant=s belief that @ot 17 Jthe 0uestione( lotK+ is his. 2his fact bolsters appellant )i%uel=s %oo( faith in buil(in% his house on appellees= lot un(er the 1ista&en belief that the sa1e is his property. Otherwise+ he shoul( ha,e secure( a buil(in% per1it on @ot 17 instea( or shoul( not ha,e bothere( to ta&e the necessary 1easures to obtain a buil(in% per1it on @ot 16 in the first place.

Pere1ptorily+ contrary to the flawe( pronounce1ents 1a(e by the court a 0uo that appellant )i%uel is (ee1e( as a buil(er in ba( faith on the basis of a 1ere assertion that he built his house without initially satisfyin% hi1self that he owns the sai( property+ this ourt fin(s reason to 1aintain %oo( faith on the part of the appellant. A(1itte(ly+ the appellants= house erroneously encroache( on the property of the appellees (ue to a 1ista&e in the place1ent of stone 1onu1ents as in(icate( in the sur,ey plan+ which error is (irectly attributable to the fault of the %eo(etic en%ineer who con(ucte( the sa1e. 2his fact alone ne%ates ba( faith on the part of appellant )i%uel.

)oreo,er+ it is 0uite illo%ical for appellant )i%uel to &nowin%ly buil( his house on a property which he &new belon%s to another person. : : :

?y an( lar%e+ the recor(s show that+ as testifie( to by Dn%r. *ebecca 2. @anuan%+ appellant )i%uel ha( alrea(y applie( for a buil(in% per1it as early as February 1994 an( was in fact issue( a te1porary buil(in% per1it pen(in% the co1pletion of the re0uire1ents for sai( per1it. Althou%h the buil(in% per1it was belate(ly issue( in 'anuary 1996+ this (oes not in any way (etract fro1 appellant )i%uel=s %oo( faith.

.n ,iew of the %oo( faith of both parties in this case+ their ri%hts an( obli%ations are to be %o,erne( by Article 448+ which has been applie( to i1pro,e1ents or portions of i1pro,e1ents built by 1ista&en belief on lan( belon%in% to the a(<oinin% owner. : : :

Petitioners= )otion for *econsi(erationJ21K (ate( October 22+ 2002 ha,in% been (enie( by the A by *esolution of )arch 13+ 2002+ the present petition was file( raisin% the followin% issues#

Petitioners rely on the followin% (octrine establishe( in Dlay(a ,. Appeals#J23K

ourt of

B9D29D* O* 3O2 29D 9O3O*A?@D O-*2 OF APPDA@$ O)).22D5 A ;*AFD A?-$D OF 5.$ *D2.O3 .3 )AM.3; A F.35.3; 29A2 .$ O32*A*E 2O 29D A5).$$.O3$ ?E 29D PA*2.D$

Can a(1ission 1a(e in the plea(in%s cannot be contro,erte( by the party 1a&in% such a(1ission an( are conclusi,e as to hi1 an( that all proofs sub1itte( by hi1 contrary thereto or inconsistent therewith+ shoul( be i%nore(+ whether ob<ection is interpose( by the party or not : : :C

B9D29D* O* 3O2 29D 9O3O*A?@D O-*2 OF APPDA@$ O)).22D5 A *DFD*$.?@D D**O* OF @AB .3 O3 @-5.3; 29A2 29D 2*.A@ O-*2+ .3 5D .5.3; 29D A$D+ *D@.D5 O3 F@.)$E+ .F 3O2 .))A2D*.A@+ A@@D;A2.O3$ OF 29D PD2.2.O3D*$+ B9. 9 9AFD 3O 5.*D 2 ?DA*.3; .3 29D 5D2D*).3A2.O3 OF B9D29D* 29D *D$PO35D32$ A*D ?-.@5D*$ .3 ;OO5 FA.29

Petitioners= contention is har(ly rele,ant to the case at bar. Bhether it was astelltort an( 'u(ith or astelltort an( Dli/abeth ru/ who purchase( the property fro1 @ina is not 1aterial to the outco1e of the instant contro,ersy. As foun( by the A#

B9D29D* O* 3O2 29D 9O3O*A?@D O-*2 OF APPDA@$ O)).22D5 A *DFD*$.?@D D**O* OF @AB .3 *D35D*.3; A 5D .$.O3 29A2 .$ -3D3FO* DA?@D A;A.3$2 ?O29 *D$PO35D32 '-5.29 A$2D@@2O*2 A35 29.*58PA*2E D@.HA?D29 *-HJ22K

2he fact re1ains that appellant J astelltortK is the buil(er of the house on @ot 17 ::: 2he court a 0uo shoul( ha,e focuse( on the issue of whether appellant )i%uel built+ in %oo( faith+ the sub<ect house without notice of the a(,erse clai1 of the appellees an( un(er the honest belief that the lot which he use( in the construction belon%s to hi1. ::: it cannot be %ainsai( that appellant )i%uel has a title o,er the lan( that was purchase( fro1 the inter,enor : : :J24K

At all e,ents+ as this ourt hel( in the case of ;ar(ner ,. J24K

ourt of Appeals#

Petitioners initially ha11er a%ainst respon(ents= pro,in% that astelltort an( a certain Dli/abeth ru/ are the buil(ers of the house on the sub<ect property+ they faultin% the1 with estoppel for alle%in% in their Answer before the trial court that Cthey !respon(ents astelltort an( 'u(ith" cause( the construction of their house which they bou%ht fro1 a certain @ina @ope/8 Fille%as.C

.n its *esolution re,ersin% the ori%inal 5ecision+ respon(ent ourt (iscre(ite( the testi1ony of Ariosto $A32O$ for bein% at ,ariance with the alle%ations in his Answer. 2he fact+ howe,er+ that the alle%ations 1a(e by Ariosto $A32O$ in his plea(in%s an( in his (eclarations in open ourt (iffere( will not 1ilitate a%ainst the fin(in%s herein 1a(e nor support the re,ersal by respon(ent ourt. As a %eneral rule+ facts alle%e( in a party=s plea(in% are (ee1e( a(1issions of that party an( bin(in% upon it+ but this is not an absolute an( infle:ible rule. An Answer is a 1ere state1ent of fact which the party filin% it e:pects to pro,e+ but it is not e,i(ence. As Ariosto $A32O$ hi1self+ in open ourt+ ha( repu(iate( the (efenses he ha( raise( in his Answer an( a%ainst his own interest+ his testi1ony is (eser,in% of wei%ht

an( cre(ence.J26K !-n(erscorin% supplie(" 2he issue (eter1inati,e of the contro,ersy in the case at bar hin%es on whether astelltort is a buil(er in %oo( faith.

Possession ac0uire( in %oo( faith (oes not lose this character e:cept in the case an( fro1 the 1o1ent facts e:ist which show that the possessor is not unaware that he possesses the thin% i1properly or wron%fully.J38K 2he %oo( faith ceases or is le%ally interrupte( fro1 the 1o1ent (efects in the title are 1a(e &nown to the possessor+ by e:traneous e,i(ence or by suit for reco,ery of the property by the true owner.J39K

A buil(er in %oo( faith is one who buil(s with the belief that the lan( he is buil(in% on is his+ or that by so1e title one has the ri%ht to buil( thereon+ an( is i%norant of any (efect or flaw in his title.J27K

Article 427 of the i,il o(e pro,i(es that %oo( faith is always presu1e(+ an( upon hi1 who alle%es ba( faith on the part of a possessor rests the bur(en of proof.J28K

.n the case at bar+ astelltort=s %oo( faith cease( on Au%ust 21+ 1994 when petitioners personally apprise( hi1 of their title o,er the 0uestione( lot. As hel( by the A+ shoul( petitioners then opt to appropriate the house+ they shoul( only be 1a(e to pay for that part of

.n the case at bar+ @ot 16 was sol( by @ina+ throu%h her attorney8in8fact Fille%as+ to astelltort an( a certain Dli/abeth ru/J29K for a consi(eration of P400+000.00. Bhile prior to the sale+ what Fille%as showe( astelltort as e,i(ence of his 1other @ina=s ownership of the property was only a photocopy of her title 2 2 3o. !2842171" 2818440J30K he e:plainin% that the owner=s (uplicate of the title was lost an( that <u(icial reconstitution thereof was on%oin%+ astelltort acte( in the 1anner of a pru(ent 1an an( went to the *e%istry of 5ee(s of @a%una to procure a certifie( true copy of the 2 2. J31K 2he certifie( true copy bore no annotation in(icatin% any prior a(,erse clai1 on @ot 16.

the i1pro,e1ent built by astelltort on the 0uestione( property at the ti1e %oo( faith still e:iste( on his part or until Au%ust 21+ 1994.

2he A+ howe,er+ faile( to 0ualify that sai( part of the i1pro,e1ent shoul( be pe%%e( at its current fair 1ar&et ,alue consistent with this ourt=s pronounce1ent in Pecson ,. ourt of Appeals.J40K

in(icate that at the ti1e astelltort be%an constructin% his house on petitioners= lot+ he belie,e( that it was the @ot 16 he bou%ht an( (eli,ere( to hi1 by Fille%as. Bhere the buil(er+ planter or sower has acte( in %oo( faith+ a conflict of ri%hts arises between the owners+ an( it beco1es necessary to protect the owner of the i1pro,e1ents without causin% in<ustice to the owner of the lan(. .n ,iew of the i1practicability of creatin% a state of force( co8ownership+ the law has pro,i(e( a <ust solution by %i,in% the owner of the lan( the option to ac0uire the i1pro,e1ents after pay1ent of the proper in(e1nity+ or to obli%e the buil(er or planter to pay for the lan( an( the sower the proper rent. 9e cannot refuse to e:ercise either option. .t is the owner of the lan( who is authori/e( to e:ercise the option+ because his ri%ht is ol(er+ an( because+ by the principle of accession+ he is entitle( to the ownership of the accessory thin%.J37K

An(+ as correctly foun( by the A+ the co11ence1ent of astelltort=s pay1ent of reasonable rent shoul( start on Au%ust 21+ 1994 as well+ to be pai( until such ti1e that the possession of the property is (eli,ere( to petitioners+ sub<ect to the rei1burse1ent of e:penses+ that is+ if such option is for petitioners to appropriate the house.

2his ourt 0uotes the

A=s ratiocination with appro,al#

: : : ;enerally+ Article 448 of the i,il o(e pro,i(es that the pay1ent of reasonable rent shoul( be 1a(e only up to the (ate appellees ser,e notice of their option as pro,i(e( by law upon the appellants an( the court a 0uo> that is+ if such option is for appellees to appropriate the encroachin% structure. .n such e,ent+ appellants woul( ha,e a ri%ht to retain the lan( on which they

ha,e built in %oo( faith until they are rei1burse( the e:penses incurre( by the1. 2his is so because the ri%ht to retain the i1pro,e1ents while the correspon(in% in(e1nity is not pai( i1plies the tenancy or possession in fact of the lan( on which it is built+ plante( or sown.

$O O*5D*D5.

6gnao v. 6AC, G.R. -o. 7$%7 , 1% 1an'ar0 1991193 SCRA 17

9owe,er+ consi(erin% that appellants ha( cease( as buil(ers in %oo( faith at the ti1e that appellant )i%uel was notifie( of appellees= lawful title o,er the (ispute( property+ the pay1ent of reasonable rent shoul( accor(in%ly co11ence at that ti1e since he can no lon%er a,ail of the ri%hts pro,i(e( un(er the law for buil(ers in %oo( faith.J41K

.n this petition for re,iew by certiorari+ petitioner see&s the re,ersal of the (ecision of the .nter1e(iate Appellate ourt !now ourt of Appeals" affir1in% in toto the (ecision of the ourt of First .nstance of a,ite+ or(erin% petitioner Florencio .%nao to sell to pri,ate respon(ents 'uan an( .si(ro .%nao+ that part of his property where pri,ate respon(ents ha( built a portion of their houses.

2he antece(ent facts are as follows# .f the option chosen by petitioners is co1pulsory sale+ howe,er+ the pay1ent of rent shoul( continue up to the actual transfer of ownership.J42K

*espectin% petitioners= ar%u1ent that the appellate court erre( in ren(erin% a (ecision that is Cunenforceable a%ainst 'u(ith who is not the owner of the house an( Dli/abeth ru/ who was foun( to be a part owner of the house built on their lot but is not a party to the case+C the sa1e (oes not lie.

Petitioner Florencio .%nao an( his uncles pri,ate respon(ents 'uan .%nao an( .si(ro .%nao were co8owners of a parcel of lan( with an area of 434 s0uare 1eters situate( in ?arrio 2abon+ )unicipality of Mawit+ a,ite. Pursuant to an action for partition file( by petitioner (oc&ete( as i,il ase 3o. 381681+ the then ourt of First .nstance of a,ite in a (ecision (ate( February 6+ 1974 (irecte( the partition of the aforesai( lan(+ allotin% 133.4 s0uare 1eters or 278 thereof to pri,ate respon(ents 'uan an( .si(ro+ an( %i,in% the re1ainin% portion with a total area of 266.4 s0uare 1eters to petitioner Florencio. 9owe,er+ no actual partition was e,er effecte(. 1

Bhile one who is not a party to a procee(in% shall not be affecte( or boun(J43K by a <u(%1ent ren(ere( therein+J44K li&e Dli/abeth ru/+ this (oes not (etract fro1 the ,ali(ity an( enforceability of the <u(%1ent on petitioners an( respon(ents astelltorts.

B9D*DFO*D+ the petition is 5D3.D5. 2he 5ecision (ate( October 2+ 2002 an( *esolution (ate( February 6+ 2003 of the ourt of Appeals are AFF.*)D5 with )O5.F. A2.O3 such that the trial court shall inclu(e for (eter1ination the increase in ,alue !Cplus ,alueC" which petitioners= 314 s0uare 1eter lot 1ay ha,e ac0uire( by reason of the e:istence of that portion of the house built before respon(ents )i%uel an( 'u(ith astelltort were notifie( of petitioners= ri%htful clai1 on sai( lot+ an( the current fair 1ar&et ,alue of sai( portion.

On 'uly 17+ 1978+ petitioner institute( a co1plaint for reco,ery of possession of real property a%ainst pri,ate respon(ents 'uan an( .si(ro before the ourt of First .nstance of a,ite+ (oc&ete( as i,il ase 3o. 2662. .n his co1plaint petitioner alle%e( that the area occupie( by the two !2" houses built by pri,ate respon(ents e:cee(e( the 133.4 s0uare 1eters pre,iously allote( to the1 by the trial court in i,il ase 3o. 381681.

onse0uently+ the lower court con(ucte( an ocular inspection. .t was foun( that the houses of 'uan an( .si(ro actually encroache( upon a portion of the lan( belon%in% to Florencio. -pon a%ree1ent of the parties+ the trial court or(ere( a license( %eo(etic en%ineer to con(uct a sur,ey to (eter1ine the e:act area occupie( by the houses of pri,ate respon(ents. 2he sur,ey subse0uently (isclose( that the house of 'uan occupie( 42 s0uare 1eters

while that of .si(ro occupie( 49 s0uare 1eters of Florencio=s lan( or a total of 101 s0uare 1eters.

!b" Or(erin% the sai( plaintiff to e:ecute the necessary (ee( of con,eyance to the (efen(ants in accor(ance with para%raph !a" hereof.

.n its (ecision+ the trial court !thru 'u(%e @uis @. Fictor" rule( that althou%h pri,ate respon(ents occupie( a portion of Florencio=s property+ they shoul( be consi(ere( buil(ers in %oo( faith. 2he trial court too& into account the (ecision of the ourt of First .nstance of a,ite in the action for partition 2 an( 0uote(#

Bithout pronounce1ent as to costs. 4

Petitioner Florencio .%nao appeale( to the .nter1e(iate Appellate ourt. On Au%ust 27+ 1984+ the Appellate ourt+ $econ( i,il ases 5i,ision+ pro1ul%ate( a (ecision+ 6 affir1in% the (ecision of the trial court.

. . . . 9ence+ it is the well8consi(ere( opinion of the ourt that althou%h it turne( out that the (efen(ants ha(+ before partition+ been in possession of 1ore than what ri%htfully belon%s to the1+ their possession of what is in e:cess of their ri%htful share can at worst be possession in %oo( faith which e:e1pts the1 fro1 bein% con(e1ne( to pay (a1a%es by reason thereof. 3

9ence the instant petition for re,iew which attributes to the Appellate ourt the followin% errors#

Further1ore+ the trial court state( that pursuant to Article 448 of the i,il o(e+ the owner of the lan( !Florencio" shoul( ha,e the choice to either appropriate that part of the house stan(in% on his lan( after pay1ent of in(e1nity or obli%e the buil(ers in %oo( faith !'uan an( .si(ro" to pay the price of the lan(. 9owe,er+ the trial court obser,e( that base( on the facts of the case+ it woul( be useless an( unsuitable for Florencio to e:ercise the first option since this woul( ren(er the entire houses of 'uan an( .si(ro worthless. 2he trial court then applie( the rulin% in the si1ilar case of ;rana ,s. ourt of Appeals+ 4 where the $upre1e ourt ha( a(,ance( a 1ore Cwor&able solutionC. 2hus+ it or(ere( Florencio to sell to 'uan an( .si(ro those portions of his lan( respecti,ely occupie( by the latter. 2he (ispositi,e portion of sai( (ecision rea(s as follows#

1. 2hat the respon(ent ourt has consi(ere( pri,ate respon(ents buil(ers in %oo( faith on the lan( on 0uestion+ thus applyin% Art. 448 of the i,il o(e+ althou%h the lan( in 0uestion is still owne( by the parties in co8ownership+ hence+ the applicable pro,ision is Art. 486 of the i,il o(e+ which was not applie(.

2. 2hat+ %rantin% for the sa&e of ar%u1ent that Art. 448 . . . is applicable+ the respon(ent ourt has a(<u(%e( the wor&in% solution su%%este( in ;rana an( 2orralba ,s. A. !109 Phil. 260"+ which is <ust an opinion by way of passin%+ an( not the <u(%1ent ren(ere( therein+ which is in accor(ance with the sai( pro,ision of the i,il o(e+ wherein the owner of the lan( to buy !sic" the portion of the buil(in% within 30 (ays fro1 the <u(%1ent or sell the lan( occupie( by the buil(in%.

B9D*DFO*D+ <u(%1ent is hereby ren(ere( in fa,or of the (efen(ants an(8 3. 2hat+ %rantin% that pri,ate respon(ents coul( buy the portion of the lan( occupie( by their houses+ the price fi:e( by the court is unrealistic an( pre8 war price. 7

!a" Or(erin% the plaintiff Florencio .%nao to sell to the (efen(ants 'uan an( .si(ro .%nao that portion of his property with an area of 101 s0uare 1eters at P40.00 per s0uare 1eter+ on which part the (efen(ants ha( built their houses> an(

2he recor(s of the case re,eal that the (ispute( lan( with an area of 434 s0uare 1eters was ori%inally owne( by ?alta/ar .%nao who 1arrie( twice. .n his first 1arria%e+ he ha( four chil(ren+ na1ely 'usto !the father of petitioner Florencio"+ @eon an( pri,ate respon(ents 'uan an( .si(ro. .n his secon(

1arria%e+ ?alta/ar ha( also four chil(ren but the latter wai,e( their ri%hts o,er the contro,erte( lan( in fa,or of 'usto. 2hus+ 'usto owne( 478 of the lan( which was wai,e( by his half8brothers an( sisters plus his 178 share or a total of 478. 2hereafter+ 'usto ac0uire( the 178 share of @eon for P400.00 which he later sol( to his son Florencio for the sa1e a1ount. Bhen 'usto (ie(+ Florencio inherite( the 478 share of his father 'usto plus his 178 share of the lan( which he bou%ht or a total of 678 !representin% 400.4 s0uare 1eters". Pri,ate respon(ents+ 'uan an( .si(ro+ on the other han(+ ha( 178 share !66.74 s0uare 1eters" each of the lan( or a total of 133.4 s0uare 1eters.

Art. 448. 2he owner of the lan( on which anythin% has been built+ sown or plante( in %oo( faith+ shall ha,e the ri%ht to appropriate as his own the wor&s+ sowin% or plantin%+ after pay1ent of the in(e1nity pro,i(e( for in articles 446 an( 448+ or to obli%e the one who built or plante( to pay the price of the lan(+ an( the one who sowe(+ the proper rent. 9owe,er+ the buil(er or planter cannot be obli%e( to buy the lan( if its ,alue is consi(erably 1ore than that of the buil(in% or trees. .n such case+ he shall pay reasonable rent+ if the owner of the lan( (oes not choose to appropriate the buil(in% or trees after proper in(e1nity. 2he parties shall a%ree upon the ter1s of the lease an( in case of (isa%ree1ent+ the court shall fi: the ter1s thereof.

?efore the (ecision in the partition case was pro1ul%ate(+ Florencio sol( 134 s0uare 1eters of his share to a certain Ficta for P4+000.00 on 'anuary 27+ 1974. Bhen the (ecision was han(e( (own on February 6+1974+ the lower court allote( 278 of the lan( to pri,ate respon(ents 'uan an( .si(ro+ or a total of 133.4 s0uare 1eters.

Bhether or not the pro,isions of Article 448 shoul( apply to a buil(er in %oo( faith on a property hel( in co11on has been resol,e( in the affir1ati,e in the case of $pouses (el a1po ,s. Abesia+ 10 wherein the ourt rule( that#

.t shoul( be note( that prior to partition+ all the co8owners hol( the property in co11on (o1inion but at the sa1e ti1e each is an owner of a share which is abstract an( un(eter1ine( until partition is effecte(. As cite( in Dusebio ,s. .nter1e(iate Appellate ourt+ 8 Can un(i,i(e( estate is co8ownership by the heirs.C

2he court a 0uo correctly hel( that Article 448 of the i,il o(e cannot apply where a co8owner buil(s+ plants or sows on the lan( owne( in co11on for then he (i( not buil(+ plant or sow upon lan( that e:clusi,ely belon%s to another but of which he is a co8owner. 2he co8owner is not a thir( person un(er the circu1stances+ an( the situation is %o,erne( by the rules of co8 ownership.

As co8owners+ the parties 1ay ha,e une0ual shares in the co11on property+ 0uantitati,ely spea&in%. ?ut in a 0ualitati,e sense+ each co8owner has the sa1e ri%ht as any one of the other co8owners. D,ery co8owner is therefore the owner of the whole+ an( o,er the whole he e:ercises the ri%ht of (o1inion+ but he is at the sa1e ti1e the owner of a portion which is truly abstract+ because until (i,ision is effecte( such portion is not concretely (eter1ine(. 9

9owe,er+ when+ as in this case+ the ownership is ter1inate( by the partition an( it appears that the ho1e of (efen(ants o,erlaps or occupies a portion of 4 s0uare 1eters of the lan( pertainin% to plaintiffs which the (efen(ants ob,iously built in %oo( faith+ then the pro,isions of Article 448 of the new i,il o(e shoul( apply. )anresa an( 3a,arro A1an(i a%ree that the sai( pro,ision of the i,il o(e 1ay apply e,en when there is a co8ownership if %oo( faith has been establishe(. 11

Petitioner Florencio+ in his first assi%n1ent of error+ asse,erates that the court a 0uo erre( in applyin% Article 448 of the i,il o(e+ since this article conte1plates a situation wherein the lan( belon%s to one person an( the thin% built+ sown or plante( belon%s to another. .n the instant case+ the lan( in (ispute use( to be owne( in co11on by the conten(in% parties.

.n other wor(s+ when the co8ownership is ter1inate( by a partition an( it appears that the house of an erstwhile co8owner has encroache( upon a portion pertainin% to another co8owner which was howe,er 1a(e in %oo( faith+ then the pro,isions of Article 448 shoul( apply to (eter1ine the respecti,e ri%hts of the parties.

Article 448 pro,i(es#

Petitioner=s secon( assi%ne( error is howe,er well ta&en. ?oth the trial court an( the Appellate ourt erre( when they pere1ptorily a(opte( the Cwor&able solutionC in the case of ;rana ,s. ourt of appeals+ 12 an( or(ere( the owner of the lan(+ petitioner Florencio+ to sell to pri,ate respon(ents+ 'uan an( .si(ro+ the part of the lan( they intru(e( upon+ thereby (epri,in% petitioner of his ri%ht to choose. $uch rulin% contra,ene( the e:plicit pro,isions of Article 448 to the effect that C!t"he owner of the lan( . . . shall ha,e the ri%ht to appropriate . . .or to obli%e the one who built . . . to pay the price of the lan( . . . .C 2he law is clear an( una1bi%uous when it confers the ri%ht of choice upon the lan(owner an( not upon the buil(er an( the courts.

;utierre/+ 'r.+ Feliciano an( ?i(in+ ''.+ concur.

M7SS v. C.A., 143 SCRA $3

FA 2$# 2wenty three chec&s were (eposite( by the payees 5i/on+ $ison an( )en(o/a in their respecti,e current accounts with the P .? an( P? . 2hru the entral ?an& learin%+ these chec&s were presente( for pay1ent by P? an( P .? to the (efen(ant P3?+ an( were pai(. At the ti1e of their presentation to P3? these chec&s bear the stan(ar( in(orse1ent which rea(s =all prior in(orse1ent an(7or lac& of en(orse1ent %uarantee(.=

2hus+ in Lue1uel ,s. Olaes+ 13 the ourt cate%orically rule( that the ri%ht to appropriate the wor&s or i1pro,e1ents or to obli%e the buil(er to pay the price of the lan( belon%s to the lan(owner.

$ubse0uent in,esti%ation howe,er+ con(ucte( by the 3?. showe( that *aul 5i/on+ Arturo $ison an( Antonio )en(o/a were all fictitious persons.

As to the thir( assi%n1ent of error+ the 0uestion on the price to be pai( on the lan( nee( not be (iscusse( as this woul( be pre1ature inas1uch as petitioner Florencio has yet to e:ercise his option as the owner of the lan(.

3B$A a((resse( a letter to P3? re0uestin% the i11e(iate restoration to its Account 3o. 6+ of the total su1 of P3+447+903.00 correspon(in% to the total a1ount of these twenty8three !23" chec&s clai1e( by 3B$A to be for%e( an(7or spurious chec&s.

B9D*DFO*D+ the (ecision appeale( fro1 is hereby )O5.F.D5 as follows# Petitioner Florencio .%nao is (irecte( within thirty !30" (ays fro1 entry of <u(%1ent to e:ercise his option to either appropriate as his own the portions of the houses of 'uan an( .si(ro .%nao occupyin% his lan( upon pay1ent of in(e1nity in accor(ance with Articles 446 an( 448 of the i,il o(e+ or sell to pri,ate respon(ents the 101 s0uare 1eters occupie( by the1 at such price as 1ay be a%ree( upon. $houl( the ,alue of the lan( e:cee( the ,alue of the portions of the houses that pri,ate respon(ents ha,e erecte( thereon+ pri,ate respon(ents 1ay choose not to buy the lan( but they 1ust pay reasonable rent for the use of the portion of petitioner=s lan( as 1ay be a%ree( upon by the parties. .n case of (isa%ree1ent+ the rate of rental an( other ter1s of the lease shall be (eter1ine( by the trial court. Otherwise+ pri,ate respon(ents 1ay re1o,e or (e1olish at their own e:pense the sai( portions of their houses encroachin% upon petitioner=s lan(. 14 3o costs.

.$$-D# BO3 29D 5*ABDD ?A3M BA$ @.A?@D FO* 29D @O$$ -35D* $D 2.O3 23 OF 29D 3D;O2.A?@D .3$2*-)D32$ @AB

9D@5# 3o. 2he 3?. (oes not (eclare or pro,e that the si%natures appearin% on the 0uestione( chec&s are for%eries. 2hese reports (i( not touch on the inherent 0ualities of the si%natures which are in(ispensable in the (eter1ination of the e:istence of for%ery. 2here 1ust be conclusi,e fin(in%s that there is a ,ariance in the inherent characteristics of the si%natures an( that they were written by two or 1ore (ifferent persons. For%ery cannot be presu1e(. .t 1ust be establishe( by clear+ positi,e+ an( con,incin% e,i(ence. 2his was not (one in the present case.

$O O*5D*D5.

D,en if the twenty8three !23" chec&s in 0uestion are consi(ere( for%eries+ consi(erin% the petitioner=s %ross ne%li%ence+ it is barre( fro1 settin% up the (efense of for%ery un(er $ection 23 of the 3e%otiable .nstru1ents @aw.

One factor which facilitate this frau( was the (elay in the reconciliation of ban& !P3?" state1ents with the 3ABA$A ban& accounts. 2he recor(s li&ewise show that the petitioner faile( to pro,i(e appropriate security 1easures o,er its own recor(s thereby layin% confi(ential recor(s open to unauthori/e( persons.

Be cannot fault the respon(ent (rawee ?an& for not ha,in% (etecte( the frau(ulent encash1ent of the chec&s because the printin% of the petitioner=s personali/e( chec&s was not (one un(er the super,ision an( control of the ?an&. -n(er the circu1stances+ therefore+ the petitioner was in a better position to (etect an( pre,ent the frau(ulent encash1ent of its chec&s

On 5ece1ber 24+ 1976+ petitioner D(itha assiste( by her husban( file( a co1plaint for partition an( (a1a%es before the then ourt of First .nstance of 3e%ros Oriental+ ?ranch 1+ 5u1a%uete ity+ (oc&ete( as i,il ase 3o. 6634+ clai1in% to be an ac&nowle(%e( natural chil( of (ecease( A%ustin 2ina%an an( (e1an(in% the (eli,ery of her shares in the properties left by the (ecease(.J4K

On October 4+ 1979+ the aforesai( case was (is1isse( by the trial court on the %roun( that reco%nition of natural chil(ren 1ay be brou%ht only (urin% the lifeti1e of the presu1e( parent an( petitioner D(itha (i( not fall in any of the e:ceptions enu1erate( in Article 284 of the i,il o(e.J6K

Al,iola ,.

A+ 289 $ *A 437 Petitioners assaile( the or(er of (is1issal by filin% a petition for certiorari an( 1an(a1us before this ourt.J7K On Au%ust 9+ 1982+ this ourt (is1isse( the petition for lac& of 1erit.J8K Petitioners file( a 1otion for reconsi(eration but the sa1e was (enie( on October 19+ 1982.J9K

.n this petition for re,iew on certiorari+ petitioners assail the (ecisionJ1K of the ourt of Appeals (ate( April 8+ 1994 which affir1e( the (ecision of the lower court or(erin% petitioners to peacefully ,acate an( surren(er the possession of the (ispute( properties to the pri,ate respon(ents.

ulle( fro1 the recor( are the followin% antece(ent facts of this case to wit#

On April 1+ 1940+ Fictoria $on<acon(a 2ina%an purchase( fro1 )auro 2ina%an two !2" parcels of lan( situate( at ?aran%ay ?on%bon%+ Falencia+ 3e%ros Oriental.J2K One parcel of lan( contains an area of 4+704 s0uare 1eters+ 1ore or less>J3K while the other contains 10+860 s0uare 1eters.J4K 2hereafter+ Fictoria an( her son A%ustin 2ina%an+ too& possession of sai( parcels of lan(.

On )arch 29+ 1988+ pri,ate respon(ents file( a co1plaint for reco,ery of possession a%ainst D(itha an( her husban( Porferio Al,iola before the *e%ional 2rial ourt of 3e%ros Oriental+ ?ranch 34+ 5u1a%uete ity+ (oc&ete( as i,il ase 3o. 9148+ prayin%+ a1on% others+ that they be (eclare( absolute owners of the sai( parcels of lan(+ an( that petitioners be or(ere( to ,acate the sa1e+ to re1o,e their copra (ryer an( store+ to pay actual (a1a%es !in the for1 of rentals"+ 1oral an( puniti,e (a1a%es+ liti%ation e:penses an( attorney=s fees.J10K

$o1eti1e in 1960+ petitioners occupie( portions thereof whereat they built a copra (ryer an( put up a store wherein they en%a%e( in the business of buyin% an( sellin% copra.

.n their answer+ petitioners conten( that they own the i1pro,e1ents in the (ispute( properties which are still public lan(> that they are 0ualifie( to be beneficiaries of the co1prehensi,e a%rarian refor1 pro%ra1 an( that they are ri%htful possessors by occupation of the sai( properties for 1ore than twenty years.J11K

On 'une 23+ 1974+ Fictoria (ie(. On October 26+ 1974+ A%ustin (ie(+ sur,i,e( by herein pri,ate respon(ents+ na1ely his wife+ Florencia ?ulin% F(a. (e 2ina%an an( their chil(ren 5e1osthenes+ 'esus+ Henai(a an( 'osephine+ all surna1e( 2ina%an.

After trial+ the lower court ren(ere( <u(%1ent in fa,or of the pri,ate respon(ents+ the (ispositi,e portion of which rea(s#

B9D*DFO*D+ pre1ises consi(ere(+ in i,il ase 3o. 9148+ for *eco,ery of Property+ the court hereby ren(ers <u(%1ent#

a" 5eclarin% plaintiffs as the absolute owners of the lan( in 0uestion inclu(in% the portion clai1e( an( occupie( by (efen(ants>

Petitioners a,er that respon(ent court erre( in (eclarin% pri,ate respon(ents the owners of the (ispute( properties. 2hey conten( that ownership of a public lan( cannot be (eclare( by the courts but by the D:ecuti,e 5epart1ent of the ;o,ern1ent+ citin% the case of ?usante ,s. 9on. ourt of Appeals+ Oct. 20+ 1992+ 214 $ *A 774> an( that the respon(ent court erre( in not consi(erin% that pri,ate respon(ents= pre(ecessor8in8interest+ Fictoria $on<aco 2ina%an+ (urin% her lifeti1e+ ce(e( her ri%ht to the (ispute( properties in fa,or of petitioners.

b" Or(erin% (efen(ants D(itha Al,iola an( her husban( Porfirio Al,iola to peacefully ,acate an( to surren(er the possession of the pre1ises in 0uestion to plaintiffs> 5efen(ants 1ay re1o,e their store an( (ryer on the pre1ises without in<ury an( pre<u(ice to the plaintiffs>

)oreo,er+ petitioners 1aintain that the respon(ent court erre( in hol(in% that they were in ba( faith in possessin% the (ispute( properties an( in rulin% that the i1pro,e1ents thereon are transferable. 2hey clai1 that the copra (ryer an( the store are per1anent structures+ the walls thereof bein% 1a(e of hollow8bloc&s an( the floors 1a(e of ce1ent.

c" Or(erin% (efen(ants to pay the followin% a1ounts to the plaintiffs# Pri,ate respon(ents counter that the 0uestion of whether or not the (ispute( properties are public lan( has been resol,e( by o,erwhel1in% e,i(ence showin% ownership an( possession by the 2ina%ans an( their pre(ecessors8 in8interest prior to 1949. 2hey further a,er that they 1erely tolerate( petitioners= possession of the (ispute( properties for a perio( which was less than that re0uire( for e:traor(inary prescription.

1. P140.00 1onthly rentals fro1 April 1988 up to the ti1e the i1pro,e1ents in the 0uestione( portions are re1o,e(>

2. P4+000.00 for attorney=s fees> 2he petition 1ust fail. 3. P3+000.00 for liti%ation e:penses an( to pay the costs. Petitioners clai1 that the (ispute( properties are public lan(s. 2his is a factual issue. 2he pri,ate respon(ents a((uce( o,erwhel1in% e,i(ence to pro,e their ownership an( possession of the two !2" parcels of lan( on portions of which petitioners built the copra (ryer an( a store. Pri,ate respon(ents= ta: (eclarations an( receipts of pay1ent of real estate ta:es+ as well as other relate( (ocu1ents+ pro,e their ownership of the (ispute( properties. As state( pre,iously in the narration of facts+ these two !2" parcels of lan( were ori%inally owne( by )auro 2ina%an+ who sol( the sa1e to Fictoria $. 2ina%an on April 1+ 1940+ as e,i(ence( by a 5ee( of $ale+J16K wherein the two !2" lots+ Parcels 1 an( 2+ are (escribe(.J17K Anent Parcel 1+ ta: (eclarations in(icate that the property has always been (eclare( in the na1e of the 2ina%ans. 2he first+ 2a: 5eclaration 3o. 3334J18K is in the na1e of )auro 2ina%an. .t was thereafter cancelle( by 2a: 5eclaration 3o. 19434 effecti,e 1968+J19K still in the na1e of )auro. 2his (eclaration was cancelle( by 2a: 5eclaration 3o. 016740 now in the na1e of A%ustin 2ina%an+J20K effecti,e 1974+ followe( by 2a: 5eclaration 3o. 088421 in the na1e of 'esus

$O O*5D*D5.J12K

Petitioners appeale( to the ourt of Appeals. On April 8+ 1994+ the respon(ent court ren(ere( its (ecision+J13K affir1in% the <u(%1ent of the lower court. Petitioners file( a 1otion for reconsi(erationJ14K but the sa1e was (enie( by the respon(ent court in an or(er (ate( October 6+ 1994.J14K

9ence+ this petition.

2ina%an+ effecti,e 1980>J21K an( finally by 2a: 5eclaration 3o. 088816 in the na1e of 'esus 2ina%an+ effecti,e 1984.J22K

2his clai1 of the petitioners was brushe( asi(e by the respon(ent court as 1erely an afterthou%ht+ thus 8

Bith re%ar( to Parcel 2+ pri,ate respon(ents presente( 2a: 5eclaration 3o. 20973 in the na1e of )auro 2ina%an+ effecti,e 1949+J23K 2a: 5eclaration 3o. 016747+ effecti,e 1974>J24K 2a: 5eclaration 3o. 0884048 in the na1e of A%ustin 2ina%an+ effecti,e 1980J24K an( 2a: 5eclaration 3o. 088794 in the na1e of A%ustin 2ina%an+ effecti,e 1984.J26K )oreo,er+ the realty ta:es on the two lots ha,e always been pai( by the pri,ate respon(ents.J27K 2here can be no (oubt+ therefore+ that the two parcels of lan( are owne( by the pri,ate respon(ents.

CAppellants= clai1 that they ha,e ac0uire( ownership o,er the floor areas of the store an( (ryer =in consi(eration of the account of A%ustin 2ina%an in the su1 of P7+602.04= is not plausible. .t is 1ore of an =after8thou%ht= (efense which was not alle%e( in their answer. Althou%h the e,i(ence presente( by the1 in support of this particular clai1 was not (uly ob<ecte( to by counsel for appellees at the proper ti1e an( therefore (ee1e( a(1issible in e,i(ence+ an e:a1ination of the oral an( (ocu1entary e,i(ence sub1itte( in support thereof+ re,eals the wea&ness of their clai1.

2he recor( further (iscloses that Fictoria $. 2ina%an an( her son+ A%ustin 2ina%an+ too& possession of the sai( properties in 1940+ intro(uce( i1pro,e1ents thereon+ an( for 1ore than 40 years+ ha,e been in open+ continuous+ e:clusi,e an( notorious occupation thereof in the concept of owners.

Petitioners= own e,i(ence reco%ni/e( the ownership of the lan( in fa,or of Fictoria 2ina%an. .n their ta: (eclarations+J28K petitioners state( that the house an( copra (ryer are locate( on the lan( of Fictoria $. 2ina%an7A%ustin 2ina%an. ?y ac&nowle(%in% that the (ispute( portions belon% to Fictoria7A%ustin 2ina%an in their ta: (eclarations+ petitioners= clai1 as owners thereof 1ust fail.

CAppellant testifie( that the areas on which their store an( (ryer were locate( were e:chan%e( for the a1ount of P7+602.04 owe( to the1 by A%ustin in 1967 !2$3+ 9earin% of April 14+ 1989+ p. 9"> that he (i( not bother to e:ecute a (ocu1ent reflectin% such a%ree1ent [because they were our parents an( we ha( use( the lan( for 0uite so1eti1e alrea(y they ha( also sol( their copra to us for a lon% ti1e.= !.(." Eet+ as earlier (iscusse(+ the ta: (eclarations in appellants= answer show that e,en after 1967+ they e:pressly (eclare( that the parcels of lan( on which their store an( (ryer were constructe(+ belon%e( to Fictoria an( A%ustin !D:hs. 28A+ 28?+ 28 + 38A+ 38?". .f appellants really belie,e( that they were in possession of the sai( particular areas in the concept of owners+ they coul( ha,e easily (eclare( it in sai( ta: (eclarations.CJ31K

2he assaile( (ecision of the respon(ent court states that CAppellants (o not (ispute that the two parcels of lan( sub<ect 1atter of the present co1plaint for reco,ery of possession belon%e( to Fictoria $. 2ina%an+ the %ran(1other of herein plaintiffs8appellees> that A%ustin 2ina%an inherite( the parcels of lan( fro1 his 1other Fictoria> an( that plaintiffs8appellees+ in turn+ inherite( the sa1e fro1 A%ustin.CJ29K

2a&in% e:ception to the afore0uote( fin(in%+ petitioners conten( that while the 2 parcels of lan( are owne( by pri,ate respon(ents+ the portions wherein the copra (ryers an( store stan( were ce(e( to the1 by Fictoria $. 2ina%an in e:chan%e for an alle%e( in(ebte(ness of A%ustin 2ina%an in the su1 of P7+602.04.J30K

once(e(ly+ petitioners ha,e been on the (ispute( portions since 1961. 9owe,er+ their stay thereon was 1erely by tolerance on the part of the pri,ate respon(ents an( their pre(ecessor8in8interest. 2he e,i(ence shows that the petitioners were per1itte( by Fictoria $an<oco 2ina%an to buil( a copra (ryer on the lan( when they %ot 1arrie(. $ubse0uently+ petitioner D(itha Al,iola+ clai1in% to be the ille%iti1ate (au%hter of A%ustin 2ina%an+ file( a petition for partition (e1an(in% her share in the estate of the (ecease( A%ustin 2ina%an on 5ece1ber 6+ 1976. 9owe,er+ the petition was (is1isse( since it was brou%ht only after the (eath of A%ustin 2ina%an. 2his ourt (is1isse( the petition for certiorari an( 1an(a1us file( by petitioner D(itha Al,iola on Au%ust 9+ 1982. .t was on )arch 29+ 1988+ when pri,ate respon(ents file( this co1plaint for reco,ery of possession a%ainst petitioners. onsi(erin% that the petitioners= occupation of the properties in (ispute was 1erely tolerate( by pri,ate respon(ents+ their posture that they

ha,e ac0uire( the property by CoccupationC for 20 years (oes not ha,e any factual or le%al foun(ation.

As correctly rule( by the respon(ent court+ there was ba( faith on the part of the petitioners when they constructe( the copra (ryer an( store on the (ispute( portions since they were fully aware that the parcels of lan( belon%e( to Fictoria 2ina%an. An(+ there was li&ewise ba( faith on the part of the pri,ate respon(ents+ ha,in% &nowle(%e of the arran%e1ent between petitioners an( Fictoria 2ina%an relati,e to the construction of the copra (ryer an( store. 2hus+ for purposes of in(e1nity+ Article 448 of the 3ew i,il o(e shoul( be applie(.J32K 9owe,er+ the copra (ryer an( the store+ as (eter1ine( by the trial court an( respon(ent court+ are transferable in nature. 2hus+ it woul( not fall within the co,era%e of Article 448. As the note( ci,il law authority+ $enator Arturo 2olentino+ aptly e:plains# C2o fall within the pro,ision of this Article+ the construction 1ust be of per1anent character+ attache( to the soil with an i(ea of perpetuity> but if it is of a transitory character or is transferable+ there is no accession+ an( the buil(er 1ust re1o,e the construction. 2he proper re1e(y of the lan(owner is an action to e<ect the buil(er fro1 the lan(.CJ33K

appellate court affir1e( the 5ecisionJ3K (ate( 12 $epte1ber 2000 of the *e%ional 2rial ourt !*2 "+ 6th 'u(icial *e%ion+ ?ranch 1+ Malibo+ A&lan+ in i,il ase 3o. 4411+ which re,erse( the 5ecisionJ4K (ate( 6 April 1998 of the 7th )unicipal ircuit 2rial ourt !) 2 " of .ba<ay83abas+ .ba<ay+ A&lan+ in i,il ase 3o. 146> an( (eclare(J4K the herein respon(ent8$pouses )artin an( @our(es )a%lunob !$pouses )a%lunob" an( respon(ent *o1eo $ali(o !*o1eo" as the lawful owners an( possessors of @ot 12897 with an area of 982 s0uare 1eters+ 1ore or less+ locate( in )aloco+ .ba<ay+ A&lan !sub<ect property". .n its assaile( *esolution+ the appellate court (enie( herein petitioner Dl,ira 2. Aran%ote=s )otion for *econsi(eration.

Dl,ira 2. Aran%ote+ herein petitioner 1arrie( to *ay )ars D. Aran%ote+ is the re%istere( owner of the sub<ect property+ as e,i(ence( by Ori%inal ertificate of 2itle !O 2" 3o. @OA81748.J6K *espon(ents )artin !)artin .." an( *o1eo are first cousins an( the %ran(nephews of Dsperan/a )a%lunob8 5ailisan !Dsperan/a"+ fro1 who1 petitioner ac0uire( the sub<ect property.

2he pri,ate respon(ents= action for reco,ery of possession was the suitable solution to e<ect petitioners fro1 the pre1ises.

2he Petition ste1s fro1 a o1plaintJ7K file( by petitioner an( her husban( a%ainst the respon(ents for Luietin% of 2itle+ 5eclaration of Ownership an( Possession+ 5a1a%es with Preli1inary .n<unction+ an( .ssuance of 2e1porary *estrainin% Or(er before the ) 2 + (oc&ete( as i,il ase 3o. 146.

B9D*DFO*D+ this petition shoul( be+ as it is hereby+ 5.$).$$D5. 2he assaile( (ecision is hereby AFF.*)D5.

$O O*5D*D5.

2he o1plaint alle%e( that Dsperan/a inherite( the sub<ect property fro1 her uncle Fictorino $orrosa by ,irtue of a notari/e( Partition A%ree1entJ8K (ate( 29 April 1984+ e:ecute( by the latter=s heirs. 2hereafter+ Dsperan/a (eclare( the sub<ect property in her na1e for real property ta: purposes+ as e,i(ence( by 2a: 5eclaration 3o. 16218 !1984".J9K

*e%ala(o+ ! hair1an"+ )elo+ Puno+ an( )en(o/a+ ''.+ concur.

Arangote v. Magl'no(, GR 17%9. , ,e(. 1%, $..9

?efore this ourt is a Petition for *e,iew on ertiorari un(er *ule 44 of the 1997 *e,ise( *ules of i,il Proce(ure see&in% to re,erse an( set asi(e the 5ecisionJ1K (ate( 27 October 2006 an( *esolutionJ2K (ate( 29 'une 2007 of the ourt of Appeals in A8;.*. $P 3o. 64970. .n its assaile( 5ecision+ the

2he o1plaint further state( that on 24 'une 1984+ Dsperan/a e:ecute( a @ast Bill an( 2esta1entJ10K be0ueathin% the sub<ect property to petitioner an( her husban(+ but it was ne,er probate(. On 9 'une 1986+ Dsperan/a e:ecute( another (ocu1ent+ an Affi(a,it+J11K in which she renounce(+ relin0uishe(+ wai,e( an( 0uitclai1e( all her ri%hts+ share+ interest an( participation whatsoe,er in the sub<ect property in fa,or of petitioner an( her husban(. On the basis thereof+ 2a: 5eclaration 3o. 16218 in the na1e of Dsperan/a was cancelle( an( 2a: 5eclaration 3o. 16666J12K !1987" was issue( in the na1e of the petitioner an( her husban(.

.n 1989+ petitioner an( her husban( constructe( a house on the sub<ect property. On 26 )arch 1993+ O 2 3o. @OA81748 was issue( by the $ecretary of the 5epart1ent of A%rarian *efor1 !5A*" in the na1e of petitioner+ 1arrie( to *ay )ars D. Aran%ote. 9owe,er+ respon(ents+ to%ether with so1e hire( persons+ entere( the sub<ect property on 3 'une 1994 an( built a hollow bloc& wall behin( an( in front of petitioner=s house+ which effecti,ely bloc&e( the entrance to its 1ain (oor.

A. 5eclarin% the Jherein petitioner an( her husban(K the true+ lawful an( e:clusi,e owners an( entitle( to the possession of the Jsub<ect propertyK (escribe( an( referre( to un(er para%raph 2 of the J Ko1plaint an( co,ere( by 2a: 5eclaration 3o. 16666 in the na1es of the Jpetitioner an( her husban(K>

As a conse0uence thereof+ petitioner an( her husban( were co1pelle( to institute i,il ase 3o. 146.

?. Or(erin% the Jherein respon(entsK an( anyone hire( by+ actin% or wor&in% for the1+ to cease an( (esist fro1 assertin% or clai1in% any ri%ht or interest in+ or e:ercisin% any act of ownership or possession o,er the Jsub<ect propertyK>

.n their Answer with ounterclai1 in i,il ase 3o. 146+ respon(ents a,erre( that they co8owne( the sub<ect property with Dsperan/a. Dsperan/a an( her siblin%s+ 2o1as an( .nocencia+ inherite( the sub<ect property+ in e0ual shares+ fro1 their father )artin )a%lunob !)artin .". Bhen 2o1as an( .nocencia passe( away+ their shares passe( on by inheritance to respon(ents )artin .. an( *o1eo+ respecti,ely. 9ence+ the sub<ect property was co8owne( by Dsperan/a+ respon(ent )artin .. !to%ether with his wife @our(es"+ an( respon(ent *o1eo+ each hol(in% a one8thir( pro8in(i,iso share therein. 2hus+ Dsperan/a coul( not ,ali(ly wai,e her ri%hts an( interest o,er the entire sub<ect property in fa,or of the petitioner.

. Or(erin% the Jrespon(entsK to pay the Jpetitioner an( her husban(K the a1ount of P10+000.00 as attorney=s fee. Bith cost a%ainst the Jrespon(entsK.J13K

2he respon(ents appeale( the aforesai( ) 2 2heir appeal was (oc&ete( as i,il ase 3o. 4411.

5ecision to the *2 .

*espon(ents also asserte( in their ounterclai1 that petitioner an( her husban(+ by 1eans of frau(+ un(ue influence an( (eceit were able to 1a&e Dsperan/a+ who was alrea(y ol( an( illiterate+ affi: her thu1b1ar& to the Affi(a,it (ate( 9 'une 1986+ wherein she renounce( all her ri%hts an( interest o,er the sub<ect property in fa,or of petitioner an( her husban(. *espon(ents thus praye( that the O 2 issue( in petitioner=s na1e be (eclare( null an( ,oi( insofar as their two8thir(s shares are concerne(.

*espon(ents ar%ue( in their appeal that the ) 2 erre( in not (is1issin% the o1plaint file( by the petitioner an( her husban( for failure to i(entify the sub<ect property therein. *espon(ents further faulte( the ) 2 for not (eclarin% Dsperan/a=s Affi(a,it (ate( 9 'une 1986 88 relin0uishin% all her ri%hts an( interest o,er the sub<ect property in fa,or of petitioner an( her husban( 88 as null an( ,oi( insofar as respon(ents= two8thir(s share in the sub<ect property is concerne(.

After trial+ the ) 2 ren(ere( its 5ecision (ate( 6 April 1998 in i,il ase 3o. 146+ (eclarin% petitioner an( her husban( as the true an( lawful owners of the sub<ect property. 2he (ecretal portion of the ) 2 5ecision rea(s# ) 2

On 12 $epte1ber 2000+ the *2 ren(ere( its 5ecision re,ersin% the 5ecision (ate( 6 April 1998. 2he *2 a(<u(%e( respon(ents+ as well

as the other heirs of )artin )a%lunob+ as the lawful owners an( possessors of the entire sub<ect property. 2he *2 (ecree(#

petitioner+ for herself an( in behalf of her husban(+J18K (urin% the lifeti1e of Dsperan/a. .n the *2 Or(erJ19K (ate( 2 )ay 2001+ howe,er+ the *2 (enie( the aforesai( )otion for 3ew 2rial or *econsi(eration.

B9D*DFO*D+ <u(%1ent is hereby ren(ere( as follows#

2he petitioner an( her husban( then file( a Petition for *e,iew+ un(er *ule 42 of the 1997 *e,ise( *ules of i,il Proce(ure+ before the ourt of Appeals+ where the Petition was (oc&ete( as A8;.*. $P 3o. 64970.

1" 2he appeale( J5Kecision is *DFD*$D5>

.n their Petition before the appellate court+ petitioner an( her husban( raise( the followin% errors co11itte( by the *2 in its 12 $epte1ber 2000 5ecision#

2" J9erein respon(entsK an( the other heirs of )artin )a%lunob are (eclare( the lawful owners an( possessors of the whole Jsub<ect propertyK as (escribe( in Para%raph 2 of the J Ko1plaint+ as a%ainst the Jherein petitioner an( her husban(K.

.. J) 2 K>

.t erre( in re,ersin% the J5Kecision of the

3" JPetitioner an( her husban(K are or(ere( to i11e(iately turn o,er possession of the Jsub<ect propertyK to the Jrespon(entsK an( the other heirs of )artin )a%lunob> an( ... .t erre( in (eclarin% the Jherein respon(entsK an( the other heirs of )artin )a%lunob as the lawful owners an( possessors of the whole Jsub<ect propertyK>

4" JPetitioner an( her husban(K are or(ere( to pay Jrespon(entsK attorney=s fees of P4+000.00+ other liti%ation e:penses of P4+000.00+ 1oral (a1a%es of P10+000.00 an( e:e1plary (a1a%es of P4+000.00.J14K

Petitioner an( her husban( file( before the *2 + on 26 $epte1ber 2000+ a )otion for 3ew 2rial or *econsi(erationJ14K on the %roun( of newly (isco,ere( e,i(ence consistin% of a 5ee( of AcceptanceJ16K (ate( 23 $epte1ber 2000+ an( noticeJ17K of the sa1e+ which were both 1a(e by the

.... .t erre( in (eclarin% JO 2K 3o. @OA81748 in the na1e of Jherein petitionerK Dl,ie 2. Aran%ote as null an( ,oi(>

.. Bhether the J*2 K acte( with %ra,e abuse of (iscretion a1ountin% to lac& or e:cess of <uris(iction when it (eclare( the Jpetitioner an( her husban(=s title to the sub<ect propertyK null an( ,oi(> .F. .t erre( in (enyin% Jpetitioner an( her husban(=sK J)Kotion for J3Kew J2Krial or J*Keconsi(eration (ate( J26 $epte1ber 2000> an(

F. .t erre( in not (eclarin% the Jpetitioner an( her husban(K as possessors in %oo( faith.J20K

... Bhether the J*2 K acte( with %ra,e abuse of (iscretion a1ountin% to lac& of <uris(iction when it (eclare( the Affi(a,it of Luitclai1 null an( ,oi(> an(

.... Bhether the J*2 K an( the 9onorable ourt of Appeals acte( with %ra,e abuse of (iscretion a1ountin% to lac& or e:cess of <uris(iction when it re<ecte( petitioner=s clai1 as possessors !sic" in %oo( faith+ hence+ entitle( to the ri%hts pro,i(e( in JArticleK 448 an( JArticleK 446 of the i,il o(e.J22K On 27 October 2006+ the ourt of Appeals ren(ere( a 5ecision (enyin% the Petition for *e,iew of petitioner an( her husban( an( affir1in% the *2 5ecision (ate( 12 $epte1ber 2000. Petitioner an( her husban(=s subse0uent )otion for *econsi(eration was si1ilarly (enie( by the ourt of Appeals in its *esolution (ate( 29 'une 2007.

9ence+ petitionerJ21K now co1es before this ourt raisin% in her Petition the followin% issues#

Petitioner conten(s that the aforesai( O 2 3o. @OA81748 was issue( in her na1e on 26 )arch 1993 an( was re%istere( in the *e%istry of 5ee(s of A&lan on 20 April 1993. Fro1 20 April 1993 until the institution of i,il ase 3o. 146 on 10 'une 1994 before the ) 2 + 1ore than one year ha( alrea(y elapse(. onsi(erin% that a 2orrens title can only be attac&e( within one year after the (ate of the issuance of the (ecree of re%istration on the %roun( of frau( an( that such attac& 1ust be throu%h a (irect procee(in%+ it was an error on the part of the *2 an( the ourt of Appeals to (eclare O 2 3o. @OA81748 null an( ,oi(.

Petitioner a((itionally posits that both the *2 an( the ourt of Appeals co11itte( a 1ista&e in (eclarin% null an( ,oi( the Affi(a,it (ate( 9 'une 1986 e:ecute( by Dsperan/a+ wai,in% all her ri%hts an( interest o,er the sub<ect property in fa,or of petitioner an( her husban(. Dsperan/a=s Affi(a,it is a ,ali( an( bin(in% proof of the transfer of ownership of the sub<ect property in petitioner=s na1e+ as it was also couple( with actual (eli,ery of possession of the sub<ect property to petitioner an( her husban(. 2he Affi(a,it is also proof of %oo( faith on the part of petitioner an( her husban(.

when the factual fin(in%s of the contra(ictory.

ourt of Appeals an( the trial court are

.n this case+ the fin(in%s of fact of the ) 2 as re%ar(s the ori%in of the sub<ect property are in conflict with the fin(in%s of fact of both the *2 an( the ourt of Appeals. 9ence+ this ourt will ha,e to e:a1ine the recor(s to (eter1ine first the true ori%in of the sub<ect property an( to settle whether the respon(ents ha,e the ri%ht o,er the sa1e for bein% co8heirs an( co8 owners+ to%ether with their %ran( aunt+ Dsperan/a+ before this ourt can resol,e the issues raise( by the petitioner in her Petition.

Finally+ petitioner ar%ues that+ assu1in% for the sa&e of ar%u1ent+ that Dsperan/a=s Affi(a,it is null an( ,oi(+ petitioner an( her husban( ha( no &nowle(%e of any flaw in Dsperan/a=s title when the latter relin0uishe( her ri%hts to an( interest in the sub<ect property in their fa,or. 9ence+ petitioner an( her husban( can be consi(ere( as possessors in %oo( faith an( entitle( to the ri%hts pro,i(e( un(er Articles 448 an( 446 of the i,il o(e.

After a careful scrutiny of the recor(s+ this ourt affir1s the fin(in%s of both the *2 an( the ourt of Appeals as re%ar(s the ori%in of the sub<ect property an( the fact that respon(ents+ with their %ran( aunt Dsperan/a+ were co8heirs an( co8owners of the sub<ect property.

2his present Petition is (e,oi( of 1erit. 2he recor(s (isclose( that the sub<ect property was part of a parcel of lan(J24K situate( in )aloco+ .ba<ay+ A&lan+ consistin% of 7+176 s0uare 1eters an( co11only owne( in e0ual shares by the siblin%s Pantaleon )a%lunob !Pantaleon" an( Placi(a )a%lunob8$orrosa !Placi(a". -pon the (eath of Pantaleon an( Placi(a+ their sur,i,in% an( le%al heirs e:ecute( a 5ee( of D:tra<u(icial $ettle1ent an( Partition of Dstate in 'uly 1981+J26K howe,er+ the 5ee( was not notari/e(. onsi(erin% that Pantaleon (ie( without issue+ his one8half share in the parcel of lan( he co8owne( with Placi(a passe( on to his four siblin%s !or their respecti,e heirs+ if alrea(y (ecease("+ na1ely# Placi(a+ @uis+ )artin .+ an( Fictoria+ in e0ual shares.

.t is a hornboo& (octrine that the fin(in%s of fact of the trial court are entitle( to %reat wei%ht on appeal an( shoul( not be (isturbe( e:cept for stron% an( ,ali( reasons+ because the trial court is in a better position to e:a1ine the (e1eanor of the witnesses while testifyin%. .t is not a function of this ourt to analy/e an( wei%h e,i(ence by the parties all o,er a%ain. 2his ourt=s <uris(iction is+ in principle+ li1ite( to re,iewin% errors of law that 1i%ht ha,e been co11itte( by the ourt of Appeals.J23K 2his rule+ howe,er+ is sub<ect to se,eral e:ceptions+J24K one of which is present in this case+ i.e.+

Accor(in% to the afore1entione( 5ee( of D:tra<u(icial $ettle1ent an( Partition of Dstate+ the sur,i,in% an( le%al heirs of Pantaleon an( Placi(a a%ree( to ha,e the parcel of lan( co11only owne( by the siblin%s (eclare( for real property ta: purposes in the na1e of Fictorino $orrosa !Fictorino"+ Placi(a=s husban(. 2hus+ 2a: 5eclarations 3o. 4988 !1942"+J27K 3o. 6200 !1944"J28K an( 3o. 7233 !1943"J29K were all issue( in the na1e of Fictorino.

2he Jsub<ect propertyK which is clai1e( by the Jherein petitioner an( her husban(K an( that which is clai1e( by the Jherein respon(entsK are one an( the sa1e+ the (ifference in area an( technical (escription bein% (ue to the repartition an( re8allocation of the parcel of lan( ori%inally co8owne( by Pantaleon )a%lunob an( his sister Placi(a )a%lunob an( subse0uently (eclare( in the na1e of JFictorinoK un(er 2a: 5eclaration 3o. 4988 of 1949. J32K

$ince )artin . alrea(y passe( away when the 5ee( of D:tra<u(icial $ettle1ent an( Partition of Dstate was e:ecute(+ his heirsJ30K were represente( therein by Dsperan/a. ?y ,irtue of the sai( 5ee(+ )artin . recei,e( as inheritance a portion of the parcel of lan( 1easurin% 897 s0uare 1eters.

After the (eath of Fictorino+ his heirsJ31K e:ecute( another Partition A%ree1ent on 29 April 1984+ which was notari/e( on the sa1e (ate. 2he Partition A%ree1ent 1entione( four parcels of lan(. 2he sub<ect property+ consistin% of a portion of the consoli(ate( parcels 1+ 2+ an( 3+ an( 1easurin% aroun( 982 s0uare 1eters+ was allocate( to Dsperan/a. .n co1parison+ the property %i,en to Dsperan/a un(er the Partition A%ree1ent is bi%%er than the one ori%inally allocate( to her earlier un(er the 5ee( of D:tra<u(icial $ettle1ent an( Partition of Dstate (ate( 'uly 1981+ which ha( an area of only 897 s0uare 1eters. .t 1ay be reasonably assu1e(+ howe,er+ that the sub<ect property+ 1easurin% 982 s0uare 1eters+ allocate( to Dsperan/a un(er the Partition A%ree1ent (ate( 29 April 1984+ is alrea(y inclusi,e of the s1aller parcel of 897 s0uare 1eters assi%ne( to her un(er the 5ee( of D:tra<u(icial $ettle1ent an( Partition of Dstate (ate( 'uly 1981. As e:plaine( by the *2 in its 12 $epte1ber 2000 5ecision#

.t is clear fro1 the recor(s that the sub<ect property was not Dsperan/a=s e:clusi,e share+ but also that of the other heirs of her father+ )artin .. Dsperan/a e:pressly affi:e( her thu1b1ar& to the 5ee( of D:tra<u(icial $ettle1ent of 'uly 1981 not only for herself+ but also on behalf of the other heirs of )artin .. 2hou%h in the Partition A%ree1ent (ate( 29 April 1984 Dsperan/a affi:e( her thu1b1ar& without statin% that she was (oin% so not only for herself+ but also on behalf of the other heirs of )artin .+ this (oes not 1ean that Dsperan/a was alrea(y the e:clusi,e owner thereof. 2he e,i(ence shows that the sub<ect property is the share of the heirs of )artin .. 2his is clear fro1 the s&etchJ33K attache( to the Partition A%ree1ent (ate( 29 April 1984+ which re,eals the proportionate areas %i,en to the heirs of the two siblin%s+ Pantaleon an( Placi(a+ who were the ori%inal owners of the whole parcel of lan(J34K fro1 which the sub<ect property was ta&en.

Further+ it bears e1phasis that the Partition A%ree1ent was e:ecute( by an( a1on% the son+ %ran(sons+ %ran((au%hters an( cousins of Fictorino. Dsperan/a was neither the %ran((au%hter nor the cousin of Fictorino+ as she was only Fictorino=s %ran(niece. 2he cousin of Fictorino is )artin .+ Dsperan/a=s father. .n effect+ therefore+ the sub<ect property allotte( to Dsperan/a in the Partition A%ree1ent was not her e:clusi,e share+ as she hol(s the sa1e for an( on behalf of the other heirs of )artin .+ who was alrea(y (ecease( at the ti1e the Partition A%ree1ent was 1a(e.

2o further bolster the truth that the sub<ect property was not e:clusi,ely owne( by Dsperan/a+ the Affi(a,it she e:ecute( in fa,or of petitioner an( her husban( on 6 'une 1984 was wor(e( as follows#

.n this case+ the petitioner (eri,e( her title to the sub<ect property fro1 the notari/e( Affi(a,it e:ecute( by Dsperan/a+ wherein the latter relin0uishe( her ri%hts+ share+ interest an( participation o,er the sa1e in fa,or of the petitioner an( her husban(.

2hat . hereby renounce+ relin0uish+ wai,e an( 0uitclai1 all 1y ri%hts+ share+ interest an( participation whatsoe,er in the Jsub<ect propertyK unto the sai( $ps. *ay )ars Aran%ote an( Dl,ira 2. Aran%ote+ their heirs+ successors+ an( assi%ns inclu(in% the i1pro,e1ent foun( thereon>J34K

A careful perusal of the sai( Affi(a,it re,eals that it is not what it purports to be. Dsperan/a=s Affi(a,it is+ in fact+ a 5onation. Dsperan/a=s real intent in e:ecutin% the sai( Affi(a,it was to (onate her share in the sub<ect property to petitioner an( her husban(.

As no onerous un(erta&in% is re0uire( of petitioner an( her husban( un(er the sai( Affi(a,it+ the (onation is re%ar(e( as a pure (onation of an interest in a real property co,ere( by Article 749 of the i,il o(e.J36K Article 749 of the i,il o(e pro,i(es# @o%ically+ if Dsperan/a fully owne( the sub<ect property+ she woul( ha,e si1ply wai,e( her ri%hts to an( interest in the sub<ect property+ without 1entionin% her CshareC an( CparticipationC in the sa1e. ?y inclu(in% such wor(s in her Affi(a,it+ Dsperan/a was aware of an( was li1itin% her wai,er+ renunciation+ an( 0uitclai1 to her one8thir( share an( participation in the sub<ect property.

Art. 749. .n or(er that the (onation of an i11o,able 1ay be ,ali(+ it 1ust be 1a(e in a public (ocu1ent+ specifyin% therein the property (onate( an( the ,alue of the char%es which the (onee 1ust satisfy.

;oin% to the issues raise( by the petitioner in this Petition+ this ourt will resol,e the sa1e concurrently as they are interrelate(. 2he acceptance 1ay be 1a(e in the sa1e (ee( of (onation or in a separate public (ocu1ent+ but it shall not ta&e effect unless it is (one (urin% the lifeti1e of the (onor.

.f the acceptance is 1a(e in a separate instru1ent+ the (onor shall be notifie( thereof in an authentic for1+ an( this step shall be note( in both instru1ents.

instru1ent of (onation. .f the acceptance (oes not appear in the sa1e (ocu1ent+ it 1ust be 1a(e in another. Bhere the 5ee( of 5onation fails to show the acceptance+ or where the for1al notice of the acceptance+ 1a(e in a separate instru1ent+ is either not %i,en to the (onor or else not note( in the 5ee( of 5onation an( in the separate acceptance+ the (onation is null an( ,oi(.J38K

Fro1 the aforesai( pro,ision+ there are three re0uisites for the ,ali(ity of a si1ple (onation of a real property+ to wit# !1" it 1ust be 1a(e in a public instru1ent> !2" it 1ust be accepte(+ which acceptance 1ay be 1a(e either in the sa1e 5ee( of 5onation or in a separate public instru1ent> an( !3" if the acceptance is 1a(e in a separate instru1ent+ the (onor 1ust be notifie( in an authentic for1+ an( the sa1e 1ust be note( in both instru1ents.

.n the present case+ the sai( Affi(a,it+ which is tanta1ount to a 5ee( of 5onation+ 1et the first re0uisite+ as it was notari/e(> thus+ it beca1e a public instru1ent. 3e,ertheless+ it faile( to 1eet the aforesai( secon( an( thir( re0uisites. 2he acceptance of the sai( (onation was not 1a(e by the petitioner an( her husban( either in the sa1e Affi(a,it or in a separate public instru1ent. As there was no acceptance 1a(e of the sai( (onation+ there was also no notice of the sai( acceptance %i,en to the (onor+ Dsperan/a. 2herefore+ the Affi(a,it e:ecute( by Dsperan/a in fa,or of petitioner an( her husban( is null an( ,oi(.

2his ourt a%rees with the *2 an( the ourt of Appeals that the Affi(a,it e:ecute( by Dsperan/a relin0uishin% her ri%hts+ share+ interest an( participation o,er the sub<ect property in fa,or of the petitioner an( her husban( suffere( fro1 le%al infir1ities+ as it faile( to co1ply with the aforesai( re0uisites of the law.

2he subse0uent notari/e( 5ee( of AcceptanceJ39K (ate( 23 $epte1ber 2000+ as well as the noticeJ40K of such acceptance+ e:ecute( by the petitioner (i( not cure the (efect. )oreo,er+ it was only 1a(e by the petitioner se,eral years after the o1plaint was file( in court+ or when the *2 ha( alrea(y ren(ere( its 5ecision (ate( 12 $epte1ber 2000+ althou%h it was still (urin% Dsperan/a=s lifeti1e. D,i(ently+ its e:ecution was a 1ere afterthou%ht+ a belate( atte1pt to cure what was a (efecti,e (onation.

.n $u1ipat ,. ?an%a+J37K this ourt (eclare( that title to i11o,able property (oes not pass fro1 the (onor to the (onee by ,irtue of a 5ee( of 5onation until an( unless it has been accepte( in a public instru1ent an( the (onor (uly notifie( thereof. 2he acceptance 1ay be 1a(e in the ,ery sa1e

.t is true that the acceptance of a (onation 1ay be 1a(e at any ti1e (urin% the lifeti1e of the (onor. An( %rantin% ar%uen(o that such acceptance 1ay still be a(1itte( in e,i(ence on appeal+ there is still nee( for proof that a for1al notice of such acceptance was recei,e( by the (onor an( note( in both the 5ee( of 5onation an( the separate instru1ent e1bo(yin% the

acceptance.J41K At the ,ery least+ this last le%al re0uisite of annotation in both instru1ents of (onation an( acceptance was not fulfille( by the petitioner. 3either the Affi(a,it nor the 5ee( of Acceptance bears the fact that Dsperan/a recei,e( notice of the acceptance of the (onation by petitioner. For this reason+ e,en Dsperan/a=s one8thir( share in the sub<ect property cannot be a(<u(icate( to the petitioner.

$D . 48. ertificate not sub<ect to collateral attac&. 8 A certificate of title shall not be sub<ect to collateral attac&. .t cannot be altere(+ 1o(ifie(+ or cancelle( e:cept in a (irect procee(in% in accor(ance with law.

Bith the fore%oin%+ this ourt hol(s that the *2 an( the ourt of Appeals (i( not err in (eclarin% null an( ,oi( Dsperan/a=s Affi(a,it.

$uch proscription has lon% been enshrine( in Philippine <urispru(ence. 2he <u(icial action re0uire( to challen%e the ,ali(ity of title is a (irect attac&+ not a collateral attac&.J42K

2he ne:t issue to be resol,e( then is whether the *2 + as well as the ourt of Appeals+ erre( in (eclarin% O 2 3o. @OA81748 in the na1e of petitioner an( her husban( null an( ,oi(.

2he attac& is consi(ere( (irect when the ob<ect of an action is to annul or set asi(e such procee(in%+ or en<oin its enforce1ent. on,ersely+ an attac& is in(irect or collateral when+ in an action to obtain a (ifferent relief+ an attac& on the procee(in% is ne,ertheless 1a(e as an inci(ent thereof. $uch action to attac& a certificate of title 1ay be an ori%inal action or a counterclai1+ in which a certificate of title is assaile( as ,oi(.J43K

A%ain+ this ourt answers the sai( issue in the ne%ati,e.

$ection 48 of Presi(ential (ecree 3o. 1429 states#

A counterclai1 is consi(ere( a new suit in which the (efen(ant is the plaintiff an( the plaintiff in the co1plaint beco1es the (efen(ant. .t stan(s on the sa1e footin% as+ an( is to be teste( by the sa1e rules as if it were+ an in(epen(ent action.J44K

.n their Answer to the o1plaint for Luietin% of 2itle file( by the petitioner an( her husban( before the ) 2 + respon(ents inclu(e( therein a ounterclai1 wherein they replea(e( all the 1aterial alle%ations in their affir1ati,e (efenses+ the 1ost essential of which was their clai1 that petitioner an( her husban( 88 by 1eans of frau(+ un(ue influence an( (eceit 88 were able to 1a&e their %ran( aunt+ Dsperan/a+ who was alrea(y ol( an( illiterate+ affi: her thu1b1ar& to the Affi(a,it+ wherein she renounce(+ wai,e(+ an( 0uitclai1e( all her ri%hts an( interest o,er the sub<ect property in fa,or of petitioner an( her husban(. .n a((ition+ respon(ents 1aintaine( in their Answer that as petitioner an( her husban( were not tenants either of Dsperan/a or of the respon(ents+ the 5A* coul( not ha,e ,ali(ly issue( in fa,or of petitioner an( her husban( O 2 3o. @OA81748. 2hus+ the respon(ents praye(+ in their counterclai1 in i,il ase 3o. 146 before the ) 2 + that O 2 3o. @OA81748 issue( in the na1e of petitioner+ 1arrie( to *ay )ars D. Aran%ote+ be (eclare( null an( ,oi(+ insofar as their two8thir(s shares in the sub<ect property are concerne(.

the ourt of Appeals (i( not err in (eclarin% null an( ,oi( O 2 3o. @OA8 1748 in the na1e of the petitioner+ 1arrie( to *ay )ars D. Aran%ote.

onsi(erin% that Dsperan/a (ie( without any co1pulsory heirs an( that the suppose( (onation of her one8thir( share in the sub<ect property per her Affi(a,it (ate( 9 'une 1984 was alrea(y (eclare( null an( ,oi(+ Dsperan/a=s one8thir( share in the sub<ect property passe( on to her le%al heirs+ the respon(ents.

.t is clear+ thus+ that respon(ents= Answer with ounterclai1 was a (irect attac& on petitioner=s certificate of title. Further1ore+ since all the essential facts of the case for the (eter1ination of the ,ali(ity of the title are now before this ourt+ to re0uire respon(ents to institute a separate cancellation procee(in% woul( be pointlessly circuitous an( a%ainst the best interest of <ustice.

As petitioner=s last8(itch effort+ she clai1s that she is a possessor in %oo( faith an(+ thus+ entitle( to the ri%hts pro,i(e( for un(er Articles 448 an( 446 of the i,il o(e.

2his clai1 is untenable.

Dsperan/a=s Affi(a,it+ which was the sole basis of petitioner=s clai1 to the sub<ect property+ has been (eclare( null an( ,oi(. )oreo,er+ petitioner an( her husban( were not tenants of the sub<ect property. .n fact+ petitioner herself a(1itte( in her o1plaint file( before the ) 2 that her husban( is out of the country+ ren(erin% it i1possible for hi1 to wor& on the sub<ect property as a tenant. .nstea( of culti,atin% the sub<ect property+ petitioner an( her husban( possesse( the sa1e by constructin% a house thereon. 2hus+ it is hi%hly suspicious how the petitioner was able to secure fro1 the 5A* a ertificate of @an( Ownership Awar( ! @OA" o,er the sub<ect property. 2he 5A* awar(s such certificates to the %rantees only if they fulfill the re0uire1ents of *epublic Act 3o. 6647+ otherwise &nown as the o1prehensi,e A%rarian *efor1 Pro%ra1 ! A*P".J44K 9ence+ the *2 an(

2he i,il

o(e (escribes a possessor in %oo( faith as follows#

Art. 426. 9e is (ee1e( a possessor in %oo( faith who is not aware that there e:ists in his title or 1o(e of ac0uisition any flaw which in,ali(ates it.

9e is (ee1e( a possessor in ba( faith who possesses in any case contrary to the fore%oin%.

.n the present case+ when respon(ents ca1e to &now that an O 2 o,er the sub<ect property was issue( an( re%istere( in petitioner=s na1e on 26 )arch 1993+ respon(ents brou%ht a o1plaint on 7 Au%ust 1993 before the @upon of ?aran%ay )aloco+ .ba<ay+ A&lan+ challen%in% the title of petitioner to the sub<ect property on the basis that sai( property constitutes the inheritance of respon(ent+ to%ether with their %ran(aunt Dsperan/a+ so Dsperan/a ha( no authority to relin0uish the entire sub<ect property to petitioner. Fro1 that 1o1ent+ the %oo( faith of the petitioner ha( cease(.

)ista&e upon a (oubtful or (ifficult 0uestion of law 1ay be the basis of %oo( faith.

Petitioner cannot be entitle( to the ri%hts un(er Articles 448 an( 446 of the i,il o(e+ because the ri%hts 1entione( therein are applicable only to buil(ers in %oo( faith an( not to possessors in %oo( faith.

Art. 1127. 2he %oo( faith of the possessor consists in the reasonable belief that the person fro1 who1 he recei,e( the thin% was the owner thereof+ an( coul( trans1it his ownership.

)oreo,er+ the petitioner cannot be consi(ere( a buil(er in %oo( faith of the house on the sub<ect property. .n the conte:t that such ter1 is use( in particular reference to Article 448 of the i,il o(e+ a buil(er in %oo( faith is one who+ not bein% the owner of the lan(+ buil(s on that lan(+ belie,in% hi1self to be its owner an( unaware of any (efect in his title or 1o(e of ac0uisition.J47K

Possession in %oo( faith ceases fro1 the 1o1ent (efects in the title are 1a(e &nown to the possessor by e:traneous e,i(ence or by a suit for reco,ery of the property by the true owner. D,ery possessor in %oo( faith beco1es a possessor in ba( faith fro1 the 1o1ent he beco1es aware that what he belie,e( to be true is not so.J46K

2he ,arious pro,isions of the

i,il

o(e+ pertinent to the sub<ect+ rea(#

Article 448. 2he owner of the lan( on which anythin% has been built+ sown+ or plante( in %oo( faith+ shall ha,e the ri%ht to appropriate as his own the wor&s+ sowin% or plantin%+ after pay1ent of the in(e1nity pro,i(e( for in

Articles 446 an( 448+ or to obli%e the one who built or plante( to pay the price of the lan(+ an( the one who sowe(+ the proper rent. 9owe,er+ the buil(er or planter cannot be obli%e( to buy the lan( if its ,alue is consi(erably 1ore than that of the buil(in% or trees. .n such a case+ he shall pay reasonable rent+ if the owner of the lan( (oes not choose to appropriate the buil(in% or trees after proper in(e1nity. 2he parties shall a%ree upon the ter1s of the lease an( in case of (isa%ree1ent+ the court shall fi: the ter1s thereof.

co1pel the owner of the buil(in% to instea( re1o,e it fro1 the lan(. .n or(er+ howe,er+ that the buil(er can in,o&e that accruin% benefit an( en<oy his correspon(in% ri%ht to (e1an( that a choice be 1a(e by the lan(owner+ he shoul( be able to pro,e %oo( faith on his part.J48K

Article 449. 9e who buil(s+ plants+ or sows in ba( faith on the lan( of another+ loses what is built+ plante( or sown without ri%ht to in(e1nity.

;oo( faith+ here un(erstoo(+ is an intan%ible an( abstract 0uality with no technical 1eanin% or statutory (efinition+ an( it enco1passes+ a1on% other thin%s+ an honest belief+ the absence of 1alice an( the absence of (esi%n to (efrau( or to see& an unconscionable a(,anta%e. An in(i,i(ual=s personal %oo( faith is a concept of his own 1in( an(+ therefore+ 1ay not conclusi,ely be (eter1ine( by his protestations alone. .t i1plies honesty of intention+ an( free(o1 fro1 &nowle(%e of circu1stances which ou%ht to put the hol(er upon in0uiry. 2he essence of %oo( faith lies in an honest belief in the ,ali(ity of one=s ri%ht+ i%norance of a superior clai1+ an( absence of intention to o,erreach another. Applie( to possession+ one is consi(ere( in %oo( faith if he is not aware that there e:ists in his title or 1o(e of ac0uisition any flaw which in,ali(ates it.J49K

Article 440. 2he owner of the lan( on which anythin% has been built+ plante( or sown in ba( faith 1ay (e1an( the (e1olition of the wor&+ or that the plantin% or sowin% be re1o,e(+ in or(er to replace thin%s in their for1er con(ition at the e:pense of the person who built+ plante( or sowe(> or he 1ay co1pel the buil(er or planter to pay the price of the lan(+ an( the sower the proper rent. .n this case+ the sub<ect property wai,e( an( 0uitclai1e( by Dsperan/a to the petitioner an( her husban( in the Affi(a,it was only co,ere( by a ta: (eclaration in the na1e of Dsperan/a. Petitioner (i( not e,en bother to loo& into the ori%in of the sub<ect property an( to probe into the ri%ht of Dsperan/a to relin0uish the sa1e. 2hus+ when petitioner an( her husban( built a house thereon in 1989 they cannot be consi(ere( to ha,e acte( in %oo( faith as they were fully aware that when Dsperan/a e:ecute( an Affi(a,it relin0uishin% in their fa,or the sub<ect property the only proof of Dsperan/a=s ownership o,er the sa1e was a 1ere ta: (eclaration. 2his fact or circu1stance alone was enou%h to put the petitioner an( her husban( un(er in0uiry. $ettle( is the rule that a ta: (eclaration (oes not pro,e ownership. .t is 1erely an in(iciu1 of a clai1 of ownership. Pay1ent of ta:es is not proof of ownership> it is+ at best+ an in(iciu1 of possession in the concept of ownership. 3either ta: receipts nor a (eclaration of ownership for ta:ation purposes is e,i(ence of ownership or of a ri%ht to possess realty when not supporte( by other effecti,e proofs.J40K

-n(er the fore%oin% pro,isions+ the buil(er in %oo( faith can co1pel the lan(owner to 1a&e a choice between appropriatin% the buil(in% by payin% the proper in(e1nity or obli%in% the buil(er to pay the price of the lan(. 2he choice belon%s to the owner of the lan(+ a rule that accor(s with the principle of accession+ i.e.+ that the accessory follows the principal an( not the other way aroun(. D,en as the option lies with the lan(owner+ the %rant to hi1+ ne,ertheless+ is preclusi,e. 9e 1ust choose one. 9e cannot+ for instance+

Bith the fore%oin%+ the petitioner is not entitle( to the ri%hts un(er Article 448 an( 446 as the petitioner is not a buil(er an( possessor in %oo( faith.

B9D*DFO*D+ pre1ises consi(ere(+ the instant Petition is hereby 5D3.D5. 2he 5ecision an( *esolution of the ourt of Appeals in A8;.*. $P 3o. 64970+ (ate( 27 October 2006 an( 29 'une 2007+ respecti,ely+ affir1in% the *2 5ecision (ate( 12 $epte1ber 2000 in i,il ase 3o. 4411 an( (eclarin% the respon(ents the lawful owners an( possessors of the sub<ect property are hereby AFF.*)D5. 3o costs.