RepublicofthePhilippines

SupremeCourt
Manila

THIRDDIVISION

HEIRS OF THE LATE JOAQUIN

LIMENSE, namely: CONCESA
LIMENSE, Surviving Spouse and
DANILO and JOSELITO, both
surnamedLimense,children,
Petitioners,

versus

RITA VDA. DE RAMOS,

RESTITUTO RAMOS, VIRGILIO
DIAZ, IRENEO RAMOS,
BENJAMIN RAMOS,
WALDYTRUDESRAMOSBASILIO,
TRINIDAD RAMOSBRAVO, PAZ
RAMOSPASCUA, FELICISIMA
RAMOSREYES, and JACINTA
RAMOS,
Respondents.
G.R.No.152319

Present:

QUISUMBING,
*
J.,
CARPIO,J.,Chairperson,
CHICONAZARIO,
PERALTA,and
ABAD,
**
JJ.

Promulgated:

October28,2009
XX

DECISION

PERALTA,J.,

ThisisapetitionforreviewoncertiorariunderRule45oftheRulesofCourtseekingtoannulandsetasidethe
Decision
[1]
of the Court of Appeals dated December 20, 2001 in CAG.R. CV No. 33589 affirming in toto the
Decision
[2]
oftheRegionalTrialCourtofManila,Branch15,datedSeptember21,1990inCivilCaseNo.8316128.

Theantecedentfactsareasfollows:

Dalmacio Lozada was the registered owner of a parcel of land identified as Lot No. 12, Block No. 1074 of the
cadastral survey of the City of Manila covered by Original Certificate of Title (OCT) No. 7036 issued at the City of
ManilaonJune14,1927,
[3]
containinganareaof873.80squaremeters,moreorless,locatedinBeataStreet,Pandacan,
Manila.

DalmacioLozadasubdividedhispropertyintofive(5)lots,namely:LotNos.12A,12B,12C,12Dand12E.
Through a Deed of Donation dated March 9, 1932,
[4]
he donated the subdivided lots to his daughters, namely: Isabel,
Salud,Catalina,andFelicidad,allsurnamedLozada.TheDeedofDonationwasregisteredwiththeofficeoftheRegister
ofDeedsofManilaonMarch15,1932.

UnderthesaidDeedofDonation,thelotswereadjudicatedtoDalmacio'sdaughtersinthefollowingmanner:

a.LotNo.12AinfavorofIsabelLozada,marriedtoIsaacLimense
b.LotNo.12BinfavorofCatalinaLozada,marriedtoSoteroNatividad
c.LotNo.12CinfavorofCatalinaLozada,marriedtoSoteroNatividadIsabelLozada,marriedtoIsaac
LimenseandSaludLozada,marriedtoFranciscoRamos,inequalparts
d.LotNo.12DinfavorofSaludLozada,marriedtoFranciscoRamosand
e.LotNo.12EinfavorofIsabelLozada,marriedtoIsaacLimense, and Felicidad Lozada, married to
GalicanoCenteno.

By virtue of the Deed of Donation executed by Dalmacio Lozada, OCT No. 7036, which was registered in his
name,wascancelledand,inlieuthereof,TransferCertificatesofTitle(TCTs)bearingNos.40041,40042,40043,40044,
and 40045 were issued in favor of the donees, except TCT No. 40044, which remained in his name. These new TCTs
wereannotatedatthebackofOCTNo.7036.
[5]

TCTNo.40043,whichcoveredLotNo.12C,wasissuedinthenameofitscoownersCatalinaLozada,married
toSoteroNatividadIsabelLozada,marriedtoIsaacLimenseandSaludLozada,marriedtoFranciscoRamos.Itcovered
anareaof68.60squaremeters,moreorless,wasboundedonthenortheastbyLotNo.12A,onthesouthwestbyCalle
Beata, and on the northwest by Lot No. 12D of the subdivision plan. In 1932, respondents' predecessorininterest
constructedtheirresidentialbuildingonLotNo.12D,adjacenttoLotNo.12C.

OnMay16,1969,TCTNo.96886
[6]
wasissuedinthenameofJoaquinLimensecoveringtheverysameareaof
LotNo.12C.

OnOctober1,1981,JoaquinLimensesecuredabuildingpermitfortheconstructionofahollowblockfenceonthe
boundary line between his aforesaid property and the adjacent parcel of land located at 2759 Beata Street, Pandacan,
Manila, designated as Lot No. 12D, which was being occupied by respondents. The fence, however, could not be
constructedbecauseasubstantialportionofrespondents'residentialbuildinginLotNo.12Dencroacheduponportions
ofJoaquinLimense'spropertyinLotNo.12C.
JoaquinLimensedemandedtheremovaloftheencroachedareahowever,respondentignoredbothoralandwritten
demands.The parties failed to amicably settle the differences between them despite referral to the barangay. Thus, on
March9,1983,JoaquinLimense,dulyrepresentedbyhisAttorneyinFact,TeofistaL.Reyes,institutedaComplaint
[7]
against respondents before the Regional Trial Court (RTC) of Manila, Branch 15, for removal of obstruction and
damages.

Joaquin Limense prayed that the RTC issue an order directing respondents, jointly and severally, to remove the
portionwhichillegallyencroacheduponhispropertyonLotNo.12Cand,likewise,prayedforthepaymentofdamages,
attorneysfeesandcostsofsuit.

Respondents,ontheotherhand,averredintheirAnswer
[8]
thattheywerethesurvivingheirsofFranciscoRamos,
[9]
who,duringhislifetime,wasmarriedtoSaludLozada,oneofthedaughtersofDalmacioLozada,theoriginalowner
ofLotNo.12.Aftersubdividingthesaidlot,DalmacioLozadadonatedLotNo.12CinfavorofhisdaughtersCatalina,
married to Sotero Natividad Isabel, married to Isaac Limense and Salud, married to Francisco Ramos. Being the
surviving heirs of Francisco Ramos, respondents later became coowners of Lot No. 12C. Lot No. 12C has served as
right of way or common alley of all the heirs of Dalmacio Lozada since 1932 up to the present. As a common alley, it
couldnotbeclosedorfencedbyJoaquinLimensewithoutcausingdamageandprejudicetorespondents.

Aftertrialonthemerits,theRTCrenderedaDecision
[10]
datedSeptember21,1990dismissingthecomplaintof
JoaquinLimense.Itruledthatanapparenteasementofrightofwayexistedinfavorofrespondents.Pertinentportionsof
thedecisionreadasfollows:

The Court finds that an apparent easement of right of way exists in favor of the defendants under Article 624 of the Civil
Code.Itcannotbedeniedthatthereisanalleywhichshowsitsexistence.Itisadmittedthatthisalleywasestablishedbytheoriginal
ownerofLot12andthatindividinghisproperty,thealleyestablishedbyhimcontinuedtobeusedactivelyandpassivelyassuch.
Evenwhenthedivisionofthepropertyoccurred,thenonexistenceoftheeasementwasnotexpressedinthecorrespondingtitlesnor
weretheapparentsignofthealleymadetodisappearbeforetheissuanceofsaidtitles.

TheCourtalsofindsthatwhenplaintiffacquiredthelot(12C)whichformsthealley,heknewthatsaidlotcouldserveno
other purpose than as an alley. That is why even after he acquired it in 1969, the lot continued to be used by defendants and
occupantsoftheotheradjoininglotsasanalley.Theexistenceoftheeasementofrightofwaywasthereforeknowntoplaintiffwho
must respect the same in spite of the fact that his transfer certificate of title does not mention the lot of defendants as among those
listed therein as entitled to such right of way. It is an established principle that actual notice or knowledge is as binding as
registration.
[11]

Aggrievedbysaiddecision,JoaquinLimensefiledanoticeofappeal.Therecordsofthecaseweretransmittedto
theCourtofAppeals(CA).DuringthependencyoftheappealwiththeCA,JoaquinLimensediedin1999.
[12]

TheCA,SeventhDivision,inCAG.R.CVNo.33589,initsDecision
[13]
datedDecember20,2001dismissed
theappealandaffirmedintotothedecisionoftheRTC.

Frustratedbythisturnofevents,petitioners,assurvivingheirsofJoaquinLimense,elevatedthecasetothisCourt
viaaPetitionforReviewonCertiorari
[14]
raisingthefollowingissues:

1. DIDTHEHONORABLECOURTOFAPPEALSCOMMITAGRAVEABUSEOFDISCRETIONAMOUNTINGTO
LACKOFJURISDICTION,INHOLDING,LIKETHETRIALCOURTDID,THATRESPONDENTS'LOT12DHAS
ANEASEMENTOFRIGHTOFWAYOVERJOAQUINLIMENSE'SLOT12C?

2. DIDTHEHONORABLECOURTOFAPPEALSCOMMITAGRAVEABUSEOFDISCRETIONAMOUNTINGTO
LACK OF JURISDICTION, IN FAILING TO HOLD, LIKE THE TRIAL COURT DID, THAT THE PROTRUDING
PORTIONS OF RESPONDENTS' HOUSE ON LOT 12D EXTENDING INTO JOAQUIN LIMENSE'S LOT 12C
CONSTITUTEANUISANCEAND,ASSUCH,SHOULDBEREMOVED?

Petitioners aver that the CA erred in ruling that since Lot No. 12C was covered by two TCT's, i.e., TCT Nos.
40043 and 96886, and there was no evidence on record to show how Joaquin Limense was able to secure another title
overanalreadytitledproperty,thenoneofthesetitlesmustbeofdubiousorigin.AccordingtotheCA,TCTNo.96886,
issued in the name of Joaquin Limense, was spurious because the Lozada sisters never disposed of the said property
covered by TCT No. 40043. The CA further ruled that a coownership existed over Lot No. 12C between petitioners
andrespondents.PetitionerscounteredthatTCTNo.96886,beingtheonlyandbestlegitimateproofofownershipover
LotNo.12C,mustprevailoverTCTNo.40043.

RespondentsallegethatitwaspossiblethatTCTNo.96886,inthenameofJoaquinLimense,wasobtainedthru
fraud,misrepresentationorfalsificationofdocumentsbecausethedoneesofsaidpropertycouldnotpossiblyexecuteany
valid transfer of title to Joaquin Limense, as they were already dead prior to the issuance of TCT No. 96886 in 1969.
RespondentsfurtherallegethatpetitionersfailedtoproduceproofsubstantiatingtheissuanceofTCTNo.96886inthe
nameofJoaquinLimense.
Apparently,respondentsarequestioningthelegalityofTCTNo.96886,anissuethatthisCourtcannotpassupon
in the present case. It is a rule that the validity of a torrens title cannot be assailed collaterally.
[15]
Section 48 of
PresidentialDecree(PD)No.1529providesthat:

[a]certificateoftitleshallnotbesubjecttocollateralattack.Itcannotbealtered,modified,orcancelledexceptinadirectproceeding
inaccordancewithlaw.

Inthecaseatbar,theactionfiledbeforetheRTCagainstrespondentswasanactionforremovalofobstructionand
damages. Respondents raised the defense that Joaquin Limense's title could have been obtained through fraud and
misrepresentationinthetrialproceedingsbeforetheRTC.Suchdefenseisinthenatureofacollateralattack,whichisnot
allowedbylaw.

Further, it has been held that a certificate of title, once registered, should not thereafter be impugned, altered,
changed, modified, enlarged or diminished, except in a direct proceeding permitted by law. Otherwise, the reliance on
registeredtitleswouldbelost.Thetitlebecameindefeasibleandincontrovertibleafterthelapseofoneyearfromthetime
ofitsregistrationandissuance.Section32ofPD1529providesthatupontheexpirationofsaidperiodofoneyear,the
decree of registration and the certificate of title shall become incontrovertible. Any person aggrieved by such decree of
registration in any case may pursue his remedy by action for damages against the applicant or other persons responsible
forthefraud.
[16]
Ithas,therefore,becomeanancientrulethattheissueonthevalidityoftitle,i.e.,whetherornotitwas
fraudulentlyissued,canonlyberaisedinanactionexpresslyinstitutedforthatpurpose.
[17]

Inthepresentcase,TCTNo.
96886wasregisteredin1969andrespondentsneverinstitutedanydirectproceedingoractiontoassailJoaquinLimense's
title.

Additionally,anexaminationofTCTNo.40043wouldreadilyshowthatthereisanannotationthatithas
beenCANCELLED.
[18]
A reading of TCT No. 96886 would also reveal that said title is a transfer from TCT No.
48866
[19]
and not TCT 40043. Thus, it is possible that there was a series of transfers effected from TCT No. 40043
priortotheissuanceofTCTNo.96886.Hence,respondents'positionthattheissuanceofTCTNo.96886inthename
ofJoaquinLimenseisimpossible,becausetheregisteredownersofTCTNo.40043werealreadydeadpriorto1969and
couldnothavetransferredthepropertytoJoaquinLimense,cannotbetakenasproofthatTCTNo.96886wasobtained
throughfraud,misrepresentationorfalsificationofdocuments.

FindingsoffactoftheCA,althoughgenerallydeemedconclusive,mayadmitreviewbythisCourtiftheCAfailed
tonoticecertainrelevantfactsthat,ifproperlyconsidered,wouldjustifyadifferentconclusion,andifthejudgmentofthe
CAispremisedonamisapprehensionoffacts.
[20]
Aswiththepresentcase,theCA'sobservationthatTCTNo.96886is
ofdubiousorigin,asTCTNo.40043doesnotappeartohavebeendisposedofbyCatalina,IsabelandSaludLozada,is
improper and constitutes an indirect attack on TCT No. 96886. As we see it, TCT No. 96886, at present, is the best
proofofJoaquinLimensesownershipoverLotNo.12C.Thus,theCAerredinrulingthatrespondentsandpetitioners
coownedLotNo.12C,assaidlotisnowregisteredexclusivelyinthenameofJoaquinLimense.

Due to the foregoing, Joaquin Limense, as the registered owner of Lot 12C, and his successorsininterest, may
enclose or fence his land or tenements by means of walls, ditches, live or dead hedges, or by any other means without
detrimenttoservitudesconstitutedthereon.
[21]

However, although the owner of the property has the right to enclose or fence his property, he must respect
servitudesconstitutedthereon.Thequestionnowiswhetherrespondentsareentitledtoaneasementofrightofway.

Petitioners contend that respondents are not entitled to an easement of right of way over Lot No. 12C, because
theirLotNo.12DisnotdulyannotatedatthebackofTCTNo.96886whichwouldentitlethemtoenjoytheeasement,
unlikeLotNos.12A1,12A2,12A3,12A4,12A5,and12A6.Respondents,ontheotherhand,allegethatthey
areentitledtoaneasementofrightofwayoverLotNo.12C,whichhasbeencontinuouslyusedasanalleybytheheirs
ofDalmacioLozada,theresidentsintheareaandthepublicingeneralfrom1932uptothepresent.Sincepetitionersare
fullyawareofthelongexistenceofthesaidalleyoreasementofrightofway,theyareboundtorespectthesame.

Asdefined,aneasementisarealrightonanother'sproperty,corporealandimmovable,wherebytheownerofthe
lattermustrefrainfromdoingorallowingsomebodyelsetodoorsomethingtobedoneonhisproperty,forthebenefitof
anotherpersonortenement.
[22]

Easementsmaybecontinuousordiscontinuous,apparentornonapparent.

Continuous easements are those the use of which is or may be incessant, without the intervention of any act of
man. Discontinuous easements are those which are used at intervals and depend upon the acts of man. Apparent
easements are those which are made known and are continually kept in view by external signs that reveal the use and
enjoymentofthesame.Nonapparenteasementsarethosewhichshownoexternalindicationoftheirexistence.
[23]

Inthepresentcase,theeasementofrightofwayisdiscontinuousandapparent.Itisdiscontinuous,astheuse
depends upon the acts of respondents and other persons passing through the property. Being an alley that shows a
permanentpathgoingtoandfromBeataStreet,thesameisapparent.

Beingadiscontinuousandapparenteasement,thesamecanbeacquiredonlybyvirtueofatitle.
[24]

Inthecaseatbar,TCTNo.96886,issuedinthenameofJoaquinLimense,doesnotcontainanyannotation
that Lot No. 12D was given an easement of right of way over Lot No. 12C. However, Joaquin Limense and his
successorsininterests are fully aware that Lot No. 12C has been continuously used and utilized as an alley by
respondentsandresidentsintheareaforalongperiodoftime.

JoaquinLimense'sAttorneyinFact,TeofistaL.Reyes,testifiedthatrespondentsandseveralotherresidentsinthe
areahavebeenusingthealleytoreachBeataStreetsince1932.Thus:

Atty.ManuelB.Tomacruz:
Q: Mrs. Witness, by virtue of that Deed of Donation you claim that titles were issued to the children of Dalmacio Lozada
namelySaludLozada,CatalinaLozadaandIsabelLozada,isthatright?
A:Yes,sir.

Q:Andafterthesaidpropertywasadjudicatedtohissaidchildrenthelatterconstructedtheirhousesontheirlots.
A:Yes,sir.

Q:Asamatteroffact,thehereindefendantshaveconstructedtheirhousesonthepremisesallotedtothemsincetheyear1932?
A:Yes,sir,theywereabletoconstructtheirhousefrontingBeataStreet.

Q:Andthathousetheyhaveconstructedontheirlotin1932isstillexistingtoday?
A:Yes,sirandtheystillusedthealleyinquestionandtheyaresupposedtouseBeataStreetbuttheyarenotusingBeataStreet.

Q:Theyareusingthealley?
A:Yes,sir,theyareusingthealleyandtheydonotpassthroughBeataStreet.

Q:Andtheyhavebeenusingthealleysince1932uptothepresent?
A:Yes,sirtheyhavebeenusingthealleysincethattime.ThatwastheirmistakeandtheyshouldbeusingBeataStreetbecause
theyarefrontingBeataStrret.

Q:Asamatteroffact,itisnotonlyhereindefendantswhohavebeenusingthatalleysince1932uptothepresent?
A:Yes,sirtheyareusingthealleyuptonow.

Q:Asamatteroffact,inthispicturemarkedasExh.C1thealleyisveryapparent.Thisisthealley?
A:Yes,sir.

Q:Andtherearehousesoneithersideofthisalley?
A:Yes,sir.

Q:Asamatteroffact,alltheresidentsoneithersideofthealleyarepassingthroughthisalley?
A:Yes,sir,becausetheothershavepermittousethisalleyandtheyarenowallowedtousethealleybuttheRamos'sfamilyare
now[not]allowedtousethisalley.
[25]

InMendozav.Rosel,
[26]
thisCourtheldthat:

Petitionersclaimthatinasmuchastheirtransfercertificatesoftitledonotmentionanylienorencumbranceontheirlots,they
arepurchasersingoodfaithandforvalue,andassuchhavearighttodemandfromrespondentssomepaymentfortheuseofthe
alley.However,theCourtofAppealsfound,asafact,thatwhenrespondentsacquiredthetwolotswhichformthealley,theyknew
thatsaidlotscouldservenootherpurposethanasanalley.Theexistenceoftheeasementofrightofwaywasthereforeknownto
petitioners who must respect the same, in spite of the fact that their transfer certificates of title do not mention any burden or
easement.Itisanestablishedprinciplethatactualnoticeorknowledgeisasbindingasregistration.
Everybuyerofaregisteredlandwhotakesacertificateoftitleforvalueandingoodfaithshallholdthesame
free of all encumbrances except those noted on said certificate. It has been held, however, that where the party has
knowledge of a prior existing interest that was unregistered at the time he acquired a right to the same land, his
knowledgeofthatpriorunregisteredinteresthastheeffectofregistrationastohim.
[27]

Inthecaseatbar,LotNo.12ChasbeenusedasanalleyeversinceitwasdonatedbyDalmacioLozadato
hisheirs.ItisundisputedthatpriortoandaftertheregistrationofTCTNo.96886,LotNo.12Chasservedasarightof
wayinfavorofrespondentsandthepublicingeneral.WequotefromtheRTC'sdecision:

xxxItcannotbedeniedthatthereisanalleywhichshowsitsexistence.Itisadmittedthatthisalleywasestablishedbytheoriginal
ownerofLot12andthatindividinghispropertythealleyestablishedbyhimcontinuedtobeusedactivelyandpassivelyassuch.
Evenwhenthedivisionofthepropertyoccurred,thenonexistenceoftheeasementwasnotexpressedinthecorrespondingtitlesnor
weretheapparentsignofthealleymadetodisappearbeforetheissuanceofsaidtitles.

TheCourtalsofindsthatwhenplaintiffacquiredthelot(12C)whichformsthealley,heknewthatsaidlotcouldserveno
other purpose than as an alley. That is why even after he acquired it in 1969 the lot continued to be used by defendants and
occupantsoftheotheradjoininglotsasanalley.xxx
[28]

Thus,petitionersareboundbytheeasementofrightofwayoverLotNo.12C,eventhoughnoregistrationofthe
servitudehasbeenmadeonTCTNo.96886.

However,respondentsrighttohaveaccesstothepropertyofpetitionersdoesnotincludetherighttocontinually
encroach upon the latters property. It is not disputed that portions of respondents' house on Lot No. 12D encroach
upon Lot No. 12C. Geodetic Engineer Jose Agres, Jr. testified on the encroachment of respondents' house on Lot No.
12C,whichhesurveyed.
[29]
Inordertosettletherightsofthepartiesrelativetotheencroachment,Weshoulddetermine
whetherrespondentswerebuildersingoodfaith.

Good faith is an intangible and abstract quality with no technical meaning or statutory definition and it
encompasses, among other things, an honest belief, the absence of malice and the absence of a design to defraud or to
seekanunconscionableadvantage.Anindividualspersonalgoodfaithisaconceptofhisownmindand,therefore,may
notconclusivelybedeterminedbyhisprotestationsalone.Itimplieshonestyofintention,andfreedomfromknowledge
of circumstances which ought to put the holder upon inquiry. The essence of goodfaith lies in an honest belief in the
validity of ones right, ignorance of a superior claim, and absence of intention to overreach another. Applied to
possession,oneisconsideredingoodfaithifheisnotawarethatthereexistsinhistitleormodeofacquisitionanyflaw
whichinvalidatesit.
[30]

Goodfaithisalwayspresumed,anduponhimwhoallegesbadfaithonthepartofthepossessorreststheburdenof
proof.
[31]
Itisamatterofrecordthatrespondents'predecessorininterestconstructedtheirresidentialbuildingonLotNo.
12D,adjacenttoLotNo.12C,in1932.
[32]
Respondents'predecessorininterestownedthe1/3portionofLotNo.12
CatthetimethepropertywasdonatedtothembyDalmacioLozadain1932.TheDeedofDonationexecutedbythelate
DalmacioLozada,datedMarch9,1932,specificallyprovidesthat:

Iherebygrant,cedeanddonateinfavorofCatalinaLozadamarriedtoSoteroNatividad,IsabelLozadamarriedto
IsaacSimenseandSaludLozadamarriedtoFranciscoRamos,allFilipinos,oflegalage,theparceloflandknownasLotNo.12C,
inequalparts.
[33]

TheportionsofLotNo.12D,particularlytheoverhang,covering1meterinwidthand17metersinlengththe
stairsandtheconcretestructuresareallwithinthe1/3shareallotedtothembytheirdonorDalmacioLozadaand,hence,
therewasabsenceofashowingthatrespondentsactedinbadfaithwhentheybuiltportionsoftheirhouseonLotNo.12
C.

Usingtheaboveparameters,weareconvincedthatrespondents'predecessorsininterestactedingoodfaithwhen
they built portions of their house on Lot 12C. Respondents being builders in good faith, we shall now discuss the
respectiverightsofthepartiesrelativetotheportionsencroachinguponrespondents'house.

Articles448and546oftheNewCivilCodeprovide:

Art. 448. The owner of the land on which anything has been built, sown or planted in goodfaith, shall have the right to
appropriate as his own the works, sowing or planting, after payment of the indemnity provided for in Articles 546 and 548, or to
obligetheonewhobuiltorplantedtopaythepriceoftheland,andtheonewhosowed,theproperrent.However,thebuilderor
plantercannotbeobligedtobuythelandifitsvalueisconsiderablymorethanthatofthebuildingortrees.Insuchcase,heshallpay
reasonablerent,iftheownerofthelanddoesnotchoosetoappropriatethebuildingortreesafterproperindemnity.Thepartiesshall
agreeuponthetermsoftheleaseand,incaseofdisagreement,thecourtshallfixthetermsthereof.

Art.546.Necessaryexpensesshallberefundedtoeverypossessorbutonlythepossessoringoodfaithmayretainthething
untilhehasbeenreimbursedtherefor.
Usefulexpensesshallberefundedonlytothepossessoringoodfaith with the same right of retention, the person who has
defeatedhiminthepossessionhavingtheoptionofrefundingtheamountoftheexpensesorofpayingtheincreaseinvaluewhich
thethingmayhaveacquiredbyreasonthereof.

InSpousesDelCampov.Abesia,
[34]
thisprovisionwasappliedtoonewhosehouse,despitehavingbeenbuiltat
thetimehewasstillcoowner,overlappedwiththelandofanother.Inthatcase,thisCourtruled:

ThecourtaquocorrectlyheldthatArticle448oftheCivilCodecannotapplywhereacoownerbuilds,plantsorsowson
thelandownedincommonforthenhedidnotbuild,plantorsowuponthelandthatexclusivelybelongstoanotherbutofwhichhe
is a coowner. The coowner is not a third person under the circumstances, and the situation is governed by the rules of co
ownership.

However, when, as in this case, the ownership is terminated by the partition and it appears that the house of defendants
overlaps or occupies a portion of 5 square meters of the land pertaining to plaintiffs which the defendants obviously built in good
faith,thentheprovisionsofArticle448ofthenewCivilCodeshouldapply.xxx
[35]

Inotherwords,whenthecoownershipisterminatedbyapartition,anditappearsthatthehouseofanerstwhileco
ownerhasencroacheduponaportionpertainingtoanothercoowner,buttheencroachmentwasingoodfaith,thenthe
provisionsofArticle448shouldapplytodeterminetherespectiverightsoftheparties.Inthiscase,thecoownershipwas
terminatedduetothetransferofthetitleofthewholepropertyinfavorofJoaquinLimense.

Undertheforegoingprovision,petitionershavetherighttoappropriatesaidportionofthehouseofrespondents
uponpaymentofindemnitytorespondents,asprovidedforinArticle546oftheCivilCode.Otherwise,petitionersmay
obligerespondentstopaythepriceofthelandoccupiedbytheirhouse.However,ifthepriceaskedforisconsiderably
much more than the value of the portion of the house of respondents built thereon, then the latter cannot be obliged to
buytheland.Respondentsshallthenpaythereasonablerenttopetitionersuponsuchtermsandconditionsthattheymay
agree.Incaseofdisagreement,thetrialcourtshallfixthetermsthereof.Ofcourse,respondentsmaydemolishorremove
thesaidportionoftheirhouse,attheirownexpense,iftheysodecide.
[36]

Thechoicebelongstotheowneroftheland,arulethataccordswiththeprincipleofaccessionthattheaccessory
follows the principal and not the other way around.
[37]
Even as the option lies with the landowner, the grant to him,
nevertheless, is preclusive. He must choose one. He cannot, for instance, compel the owner of the building to instead
removeitfromtheland.
[38]

Theobviousbenefittothebuilderunderthisarticleisthat,insteadofbeingoutrightlyejectedfromtheland,hecan
compel the landowner to make a choice between two options: (1) to appropriate the building by paying the indemnity
requiredbylaw,or(2)tosellthelandtothebuilder.
[39]

Theraisondetreforthisprovisionhasbeenenunciated,thus:

Wherethebuilder,planterorsowerhasactedingoodfaith,aconflictofrightsarisesbetweentheowners,andit
becomes necessary to protect the owner of the improvements without causing injustice to the owner of the land. In view of the
impracticabilityofcreatingastateofforcedcoownership,thelawhasprovidedajustsolutionbygivingtheownerofthelandthe
optiontoacquiretheimprovementsafterpaymentoftheproperindemnity,ortoobligethebuilderorplantertopayforthelandand
the sower the proper rent. He cannot refuse to exercise either option. It is the owner of the land who is authorized to exercise the
option,becausehisrightisolder,andbecause,bytheprincipleofaccession,heisentitledtotheownershipoftheaccessorything.
[40]
In accordance with Depra v. Dumlao,
[41]
this case must be remanded to the trial court to determine matters
necessary for the proper application of Article 448 in relation to Article 546. Such matters include the option that
petitioners would take and the amount of indemnity that they would pay, should they decide to appropriate the
improvementsonthelots.

Anent the second issue, although it may seem that the portions encroaching upon respondents' house can be
considered a nuisance, because it hinders petitioners' use of their property, it cannot simply be removed at respondents'
expense,asprayedforbypetitioner.Thisisbecauserespondentsbuiltthesubjectencroachmentingoodfaith,andthelaw
affordsthemcertainrightsasdiscussedabove.

WHEREFORE,thepetitionisDENIED,theDecisionoftheCourtofAppealsdatedDecember20,2001inCA
G.R.CVNo.33589isAFFIRMEDwiththefollowingMODIFICATIONS:

1. No coownership exists over Lot No. 12C, covered by TCT No. 96886, between petitioners and
respondents.

2.ThecaseisREMANDEDtotheRegionalTrialCourt,Branch15,Manila,forfurtherproceedingswithout
furtherdelaytodeterminethefactsessentialtotheproperapplicationofArticles448and546oftheCivilCode.
SOORDERED.

DIOSDADOM.PERALTA
AssociateJustice

WECONCUR:

LEONARDOA.QUISUMBING
AssociateJustice

ANTONIOT.CARPIOMINITAV.CHICONAZARIO
AssociateJusticeAssociateJustice
Chairperson

ROBERTOA.ABAD
AssociateJustice

ATTESTATION

IattestthattheconclusionsintheaboveDecisionhadbeenreachedinconsultationbeforethecasewasassignedto
thewriteroftheopinionoftheCourtsDivision.

ANTONIOT.CARPIO
AssociateJustice
ThirdDivision,Chairperson

CERTIFICATION

PursuanttoSection13,ArticleVIIIoftheConstitutionandtheDivisionChairpersonsAttestation,Icertifythatthe
conclusionsintheaboveDecisionwerereachedinconsultationbeforethecasewasassignedtothewriteroftheopinion
oftheCourtsDivision.

REYNATOS.PUNO
ChiefJustice

*
DesignatedtositasanadditionalmemberinlieuofAssociateJusticeAntonioEduardoB.NachuraperSpecialOrderNo.755datedOctober12,2009.
**
DesignatedtositasanadditionalmemberinlieuofAssociateJusticePresbiteroJ.Velasco,Jr.perSpecialOrderNo.753datedOctober12,2009.
[1]
PennedbyAssociateJusticeRebeccadeGuiaSalvador,withAssociateJusticesEugenioS.LabitoriaandTeodoroP.Regino,concurringrollo,pp.2935.
[2]
Id.at5255.
[3]
Records,p.231.
[4]
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[5]
Id.at231.
[6]
Id.at183.
[7]
Id.at15.
[8]
Id.at1013.
[9]
Intheiranswer,respondentsreferredtoFranciscoRamosasFranciscoRamos,Sr.
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Records,pp.311314.
[11]
Id.at314.
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NewCivilCode,Art.430.
[22]
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[23]
NewCivilCode,Art.615.
[24]
NewCivilCode,Art.622.
[25]
TSN,May9,1990,pp.1315.
[26]
74Phil.84(1943).(Emphasissupplied).
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[31]
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[32]
DirectExaminationofMs.RitaVda.deRamosbyAtty.Meneses,TSN,October12,1987,p.11.
Q:Howaboutthelandwhichwasdonatedtothedefendantstherein,namelyLotNo.12D,whathappenedtothisland?
A:Thatiswhereourhouseislocated.
Q:Whendidyouconstructyourhouseonthatland?
A:Sometimein1932.
Q:Andthathouseisstillexistingtoday?
A:Yes,sir.
[33]
Records,p.228.(Emphasissupplied.)
[34]
No.L49219,April15,1988,160SCRA379.
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[41]
221Phil.168(1985),citedinMacasaetv.Macasaet,G.R.Nos.15439192,September30,2004,439SCRA625.