ACCESSION CASES

Bachrach Motor Co., Inc. v. Talisay Silay Milling Co.

FACTS: On December 22, 1923, the Talisay-Silay Milling Co., Inc., was indebted to
the Philippine National Bank. To secure the payment of its debt, it succeeded in
inducing its planters, among whom, was Mariano Lacson Ledesma, to mortgage their
land to the creditor bank. And in order to compensate those planters for the risk they
were running with their property under the mortgage, the aforesaid central, by a
resolution passed on that same date, i.e., December 22, 1923, undertook to credit the
owners of the plantation thus mortgaged every year with a sum equal to two per
centum of the debt secured according to yearly balance, the payment of the bonus
being made at once, or in part from time to time, as soon as the central became free of
its obligations to the aforesaid bank, and of those contracted by virtue of the contract
of supervision, and had funds which might be so used, or as soon as it obtained from
said bank authority to make such payment.
Bachrach Motor Co., Inc. filed a complaint against the Talisay-Silay Milling Co., Inc.,
for the delivery of the amount P13,850 or promissory notes or other instruments or
credit for that sum payable on June 30, 1930, as bonus in favor of Mariano Lacson
Ledesma.
The Philippine National Bank filed a third party claim alleging a preferential right to
receive any amount which Mariano Lacson Ledesma might be entitled to from the
Talisay-Silay Milling Co. as bonus, because that would be civil fruits of the land
mortgaged to said bank by said debtor for the benefit of the central referred to, and by
virtue of a deed of assignment, and praying that said central be ordered to delivered
directly to the intervening bank said sum on account of the latter's credit against the
aforesaid Mariano Lacson Ledesma.
ISSUE: Whether or not the bonus in question is civil fruits
HELD: No. The said bonus bears no immediate, but only a remote accidental relation
to the land mentioned, having been granted as compensation for the risk of having
subjected one's land to a lien in favor of the bank, for the benefit of the entity granting
said bonus. If this bonus be income or civil fruits of anything, it is income arising
from said risk, or, if one chooses, from Mariano Lacson Ledesma's generosity in
facing the danger for the protection of the central, but certainly it is not civil fruits or
income from the mortgaged property. Hence, the amount of the bonus, according to
the resolution of the central granting it, is not based upon the value, importance or any
other circumstance of the mortgaged property, but upon the total value of the debt
thereby secured, according to the annual balance, which is something quite distinct
from and independent of the property referred to.
Ignacio v. Hilario
FACTS: This case concerns the ownership of a parcel of land, partly rice-land and
partly residential. The lower court rendered judgment holding plaintiffs as the legal
owners of the whole property but conceding to defendants the ownership of the

houses and granaries built by them on the residential portion with the rights of a
possessor in good faith, in accordance with article 361 of the Civil Code.
Subsequently, the plaintiffs prayed for an order of execution alleging that since they
chose neither to pay defendants for the buildings nor to sell to them the residential lot,
said defendants should be ordered to remove the structure at their own expense and to
restore plaintiffs in the possession of said lot. Defendants objected to this motion
which, after hearing, was granted by Judge Natividad. Hence, this petition by
defendants praying for (a) a restraint and annulment of the order of execution issued
by Judge Natividad; (b) an order to compel plaintiffs to pay them the sum of P2,000
for the buildings, or sell to them the residential lot for P45; or (c), a rehearing of the
case for a determination of the rights of the parties upon failure of extra-judicial
settlement.
ISSUE: Whether the respondent Court erred in its judgment.
HELD: Yes. The Civil Code provides:
ART. 361. The owner of land on which anything has been built, sown or planted in
good faith, shall have the right to appropriate as his own the work, sowing or planting,
after the payment of the indemnity stated in articles 453 and 454, or to oblige the one
who built or planted to pay the price of the land, and the one who sowed, the proper
rent.
ART. 453. Necessary expenses shall be refunded to every possessor; but only the
possessor in good faith may retain the thing until such expenses are made good to
him.
Useful expenses shall be refunded to the possessor in good faith with the same right
of retention, the person who has defeated him in the possession having the option of
refunding the amount of the expenses or paying the increase in value which the thing
may have acquired in consequence thereof.
The owner of the building erected in good faith on a land owned by another, is
entitled to retain the possession of the land until he is paid the value of his building,
under article 453. The owner of the land, upon the other hand, has the option, under
article 361, either to pay for the building or to sell his land to the owner of the
building. But he cannot, as respondents here did, refuse both to pay for the building
and to sell the land and compel the owner of the building to remove it from the land
where it is erected. He is entitled to another motion only when, after having chosen to
sell his land, the other party fails to pay for the same.
The Court holds, therefore, that the order of Judge Natividad compelling defendantspetitioners to remove their buildings from the land belonging to plaintiffs-respondents
only because the latter chose neither to pay for such buildings not to sell the land, is
null and void, for it amends substantially the judgment sought to be executed and is,
furthermore, offensive to articles 361 and 453 of the Civil Code.

Ignao v. Intermediate Appellate Court

FACTS: Petitioner Florencio Ignao and his uncles Juan Ignao and Isidro Ignao were
co-owners of a 534sqm land located in Cavite. Pursuant to an action for partition filed
by petitioner, the CFI of Cavite directed the partition of the said land. A total of 133.5
sqm was allotted to the petitioners uncles while the remaining 266.5 was allotted to
the petitioner. However, when Juan and Isidro built their houses they encroached upon
a portion of land belonging to Florencio. A geodetic engineer surveyed the land and it
was found out that Juan and Isidro occupied a total of 101sqm of Florencios lot.
The trial court which based its decision on Article 448 of the Civil Code, ruled that
Florencio should have the choice to either appropriate to himself that part of the house
standing on his lot or to require Juan and Isidro to pay the price of the land. But since
the first option seems to be impractical, it ordered to sell to Juan and Isidro those
portions occupied by them because it is the workable solution. Upon appeal
petitioner contends that Article 448 cannot be applied because they are co-owners of
he subject property. However, the appellate court affirmed in toto the decision of the
trial court.
ISSUE: Whether or not Article 448 of the Civil Code is applicable in the case at bar.
HELD: Yes. It is true that Article 448 cannot be applied where a co-owner builds upon
a land owned in common. However, in the case at bar, the co-ownership has already
been terminated by virtue of the partition, thus, Article 448 now applies since the
builder is not anymore considered as an owner of the land where the house was built.
As to the workable solution applied by the lower court, the same cannot be upheld
because Article 448 clearly states that the right of choice belongs to the land owner
and not upon the builder and the courts. Thus, whether it might seem impractical, the
landowner may choose to appropriate the improvements.
Filipinas Colleges, Inc. v. Garcia Timbang, et. al.,
FACTS: After appropriate proceedings, the Court of Appeals held, among other
things, that Filipinas Colleges, Inc. are declared to have acquired the rights of the
spouses Timbang in the questioned lots, they are ordered to pay the spouses Timbang
in the amount of P15,807.90 plus such other amount which said spouses might have
paid or had to pay. On the other hand, Maria Gervacio Blas was also declared to be a
builder in good faith of the school building constructed in the lot in question and was
entitled to be paid the amount of P19,000.00 for the same. Also, in case that Filipinas
Colleges, Inc. failed to deposit the value of the land, which after liquidation was fixed
at P32,859.34, within the 90-day period set by the Court, Filipinas Colleges would
lose all its rights to the land and the spouses Timbang would then become the owners
thereof. If that is the case, the Timbangs are ordered to make known to the court their
option under Article 448 of the Civil Code whether they would appropriate the
building in question, in which even they would have to pay Filipinas Colleges, Inc.
the sum of P19,000.00, or would compel the latter to acquire the land and pay the
price thereof. Filipinas Colleges, Inc. failed to pay the sum of P32,859.34 so the
spouses Timbang made known to the court their decision that they had chosen not to
appropriate the building but to compel Filipinas Colleges, Inc., for the payment of the

sum of P32,859,34 which was granted by the Court. As a consequence of which, a

writ of execution was issued. Meanwhile, Blas filed a motion for execution of her
judgment representing the unpaid portion of the price of the house sold to Filipinas
which was granted. Levy was made on the house in virtue of the writs of execution.
Then, the Sheriff of Manila sold the building in public auction in favor of the spouses
Timbang, as the highest bidders. Several motion were the subsequently filed before
the lower court wherein the court held that: a) the Sheriff's certificate of sale covering
a school building sold at public auction was null and void unless within 15 days from
notice of said order spouses Timbang shall pay to Blas the sum of P5,750.00 that the
spouses Timbang had bid for the building at the Sheriff's sale; b) that Filipinas is
owner of 245.00/32,859.34 undivided interest in Lot No. 2-a on which the building
sold in the auction sale is situated; and c) that the undivided interest of the Filipinas in
the lot should be sold to satisfy the unpaid portion of the judgment in favor of Blas
and against Filipinas in the amount of P8,200.00 minus the sum of P5,750.00. The
spouses Timbang contends that because the builder in good faith has failed to pay the
price of the land after the owners thereof exercised their option under Article 448 of
the Civil Code, the builder lost his right of retention provided in Article 546 and that
by operation of Article 445, the spouses Timbang as owners of the land automatically
became the owners ipso facto of the school building.
ISSUE: Whether or not the spouses Timbang automatically become the owners of the
building upon failure of Filipinas to pay the value of the land.
HELD: No. Based on Article 448 and 546 of the New Civil Code, the owner of the
land has the right to choose between appropriating the building by reimbursing the
builder of the value thereof or compelling the builder in good faith to pay for his land.
Even this second right cannot be exercised if the value of the land is considerably
more than that of the building. In addition to the right of the builder to be paid the
value of his improvement, Article 546 gives him the corollary right of retention of the
property until he is indemnified by the owner of the land. There is nothing in the
language of these two articles, 448 and 546, which would justify the conclusion of
appellants that, upon the failure of the builder to pay the value of the land, when such
is demanded by the land-owner, the latter becomes automatically the owner of the
improvement under Article 445. The case of Bataclan vs Bernardo cannot be applied
in this case in the sense that although it is true it was declared therein that in the event
of the failure of the builder to pay the land after the owner thereof has chosen this
alternative, the builder's right of retention provided in Article 546 is lost, nevertheless
there was nothing said that as a consequence thereof, the builder loses entirely all
rights over his own building. Also, in the present case, the Court of Appeals has
already adjudged that appellee Blas is entitled to the payment of the unpaid balance of
the purchase price of the school building. Blas is actually a lien on the school building
are concerned. The order of the lower court directing the Timbang spouses, as
successful bidders, to pay in cash the amount of their bid in the sum of P5,750.00 is
therefore correct.

Manotok Realty v. Tecson

FACTS: Petitioner Manotok Realty filed a complaint against Nilo Madlangawa for
recovery of possession with damages with the Court of First Instance of Manila. Said
court rendered judgment declaring Madlangawa as a builder-possessor in good faith;
ordering the company to recognize the right of Madlangawa to remain in Lot 345,
Block 1, of the Clara Tambunting Subdivision until after he shall have been
reimbursed by the company the sum of P7,500.00, without pronouncement as to costs.
Not satisfied with the trial courts decision, petitioner appealed to the Court of
Appeals and upon affirming the trial courts decision, it elevated the case to the
Supreme Court. On July 13, 1977, the Supreme Court issued a resolution denying
Manotoks petition for lack of merit. Petitioner then filed with the trial court (Judge
Jose H. Tecson), a motion for the approval of the companys exercise of option and
for satisfaction of judgment. However, Judge Tecson denied the motion for approval.
Hence, this petition is filed.
ISSUE: Whether or not respondent Judge Tecson can deny petitioners (landowner)
motion to avail of its option.
HELD: No. There is, therefore, no basis for the respondent judge to deny the
petitioners motion to avail of its option to appropriate the improvements made on its
property. Neither can the judge deny the issuance of a writ of execution because the
private respondent was adjudged a builder in good faith or on the ground of peculiar
circumstances which supervened after the institution of this case, like, for instance,
the introduction of certain major repairs of and other substantial improvements
because the option given by law belongs to the owner of the land. Under Article 448
of the Civil Code, the right to appropriate the works or improvements or to oblige the
one who built or planted to pay the proper price of the land belongs to the owner of
the land. The only right given to the builder in good faith is the right of
reimbursement of necessary expenses for the preservation of the land; the builder
cannot compel the landowner to sell such land to the former.
Bernardo v. Bataclan
FACTS: Bernardo bought a parcel of land from Samonte which was located in Cavite.
In order that he may take possession and occupy the said land, he filed a case in the
CFI for such purpose and the court rendered a favorable decision for Bernardo.
However, when he was supposedly set in occupying the said land, he found Bataclan.
He was within the premises because he was authorized by the previous owners to
clear the land and make the necessary improvements he deems fit, further claiming
that such authorization was granted to him ever since 1922. Since Bataclan was not a
party in the first case, Bernardo filed against him a separate case. Bernardo was
declared owner but the defendant was held to be a possessor in good faith for whom
the work done and improvements made by him should be reimbursed. An appeal to
the decision of the court was filed by both Bernardo and Bataclan. The decision was
modified by lowering the price of the land from P300 to P200 per hectare. Bernardo
was given 30 days to exercise his option, whether to sell the land to Bataclan or to buy
the improvements from him. Bernardo chose the option which would require Bataclan
to pay him the value of the land at the rate of P200 per hectare. However, Bataclan
informed the court that he will not be able to pay for the price of the land. The court
then gave Bataclan 30 days to pay the price of the property and after the lapse of the

period, the land shall be sold in a public auction. After 30 days, the land was sold to
Teodoro at a public auction, after failure of Bataclan to pay within the period the
purchase price.
ISSUE: Whether or not Bataclan has the right of retention over the parcel of land in
question.
HELD: No. Bataclan no longer has lost the right of retention. The option of the owner
was already exercised where he decided that he will just allow the defendant to
purchase the land such that Bataclan was to comply with the option if he wants to
retain the land. From the moment that he told the courts of his inability to pay for the
price of the land, he already lost his right to retain the land.
Ballatan v. Court of Appeals
FACTS: Ballatan, Martinez and Ling are the owners of adjacent lots in Malabon,
Metro Manila. Lot No. 24, 414 square meters in area, is registered in the name of
petitioners Eden Ballatan and spouses Betty Martinez and Chong Chy Ling. Lots Nos.
25 and 26 are registered in the name of respondent Gonzalo Go, Sr. On Lot No. 25,
respondent Winston Go, son of Gonzalo Go, Sr., constructed his house. Adjacent to
Lot No. 26 is Lot No. 27, registered in the name of respondent Li Ching Yao. In 1985,
petitioner Ballatan constructed her house on Lot No. 24. During the construction, she
noticed that the concrete fence and side pathway of the adjoining house of respondent
Winston Go encroached on the entire length of the eastern side of her property. Her
building contractor informed her that the area of her lot was actually less than that
described in the title. Forthwith, Ballatan informed respondent Go of this discrepancy
and his encroachment on her property. Go, however, claimed that his house, including
its fence and pathway, were built within the parameters of his father's lot; and that this
lot was surveyed by Engineer Jose Quedding, the authorized surveyor of the Araneta
Institute of Agriculture (AIA), the owner-developer of the subdivision project. So
Ballatan called the attention of the IAI and after another survey of the land, Engineer
Quedding found that the lot area of petitioner Ballatan was less by few meters and
that of respondent Li Ching Yao, which was three lots away, increased by two meters.
Engineer Quedding declared that he made a verification survey of Lots Nos. 25 and
26 of respondents Go in 1983 and allegedly found the boundaries to have been in their
proper position. He, however, could not explain the reduction in Ballatan's area since
he was not present at the time respondents Go constructed their boundary walls.
On 10 June 1985, petitioner Ballatan made a written demand on respondents Go to
remove and dismantle their improvements on Lot No. 24 but Go refused. So Ballatan
instituted against Go a civil case for recovery of possession the RTC of Malabon
decided in favor of Ballatan, ordering the Go's to vacate the subject portion of Lot No.
24, demolish their improvements and pay petitioner Ballatan actual damages,
attorney's fees and the costs of the suit. Go appealed.
ISSUE: Whether or not Ballatan have a right of remotion.
HELD: All the parties have acted in good faith so Article 448 must apply. Petitioners
are ordered to exercise within thirty (30) days from finality of the decision their
option to either buy the portion of respondents Go's improvement on their Lot No. 24,

or sell to said respondents the portion of their land on which the improvement stands.
If petitioners elect to sell the land or buy the improvement, the purchase price must be
at the prevailing market price at the time of payment. If buying the improvement will
render respondents Go's house useless, then petitioners should sell the encroached
portion of their land to respondents Go. If petitioners choose to sell the land but
respondents Go are unwilling or unable to buy, then the latter must vacate the subject
portion and pay reasonable rent from the time petitioners made their choice up to the
time they actually vacate the premises. But if the value of the land is considerably
more than the value of the improvement, then respondents Go may elect to lease the
land, in which case the parties shall agree upon the terms, the lease. Should they fail
to agree on said terms, the court of origin is directed to fix the terms of the lease.
Spouses Del Ocampo v. Abesia
FACTS: Plaintiffs spouses Concepcion Fernandez and Estanislao Del Campo and
defendant Bernarda Fernandez Abesia are co-owners of parcel of land with an area of
45 square meters and divided in the proportion of 2/3 and 1/3 share each, respectively.
A commissioner, who is appointed by the court, conducted a survey and
recommended that the property be divided into two lots: Lot 1161 A with an area of
30 square meters for the plaintiffs and Lot 1161 B with an area of 15 square meters
for the defendants. However, it was shown in the sketch plan that the house of the
defendant occupied the portion with an area of 5 square meters of Lot 1161 A of
plaintiffs. The parties asked the court to finally settle and adjudicate who among the
parties should take possession of the 5 square meters of land.
ISSUES:
1.) Whether or not Article 448 of the Civil Code, the rights of a builder in good faith,
should be applied to the plaintiff-spouses Del Campo.
2.) Whether or not the house of the defendant Abesia should be removed and
demolished at their expense.
HELD: 1.) Yes. Article 448 of the Civil Code cannot apply where a co-owner builds,
plants or sows on the land owned in common for then, he did not build, plant or sow
upon land that exclusively belongs to another but of which he is a co-owner. 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 co-ownership is
terminated by the partition and it appears that the house of defendants overlaps or
occupies a portion of 5 square meters of the land pertaining to plaintiffs which the
defendants obviously built in good faith, then the provisions of Article 448 of the new
Civil Code should apply. Manresa and Navarro Amandi agree that the said provision
of the Civil Code may apply even when there was co-ownership if good faith has been
established.
2.) It depends. Applying Article 448 of the Civil Code, the plaintiffs have the right to
appropriate said portion of the house of defendants upon payment of indemnity to
defendants as provided for in Article 546 of the Civil Code. Otherwise, the plaintiffs
may oblige the defendants to pay the price of the land occupied by their house.
However, if the price asked for is considerably much more than the value of the
portion of the house of defendants built thereon, then the latter cannot be obliged to
buy the land. The defendant shall then pay the reasonable rent to the plaintiffs upon

such terms and conditions that they may agree. In case of disagreement, the trial court
shall fix the terms thereof. Of course, defendants may demolish or remove the said
portion of their house, at their own expense, if they so decide.
Pacific Farms Inc. v. Esguerra
FACTS: On October 1, 1956 to March 2, 1957 the Company sold and delivered
lumber and construction materials to the Insular Farms Inc. which the latter used in
the construction of the si buildings at its compound in Bolinao, Pangasinan, of the
total procurement price of P15,000.00, the sum of P4,710.18 has not been paid.
Consequently, the Company instituted a civil case to recover the unpaid balance and
the court sustained their claim. The defendant sheriff levied th six buildings. The
Pacific Farms, Inc. filed a suit against the Company and the sheriff asserting
ownership over the levied buildings which it had acquired from the Insular Farms by
virtue of absolute sale executed on March 21, 1958. Pacific prays that the judicial sale
of the six buildings be declared null and void. The trial court rendered judgment
annulling the levy and the certificate of sale. However, it denied the plaintiff's claim
for actual and exemplary damages on the ground that it was not "prepared to find
there was gross negligence or bad faith on the part of any defendants".
ISSUE: Whether or not the application by analogy of the rules of accession would
suffice for a just adjudication.
HELD: Article 447 of the Civil Code contemplates a principal and an accessory; the
land being considered the principal, and the plantings, constructions or works, the
accessory. The owner of the land who in good faith - whether personally or through
another - makes constructions or works thereon, using materials belonging to
somebody else, becomes the owner of the said materials with the obligation however
of paying for their value. On the other hand, the owner of the materials is entitled to
remove them, provided no substantial injury is caused to the landowner. Otherwise, he
has the right to reimbursement for the value of his materials,
Applying article 447 by analogy, the Court consider the buildings as the principal and
the lumber and construction materials that went into their construction as the
accessory. Thus the appellee, if it does own the six buildings, must bear the obligation
to pay for the values of the said materials; the appellant which apparently has no
desire to remove the materials, and, even if it were minded to do so, cannot remove
them without necessarily damaging the buildings has the corresponding right to
recover the value of the unpaid lumber and construction materials.
Technogas Philippines Manufacturing Corporation v. Court of Appeals
FACTS: Technogas purchased a parcel of land from Pariz Industries, Inc. In the same
year, Eduardo Uy purchased the land adjacent to it. The following year, Uy bought
another lot adjoining the lot of Technogas. Portions of the buildings and wall bought
by Technogas together with the land from Pariz Industries are occupying a portion of
Uys adjoining land. The knowledge of some encroachment was only made known to
both parties after their parties of their respective parcels of land.
ISSUES:

1.)Whether or not petitioner Technogas Philippines is a possessor in bad faith.

2.)Whether or not petitioner Technogas Philippines has stepped into the shoes of the
seller.
HELD: 1.) No. Unless one is versed in the science of surveying, no one can
determine the precise extent or location of his property by merely examining his paper
title. There is no question in that when Technogas purchased the land from Pariz
Industries, the buildings and other structures were already in existence. Furthermore,
it is not clear as to who actually built these structures but it can be assumed that the
predecessor-in-interest of Technogas, Pariz Industries, did so. An article 527 of the
New Civil Code presumes good faith. Since no proof exists to show that the builder
built the encroaching structures in bad faith, the structures should be presumed to
have been built in good faith. Good faith consists in the belief of the builder that the
land he is building on is his, and his ignorance of any defect or flaw in his title.
Furthermore, possession acquired in good faith does not lose this character except in
case and from the moment facts exist which show that the possessor is not aware that
he possesses the thing improperly or wrongfully. The good faith ceases from the
moment the defects in the title are made known to the possessor, by extraneous
evidence or by suit for recovery of the property of the true owner.
2.) Yes. Has been shown, contrary as to the good faith of Technogas has not been
overthrown. Similarly, upon delivery of the property to Pariz Industries, as seller, to
Technogas, as buyer, the latter acquired ownership of the property. Consequently,
Technogas is deemed to have stepped into the shoes of the seller with regard to all the
rights of ownership of the property over the immovable sold, including the right to
compel Uy to exercise either of the two options under Article 448 of the New Civil
Code. Thus, the landowners exercise of his option can only take place after the
builder shall have to know the intrusion in short, when both parties shall have
become aware of it. Only then will the occasion for exercising the option arise, for it
is only then that both parties will have been aware that a problem exists with regard to
their property rights.
Germiniano v. Court of Appeals
FACTS: This is a petition for review on certiorari which has its origins in Civil Case
No. 9214 of Branch 3 of the Municipal Trial Court in Cities (MTCC) in Dagupan City
for unlawful detainer and damages. During the pre-trial conference, the parties agreed
to confine the issues to: (1) whether there was an implied renewal of the lease which
expired in November 1985; (2) whether the lessees were builders in good faith and
entitled to reimbursement of the value of the house and improvements; and (3) the
value of the house.
On the first issue, the court held that since the petitioners' mother was no longer the
owner of the lot in question at the time the lease contract was executed in 1978, in
view of its acquisition by Maria Lee as early as 1972, there was no lease to speak of,
much less, a renewal thereof. And even if the lease legally existed, its implied renewal
was not for the period stipulated in the original contract, but only on a month-tomonth basis pursuant to Article 1687 of the Civil Code. The refusal of the petitioners'
mother to accept the rentals starting January 1986 was then a clear indication of her
desire to terminate the monthly lease. As regard the petitioners' alleged failed promise

to sell to the private respondents the lot occupied by the house, the court held that
such should be litigated in a proper case before the proper forum, not an ejectment
case where the only issue was physical possession of the property.
The court resolved the second issue in the negative, holding that Articles 448 and 546
of the Civil Code, which allow possessors in good faith to recover the value of
improvements and retain the premises until reimbursed, did not apply to lessees like
the private respondents, because the latter knew that their occupation of the premises
would continue only during the life of the lease. Besides, the rights of the private
respondents were specifically governed by Article 1678, which allow reimbursement
of up to one-half of the value of the useful improvements, or removal of the
improvements should the lessor refuse to reimburse.
On the third issue, the court deemed as conclusive the private respondents' allegation
that the value of the house and improvements was P180,000.00, there being no
controverting evidence presented.
On appeal by the private respondents, the RTC of Dagupan City reversed the trial
court's decision.
ISSUE: Whether or not Article 448 or Article 1678 of the Civil Code should apply in
the instant case.
HELD: In this case, both parties admit that the land in question was originally owned
by the petitioners' mother. The land was allegedly acquired later by one Maria Lee by
virtue of an extrajudicial foreclosure of mortgage. Lee, however, never sought a writ
of possession in order that she gain possession of the property in question. The
petitioners' mother therefore remained in possession of the lot. It has been said that
while the right to let property is an incident of title and possession, a person may be
lessor and occupy the position of a landlord to the tenant although he is not the owner
of the premises let. There is no need to apply by analogy the provisions of Article 448
on indemnity as was done in Pecson vs. Court of Appeals, because the situation
sought to be avoided and which would justify the application of that provision, is not
present in this case. Suffice it to say, "a state of forced co-ownership" would not be
created between the petitioners and the private respondents. For, as correctly pointed
out by the petitioners, the right of the private respondents as lessees is governed by
Article 1678 of the Civil Code which allows reimbursement to the extent of one-half
of the value of the useful improvements.
It must be stressed, however, that the right to indemnity under Article 1678 of the
Civil Code arises only if the lessor opts to appropriate the improvements. Since the
petitioners refused to exercise that option the private respondents cannot compel them
to reimburse the one-half value of the house and improvements. Neither can they
retain the premises until reimbursement is made. The private respondents' sole right
then is to remove the improvements without causing any more impairment upon the
property leased than is necessary.
Tan Queto v. CA

Facts: Restituta Tagalinar Guangco de Pombuena received the questioned lot (Lot
304-B of the Cadastre Survey of the Municipality of Centro, Misamis Occidental)
either as a purported donation or by way of purchase on 11 February 1927 for P50.00
as the alleged consideration thereof. The transaction took place during her mothers
lifetime (her father having predeceased the mother) and consummated while Restituta
was already married to her husband Juan Pombuena. On 22 January 1935, Juan filed
an application of Torrens title over the land for himself and his supposed co-owner
Restituta. On 22 November 1938, a decision was promulgated (GLRC 1638,
Cadastral Case 12) pronouncing Juan (married to Restituto) as the owner of the land.
On 22 September 1949 a contract of lease over the lot was entered into between
Pershing Tan Queto and Restituta (with the consent of her husband) for a period of 10
years.
Meanwhile, On 27 December 1960 Restituta sued Tan Queto for unlawful detainer
(the lease contract having expired) before the Municipal Court of Ozamis City.
On 22 April 1962, as a consequence of the cadastral case, an OCT was issued in
Juans name. On 10 October 1962, Tan Queto and Juan entered into a barter
agreement whereby Tan Queto became the owner of the disputed lot, and the spouses
in turn became the owners of a parcel of land with the house constructed thereon
previously owned (that is, before the barter) by Tan Queto. Thereafter, Tan Queto
constructed on the disputed land a concrete building, without any objection on the part
of Restituta.
The Municipal court ruled in favor of the spouses in the unlawful detainer case; but
on appeal in the CFI, the entire case was dismissed because of an understanding
(barter) entered into by Juan and Tan Queto.
Restituta sued both Juan and Tan Queto for reconveyance of the title over the
registered but disputed lot, for annulment of the barter, and for recovery of the land
with damages. The CFI and the Court of Appeals found the disputed lot as
paraphernal and that Tan Queto was a builder in bad faith. These findings were
regarded by the Supreme Court as findings of facts and thus ordinarily conclusive
upon the Court. Tan Queto filed for a motion for reconsideration of the Supreme
Court decision dated 16 May 1983.
The Supreme Court set aside its decision promulgated on 16 May 1983, and rendered
a new one declaring the questioned lot together with the building thereon, as Tan
Quetos exclusive property; without costs.
1. Findings of the lower courts ordinary conclusive upon the Court; exception, if
erroneous
The findings of the Court of First Instance and the Court of Appeals were regarded by
the Supreme Court as findings of facts and thus ordinarily conclusive upon the Court.
Assuming they are factual findings, still if they are erroneous inferences from certain
facts, they cannot bind the Court.
2. Land not transferred to Restituta by donation, for it to be paraphernal

The oral donation of the lot cannot be a valid donation inter-vivos because it was not
executed in a public instrument (Art. 749, Civil Code), nor as a valid donation mortis
causa for the formalities of a will were not complied with. The allegation that the
transfer was a conveyance to Restituta of her hereditary share in the estate of her
mother (or parents) cannot be sustained for the contractual transmission of future
inheritance is generally prohibited.
3. Land is conjugal, not paraphernal; Ownership by tradition
The land is conjugal, not paraphernal. Ownership was acquired by the spouses by
tradition (delivery) as a consequence of the contract of sale (See Art. 712, Civil Code)
with P50.00 (then a considerable amount) as the cause or consideration of the
transaction. The lot is therefore conjugal, having been acquired by the spouses thru
onerous title (the money used being presumably conjugal, there being no proof that
Restituta had paraphernal funds of her own).
4. Sale not fictitious nor simulated; Allegation of simulation cannot prejudice a
stranger
The sale cannot be said to be fictitious or simulated (and therefore void) as there was
a valid consideration therefor. Assuming that there had indeed been a simulation, the
parties thereto cannot use said simulation to prejudice a stranger to said strategem
(like petitioner herein).
5. Tan Queto recognized Restituta as an owner, not the owner
Tan Queto admitted Restituta was an owner (not the owner) of the lot in his Answer,
and this is true, for she was a co-owner (with Juan, and therefore an owner.) There
is no admission of Restitutas exclusive ownership.
6. Assuming Tan Queto recognized Restituta as the owner; bad faith of one neutralizes
the bad faith of the other
Even assuming that despite registration of the lot as conjugal, Tan Queto nursed the
belief that the lot was actually Restitutas (making him in bad faith), still Restitutas
failure to prohibit him from building despite her knowledge that construction was
actually being done, makes her also in bad faith. The net resultant of mutual bad faith
would entitle Tan Qyeto to the rights of a builder in good faith (Art. 448, Civil Code),
ergo, reimbursement should be given him if Restituta decides to appropriate the
building for herself (Art. 448, Civil Code).
7. Tan Queto an owner-possessor
Tan Queto having bartered his own lot and small house with the questioned lot with
Juan (who has been adverted to by a court decision and by the OCT a conjugal owner)
may be said to be the owner-possessor of the lot. Certainly he is not merely a
possessor or builder in good faith (this phrase presupposes ownership in another);
much less is he a builder in bad faith. He is a builder-possessor (jus possidendi)
because he is the owner himself.

8. Jus possessionis, jus possidendi; good faith and bad faith

The Chapter on Possession (jus possessionis, not jus possidendi) in the Civil Code
refers to a possessor other than the owner. The difference between a builder (or
possessor) in good faith and one in bad faith is that the former is not aware of the
defect or flaw in his title or mode of acquisition while the latter is aware of such
defect or flaw (Art. 526, Civil Code). But in either case there is a flaw or defect. In the
present case, there is no such flaw or defect because it is Tan Queto himself (not
somebody else) who is the owner of the property.
Agustin v. Intermediate Appellate Court
FACTS: The Cagayan River separates the towns of Solana on the west and
Tuguegarao on the east in the province of Cagayan. In 1919 the lands of the east of
the river were covered by the Tuguegarao Cadastre. In 1925, OCT 5472 was issued
for land east of the Cagayan River owned by Eulogio Agustin. As the years went by,
the Cagayan River moved gradually eastward, depositing silt on the west bank. The
shifting of the river and siltation continued until 1968. In 1950, all lands west of the
river were included in the Solana Cadastre. Among these occupying lands covered by
Solana Cadastre were Pablo Binayug and Maria Melad. Through the years, the
Cagayan River eroded lands of the Tuguegarao Cadastre on its eastern bank among
which was Agustins Lot 8457, depositing the alluvium as accretion on the land
possessed by Binayug on the western bank. However, 1968, after a big flood, the
Cagayan River changed its course, returned to its 1919 bed and in the process, cut
across the lands of Maria Melad, Timoteo Melad, and the spouses Pablo Binayug and
Geronima Ubina whose lands were transferred on the eastern, or Tuguegarao, side of
the river. To cultivate those lots they had to cross the river. In April 1969, while the
Melads, Binayug, Urbina and their tenants were planting corn on their lots located on
the easter side of Cagayan River, Agustin, the heirs of Baldomero Langcay, Juan
Langcay, and Arturo Balisi, accompanied by the mayor and some policemen of
Tuguegarao, claimed the same lands as their own and drove away the Melads,
Binayug and Urbina from the premises.
ISSUE: Whether or not ownership of accretion is lost upon sudden and abrupt change
of the river.
HELD: No. The ownership of the accretion to the lands was not lost upon sudden and
abrupt change of the course of the river (Cagayan River in 1968 or 1969 when it
reverted to its old 1919 bed), and separated or transferred said accretions to the other
side (eastern bank) of the river. Articles 459 and 463 of the New Civil Code apply to
this situation. Article 459 provides that whenever the current of a river, creek or
torrent segregates from an estate on its bank a known portion of land and transfer it to
another estate, the owner of the land to which the segregated portion belonged retains
the ownership of it, provided that he removes the same within two years. Article 463
provides that, whenever the current of a river divides itself into branches, leaving a
piece of land or part thereof isolated, the owner of the land retains his ownership. He
also retains it if a portion of land is separated from the estate by the current.
Cureg v. Intermediate Appellate Court

FACTS: On November 5, 1982, private respondents Domingo Apostol et al. filed a

complaint for quieting of title against petitioners Leonida Cureg et al. The complaint
alleged that private respondents, except Apostol, are the legal and/or the forced heirs
of the late Domingo Gerardo, and his predecessors-in-interest have been in actual,
open, peaceful and continuous possession, under a bona fide claim of ownership of a
parcel of land (referred to as their motherland). Subsequently, the heirs verbally
sold the motherland to Apostol. The motherland showed signs of accretion caused
by the movement of the Cagayan River. When private respondents were about to
cultivate their motherland together with its accretion, they were prevented by the
petitioners. Petitioners alleged that the motherland claimed by the private
respondents is non-existent, that the subject land is an accretion to their registered
land, and that petitioners have been in possession and cultivation of the accretion
for many years now.
ISSUE: Whether or not the petitioners have the better right of accretion.
HELD: Yes. The petitioners are entitled to the accretion. The subject land is an
alluvial deposit left by the northward movement of the Cagayan River and pursuant to
Article 457 of the New Civil Code: To the owners of land adjoining the banks of
river belong the accretion which they gradually receive from the effects of the current
of the waters. However, the increase in the area of the petitioners land, being an
accretion left by the change of course or the northward movement of the Cagayan
River does not automatically become registered land just because the lot which
receives such accretion is covered by a Torrens title. As such, it must also be placed
under the operation of the Torrens system.
Viajar v. Court of Appeals
FACTS: The spouses Ricardo and Leonor Ladrido were the owners of Lot 7511.
Spouses Rosendo and Ana Te were also the registered owners of a parcel of land
described in their title as Lot 7340 of the Cadastral Survey of Pototan. On 6
September 1973, Rosendo Te, with the conformity of his wife, sold this lot to
Angelica F. Viajar and Celso F. Viajar for P5,000. A Torrens title was later issued in
the latters names. Later, Angelica Viajar had Lot 7340 relocated and found out that
the property was in the possession of Ricardo Y. Ladrido. Consequently, she
demanded its return but Ladrido refused. The piece of real property which used to be
Lot 7340 of the Cadastral Survey of Pototan was located in barangay Guibuanogan,
Pototan, Iloilo; that at the time of the cadastral survey in 1926, Lot 7511 and Lot 7340
were separated by the Suague River; that Lot 7340 has been in the possession of
Ladrido; that the area of 14,036 sq.ms., which was formerly the river bed of the
Suague River per cadastral survey of 1926, has also been in the possession of
Ladrido; and that the Viajars have never been in actual physical possession of Lot
7340. On 15 February 1974, Angelica and Celso Viajar instituted a civil action for
recovery of possession and damages against Ricardo Y. Ladrido. The trial court
rendered its decision in favor of Ladrido, dismissing the complaint of Angelica and
Celso Viajar with costs against them, declaring the Ladridos are entitled to the
possession thereof. Not satisfied with the decision, the Viajars appealed to the Court
of Appeals. The Court of Appeals affirmed the decision of the court. The Viajars filed
a petition for review on certiorari.

ISSUE: Whether the respondents are entitled to the land on the ground of accretion.
HELD: Article 457 of the New Civil Code provides that to the owners of lands
adjoining the banks of rivers belong the accretion which they gradually receive from
the effects of the current of the waters." The presumption is that the change in the
course of the river was gradual and caused by accretion and erosion. In the present
case, the lower court correctly found that the evidence introduced by the Viajars to
show that the change in the course of the Suague River was sudden or that it occurred
through avulsion is not clear and convincing. The Ladridos have sufficiently
established that for many years after 1926 a gradual accretion on the eastern side of
Lot 7511 took place by action of the current of the Suague River so that in 1979 an
alluvial deposit of 29,912 sq.ms. more or less, had been added to Lot 7511. The
established facts indicate that the eastern boundary of Lot 7511 was the Suague River
based on the cadastral plan. For a period of more than 40 years (before 1940 to 1980)
the Suague River overflowed its banks yearly and the property of the defendant
gradually received deposits of soil from the effects of the current of the river. The
consequent increase in the area of Lot 7511 due to alluvion or accretion was
possessed by the defendants whose tenants plowed and planted the same with corn
and tobacco. The quondam river bed had been filled by accretion through the years.
The land is already plain and there is no indication on the ground of any abandoned
river bed. Under the law, accretion which the banks or rivers may gradually receive
from the effects of the current of the waters becomes the property of the owners of the
lands adjoining the banks. Therefore, the accretion to Lot 7511 which consists of Lots
A and B belong to the Ladridos.
Heirs of Navarro v. Intermediate Appellate Court
FACTS: On October 3, 1946, Sinforoso Pascual, filed an application for foreshore
lease covering a tract of foreshore land in Sibocon, Balanga, Bataan, having an area of
approximately seventeen (17) hectares. Subsequently, petitioners' predecessor-ininterest, Emiliano Navarro, filed a fishpond application with the Bureau of Fisheries
covering twenty five (25) hectares of foreshore land also in Sibocon, Balanga, Bataan.
Initially, such application was denied by the Director of Fisheries on the ground that
the property formed part of the public domain.
Sometime in the early part of 1960, Sinforoso Pascual flied an application to register
and confirm his title to a parcel of land, situated in Sibocon, Balanga, Bataan,
described in Plan Psu-175181 and said to have an area of 146,611 square meters.
Pascual claimed that this land is an accretion to his property, situated in Barrio Puerto
Rivas, Balanga, Bataan, and covered by Original Certificate of Title No. 6830. It is
bounded on the eastern side by the Talisay River, on the western side by the Bulacan
River, and on the northern side by the Manila Bay. The Talisay River as well as the
Bulacan River flow downstream and meet at the Manila Bay thereby depositing sand
and silt on Pascual's property resulting in an accretion thereon. Sinforoso Pascual
claimed the accretion as the riparian owner.
On March 25, 1960, the Director of Lands, represented by the Assistant Solicitor
General, filed an opposition thereto stating that neither Pascual nor his predecessorsin-interest possessed sufficient title to the subject property, the same being a portion
of the public domain and, therefore, it belongs to the Republic of the Philippines.

ISSUE: Whether or not the land sought to be registered is accretion or foreshore land,
or, whether or not said land was formed by the action of the two rivers of Talisay and
Bulacan or by the action of the Manila Bay.
HELD: Accretion as a mode of acquiring property under said Article 457, requires the
concurrence of the following requisites: (1) that the accumulation of soil or sediment
be gradual and imperceptible; (2) that it be the result of the action of the waters of the
river; and (3) that the land where the accretion takes place is adjacent to the bank of
the river. If the accretion were to be attributed to the action of either or both of the
Talisay and Bulacan Rivers, the alluvium should have been deposited on either or
both of the eastern and western boundaries of petitioners' own tract of land, not on the
northern portion thereof which is adjacent to the Manila Bay. Clearly lacking, thus, is
the third requisite of accretion, which is, that the alluvium is deposited on the portion
of claimant's land which is adjacent to the river bank.
The disputed land, thus, is an accretion not on a river bank but on a sea bank, or on
what used to be the foreshore of Manila Bay which adjoined petitioners' own tract of
land on the northern side. Applicant Pascual has not presented proofs to convince the
Court that the land he has applied for registration is the result of the settling down on
his registered land of soil, earth or other deposits so as to be rightfully be considered
as an accretion [caused by the action of the two rivers]. Article 457 finds no
applicability where the accretion must have been caused by action of the bay.
The conclusion formed by the trial court on the basis of the aforegoing observation is
that the disputed land is part of the foreshore of Manila Bay and therefore, part of the
public domain. Thus, the disputed property is an accretion on a sea bank, Manila Bay
being an inlet or an arm of the sea; as such, the disputed property is, under Article 4 of
the Spanish Law of Waters of 1866, part of the public domain.