Lao Chit v Security Bank
. demand.
FACTS:
Consolidated Investments (lessor), leaser
to Domingo Dikit part of the lobby of the
Consolidated Building at Plaza Goiti,
Manila to be used as offices for a proposed
Bank of Manila to be organized by Dikit
and Jose Silva.
The lessee undertook to construct walls,
partitions, and other improvements; such
improvements shall become the
property of the lessor upon the
termination and/or rescission of the lease
contract.
Dikit and Silva entered into a contract
with plaintiff Lao Chit for the latter to
furnish the materials and the work for the
improvements at a total cost of P59,365
payable as soon as the Bank of Manila
opens for business, and is given permit by
the Central Bank. The permit was never
issued.
The rentals for the lease of the space were
also not paid. The lessor then instituted an
unlawful detainer action.
Municipal Court of Manila: rendered
judgment sentencing Dikit.
Dikit appealed to the CFI and eventually
the Supreme Court.
The cases were soon dismissed upon
agreement of the parties that Dikit will
relinquish whatever rights he might have
to the possession of the leased premises
and disclaimed all rights to and over any
and all improvements introduced therein.
Lao filed a separate civil action against
Dikit and Silva for recovery of whatever
was due from them.
CFI of Manila: ruled in favor of Lao and
sentenced Dikit and Silva as solidarily
liable for the sum of P59,365.
A writ of execution was issued but
remained unsatisfied. Dikit nor Silva had
any properties registered in their
respective names and Silva was nowhere
to be found.
Lao Chit then brought the present action
against Security Bank and (Bank) to which
lessor had leased the property, together
with the improvements. He demanded a
payment of P1,000/month by way of
rentals.
In its answer, the Bank alleged that it
used the improvements pursuant to its
contract of lease with the lessor.
Soon after, Lao demanded the amount of
the improvements plus P1000/month from
the lessor, which did not heed said
According to the lessor, it had no
contractual or juridical relation with Lao
and that the improvements belonged to it
and not to Lao.
CFI of Manila: sentenced Consolidated
Investments and Security Bank solidarily
to pay P59,365 and rentals at the rate of
P1,000/mo.
Defendants filed a motion for
reconsideration and new trial, but were
denied. Hence, this appeal.
ISSUES + RULING:
WoN the lower court erred in rendering judgment
against the Bank. YES.
It is clear that the Bank entered into the
premises in question pursuant to a lease
contract with the lessor.
The Bank paid the rentals and fulfilled its
obligations under the contract.
It cannot be denied that the
improvements introduced became
property of the lessor pursuant to the
provision in the contract between it and
Dikit and Silva that the former shall own
said improvements upon expiration and/or
rescission of the contract.
Although Lao Chit was not a party to said
contract, this stipulation is binding upon
him, he having introduced said
improvements pursuant to his contract
with Dikit, from whom he derived,
therefore, his right to enter the building
and make the improvements.
o In short, insofar as the
construction thereof, Lao Chit was,
vis-a-vis the lessor, a mere agent
or representative of Dikit and, as
such, was privy to the
undertakings of Dikit under his
contract of lease with the lessor.
WoN the lessor is liable to Lao Chit for the
improvements. NO.
The lower court held the lessor liable to
Lao upon the ground that he was a builder
in good faith, and under the theory of
unjust enrichment.
Art. 361 (now 448) of the [Old] Civil Code
provides:
o The owner of land on which anything
has been built, sown, or planted, in
good faith, shall be entitled to
appropriate the thing so built, sown, or
planted, upon paying the
compensation mentioned in Articles
 453 and 454, or to compel the person Thus, despite the fact that the lessor had
who has built or planted to pay him become the owner of the improvements in
the value of the land, and the person question, worth P59,365.00, it still
who sowed thereon to pay the proper suffered a loss of over P45,000.00. Such
rent therefor. "loss" negates the idea of "enrichment".
However, this provision refers to one who Had he been reasonably vigilant, Lao Chit
builds upon a land which he believes to be could have demanded from Dikit a
his property. Neither Lao nor Dikit claimed mortgage, or a bond, or some other
the building as their own. security, for the protection of his rights,
Moreover, the provision is limited in its yet he did not do so.
application to buddings constructed on Should the lessor be required to pay Lao
anothers land, and not to partitions, Chit what he is entitled to recover from
railing, counters, shelves, and the like. Dikit, but which he (Lao Chit) cannotdue
Moreover, there was no bad faith on the to his oversight, carelessness or
part of the lessor since it was bound to negligencecollect from Dikit, the effect
permit Dikit and Lao as his agent to would be to relieve Lao Chit of the
construct improvements. consequences of his own inadvertence or
The lower court also relied on Art. 356 negligence, and hold the lessor
(now 443) in ruling that there should be responsible therefor.
no unjust enrichment:
o He who receives fruits is obliged to
pay any expenses which may have
been incurred by another in the
production, gathering, and
preservation thereof.
The Supreme Court ruled, however, that
the provision is not on point since it refers
to "expenses" of production, gathering
and preservation" of fruits received by the
owner of a property, not to improvements,
whereas the claim of Lao Chit is based
upon "improvements" introduced, not
"expenses" incurred by him for the
"production, gathering and preservation"
of fruits.
The provision on quasi-contracts (Art.
2142) of the Civil Code cannot likewise be
applied. It provides:
o Certain lawful, voluntary and
unilateral acts give rise to the
juridical relation of quasi-contract
to the end that no one shall be
unjustly enriched or benefited at
the expense of another.
The construction of the improvements in
question was not a "purely voluntary act"
or "unilateral act" of Lao Chit.
He introduced them in compliance with a
bilateral "obligation" he undertook under
his contract with Dikit.
For the principle of undue enrichment to
apply, there must be "enrichment" and
the same must be "undue" or "unjust".
In the case at bar, Dikit failed to pay the
agreed monthly rental of P5,000 from
October, 1949. Up to July 1, 1951, when
the premises in question were leased to
the Bank, the rentals due from Dikit
aggregated, therefore, P105,000.

DEPRA vs. DUMLAO
FACTS:
Dumlao is the owner of a parcel of land in Iloilo,
while Depra owns the lot adjoining his. Dumlao
built his house on his own land, but the kitchen
encroached about 34 sq.m on Depras property.
Upon finding this, Depras mom ordered Dumlao
to move back from his encroachment, then
subsequently filed an action for unlawful detainer
against Dumlao.
The lower court found that Dumlao was a builder
in good faith, and ordered him to pay rent
(PhP5.00/month) forced lease between the
parties. Depra refused to accept the rentals so
Dumlao deposited this with the MTC. Neither
party appealed judgment so this became final
and executory.
1 year later, though, Depra filed an complaint for
Quieting of Title. Dumlao contested this, stating
that the suit is barred by res judicata. But Depra
averred that the lower court did not have
jurisdiction to rule on encumbrances of real
property only the CFI has jurisdiction. A case to
quiet title was also instituted wherein Depra was
held to be the owner of the land.
ISSUE:
1. Whether or not res judicata would apply to the
case at bar?
2. Whether or not the land owner can be
compelled to accept rent payments by the court
(with both LO and BPS being in good faith)?
HELD:
In the first issue, res judicata would not apply
should the first case be one for ejectment and
the other for quieting of title. Article 448 of the
Civil Code provides that the land owner has 2
options to buy the building or to sell/rent his
land. This is so because the rights of the owner of
the land is older, and by the principle of
accession, he also has a right to the accessories.
The Court remanded the case to the RTC to
determine the fair price of the land, the expenses
incurred by the BPS (Dumlao), the increase in
value of the land, and whether the value of the
land is considerably more than the value of the
kitchen built on it. The RTC shall then give Depra
15 days to exercise such option.
Sarmiento vs. Agana 129 scra 122
Facts:
ERNESTO was still courting his wife, the
latter's mother had told him the couple could
build a RESIDENTIAL HOUSE whom Ernesto did
construct a RESIDENTIAL HOUSE on the LAND at
a cost of P8,000.00 to P10,000.00 who probably
assumed that the wife's mother was the owner of
the LAND and that, it would be transferred to the
spouses. Subsequently turned out that the LAND
had been titled in the name of Mr. & Mrs. Jose C.
Santo, Jr. who, sold the same to petitioner
SARMIENTO. SARMIENTO filed an Ejectment suit
against them. In the evidentiary hearings before
the Municipal Court, SARMIENTO submitted the
deed of sale of the LAND in her favor, which
showed the price to be P15,000.00. On the other
hand, ERNESTO testified that the then cost of the
RESIDENTIAL HOUSE would be from P30,000.00
to P40,000.00.Sarmiento refuse to pay and give
option to buy the property.
Issue: 1.Whether or not Ernesto was in good
faith.
2.Whether or not Sarmiento could
exercise both refusal to pay the spouses and give
option to purchase.
Held:
1.Yes. We agree that ERNESTO and wife
were builders in good faith in view of the peculiar
circumstances under which they had constructed
the RESIDENTIAL HOUSE. As far as they knew,
the LAND was owned by ERNESTO's mother-in-
law who, having stated they could build on the
property, could reasonably be expected to later
on give them the LAND.
In regards to builders in good faith, Article 448 of
the Code provides:
ART. 448.The owner of the land on
which anything has been built, sown or
planted in good faith ,shall have the right to
appropriate as his own the works, sowing or
planting, after payment of the indemnity
provided for in articles 546 and 548, or to
oblige the one who built or planted to pay
the price of the land, and the one who
sowed, the proper rent. However, the
builder or planter cannot be obliged to buy
the land if its value is considerably more
than that of the building or trees. In such
case, he shall pay reasonable rent, if the
 owner of the land does not choose to
appropriate the building or trees after
proper indemnity. The parties shall agree
upon the terms of the lease and in case of
disagreement, the court shall fix the terms
thereof.
2.No. 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
(now Article 546). The owner, of the land. upon,
the other hand, has the option, under article 361
(now Article 448), 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 such remotion only when, after having chosen
to sell his land, the other party fails to pay for the
same.
We hold, therefore, that the order of Judge
Natividad compelling defendants-petitioners
to remove their buildings from the land
belonging to plaintiffs-respondents only
because the latter chose neither to pay for
such buildings nor 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 (now
Article 448) and 453 (now Article 546) of the
Civil Code. (Ignacio vs. Hilario, 76 Phil. 605,
608 [1946]).
FLORENCIO IGNAO, petitioner, vs. IAC
FACTS:
In this petition for review by certiorari, petitioner seeks
the reversal of the decision of the Intermediate
Appellate Court (now Court of Appeals) affirming in
toto the decision of the Court of First Instance of
Cavite, ordering petitioner Florencio Ignao to sell to
private respondents Juan and Isidro Ignao, that part of
his property where private respondents had built a
portion of their houses.
Petitioner Florencio Ignao and his uncles private
respondents Juan Ignao and Isidro Ignao were co-
owners of a parcel of land with an area of 534 square
meters situated in Barrio Tabon, Municipality of Kawit,
Cavite. Pursuant to an action for partition filed by
petitioner docketed as Civil Case No. N-1681, the then
Court of First Instance of Cavite in a decision directed
the partition of the aforesaid land, allotting 133.5
square meters or 2/8 thereof to private respondents
Juan and Isidro, and giving the remaining portion with
a total area of 266.5 square meters to petitioner
Florencio. However, no actual partition was ever
effected.
On July 17, 1978, petitioner instituted a complaint for
recovery of possession of real property against private
respondents Juan and Isidro before the Court of First
Instance of Cavite. In his complaint petitioner alleged
that the area occupied by the two (2) houses built by
private respondents exceeded the 133.5 square meters
previously alloted to them by the trial court.
Consequently, the lower court conducted an ocular
inspection. It was found that the houses of Juan and
Isidro actually encroached upon a portion of the land
belonging to Florencio. Upon agreement of the parties,
the trial court ordered a licensed geodetic engineer to
conduct a survey to determine the exact area occupied
by the houses of private respondents. The survey
subsequently disclosed that the house of Juan occupied
42 square meters while that of Isidro occupied 59
square meters of Florencio's land or a total of 101
square meters.
TRIAL COURT: In its decision, the trial court
(thru Judge Luis L. Victor) ruled that although
private respondents occupied a portion of
Florencio's property, they should be considered
builders in good faith.
Thus, it ordered Florencio to sell to Juan and
Isidro those portions of his land respectively
occupied by the latter. The dispositive portion of
said decision reads as follows:
IAC: Petitioner Florencio Ignao appealed to the
Intermediate Appellate Court. The Appellate
Court, promulgated a decision, affirming the
decision of the trial court.
ISSUE:
W/O the respondent Court is correct in
considering the private respondents builders in
good faith on the land on question, thus applying
Art. 448 of the Civil Code, although the land in
question is still owned by the parties in co-
ownership, hence, the applicable provision is Art.
486 of the Civil Code, which was not applied.
HELD:
The records of the case reveal that the disputed
land with an area of 534 square meters was
originally owned by Baltazar Ignao who married
twice. In his first marriage, he had four children,
namely Justo (the father of petitioner Florencio),
Leon and private respondents Juan and Isidro. In
his second marriage, Baltazar had also four
children but the latter waived their rights over
the controverted land in favor of Justo. Thus,
Justo owned 4/8 of the land which was waived by
his half-brothers and sisters plus his 1/8 share or
a total of 5/8. Thereafter, Justo acquired the
1/8share of Leon for P500.00 which he later sold
to his son Florencio for the same amount.
WhenJusto died, Florencio inherited the 5/8 share
of his father Justo plus his 1/8 share of the land
which he bought or a total of 6/8 (representing
400.5 square meters). Private respondents, Juan
and Isidro, on the other hand, had 1/8 share
(66.75sq) each of the land or a total of
133.5square meters.
Before the decision in the partition case was
promulgated, Florencio sold 134 square meters of
his share to a certain Victa for P5,000.00 on
January 27, 1975. When the decision was handed
down on February 6,1975, the lower court
allotted 2/8 of the land to private respondents
Juan and Isidro, or a total of 133.5 square
meters.
It should be noted that prior to partition, all the
co-owners hold the property in common dominion
but at the same time each is an owner of a share
which is abstract and undetermined until partition
is effected. As co-owners, the parties may have
unequal shares in the common property,
quantitatively speaking. But in a qualitative
sense, each co-owner has the same right as any
one of the other co-owners. Every co-owner is
therefore the owner of the whole, and over the
whole he exercises the right of dominion, but he
is at the same time the owner of a portion which
is truly abstract, because until division is effected
such portion is not concretely determined.
Petitioner Florencio, in his first assignment of
error, asseverates that the court a quo erred in
applying Article 448 of the Civil Code, since this
article contemplates a situation wherein the land
belongs to one person and the thing built, sown
or planted belongs to another. In the instant case
the land in dispute used to be owned in common
by the contending parties.
Article 448 provides:
Art. 448. The owner of the land on which
anything has been built, sown or planted in
good faith, shall have the right to
appropriate as his own the works, sowing or
planting, after payment of the indemnity
provided for in articles 546 and 548, or to
oblige the one who built or planted to pay
the price of the land, and the one who
sowed, the proper rent. However, the
builder or planter cannot be obliged to buy
the land if its value is considerably more
than that of the building or trees. In such
case, he shall pay reasonable rent, if the
owner of the land does not choose to
appropriate the building or trees after
proper indemnity. The parties shall agree
upon the terms of the lease and incase of
disagreement, the court shall fix the terms
thereof.
Whether or not the provisions of Article 448
should apply to a builder in good faith on a
property held in common has been resolved in
the affirmative in the case of Spouses del Campo
vs. Abesia, wherein the Court ruled that:
The court a quo correctly held that 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 co-owner 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 home 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 is a
co-ownership if good faith has been established.
In other words, when the co-ownership is
terminated by a partition and it appears that the
house of an erstwhile co- owner has encroached
upon a portion pertaining to another co-owner
which was however made in good faith, then the
provisions of Article 448 should apply to
determine the respective rights of the parties.

SPOUSES DEL CAMPO V. ABESIA 160
Facts:
This case involves a parcel of land, situated at
the corner of F. Flores and Cavan Streets, Cebu
City. An action for partition was filed by plaintiffs
in the CFI of Cebu. Plaintiffs and defendants are
co-owners pro indiviso of this lot in the
proportion of and 1/3 share each, respectively.
The trial court appointed a commissioner in
accordance with the agreement of the parties.
,the Id commissioner conducted a survey,
prepared a sketch plan and submitted a report to
the trial court on May 29, 1976, recommending
that the property be divided into two lots: Lot
1161-A with an area of 30 square meters for
plaintiffs and Lot No. 1161-B with an area of 15
square meters for the defendants. The houses of
plaintiffs and defendants were surveyed and
shown on the sketch plan. The house of
defendants occupied the portion with an area of 5
square meters of Lot 1161-A of plaintiffs. The
parties manifested their conformity to the report
and asked the trial court to finally settle and
adjudicate who among the parties should take
possession of the 5 square meters of the land in
question.
Issue: Whether or Not Article 448 of the Civil
Code is applicable to a builder in good faith when
the property involved is owned in common.
Held: When the co-ownership is terminated by
the partition and it appears that the house of
defendants overlaps or occupies a portion of 5
square meters of the land pertaining to plaintiffs
which the defendants obviously built in good
faith, then the provisions of Article 448 of the
new Civil Code should apply. Manresa and
Navarro Amandi agree that the said provision of
the Civil Code may apply even when there was
co-ownership if good faith has been established.
Applying the aforesaid provision of the Civil Code,
the plaintiffs have the right to appropriate said
portion of the house of defendants upon payment
of indemnity to defendants as provided for in
Article 546 of the Civil Code. Otherwise, the
plaintiffs may oblige the defendants to pay the
price of the land occupied by their house.
However, if the price asked for is considerably
much more than the value of the portion of the
house of defendants built thereon, then the latter
cannot be obliged to buy the land. The
defendants shall then pay the reasonable rent to
the plaintiff upon such terms and conditions that
they may agree. In case of disagreement, the
trial court shall fix the terms thereof. Of course,
defendants may demolish or remove the said
portion of their house, at their own expense, if
they so decide.
Article 448 of the New Civil Code provides as
follows:
Art. 448. The owner of the land on which
anything has been built, sown, or planted in good
faith, shall have the right to appropriate as his
own the works, sowing or planting, after payment
of the indemnity provided for in articles 546 and
548, or to oblige the one who built or planted to
pay the price of the land, and the one who
sowed, the proper rent. However, the builder or
planter cannot be obliged to buy the land if its
value is considerably more than that of the
building or trees. In such case, he shall pay
reasonable rent, if the owner of the land does not
choose to appropriate the building or trees after
proper indemnity. The parties shall agree upon
the terms of the lease and in case of
disagreement, the court shall fix the terms
thereof.
Alviola v. CA
FACTS:
Victoria Tinagan bought two parcels of land in
1950. She and her son Agustin took possession
of the said land thereafter.
Sometime in 1960, petitioners occupied portions
of the land whereat they built a copra dryer and
put up a store wherein they engaged in the
business of buying and selling copra.
On 1975, Victoria and Agustin died, the latter
survived by his wife and children who are the
private respondents in the instant case.
The private respondents filed a complaint for
recovery of possession against the petitioners
asking the Regional Trial Court of Negros Oriental
that they be declared the absolute owners of the
said parcels of land and that petitioners be
ordered vacate the same, to remove their copra
dryer and store, to pay actual damages (in the
form of rentals), moral and punitive damages,
litigation expenses and attorney's fees.
The trial court ruled in favour of the private
respondents, hence this petition.
The petitioners put up the defense that the
contested parcels of land are public lands,
making them qualify to become beneficiaries of
the comprehensive agrarian reform program and
rightful possessors of the land in virtue of their
occupation of the same for 20 years.
The petitioners also contend that the copra dryer
and the store are permanent structures as they
are made of hollow blocks and cement.
Private respondents on the other hand offer
overwhelming evidence of their ownership and
possession of the land and contended that they
merely tolerated the petitioners occupation of
the disputed property.
ISSUE:
WON the petitioners have ownership over the
portions of land where the copra dryer and store
are located.
HELD:
No.
The petitioners defense that the said parcels of
land are public lands is rebutted by the Private
respondents' tax declarations and receipts of
payment of real estate taxes, as well as other
related documents which prove their ownership
of the disputed properties.
As correctly ruled by the respondent court, there
was bad faith on the part of the petitioners when
they constructed the copra dryer and store on the
disputed portions since they were fully aware that
the parcels of land belonged to Victoria Tinagan.
But there was likewise bad faith on the part
of the private respondents, having knowledge
of the arrangement between petitioners and
Victoria Tinagan relative to the construction of
the copra dryer and store.
Thus, for purposes of indemnity, Article 448 of
the New Civil Code should be
applied. 32 However, the copra dryer and the
store, as determined by the trial court and
respondent court, are transferable in
nature. Thus, it would not fall within the
coverage of Article 448. As the noted civil law
authority, Senator Arturo Tolentino, aptly
explains: "To fall within the provision of this
Article, the construction must be of permanent
character, attached to the soil with an idea of
perpetuity; but if it is of a transitory character or
is transferable, there is no accession, and the
builder must remove the construction. The proper
remedy of the landowner is an action to eject the
builder from the land." 33
The private respondents' action for recovery of
possession was the suitable solution to eject
petitioners from the premises.

The record further discloses that Victoria S. Petition dismissed.

Tinagan and her son, Agustin Tinagan, took
possession of the said properties in 1950,
introduced improvements thereon, and for more
than 40 years, have been in open, continuous,
exclusive and notorious occupation thereof in the
concept of owners.

The Court brushed as an afterthought the

petitioners later defense that the portions where
the copra dryer and store are located were ceded
to them by Victoria in exchange for a prior debt
since it was not supported by any document
pointing to Victoria transferring the ownership of
the said portion and the lack of declaration on the
part of the petitioners.

The Court also ruled that though the petitioners

were in occupation of the portions of land in
question for 20 years, they were able to do so
out of the tolerance of the private respondents
and thus, their posture that they have acquired
the property by "occupation" for 20 years does
not have any factual or legal foundation.
BALUCANAG VS. FRANCISCO Kilario v. CA
122 SCRA 344 G.R. No. 134329. January 19, 2000
FACTS: The petitioner bought a lot owned by Mrs.
Respondent SilverioPada filed an ejectment case
Charvet which was then previously leased by the latter
against sps. Kilario. The latter
to one Richard Stohner. The said lease contract occupies a portion of the intestate estate of
provided that the lessee may erect structures and Jacinto Pada, Grandfather of Silverio. The
improvements which shall remain as lessee's property Kilarios have been living therein since 1960 by
and he may remove them at any time. It further sheer tolerance. When Jacinto Pada
provided that should the lessee fail to remove the dies, his heirs entered into extrajudicial partition
same structures or improvements withing two months of his estate in 1951. As a result
after the expiration of the lease, the lessor may thereof, lot 5581 was allocated to Ananias and
Marciano who became co-owners of said
remove them or cause them to be removed at the
lot.
expense of the lessee. Stohner made fillings on the
land and constructed a house. When he failed to pay
Ananias died and his daughter succeeded in his
the rent, the petitioner, through counsel, sent Stohner right as co-owner. Eventually,
a demand letter ordering him to vacate the lot. The Juanita sold her right in the co-ownership to
lessee contended that he is a 'builder in good faith.' Engr. Paderes. Mariaon the other hand,
heir of Marciano, sold her share to her cousin
ISSUE:Is the lessee a builder in good faith? respondent SilverioPada. The latter
demanded sps. Kilario to vacate but the sps.
HELD: No, the lessee cannot be considered a refused.On June 1995, a complaint for
builder in good faith. The provision under Art. ejectment was filed against sps. Kilario. On
July1995 a deed of donation in their favor
448 of the New Civil Code (Philippine) on a
was executed by heirs of Amador Pada.
builder of good faith applies only to the owner of
the land who believes he is the rightful owner ISSUE: Whether or not the partition was valid
thereof, but not to a lessee who's interest in the
land is derived only from a rental contract. The extrajudicial partition of the estate of Jacinto
Neither can Stohner be considered a 'possessor in Pada among his heirs made in
good faith'. A possessor in good faith is a party 1951 is valid, albeit executed in an unregistered
who possesses property believing that he is its private document. No law requires
rightful owner but discovers later on a flaw in his partition among heirs to be in writing and
title that could indicate that he might not be its be registered in order to be valid. The object of
legal owner. It cannot apply to a lessee because registration is to serve as constructive notice to
others. It follows then that the intrinsic validity of
he knows right from the start that he is merely a
partition not executed with the
lessee and not the owner of the premises.
prescribed formalities is not undermined when
As a mere lessee, he introduces no creditors are involved. Without creditors to
improvements to the property at his own risk take into consideration, it is competent for the
such that he cannot recover from the owner the heirs of an estate to enter into an agreement for
reimbursements nor he has any right to retain distribution thereof in a manner and upon a plan
the premises until reimbursements. What applies different from those provided by the rules from
in this case is Art. 1678 (NCC) which provides which, in the first place, nothing can be inferred
that, " if the lessee, makes, in good faith, useful that a writing or other formality is essential for
the partition to be valid. The partition of inherited
improvements which are suitable to the use for
property need not be embodied in a public
which the lease is intended, without altering the
document so as to be effective as regards the
form or substance of the property leased, the heirs that participated therein. The extrajudicial
lessor upon the termination of the lease shall pay partition which the heirs of Jacinto Pada executed
the lessee 1/2 of the value of the improvements voluntarily and spontaneously in 1951 has
at the time. Should the lessor refuse to produced a legal status. When they discussed
reimburse said amount, the lessee may remove and agreed on the division of the estate of
the improvements even though the principal Jacinto Pada, it is presumed that they did so in
thing may suffer damage thereby. He shall not. furtherance of their mutual interests. As such,
their division is conclusive, unless and until it is
however, cause any more impairment upon the
shown that there were debts existing against the
property leased than is necessary."
estate which had not been paid. No showing,
however, has been made of any unpaid charges
against the estate of Jacinto Pada. Thus, there is
no reason why the heirs should not be bound by
their voluntary acts.
The belated act of Concordia, Esperanza
and Angelito, who are the heirs of
Amador Pada, of donating the subject property to
petitioners after forty four (44) years
of never having disputed the validity of the 1951
extrajudicial partition that allocated the subject
property to Marciano and Ananias, produced no
legal effect. The donation made by his heirs to
petitioners of the subject property, thus, is void
for they were not the owners thereof. At any rate
it is too late in the day for the heirs
of Amador Padatorepudiate the legal effects of
the 1951 extrajudicial partition as prescription
and laches have equally set in.Petitioners are
estopped from impugning the extrajudicial
partition executed by the heirs of Jacinto Pada
after explicitly admitting in their Answer that
they had been occupying the subject property
since 1960 without ever paying any rental
as they only relied on the liberality and tolerance
of the Pada family. Their admissions are evidence
of a high order and bind them insofar as the
character of their possession of the subject
property is concerned.
LUMUNGO V. USMAN
25 SCRA 255
FACTS:
Dominga Usman sold and transfers her
rights in and to the 3 lots in question to Jose
Angeles. The latter made the purchase with the
knowledge that the property was already in
dispute by Atty. Usman, husband of Dominga,
and by the plaintiffs. Angeles, upon taking
possession of the land, planted the same with
coconuts, which, together with those already
planted by Dominga Usman, numbered about
3,000, most of which are now fruit-bearing. In
short, Angeles was a purchaser and a builder in
bad faith.
ISSUE:
Whether or not Angeles is entitled to
reimbursement for the coconuts tree he planted
on the property in litigation.
HELD:
No. It should be noted that said trees are
improvements, not "necessary expenses of
preservation," which a builder, planter or sower
in bad faith may recover under Arts. 452 and
546, first paragraph, of the Civil Code. The facts
and findings of both the trial court and the Court
of Appeals leave no room for doubt that Jose
Angeles was a purchaser and a builder in bad
faith.The provision applicable to this case is,
accordingly, Article 449 of the Civil Code, which
provides that, "he who builds, plants or sows in
bad faith on the land of another, loses what is
built, planted or sown without right to
indemnity."
ART. 453
MUNICIPALITY OF OAS V. ROA
FACTS:
The Municipality brought the action for the
recovery of a tract of land in the pueblo of Oas,
claiming that it was a part of the public square of
said town, while Roa alleged that he was the
owner of the property. The defendant admitted in
writing that he knew that the land is owned by
the Municipality and that Jose Castillo, whom he
bought the property did not own the land. When
Roa constructed a substantial building on the
property in question after he acquired the
property from Castillo, the Municipality did not
oppose the construction.
ISSUE:
Whether or not the municipality owns the land.
HELD:
Yes.The defendant was not a purchaser in good
faith. The plaintiff, having permitted the erection
by the defendant of a building on the land
without objection, acted in bad faith. The rights
of the parties must, therefore, be determined as
if they both had acted in good faith. To the case
are applicable those provisions of the Civil Code
which relate to the construction by one person of
a building upon land belonging to another. Article
364 (now Art.453) of the Civil Code is as follows:
"When there has been bad faith, not only on the
part of the person who built, sowed, or planted
on another's land, but also on the part of the
owner of the latter, the rights of both shall be the
same as if they had acted in good faith. The
Supreme declared that the Municipality is the
owner of the land and that it has the option of
buying the building thereon, which is the
property of the defendant, or of selling to him the
land on which it stands.
MWSS V. CA, CITY OF DAGUPAN,
FACTS:
The City of Dagupan (CITY) filed a complaint
against the former National Waterworks and
Sewerage Authority (NAWASA), now the
Metropolitan Waterworks and Sewerage System
(MWSS), for recovery of the ownership and
possession of the Dagupan Waterworks System.
NAWASA interposed as one of its special defenses
R.A. 1383 which vested upon it the ownership,
possession and control of all waterworks systems
throughout the Philippines and as one of its
counterclaims the reimbursement of the
expenses it had incurred for necessary and useful
improvements amounting to P255,000.00.
Judgment was rendered by the trial court in favor
of the CITY on the basis of a stipulation of facts.
The trial court found NAWASA to be a possessor
in bad faith and hence not entitled to the
reimbursement claimed by it.
ISSUE:
Whether or not MWSS has the right to remove all
the useful improvements introduced by NAWASA
to the Dagupan Waterworks System,
notwithstanding the fact that NAWASA was found
to be a possessor in bad faith?
HELD: No.
Article 449 of the Civil Code of the Philippines
provides that "he who builds, plants or sows in
bad faith on the land of another, loses what is
built, planted or sown without right to
indemnity." As a builder in bad faith, NAWASA
lost whatever useful improvements it had made
without right to indemnity. Moreover, under
Article 546 of said code, only a possessor in good
faith shall be refunded for useful expenses with
the right of retention until reimbursed; and under
Article 547 thereof, only a possessor in good faith
may remove useful improvements if this can be
done without damage to the principal thing and if
the person who recovers the possession does not
exercise the option of reimbursing the useful
expenses. The right given a possessor in bad
faith is to remove improvements applies only to
improvements for pure luxury or mere pleasure,
provided the thing suffers no injury thereby and
the lawful possessor does not prefer to retain
them by paying the value they have at the time
he enters into possession (Article 549).
FILIPINAS COLLEGES INC. vs. MARIA
GARCIA TIMBANG, ET AL.
[G.R. No. L-1281, September 29, 1959]
BARRERA, J.:
FACTS:
This is an appeal taken from an order of the
Court of First Instance of Manila dated May 10,
1957 (a) declaring the Sheriff's certificate of sale
covering a school building sold at public auction
null and void unless within 15 days from notice of
said order the successful bidders, defendants-
appellants spouses Maria Garcia Timbang and
Marcelino Timbang, shall pay to, appellee Maria
Gervacio Blas directly or through the Sheriff of
Manila the sum of P5,750.00 that the spouses
Timbang had bid for the building at the Sheriff's
sale; (b) declaring the other appellee Filipinas
Colleges, Inc. owner of 24,500/3,285,934
undivided interest in Lot No. 2-a covered by
certificate of tile No 45970, on which the building
sold in the auction sale is situated; and (c)
ordering the sale in public auction of the said
undivided interest of the Filipinas Colleges, Inc.,
in lot No. 2-a aforementioned to satisfy the
unpaid portion of the judgment in favor of
appellee Blas and against Filipinas Colleges, Inc.
in the amount of P8,200.00 minus the sum of
P5,750.00 mentioned in (a) above. The order
appealed from is the result of three motions filed
in the court a quo in the course of the execution
of a final judgment of the Court of Appeals
rendered in 2 cases appealed to it in which the
spouses Timbang, the Filipinas Colleges, Inc., and
Maria Gervacio Blas were the parties. The
Timbang spouses presented their opposition to
each and all of this motion. In assailing the order
of the court a quo directing the appellants to pay
appellee Blas the amount of their bid (P5,750.00)
made at the public auction, appellants' counsel
has presented a novel, albeit ingenious,
argument. They contend that since the builder in
good faith has failed to pay the price of the land
after the owners thereof exercised their option
under Article 448 of the Civil Code, the builder
has lost his right and the appellants as owners of
the land automatically became the ownersipso
facto.
ISSUE/S:
1. Whether or not the contention of the
appellants is valid. If not, what are the
remedies left to the owner of the land if
the builder fails to pay?
2. Whether or not the appellants, as owner
of the land, may seek recovery of the
value of their land by a writ of execution;
levy the house of the builder and sell it in
public auction.
RULING: NO, THE APPELLANTS
CONTENTION IS SUPERFLUOUS. There is
nothing in the language of these two articles, 448
and 546, which would justify the conclusion of
appellants that, upon the failure of the builder to
pay the value of the land, when such is
demanded by the land-owner, the latter becomes
automatically the owner of the improvement
under Article 445. Although it is true, it was
declared therein that in the event of the failure of
the builder to pay the land after the owner
thereof has chosen this alternative, the 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. The remedy left to
the parties in such eventuality where the builder
fails to pay the value of the land, though the
Code is silent on this Court, a builder in good
faith not be required to pay rentals. He has right
to retain the land on which he has built in good
faith until he is reimbursed the expenses incurred
by him. Possibly he might be made to pay
rental only when the owner of the land
chooses not to appropriate the improvement
and requires the builder in good faith to pay
for the land but that the builder is unwilling
or unable to pay the land, and then they
decide to leave things as they are and
assume the relation of lessor and lessee,
and should they disagree as to the amount
of rental then they can go to the court to fix
that amount. This was ruled in the case of Miranda
vs. Fadullon, et al., 97 Phil., 801. A further remedy is
indicated in the case of Bernardo vs. Bataclan, supra,
where this Court approved the sale of the land and the
improvement in a public auction applying the proceeds
thereof first to the payment of the value of the land
and the excess, if any, to be delivered to the owner of
the house in payment thereof. The second
contention was without merit. In the instant
case, the Court of Appeals has already adjudged
that appellee Blas is entitled to the payment of
the unpaid balance of the purchase price of the
school building. With respect to the order of the
court declaring appellee Filipinas Colleges, Inc.
part owner of the land to the extent of the value
of its personal properties sold at public auction in
favor of the Timbang, this Court likewise finds the
same as justified, for such amount represents, in
effect, a partial payment of the value of the land.
Failure of the Timbang spouses to pay to the
Sheriff or to Manila Gervacio Blas said sum of
P5,750.00 within fifteen (15) days from notice of
the final judgment, an order of execution shall
issue in favor of Maria Gervasio Blas to be levied
upon all properties of the Timbang spouses not
exempt from execution for the satisfaction of the
said amount.
Heirs of Navarro v. IAC
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. This application was denied on January
15, 1953. So was his motion for reconsideration.
Subsequently, petitioners' predecessor-in-
interest, also now deceased, 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 the application was denied, eventually
however the grant was given. Pascual claimed
that this land is an accretion to his property, 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 predecessors-in-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. On November 10, 1975, the
courtaquorendered judgment finding the subject
property to be foreshore land and, being a part of
the public domain, it cannot be the subject of
land registration proceedings. On appeal, the
respondent court reversed the findings of the
courtaquoand granted the petition for registration
of the subject property but excluding certain
areas. A motion for reconsideration was filed by
in the CA but the same was denied. Anchoring
their claim of ownership on Article 457 of the
Civil Code, petitioners vigorously argue that the
disputed 14-hectare land is an accretion caused
by the joint action of the Talisay and Bulacan
Rivers which run their course on the eastern and
western boundaries, respectively, of petitioners'
own tract of land.
Issue:
Whether or not the petitioners can rightfully claim
the land under the principle of accretion
Held:
The petitioners claim is misplaced. The principle
of accretion is only applicable to owners whose
estates are adjacent to rivers as stated in Article
457 of the Civil Code. The disputed land 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. As such, the applicable law
is not Article 457 of to Civil Code but Article 4 of
the Spanish Law of Waters of 1866. 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. As part of the public domain, the herein
disputed land is intended for public uses, and "so
long as the land in litigation belongs to the
national domain and is reserved for public uses, it
is not capable of being appropriated by any
private person, except through express
authorization granted in due form by a competent
authority."Only the executive and possibly the
legislative departments have the right and the
power to make the declaration that the lands so
gained by action of the sea is no longer
necessary for purposes of public utility or for the
cause of establishment of special industries or for
coast guard services.Petitioners utterly fail to
show that either the executive or legislative
department has already declared the disputed
land as qualified, under Article 4 of the Spanish
Law of Waters of 1866, to be the property of
petitioners as owners of the estates adjacent
thereto.
MENESES vs. CA et al
FACTS: On March 1, 1977, Darum, then
the District Land Officer of Los Baos, Laguna,
issued to PablitoMeneses 2 Free Patent and 2
OCT covering lots located in Los Baos, Laguna.
Pablito acquired said property from Bautista
through a Deed of Waiver and Transfer of Rights
executed in 1975 in consideration of Bautistas
love and affection for and some monetary
obligations in favor of Meneses. After the
execution of said document, Meneses took
possession of the land, introduced improvements
thereon, declared the land as his own for tax
purposes and paid the corresponding realty
taxes. In turn, Bautista acquired the land from
his aunt. He had been occupying the land since
1956.
On the other hand, the Quisumbing family traces
ownership of their land as far back as 1919 when
their matriarch was issued an OCT covering a lot,
with the Laguna de Bay as its northwestern
boundary. The same parcel of land was
registered on 1973 under a TCT in the names of
her heirs, all surnamed Quisumbing.
The Quisumbings applied for registration and
confirmation of title over an additional area which
had gradually accrued to their property by the
natural action of the waters of Laguna de Bay.
The CFI of Bian confirmed the Quisumbings title
thereto.
In 1979, the Quisumbings filed a case before the
CFI of Calamba against Lorenzo and
PablitoMeneses, Darum and Almendral for
nullification of the free patents and titles issued
to PablitoMeneses. They alleged that Lorenzo
Menesis, then the Mayor of Los Baos, using his
brother Pablito as a tool and dummy, illegally
occupied their private accretion land and
confederating with District Land Officer Darum
and Land Inspector Almendral, obtained free
patents and OCTs to the land.
In 1984, the trial court rendered the decision
finding that the lands registered by the Meneses
brothers are accretion lands to which the
Quisumbings have a valid right as owners of the
riparian land to which nature had gradually
deposited the disputed lots. (The lots occupied by
Meneses, as found by the court, are to be
accretion lands forming parts of the bigger
accretion land owned by the Quisumbings. )
Meanwhile, the Meneses brothers and Darum
appealed the to the CA, which affirmed in toto
the lower courts decision.The defendants-
appellants filed two MRs of the CA decision but it
was denied, hence this petition for review on
certiorari.
ISSUE: WON
1. The lands in question were not accretion lands
but lands of the public domain
2. Conspiracy to commit fraud, deceit and bad
faith attended the issuance of the free patent and
titles to PablitoMeneses; and
HELD: WHEREFORE, the petition is DENIED. The
Decision CA is AFFIRMED
While the lots occupied by Villamor and Lanuzo
may not be the very same lots petitioners are
claiming here, the two cases refer to the same
accretion lands northwest of the original land
owned by the Quisumbings.
The submersion in water of a portion of the land
in question is due to the rains falling directly on
or flowing into Laguna de Bay from different
sources. Since the inundation of a portion of the
land is not due to flux and reflux of tides it
cannot be considered a foreshore land. The land
sought to be registered not being part of the bed
or basin of Laguna de Bay, nor a foreshore land
as claimed by the Director of Lands, it is not a
public land and therefore capable of registration
as private property provided that the applicant
proves that he has a registerable title.
Additionally, the provision of the law on waters
will govern in determining the natural bed or
basin of the lake. And accordingly, to Art. 84 of
the Law of Waters of August 3, 1866:
Accretions deposited gradually upon land
contiguous to creeks, streams, rivers and lakes
by accessions or sediments from the waters
thereof, belong to the owners of such lands.
As pointed out by the lower court, no act of
appropriation is necessary in order to acquire
ownership of the alluvial formation as the law
does not require the same.
2. As found by the CA, petitioners conspired in
the approval and grant of the free patents heirs
Quisumbing. Such fraud was confirmed by this
Court in Meneses v. People, which held the
petitioners therein liable for violation of the Anti-
Graft and Corrupt Practices Act in the issuance of
the same free patents and titles. In due course,
the Sandiganbayan rendered a decision finding
the defendants guilty as charged. The judgment
of conviction was affirmed.
NOTES:
1. Accretion as a mode of acquiring property
under Article 457 of the Civil Code requires the
concurrence of these requisites:
(1) that the deposition of soil or sediment be
gradual and imperceptible;
(2) that it be the result of the action of the
waters of the river (or sea); and
(3) that the land where accretion takes place is
adjacent to the banks of rivers (or the sea coast).
2. The task of fixing the amount of damages is
primarily with the trial court. While it is the
appellate courts duty to review the same, a
reduction of the award of damages must pass the
test of reasonableness. The CA can only modify
or change the amount awarded as damages when
they are palpably or scandalously and reasonably
excessive.
3. A public official is by law not immune from
damages in his personal capacity for acts done in
bad faith which, being outside the scope of his
authority, are no longer protected by the mantle
of immunity for official actions.
Grande v. Court of Appeals
SUMMARY: Owners of a parcel of land filed a
suit for quieting of title and recovery of
possession over a portion of property that
was added to the original parcel of land via
accretion. The defendants claim ownership
by acquisitive prescription, being in open,
continuous and undisturbed possession of
the property for over 30 years prior to the
filing of this case.
DOCTRINE: Alluvial deposits become part of
the property to which it becomes attached,
and ownership of the alluvial portion
belongs to the owner of the attached
property. However, this land is not
automatically covered by the Torrens title of
the land owned prior to the accretion, and is
considered unregistered land, making it
susceptible to acquisitive prescription.
FACTS: Petitioners Ignacio, Eulogia, Alfonso,
Eulalia, and Sofia Grande filed a suit for quieting
of title and recovery of possession over a parcel
of land that came about through alluvial deposits
from the Cagayan River. Their original lot,
defined in OCT No. 2982 (issued in 1934)
provides their northeastern boundary as the
Cagayan River, from a survey conducted in 1930.
It is to this boundary that the accretion occurred.
The Grandes allege that they have been in
possession of this property until 1948, when
defendants Domingo and Esteban Calalung
entered the land on a claim of ownership. On the
issue of filing the case only in 1958, the Grandes
claim they could not acquire a copy of their title
as they could not afford a surveyor.
The Calalungs, on the other hand, claim to have
been in open, continuous, and undisturbed
possession of the contested property since 1933,
and argue that they are now the owners of the
property through acquisitive prescription, since
the case was filed more than 30 years after they
first took possession of the property. The
Calalungs had declared the property for taxation
purposes in 1944, and again in 1948 when the
municipality changed its name. The Calalungs
allege that the only reason the Grandes filed a
case was because a survey commissioned by the
Calalungs inadvertently included a part of the
property covered by OCT No. 2982 - property
which they readily ceded back to the Grandes in
1958. Two owners of adjoining lots, Laman and
Bacani, both testified in support of the Calalungs.
The RTC ruled in favor of the Grandes, but the
Court of Appeals reversed the decision below and
upheld the Calalungs argument on acquisitive
prescription.
ISSUES/HELD:WON the contested property can
be acquired by prescription
RATIO:The Supreme Court ruled in favor of the
Calalungs and upheld the decision of the Court of
Appeals.
The Supreme Court acknowledged that by Article
457 of the New Civil Code and Article 366 of the
Old Civil Code, the Grandes are the owners of the
alluvial property. However, this does not operate
to automatically include the alluvial property
under OCT No. 2892. While ownership is
governed by the Civil Code, imprescriptibility of
registered land is provided in the registration law.
As the Grandes never sought to have the alluvial
property titled, it is considered unregistered land.
The Supreme Court upheld the findings of the
Court of Appeals on the possession of the
Calalungs of the property since 1933-1934,
openly, continuously and adversely, under a
claim of ownership up to the filing of the action in
1958. The Court pointed out that it is the
provisions of Act No. 190, particularly Sec. 41,
that governs this case, since the provisions of the
Old Civil Code were not yet in effect. Sec. 41
provides an acquisitive prescriptive period of only
ten years, meaning the Calalung acquired
ownership as early as 1943-1944.
Jagualing v. Court of Appeals
194 SCRA 607
Facts:
A certain parcel of land is located in Sta. Cruz,
Tagoloan, Misamis Oriental with an area of
16,452 sq. m., forming part of an island in a non-
navigable river, bounded by the Tagoloan River
on the north, south, and east and by the portion
belonging to Vicente Neri on the west.
Janita Eduave claims that she inherited the land
from her father, Felomino Factura, together with
his co-heirs, Reneiro Factura and Aldenora
Factura, and acquired sole ownership of the
property by virtue of a Deed of Extra
Judicial Partition with sale. The land is declared
for tax purposes under Tax Declaration 26137
with an area of 16,452 sq. m. Since the death of
her father on 5 May 1949, Eduave had been in
possession of the property although the tax
declaration remains in the name of the deceased
father. The entire land had an area of 16,452 sq.
m. appearing in the deed of extrajudicial
partition, while in tax declaration the area is only
4,937 sq. m., and she reasoned out that she
included the land that was under water.
The land was eroded sometime in November
1964 due to typhoon Ineng, destroying the
bigger portion and the improvements leaving only
a coconut tree. In 1966 due to the movement of
the river deposits on the land that was not
eroded increased the area to almost half a
hectare and in 1970 Eduave started to plant
banana trees.
In 1973, Maximo and Anuncita Jagualing asked
her permission to plant corn and bananas
provided that they prevent squatters to come to
the area. Eduave engaged the services of a
surveyor who conducted a survey and placed
concrete monuments over the land. Eduave also
paid taxes on the land in litigation, and
mortgaged the land to the Luzon Surety and Co.,
for a consideration of P6,000.00.
The land was the subject of a reconveyance case
between Janita Eduave vs. Heirs of Antonio
Factura, which was the subject of judgment by
compromise in view of the amicable settlement of
the parties. The heirs of Antonio Factura had
ceded a portion of the land with an area of 1,289
sq. m., to Janita Eduave in a notarial document
of conveyance, pursuant to the decision of the
CFI, after a subdivision of the lot 62 Pls-799, and
containing 1,289 sq. m. was designated as Lot
62-A, and the subdivision plan was approved.
Eduave also applied for concession with the
Bureau of Mines to extract 200 m3 of grave, and
after an ocular inspection the permit was
granted. Eduave, after permit was granted,
entered into an agreement with Tagoloan
Aggregates to extract sand and gravel, which
agreement was registered in the office of the
Register of Deeds. Maximo
and Anuncita Jagualing assert that they are the
real owners of the land in litigation containing an
area of 18,000 sq. m. During the typhoon Ineng
in 1964 the river control was washed away
causing the formation of an island. Jagualing
started occupying the land in 1969, paid land
taxes as evidenced by tax declaration 26380 and
tax receipts, and tax clearances. Actual
occupation of the land by Jagualing included
improvements and the house.
Rudy Gondo and Janita Eduave filed with the RTC
Misamis Oriental an action to quiet title and/or
remove a cloud over the property in question
against Jagualing. On 17 July 1987 the trial court
dismissed the complaint for failure of Eduave to
establish by preponderance of evidence their
claim of ownership over the land in litigation. The
court found that the island is a delta forming part
of the river bed which the government may use
to reroute, redirect or control the course of the
Tagoloan River. Accordingly, it held that it was
outside the commerce of man and part of the
public domain, citing Article 420 of the Civil Code.
As such it cannot be registered under the land
registration law or be acquired by prescription.
The trial court, however, recognized the validity
of Jagualings possession and gave them
preferential rights to use and enjoy the property.
The trial court added that should the State allow
the island to be the subject of private ownership,
the Jagualings have rights better than that of
Eduave.
On appeal to the CA, the court found that the
island was formed by the branching off of the
Tagoloan River and subsequent thereto the
accumulation of alluvial deposits. Basing its ruling
on Articles 463 and 465 of the Civil Code, the CA
reversed the decision of the trial court, declared
Eduave as the lawful and true owners of the land
subject of the case and ordered Jagualing to
vacate the premises and deliver possession of the
land to Eduave.
Lands formed by accretion belong to the riparian
owner. This preferential right is, under Article
465, also granted the owners of the land located
in the margin nearest the formed island for the
reason that they are in the best position to
cultivate and attend to the exploitation of the
same. In fact, no specific act of possession over
the accretion is required. If, however, the
riparian owner fails to assert his claim thereof,
the same may yield to the adverse possession of
third parties, as indeed even accretion to land
titled under the Torrens system must itself still be
registered.
There is no need to make a final determination
regarding the origins of the island, i.e., whether
the island was initially formed by the branching
off or division of the river and covered by Article
463 of the Civil Code, in which case there is
strictly no accession because the original owner
retains ownership, or whether it was due to the
action of the river under Article 465, or whether
it was caused by the abrupt segregation and
washing away of the stockpile of the river
control, which makes it a case of avulsion under
Article 459, as the case is not between parties as
opposing riparian owners contesting ownership
over an accession but rather between a riparian
owner and the one in possession of the island.

Issue:
Who between the one who has actual possession
of an island that forms in a non-navigable and
non-floatable river and the owner of the land
along the margin nearest the island, has the
better right thereto?

Held:
The parcel of land is part of an island that formed
in a non-navigable and non-floatable river; from
a small mass of eroded or segregated outcrop of
land, it increased to its present size due to the
gradual and successive accumulation of alluvial
deposits. The CA did not err in applying Article
465 of the Civil Code. Under this provision, the
island belongs to the owner of the land along the
nearer margin as sole owner thereof; or more
accurately, because the island is longer than the
property of Eduave, they are deemed ipso jure to
be the owners of that portion which corresponds
to the length of their property along the margin
of the river.