E.M.A.

SERNEO

71. ABAD v CA
G.R. No. 84908 December 4, 1989

FACTS: Herminigildo Aquino, Juanito Dichoso, Damian Garcia and herein petitioner Felix Abad agreed
among themselves to contribute to a certain fund in order to purchase from Cres Pilias and Narciso
Adaya a parcel of land situated in Diliman, Quezon City.

To conform with the rules and regulations of the People's Homesite and Housing Corporation (PHHC),
Cres Pilias and Narciso Adaya executed a Deed of Assignment naming Herminigildo Aquino as the only
assignee of the said parcel of land.

Aquino executed an affidavit on October 10, 1969 stating among others that although he is the sole
assignee in the Deed of Assignment executed jointly by Cres Pilias and Narciso Adaya, in truth and in
fact, Juanito Dichoso, Damian Garcia and herein petitioner Felix Abad are also assignees as they have
contributed equally to the amount corresponding to the payments made on the property; that he
voluntarily recognizes and acknowledges the above-named persons as his co-owners of the property;
and that after the corresponding transfer certificate of title is issued in his name, he would execute the
necessary deed of absolute sale to each co-owner .

Transfer Certificate of Title No. 175968 was finally issued in the name of the Aquino spouses covering the
lot which was purchased by the four co-owners. Felix Abad went to see Herminigildo Aquino to ask the
latter to execute the necessary document (deed of sale) that will cause the issuance of title in his
(petitioner's) name. In violation of the agreement and in contravention of the affidavit that he himself
signed, Aquino refused. This being the case, petitioner had to insure that his interest over the property
would be protected by having his adverse claim duly annotated at the back of TCT No. 175968.
Hence, petitioner Felix Abad filed Civil Case No. Q-27582 with the Regional Trial Court of Quezon City to
compel Aquino spouses to execute the requisite instrument recognizing his co-ownership over the
property and for the Register of Deeds to issue a transfer certificate of title in his favor over his portion
thereof.

Unfortunately, the contest over the property in question did not end there. After the decision in Civil Case
No. Q-27582 was rendered, petitioners Abad spouses learned that private respondents Dayap
spouses intended to build a fence around the area already allocated to the former by virtue of the above
decision. Hence, petitioners Abad spouses filed another case, Civil Case No. Q-35941, this time against
private respondents Dayap spouses, for injunction with prayer for a writ of preliminary injunction, to enjoin
the latter from building the said fence. However, private respondents claimed that the lot belonged to
them as it was within the property they bought from Herminigildo Aquino.

The private respondents claimed that they are the rightful owners of the property, presenting that:
(1) they purchased the lot in question from Herminigildo Aquino in good faith and for value as
evidenced by the Deed of Sale executed by the latter in their favor; and (2) they are the ones in
possession of the property.
Considering that both parties were asserting their right over the same piece of property, the lower court
ordered the Bureau of Lands to make a survey that would determine the Identity of the land claimed by
each party based on the titles and other documents of ownership submitted in court.

ISSUE: Who has the better right to the subject property in the case?

RULING: The petitioner, Felix Abad has a better right than the private respondents.

With respect to the allegation of private respondents that they purchased the property in question from
Herminigildo Aquino in good faith and for value in 1972 We hold that such sale could not have covered
a definite portion of the land under co-ownership. It has been established on record that from 1969, the
property in question was co-owned by Herminigildo Aquino and three other persons including petitioner
Felix Abad. Such co-ownership still existed and even the Court of Appeals does not deny the fact of such
co-ownership. It is well-settled that a co-owner has no right to sell a divided part, by metes and bounds, of
the real estate owned in common. This doctrine was reiterated in Mercado vs. Liwanag, where it was
held that a co-owner may not convey a physical portion of the land owned in common. Applying the
foregoing principles, We hold, therefore, that Aquino, a mere co-owner, could not have validly sold
to private respondents a specific part of the land he owned in common with petitioner and two
others as described in the Deed of Sale executed by him in favor of private respondents. Private
respondents, therefore, cannot claim title to that definite portion of the land owned in common,
wherein they have made and were about to begin other constructions at the time the complaint for
injunction was filed by petitioners in the lower court. (MAIN POINT)
With regard to the contention of private respondents that they have a better right to the property since
they have occupied and are presently in possession of the same, it is but proper to reiterate the well-
established rule that mere possession cannot defeat the title of a holder of a registered torrens title
to real property. 17 It is indeed questionable that up to now, private respondents merely have in their
possession a deed of absolute sale executed way back in 1972 to evidence their claim of ownership.
Petitioners, on the other hand, have the affidavit proving their right as co-owner of the lot, their adverse
claim annotated at the back of the torrens title of Aquino, and a final judgment in their favor. The transfer
certificate of title covering the disputed lot is now in the name of petitioner spouses. Such title is entitled
to respect and great weight until somebody else can show a better right to the lot.

Of course, this Decision is without prejudice to any right private respondents may have against
Herminigildo Aquino. All constructions built by private respondents in good faith may be removed by them
following the provisions in the Civil Code on builders in good faith.

WHEREFORE, in view of the foregoing, the decision of the Court of Appeals in CA-G.R. No. 09424 is
hereby REVERSED and SET ASIDE and the decision of the Regional Trial Court in Civil Case No. Q-
35941 is hereby REINSTATED. The case is hereby remanded to the Regional Trial Court of Quezon City
for immediate execution. No costs.
SO ORDERED.
72. SPS. DEL CAMPO v. ABRESIA
G.R. No. L-49219 April 15, 1988

FACTS: The case involves a corner lot at Flores and Cavan Streets in Cebu City. Plaintiffs and
defendants are co-owners pro indiviso of this lot in the proportion of and 1/3 share each. Plaintiffs
(spouses) owns 2/3 of the lot and Defendant owns 1/3 of the same. The total size of the lot is 45 square
meters.

Later on, the two parties decided, through the recommendation of the commissioner appointed by the
court, to divide the co-owned property into two lots. 30 square meters went to the plaintiffs and 15 square
meters went to the defendants. From the sketch plan, both parties discovered that the house of the
defendants occupied a portion of the plaintiffs adjacent lot, eating 5 sqm of it. The parties then requested
the trial court to adjudicate who should take possession of the encroached 5 sqm.

The trial court ruled that Art. 448 does not apply. 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. Since art 448 does not apply, the Plaintiff
cannot be obliged to pay for the portion of defendants house that entered into the 30 sqm lot, AND
Defendant cannot be obliged to pay for the price of the 5 sqm their house occupied. Why? The RTC
believed the rules of co-ownership should govern, and not that of accession.

RTC then assigned the full 30sqm to Plaintiff and ordered Defendants to demolish the 5sqm part of their
house encroaching the 30sqm lot of the Plaintiffs. Defendants were aghast at having to axe the family
home, hence they appealed.

CA affirmed the decision.

ISSUE: W/N the rules of accession applies (and not coownership) on property that used to be co-owned,
but was subdivided.

RULING: The rule of accession applies because co-ownership was terminated upon the partitioning of
the lot. Art 448 therefore governs. 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.
The house of Defendant overlapped that of Plaintiff, but this was built on good faith. Hence, the plaintiffs
have the right to choose one of two options

1. Appropriate the 5sqm portion of the house of Defendants after indemnifying the Defendants; or
2. Obliging the Defendants to pay a portion of the land on which their home rested. ( or they can rent it)
72. IGNAO v. IAC
G.R. No. 72876 January 18, 1991

FACTS: 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, a partition of the aforesaid land was
directed, alloting 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.

Subsequently,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.

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.

Respondents contend that they were builders in good faith. They stated that petitioner should have the
choice to either appropriate the part of the house standing on his land after payment of indemnity or
oblige the respondents to pay the price of the land. However, it would be useless and unsuitable for
Florencio to exercise the first option since this would render the entire house worthless.

ISSUE: Is Article 448 applicable to a builder in good faith on a property held in common?

RULING: Yes. 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.

The law is clear and unambiguous when it confers the right of choice upon the landowner and not upon
the builder and the courts.
73. PERSHING TAN QUETO V. COURT OF APPEALS, JUAN POMBUENA AND RESTITUTA
TACALINAR GUANGCO DE POMBUENA

G.R. NO. L-35648 FEBRUARY 27, 1987

FACTS: The parcel of land involved in the dispute was registered in the name of Juan married to
Restituta. In 22 September 1949, a contract of lease over the said parcel of land was entered into
between Tan Queto and Restituta. On 27 December 1960, Restituta sued Tan Queto for unlawful
detainer on the ground the lease contract has already expired. However, on appeal the Court of First
Instance dismissed the case on the ground Juan and Tan Queto entered into a barter agreement on 10
October 1962. After the barter agreement, Tan Queto constructed on the disputed land a concrete
building without any objection on the part of Restituta.

ISSUE: Is Tan Queto a builder in bad faith?

RULING: No. TAN QUETO having bartered his own lot and small house with the questioned lot with
JUAN may be said to be the OWNER-POSSESSOR of the lot. Certainly he is not merely a possessor or
builder in good faith; much less is he a builder in bad faith. He is a builder possessor jus possidendi
because he is the OWNER himself. 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. But in either case there is a flaw or defect. In the case of
TAN QUETO there is no such flaw or defect because it is he himself (not somebody else) who is the
owner of the property.
74. SANTOS v. MOJICA
G.R. No. L-25450 January 31, 1969

FACTS: On March 19, 1959, in the Court of First Instance of Rizal, eleven brothers and sisters, all
surnamed Allanigue, brought an action (Civil Case No. 217-R) against their sister, Lorenza Allanigue, her
husband, Simeon Santos, Maria San Agustin and Felicidad San Agustin, for partition of a 360-square-
meter lot situated at San Dionisio, Paraaque, Rizal, and for the annulment of certain conveyances
involving the same. Defendants having been declared in default, the trial court, after hearing the
plaintiffs' evidence, rendered judgment ordering the partition of the lot among the eleven plaintiffs
and the defendant Lorenza Allanigue. In a subsequent order the court set off Lorenza Allanigue's share
against the amount that she had failed to pay as rents to the plaintiffs as directed in the decision.

A writ of execution was issued on the judgment ordering the defendants to vacate the lot and deliver its
possession to the plaintiffs. Leonardo Santos, not a party defendant but a son of defendants Simeon
Santos and Lorenza Allanigue, owned a house standing on the lot. He filed with the sheriff a third-party
claim, and with the court, a motion to recall the writ of execution insofar as his house was concerned. The
motion was denied. On March 15, 1962, the defendants and movant Leonardo Santos having failed to
remove their houses from the lot within the period given them, the court ordered the sheriff to demolish
said houses.

On April 2, 1962, Leonardo Santos and the defendants in the case as petitioners, filed in the Supreme
Court a petition for certiorari and prohibition, G.R. No. L-19618, against Judge Angel H. Mojica, the
Provincial Sheriff of Rizal and the plaintiffs in the case, as respondents. Among the issues raised
therein was whether or not the lower court had jurisdiction to order the demolition of petitioners'
houses in that special civil action. In its decision of February 28, 1964, the Supreme Court denied the
petition after finding that Leonardo Santos, who claimed to be the owner of a house and the portion of
land on which it stood by purchase from his parents, did not follow the procedure sanctioned by law in
vindicating his alleged ownership, i.e., he should have filed an ordinary civil action to vindicate his alleged
ownership of the house and the portion of land on which it was built.

After the said decision of the Supreme Court had become final, the respondent Judge, Angel H. Mojica,
on motion of the plaintiffs, ordered the demolition of the defendants' houses. The defendants having
voluntarily removed their houses, the only house that remained standing on the lot was that belonging to
Leonardo Santos. Subsequently, the respondent Judge issued an order directing the sheriff to demolish
the house of Leonardo Santos. Hence, the present petition for certiorari and prohibition in this Court
where Leonardo Santos, petitioner, questions the jurisdiction of the respondent Judge in issuing the order
of demolition of his house.

ISSUE: Is Leonardo Santos deemed to be a builder in bad faith and thus, loses his rights and is liable for
damages?

RULING: Yes. Leonardo Santos' house having been built and reconstructed (after March, 1962) into a
bigger one after his predecessors-in-interest, his parents, had been summoned in 1959 in Civil Case No.
217-R, he must be deemed a builder in bad faith. As builder in bad faith he lost the improvement made by
him consisting of the reconstructed house to the owners of the land without right to indemnity, pursuant to
Article 449 of the Civil Code, which provides:

ART. 449. 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.

The Allanigue brothers and sisters therefore become owners of the improvement consisting of the house
built in bad faith by Leonardo Santos if they chose to appropriate the accession. (Articles 445 and 449,
Civil Code.) However, said owners could choose instead the demolition of the improvement or building at
the expense of the builder, pursuant to Article 450 of the Civil Code.

It is of record in Civil Case No. 217-R that the owners of the land chose to have the house or
improvement demolished pursuant to their motion for demolition which was granted by respondent Judge
Mojica on December 9, 1965.

PREMISES CONSIDERED, the petition is denied, with treble costs against the petitioner. The writ of
preliminary injunction issued by this Court is hereby dissolved.
75. BALUCANAG v. STOHNER
G.R. No. L-33422 May 30, 1983

FACTS: This petition for review of the decision of the Court of First Instance of Manila in Civil Case No.
67503 calls for a determination of the respective rights of the lessor and the lessee over the
improvements introduced by the latter in the leased premises.

Cecilia dela Cruz Charvet was the owner of a 177.50 square meter lot located in Zamora Street,
Pandacan, Manila. On August 31, 1952, Mrs. Charvet leased said lot to respondent Richard Stohner for a
period of five [5] years at the monthly rental of 2140.00, payable in advance within the first ten [10] days
of each month. The lease contract 1 provided, among others, that:

IV. The lessee may erect such buildings upon and make such improvements to the
leased land as he shag see fit. All such buildings and improvements shall remain the
property of the lessee and he may remove them at any nine, it being agreed, however,
that should he not remove the said buildings and improvements within a period of two
months after the expiration of this Agreement, the Lessor may remove the said buildings
and improvements or cause them to be removed at the expense of the Lessee.

During the existence of the lease, Stohner made fillings on the land and constructed a house thereon,
said improvements being allegedly valued at P35,000.00.

On March 8, 1966, Mrs. Charvet sold the said lot to petitioner Rosendo Balucanag. 2

For Stohner's failure to pay the rents, Balucanag, thru counsel, wrote Stohner a letter demanding that he
vacate the premises. 3 In reply thereto, Stohner, also thru counsel, claimed that he was a builder in good
faith of the residential house erected in the land. He offered the following proposals for a possible
compromise, to wit:

[a] Mr. Stohner will purchase the said lot from your client with the interest of 12% per
annum on the value, or

[b] Your client Mr. Rosendo Balucanag will reimburse our client in the total amount of
P35,000.00 for the improvements and construction he has made on the lot in question.

As no agreement was reached, Balucanag instituted in the City Court of Manila an ejectment suit against
Stohner and, after due trial, the court rendered a decision in favour of Balucanag.

On appeal, the Court of First Instance of Manila, presided by respondent judge held that Stohner was a
builder in good faith because he had constructed the residential house with the consent of the original
lessor, Mrs. Charvet, and also because the latter, after the expiration of the lease contract on August 31,
1957, had neither sought Stohner's ejectment from the premises, nor the removal of his house therefrom.
Invoking Articles 448 and 546 of the Civil Code. 4 respondent judge concluded that Stohner, being a
builder in good faith, cannot be ejected until he is reimbursed of the value of the improvements.

Frustrated in his effort to have the decision reconsidered, Balucanag filed the instant petition for review.

ISSUE: W/N Stohner is a builder in good faith;

RULING: No.

Paragraph IV of the lease contract entered into by Stohner with Mrs. Charvet specifically provides that "...
such buildings and improvements shan remain the property of the lessee and he may remove them at
any time, it being agreed, however, that should he not remove the said buildings and improvements within
a period of two months after the expiration of this Agreement, the Lessor may remove the said buildings
and improvements or cause them to be removed at the expense of the Lessee." Respondent Stohner
does not assail the validity of this stipulation, Neither has he advanced any reason why he should not be
bound by it.

But even in the absence of said stipulation, respondent Stohner cannot be considered a builder in good
faith. Article 448 of the Civil Code, relied upon by respondent judge, applies only to a case where one
builds on land in the belief that he is the owner thereof and it does not apply where one's only interest in
the land is that of a lessee under a rental contract.
In the case at bar, there is no dispute that the relation between Balucanag and Stohner is that of lessor
and lessee, the former being the successor in interest of the original owner of the lot. As we ruled
in Lopez, Inc. vs. Phil. and Eastern Trading Co., Inc., 5 "... the principle of possessor in good faith refers
only to a party who occupies or possess property in the belief that he is the owner thereof and said good
faith ends only when he discovers a flaw in his title so as to reasonably advise or inform him that after all
he may not be the legal owner of said property. It cannot apply to a lessee because as such lessee he
knows that he is not the owner of he leased premises. Neither can he deny the ownership or title of his
lessor. ... A lessee who introduces improvements in the leased premises, does so at his own risk in the
sense that he cannot recover their value from the lessor, much less retain the premises until such
reimbursement. ..."

The law applicable to the case at bar is Article 1678 of the Civil Code, which We quote:

Art. 1678. If the lessee makes, in good faith, useful improvements which are suitable to
the use for which the lease is intended, without altering the form or substance of the
property leased, the lessor upon the termination of the lease shall pay the lessee one-half
of the value of the improvements at the time. Should the lessor refuse to reimburse said
amount, the lessee may remove the improvements, even though the principal thing may
suffer damage thereby. He shall not, however, cause any more impairment upon the
property leased than is necessary. ...

This article gives the lessor the option to appropriate the useful improvements by paying one-half of their
value, 6And the lessee cannot compel the lessor to appropriate the improvements and make
reimbursement, for the lessee's right under the law is to remove the improvements even if the leased
premises may suffer damage thereby. But he shall not cause any more damage upon the property than is
necessary.