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Davao Sawmill Co. vs Castillo GR No. L-40411

A tenant placed machines for use in a sawmill on the landlord's land.
Facts: Davao Sawmill Co., operated a sawmill. The land upon which the business was conducted was
leased from another person. On the land, Davao Sawmill erected a building which housed the machinery
it used. Some of the machines were mounted and placed on foundations of cement. In the contract of
lease, Davo Sawmill agreed to turn over free of charge all improvements and buildings erected by it on
the premises with the exception of machineries, which shall remain with the Davao Sawmill. In an action
brought by the Davao Light and Power Co., judgment was rendered against Davao Sawmill. A writ of
execution was issued and the machineries placed on the sawmill were levied upon as personalty by the
sheriff. Davao Light and Power Co., proceeded to purchase the machinery and other properties
auctioned by the sheriff.
Issue: Are the machineries real or personal property?
Held: Art.415 of the New Civil Code provides that Real Property consists of:
(1) Lands, buildings, roads and constructions of all kinds adhered to the soil; xxx
(5) Machinery, receptacles, instruments or implements intended by the owner pf the tenement for an
industry ot works which may be carried on in a building or on a piece of land, and which tend directly
to meet the needs of the said industry or works;
Appellant should have registered its protest before or at the time of the sale of the property. While not
conclusive, the appellant's characterization of the property as chattels is indicative of intention and
impresses upon the property the character determined by the parties.
Machinery is naturally movable. However, machinery may be immobilized by destination or purpose
under the following conditions:
General Rule: The machinery only becomes immobilized if placed in a plant by the owner of the property
or plant.
Immobilization cannot be made by a tenant, a usufructuary, or any person having only a temporary
right.
Exception: The tenant, usufructuary, or temporary possessor acted as agent of the owner of the
premises; or he intended to permanently give away the property in favor of the owner.
As a rule, therefore, the machinery should be considered as Personal Property, since it was not placed
on the land by the owner of the said land.

Lopez vs. Orosa, Jr. and Plaza Theatre, Inc.
G.R. Nos. L-10817-18. February 28, 1958.
Doctrine: In the absence of any specific provision of law to the contrary, a building is an immovable
property, irrespective of whether or not said structure and the land on which it is adhered to belong to
the same owner.
Facts: Sometime in May, 1946, Vicente Orosa, Jr., invited Lopez to make an investment in the theatre
business. Although Lopez expressed his unwillingness to invest of the same, he agreed to supply the
lumber necessary for the construction of the proposed theatre, and at Orosas request and assurance
that the latter would be personally liable for any account that the said construction might incur, Lopez
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further agreed that payment therefore would be on demand and not cash on delivery basis. With this,
Lopez delivered the lumber which was used for the construction of the Plaza Theatre on May 17, 1946,
up to December 4 of the same year. The total cost of materials amounted to P62,255.85 but Lopez was
only paid P20,848.50, thus leaving a balance of P41,771.35. Orosa and Rustia, corporation president,
promised Lopez to obtain a bank loan to satisfy the balance, to which assurance Lopez had to accede.
Unknown to Lopez, Orosa and Rustia already secured a loan for P30,000 from the PNB with the Luzon
Surety Company as surety, and the corporation in turn executed a mortgage on the land and building
in favor of said company as counter-security. As the land at that time was not yet brought under the
operation of the Torrens System, the mortgage on the same was registered on 16 November 1946,
under Act 3344. Subsequently, when the corporation applied for the registration of the land under Act
496, such mortgage was not revealed and thus OCT O-391 was correspondingly issued on October 25,
1947, without any encumbrance appearing thereon.
Persistent demand from Lopez caused Vicente Orosa, Jr. to execute, on 17 March 1947, an alleged
deed of assignment of his 420 shares of stock of the Plaza Theater, Inc., at P100 per share or with a
total value of P42,000 in favor of the creditor, and as the obligation still remained unsettled, Lopez filed
on 12 November 1947, a complaint with the CFI Batangas against Vicente Orosa Jr. and Plaza Theatre,
Inc., praying that defendants be sentenced to pay him jointly and severally the sum of P41,771.35 with
legal interest from the filing of the action; that in case defendants fail to pay the same, that the building
and the land owned by the corporation be sold at public auction and the proceeds thereof be applied
to said indebtedness. Plaintiff also caused the annotation of a notice of lis pendens on said properties
with the Register of Deeds.
The surety company upon discovery that the land was already registered under the Torrens System and
that there was a notice of lis pendens thereon, filed a petition for review of the decree of the land
registration court in order to annotate the lights and interests of the surety company over said
properties. Lopez opposed by asserting that the amount demanded by him constituted a preferred lien
over the properties of the obligors; that the surety company was guilty of negligence when it failed to
present an opposition to the application for registration of the property; and that if any annotation of
the rights and interest of said surety would ever be made, same must be subject to the lien in his favor.
The court ruled that Orosa and the Plaza Theatre, Inc., were jointly liable for the unpaid balance of the
cost of lumber used in the construction of the building and the plaintiff thus acquired the materialmans
lien over the same; the lien being merely confined to the building and did not extend to the land on
which the construction was made.
Issue: Whether materialmans lien for the value of the materials used in the construction of a building
attaches to the building alone and does not extend to the land on which the building is adhered to.
Held: No. While it is true that generally, real estate connotes the land and the building constructed
thereon, it is obvious that the inclusion of the building, separate and distinct from the land, in the
enumeration of what may constitute real properties could mean only one thing that a building is by
itself an immovable property (Leung Yee v. Strong Machinery). In the absence of any specific provision
of law to the contrary, a building is an immovable property, irrespective of whether or not said structure
and the land on which it is adhered to belong to the same owner.

Fels Energy vs. Batangas
G.R. No. 168557. February 16, 2007.
Doctrine: In Consolidated Edison Company of New York, Inc., et al. v. The City of New York, et al., a
power company brought an action to review property tax assessment. On the citys motion to dismiss,
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the Supreme Court of New York held that the barges on which were mounted gas turbine power plants
designated to generate electrical power, the fuel oil barges which supplied fuel oil to the power plant
barges, and the accessory equipment mounted on the barges were subject to real property taxation.
Moreover, Article 415 (9) of the New Civil Code provides that docks and structures which, though
floating, are intended by their nature and object to remain at a fixed place on a river, lake, or coast
are considered immovable property. Thus, power barges are categorized as immovable property by
destination, being in the nature of machinery and other implements intended by the owner for an
industry or work which may be carried on in a building or on a piece of land and which tend directly to
meet the needs of said industry or work.
Facts: On January 18, 1993, NPC entered into a lease contract with Polar Energy, Inc. over 330 MW
diesel engine power barges moored at Balayan Bay in Calaca, Batangas. The contract, denominated as
an Energy Conversion Agreement, was for a period of five years. Article 10 states that NPC shall be
responsible for the payment of taxes. (other than (i) taxes imposed or calculated on the basis of the
net income of POLAR and Personal Income Taxes of its employees and (ii) construction permit fees,
environmental permit fees and other similar fees and charges. Polar Energy then assigned its rights
under the Agreement to Fels despite NPCs initial opposition.
FELS received an assessment of real property taxes on the power barges from Provincial Assessor Lauro
C. Andaya of Batangas City. FELS referred the matter to NPC, reminding it of its obligation under the
Agreement to pay all real estate taxes. It then gave NPC the full power and authority to represent it in
any conference regarding the real property assessment of the Provincial Assessor. NPC filed a petition
with the LBAA. The LBAA ordered Fels to pay the real estate taxes. The LBAA ruled that the power plant
facilities, while they may be classified as movable or personal property, are nevertheless considered
real property for taxation purposes because they are installed at a specific location with a character of
permanency. The LBAA also pointed out that the owner of the bargesFELS, a private corporationis
the one being taxed, not NPC. A mere agreement making NPC responsible for the payment of all real
estate taxes and assessments will not justify the exemption of FELS; such a privilege can only be granted
to NPC and cannot be extended to FELS. Finally, the LBAA also ruled that the petition was filed out of
time.
Fels appealed to the CBAA. The CBAA reversed and ruled that the power barges belong to NPC; since
they are actually, directly and exclusively used by it, the power barges are covered by the exemptions
under Section 234(c) of R.A. No. 7160. As to the other jurisdictional issue, the CBAA ruled that
prescription did not preclude the NPC from pursuing its claim for tax exemption in accordance with
Section 206 of R.A. No. 7160. Upon MR, the CBAA reversed itself.
Issue: Whether or not the petitioner may be assessed of real property taxes.
Held: YES. The CBAA and LBAA power barges are real property and are thus subject to real property
tax. This is also the inevitable conclusion, considering that G.R. No. 165113 was dismissed for failure to
sufficiently show any reversible error. Tax assessments by tax examiners are presumed correct and
made in good faith, with the taxpayer having the burden of proving otherwise. Besides, factual findings
of administrative bodies, which have acquired expertise in their field, are generally binding and
conclusive upon the Court; we will not assume to interfere with the sensible exercise of the judgment
of men especially trained in appraising property. Where the judicial mind is left in doubt, it is a sound
policy to leave the assessment undisturbed. We find no reason to depart from this rule in this case.
In Consolidated Edison Company of New York, Inc., et al. v. The City of New York, et al., a power
company brought an action to review property tax assessment. On the citys motion to dismiss, the
Supreme Court of New York held that the barges on which were mounted gas turbine power plants
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designated to generate electrical power, the fuel oil barges which supplied fuel oil to the power plant
barges, and the accessory equipment mounted on the barges were subject to real property taxation.
Moreover, Article 415 (9) of the New Civil Code provides that docks and structures which, though
floating, are intended by their nature and object to remain at a fixed place on a river, lake, or coast
are considered immovable property. Thus, power barges are categorized as immovable property by
destination, being in the nature of machinery and other implements intended by the owner for an
industry or work which may be carried on in a building or on a piece of land and which tend directly to
meet the needs of said industry or work.
Petitioners maintain nevertheless that the power barges are exempt from real estate tax under Section
234 (c) of R.A. No. 7160 because they are actually, directly and exclusively used by petitioner NPC, a
government- owned and controlled corporation engaged in the supply, generation, and transmission of
electric power.
We affirm the findings of the LBAA and CBAA that the owner of the taxable properties is petitioner FELS,
which in fine, is the entity being taxed by the local government. As stipulated under Section 2.11, Article
2 of the Agreement:
OWNERSHIP OF POWER BARGES. POLAR shall own the Power Barges and all the fixtures, fittings,
machinery and equipment on the Site used in connection with the Power Barges which have been
supplied by it at its own cost. POLAR shall operate, manage and maintain the Power Barges for the
purpose of converting Fuel of NAPOCOR into electricity.
It follows then that FELS cannot escape liability from the payment of realty taxes by invoking its
exemption in Section 234 (c) of R.A. No. 7160. Indeed, the law states that the machinery must be
actually, directly and exclusively used by the government owned or controlled corporation; nevertheless,
petitioner FELS still cannot find solace in this provision because Section 5.5, Article 5 of the Agreement
provides:
OPERATION. POLAR undertakes that until the end of the Lease Period, subject to the supply of the
necessary Fuel pursuant to Article 6 and to the other provisions hereof, it will operate the Power Barges
to convert such Fuel into electricity in accordance with Part A of Article 7.
It is a basic rule that obligations arising from a contract have the force of law between the parties. Not
being contrary to law, morals, good customs, public order or public policy, the parties to the contract
are bound by its terms and conditions.
Time and again, the Supreme Court has stated that taxation is the rule and exemption is the exception.
The law does not look with favor on tax exemptions and the entity that would seek to be thus privileged
must justify it by words too plain to be mistaken and too categorical to be misinterpreted. Thus, applying
the rule of strict construction of laws granting tax exemptions, and the rule that doubts should be
resolved in favor of provincial corporations, we hold that FELS is considered a taxable entity.
The mere undertaking of petitioner NPC under Section 10.1 of the Agreement, that it shall be responsible
for the payment of all real estate taxes and assessments, does not justify the exemption. The privilege
granted to petitioner NPC cannot be extended to FELS. The covenant is between FELS and NPC and
does not bind a third person not privy thereto, in this case, the Province of Batangas.
It must be pointed out that the protracted and circuitous litigation has seriously resulted in the local
governments deprivation of revenues. The power to tax is an incident of sovereignty and is unlimited
in its magnitude, acknowledging in its very nature no perimeter so that security against its abuse is to
be found only in the responsibility of the legislature which imposes the tax on the constituency who are
to pay for it. The right of local government units to collect taxes due must always be upheld to avoid
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severe tax erosion. This consideration is consistent with the State policy to guarantee the autonomy of
local governments and the objective of the Local Government Code that they enjoy genuine and
meaningful local autonomy to empower them to achieve their fullest development as self-reliant
communities and make them effective partners in the attainment of national goals.
In conclusion, we reiterate that the power to tax is the most potent instrument to raise the needed
revenues to finance and support myriad activities of the local government units for the delivery of basic
services essential to the promotion of the general welfare and the enhancement of peace, progress,
and prosperity of the people.

Benitez vs CA
Facts: Both pairs of spouses, Sps. Benitez and Macapagal bought parcels of land wherein the latter
found that the Sps. Benitez encroached on a portion of their land. The Sps. Macapagal filed an action
to recover possession of said portion and after which a compromise was reached wherein the Sps.
Macapagal would sell the encroached portion to the Benitez. The Sps. Macapagal bought another lot
adjacent to that of the Sps. Benitez and found that the Sps. Benitezs house encroached a portion of
their lot [again]. After refusing to vacate despite verbal and written demands, the Sps. Macapagal filed
an action for ejectment against the Sps. Benitez [within 1 year from the last demand]. The Metropolitan
Trial Court (MeTC) decided in favor of Sps. Macapagal. On appeal the RTC and the CA affirmed in toto
said decision. Thus the case at bar.
Issues:
(1) Whether or not an action for ejectment is the proper remedy to recover possession of the
encroached portion
(2) Whether or not Sps. Benitez can be made to pay rent
(3) Whether or not the option to sell exclusively belongs to the owner
Held:
(1) YES, Sec. 1 Rule 70 of the Revised Rules of Court allows any person unlawfully deprived of
possession by FISTS or after expiration of right to hold possession within 1 year from unlawful
deprivation to bring an action to recover possession. Forcible entry requires prior physical possession
but unlawful detainer does not require prior physical possession. Actual or physical possession is not
always necessary. And possession is not only acquired through material occupation but also when a
thing is subject to the action of ones will or by the proper acts and legal formalities established for
acquiring such right, through execution of deed of sale. [since it is a proper remedy, the MeTC has
jurisdiction to hear the matter]
(2) YES, The rent to be paid arises from the loss of the use and occupation of the property and is
technically damages. Therefore since petitioners benefited from the occupation of the property it is only
just that they be made to pay damages in the form of rent.
(3) YES, Art. 448 of the CC mandates that the option to sell the land on which another in good faith
builds, plants or sown on, belongs to the owner. The reason for this is because the owners right is
older and by principle of accession, he is entitled to the ownership of the accessory thing.

PEDRO P. PECSON V. COURT OF APPEALS, SPS. NUGUID
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Facts: Pedro Pecson was the owner of a commercial lot on which he built a 4-door-2-storey apartment
building. He failed to pay realty taxes amounting to P12k so the lot was sold at public auction to Mamerto
Nepomuceno who later on sold it to the Sps. Nuguid.
Pecson challenged the validity of the auction before the RTC but was dismissed but the RTC held that
the apartment bldg was not subject of the litigation. On appeal, the CA appealed in toto the decision of
the RTC that the apartment bldg was not included in the auction sale.
After an entry of judgment was made, the Sps. Nuguid filed a motion with the RTC for a motion for
delivery of possession of the lot and the apartment bldg citing Art. 546 of the CC. The RTC issued an
order declaring that the owner of the lot and apartment bldg were the Sps. Nuguid and to pay the
construction cost of the apartment before a writ of possession would be issued and to pay rent to the
spouses. Pecson moved for reconsideration but the Trial court did not act on it, instead it issued a writ
of possession. The CA affirmed in part the decision declaring the cost of construction can be offset from
the amount of rents to be collected and that since Sps. Nuguid opted to appropriate the improvement,
Pecson is entitled to be reimbursed the cost of construction at the time it was built in 1965 which is at
P53k and the right the retain the improvement until full indemnity is paid.
Thus the case at bar.
Issue: Whether or not Art. 448 and 546 applies in the case at bar
Held: YES
> With regard to Art. 448, the provision on indemnity may be applied in analogy. Whoever is the owner
of the land may appropriate whatever has been built, planted or sown after paying indemnity. However,
it does not apply when the owner of the land is also the builder of the works on his own land who later
on loses ownership by sale or donation.

> Art. 546 refers to the necessary and useful expenses which shall be refunded to the possessor in
good faith with right of retention. However, it does not state how to determine the value of the useful
improvement. The respondents [court and private respondents alike] espouses as sufficient
reimbursement the cost of construction in 1965, however, this is contrary to previous rulings which
declares that the value to the reimbursed should be the present market value of said improvements so
as not to unjustly enrich either of the parties. [the trial court erred in ordering Pecson to pay rent since
the Sps. Nuguid has yet to pay the indemnity therefore Pecson has the right to retain the improvements
and the income thereof. The case was remanded to the trial court for determination of the current
market value of the apartment bldg and ordered the Sps to pay Pecson otherwise it shall be restored
to Pecson until payment of indemnity

Sps. Nuguid vs CA
G.R. No. 151815. February 23, 2005
Facts: Pedro P. Pecson owned a commercial lot on which he built a four-door two-storey apartment
building. For failure to pay realty taxes, the lot
wassold at public auction by the City Treasurer toMamerto Nepomuceno, who in turn sold it for P103,
000 to the spouses Juan and Erlinda Nuguid. Pecson challenged the validity of the auction sale before
the RTC of Quezon City, the RTC upheld the spouses title but declared that the four-door two-
storey apartment building was not included in the auction sale. This was affirmed by the CA and by
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theSC.The Nuguids became the uncontestedowners of commercial lot. The Nuguid spousesmoved for
delivery of possession of the lot and the apartment building.
Issue: WON the Nuguids should reimburse Pecson for the benefits derived from the apartment building.
Held: YES. Since petitioners opted to appropriate the improvement for themselves as early as June
1993, when they applied for a writ of execution despite knowledge that the auction sale did not include
the apartment building, they could not benefit from the lots improvement, until they reimbursed the
improver in full, based on the current market value of the property. Under Article 448, the landowner
is given the option, either to appropriate the improvement as
his own upon payment of the proper amount of indemnity or to sell the land to the possessor in good
faith. Relatedly, Article 546 provides that a builder in good faith is entitled to full reimbursement for all
the necessary and useful expenses incurred; it also gives
him right of retention until full reimbursement is made. The right of retention is considered as one of
the measures devised by the law for the protection of builders in good faith. Its object is to guarantee
full and prompt reimbursement as it permits the actual possessor to remain in possession while he has
not been reimbursed (by the person who defeated him in the case for possession of the property) for
those necessary expenses and useful improvements made by him on the thing possessed. Given the
circumstances of the instant case where the builder in good faith has been clearly denied his right of
retention for almost half a decade, we find that the increased award of rentals by the RTC
was reasonable and equitable. The petitioners had reaped all the benefits from the improvement
introduced by the respondent during said period,
without paying any amount to the latter asreimbursement for his construction costs andexpenses. They
should account and pay for such benefits.

Technogas Phil vs CA
Facts: Petitioner bought a lot together with the building and improvements including the wall which
encroached that of the defendant. Upon learning of such encroachment, petitioner offered to buy the
land but defendant refused.
After 2 years, through an agreement, petitioner agreed to demolish the wall (but the case did not state
what happened to this agreement, my assumption is that it did not happen due to conflicts that arose
after)
Defendant dug a canal along the wall which caused a portion of it to collapse. Petitioner filed a
supplemental complaint re the action and a separate criminal action of malicious mischief (which the
wife was convicted of)
RTC decided for the petitioners and the CA reversed. Note that respondent wants to have the wall
demolished.
Issues:
A. Whether or not petitioner is a builder in bad faith because it is 'presumed to know the metes
and bounds of his property.'
B. Whether or not amicable settlement was a proper remedy
C. Whether or not respondent can opt to demolish the structure without exercising the option to
sell the land to the petitioner and the latter cannot do buy the same
Held: Petition was granted.
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Good faith or Bad Faith No such doctrinal statement that supports that the knowledge of metes and
bounds of a land due to the Torrens system would amount to bad faith if there was encroachment on
the land of another.
A. When the petitioner purchased the lot, the wall was already built. Even the respondent did not knew
about the encroachment until he has hired a surveyor.
B. Where one derives title to the property from another, the act, declaration, or omission of the latter,
while holding the title, in relation to the property, is evidence against the former. And possession in
good faith does not lose this character except when the possessor is aware of this impropriety.
C. The encroachment was very narrow which can be considered as a mere error. Remedy
the petitioner, despite being a purchaser of the original builder, can compel the landowner to either buy
the property or sell the piece of land because:
1. He was really unaware of the encroachment basing on the fact presented by both sides.
2. When the petitioner bought the land, he has stepped into the rights of the original owner (hence,
the right to compel the LO to buy or sell is also transferred)
Estoppel Petitioner is not considered in estoppel only because it has previously agreed to demolish a
part of the wall. Rather, it was to be negotiated by the parties concern. In the meantime, petitioner has
to pay the rent for the property occupied by its building only up to the date when respondent serves
notice of their option. Case remanded back to the trial court for determination of the value of the land
and the number of days to allot for the respondent to choose an option.

Rosales vs Castellfort
G.R. No. 157044. October 5, 2005
Facts: Spouses-petitioners Rodolfo V. Rosales and Lily Rosqueta-Rosales (petitioners) are the
registered
owners of a parcel of land with an area of approximately 315 square meters, covered byTransfer
Certificate of Title (TCT) No. 36856[4] and designated as Lot 17, Block 1 of Subdivision Plan LRCPsd-
55244 situated in Los Baos, Laguna. On August 16, 1995, petitioners discovered
that a house was being constructed on their lot, without their knowledge and consent, by respondent
Miguel Castelltort (Castelltort). It turned out that respondents Castelltort and his wife Judith had
purchased a lot, Lot 16 of the same Subdivision Plan, from respondent Lina Lopez-
Villegas (Lina) through her son-attorney-in-fact ReneVillegas (Villegas) but that after a survey thereof
by geodetic engineer Augusto Rivera, he pointed to Lot17 as the Lot 16 the Castelltorts purchased.
Negotiations for the settlement of the case thus began, with Villegas offering a larger lot near petitioners
lot in the same subdivision as a replacement thereof. In the alternative, Villegas proposed to pay
the purchaseprice of petitioners lot with legal interest. Bothproposals were, however, rejected by petit
ionerswhose counsel, by letter of August 24, 1995, directed Castelltort to stop the construction of and
demolish his house and any other structure he may have built thereon, and desist from entering the
lot. Petitioners subsequently filed on September 1, 1995 a complaint for recovery of possession and
damages with prayer for the issuance of a restrainingorder and preliminary injunction against spouses-
respondents Miguel and Judith Castelltort before the RTC of Calamba, Laguna, docketed as Civil Case
No.2229-95-C.
Issue: Under Art 448, who has the right of option?
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Held: Under the foregoing provision (Art 448), the landowner can choose between appropriating the
building by paying the proper indemnity or obliging the builder to pay the price of the land, unless its
value is considerably more than that of the structures, in which case the builder in good faith shall pay
reasonable rent. If the parties cannot come to terms over the conditions of the lease, the court must
fix the terms thereof. The choice belongs to the owner of the land, a rule that accords with the principle
of accession, i.e., that the accessory follows the principal and not the other way around. Even as the
option lies with the landowner, the grant to him, nevertheless, is preclusive. The landowner cannot
refuse to exercise either option and compel instead the owner of the building to remove it from the
land. The raison detre for this provision has be enunciated thus: Where the builder, planter or sower
has acted in good faith, a conflict of rights arises between the owners, and it becomes
necessary to protect the owner of the
improvements without causing injustice tothe owner of the land. In view of theimpracticability of
creating a state of forced co-ownership, the law has provided a just solution by giving the owner of the
land the option to acquire the improvements after payment of the proper indemnity, or to oblige the
builder or planter to pay for the land and the sower the proper rent. He cannot refuse to exercise either
option. It is the owner of the land who is authorized to exercise the option, because his right is older, and
because, by the principle of accession, he is entitled to the ownership of the accessory thing.

Alviola vs CA
Facts: Alviola occupied Tinagans land and built a copra dryer and put up a store where they engaged
in copra trade; this was done in bad faith but with the tolerance of Tinagan. Several years later, the
heirs of Tinagan filed a complaint for recovery of possession against Alviola. Alviola claims that the
copra dryer and store are permanent structures and that 448 should apply.
Issue: Whether 448 should apply
Held: 448 should apply. Since both parties were in bad faith, they will be treated as if they were in
good faith for purposes of indemnity and Article 448 will apply: the builder of the structures will pay
rent until the structures are dismantled.
However, the dryer and store are temporary structures. They do not have a permanent character and
were not attached to the soil with an idea of perpetuity.
Since the structures are merely temporary, the landowner does not have to choose between buying the
structures and selling the property.
*** When the structures built in good faith on the land of another are of temporary character, Article
448 applies, but only as to indemnity. The landowner is not compelled to choose between appropriating
the property and selling the land.

Maceda vs CA
http://www.lawphil.net/judjuris/juri1989/aug1989/gr_83545_1989.html

Del Campo vs Abesia
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-
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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.

Arangote vs Maglunob
G.R. No. 178906 February 18, 2009
Facts: Elvira Arangote acquired the subject parcel of land from Esperanza Maglunob, who is grand aunt
of respondents Martin Maglunob and Romeo Salido. In June 1986, Esperenza executed an affidavit
in which she renounced her rights, share and participation in the land in favor of Elvira and her husband.
It appears that the lot was not exclusive property of Esperanza but also
of the other heirs of Martin I whom sherepresented in the partition agreement. Elvira and her husband,
Ray constructed a house on the land in 1989 and
in 1993, OCT was issued in her name bythe DAR. However, respondents with the help of hired persons
entered the property and built a
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wall behind and in front of Elviras house. Elvira and Ray suedrespondents for quieting of title and
declaration of ownership. Respondents averred that they were co-owners of the land with Esperanza
who allegedly inherited the land from Martin 1 together with Tomas and Inocencia (Martin 2s and
Romeos predecessor in interest). They argued that Esperanza could not have validly waived her rights
in favour of Elvira and Ray. MCTC ruled for Elvira. RTC
reversed MCTC and declared respondents lawful owners of the land together withthe other heirs of
Martin I. Elvira went to the CA but the CA affirmed the RTC decision. Before SC, Elvira argued that both
RTC and CA erred in declaring the affidavit of Esperanza void because it is a valid and binding proof of
transfer of ownership of the subject property as it was coupled with actual delivery.
Issue: Whether or not the donation to Elvira and her husband is valid.
Held: Supreme Court affirmed the decision of CA. SC ruled that the affidavit executed by
Esperanza wherein she renounced, relinquished and waived all her rights, share, interest and
participation in the subject property in favor of Elvira and Ray is in fact a donation. Thus, it should have
complied with the requirements of Article 749 of the Civil Code.
A simple donation of real property to be valid
1) Must be made in a public instrument;
2) It must be accepted, which must be in the same deed of donation or in a separate public instrument;
3) If the acceptance is made in a separate instrument, the donor must be notified inauthentic form and
the same must be noted in both instruments.
The affidavit executed by Esperanza relinquishing her rights, share and participation over the property
in favor of Elvira suffered from legal infirmities. In Sumipat vs. Banga, the Court ruled that title
to immovable does not pass from the donor to the done by virtue of a Deed of Donation until and unless
it has been accepted in a public instrument and the donor duly notified thereof. In this case, the
acceptance of the donation was not made by Elvira either in the same affidavit or in a separate public
instrument. Neither was there notice of acceptance given to the donor, therefore the donation is void.

Meneses vs CA
G.R. No. 82220
Facts: On March 1, 1977, Darum, then the District Land Officer of Los Baos, Laguna, issued to Pablito
Meneses 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.
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In 1979, the Quisumbings filed a case before the CFI of Calamba against Lorenzo and Pablito Meneses,
Darum and Almendral for nullification of the free patents and titles issued to Pablito Meneses. 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 Pablito Meneses; 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.
1. 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:
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(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.

Vda. De Nazareno vs Court of Appeals
Facts: A parcel of land situated in Telegrapo, Puntod, Cagayan de Oro City is said to have been formed
as a result of sawdust dumped into the dried-up Balacanas Creek and along the banks of the Cagayan
river. Sometime in 1979, Jose Salasalan and Leo Rabaya leased the subject lots on which their houses
stood from one Antonio Nazareno, petitioners predecessor-in-interest. In the latter part of 1982,
Salasalan and Rabaya allegedly stopped paying rentals. As a result, Antonio Nazareno and petitioners
filed a case for ejectment with the MTC Cagayan de Oro City, Branch 4. A decision was rendered against
Salasalan and Rabaya, which decision was affirmed by the RTC Misamis Oriental, Branch 20. The case
was remanded to the Municipal trial court for execution of judgment after the same became final and
executory. Private respondents filed a case for annulment of judgment before the RTC Misamis Oriental,
Branch 24 and subsequently, a case for certiorari for restraining order and/or writ of preliminary
injunction with the RTC of Misamis Oriental, Branch 25; both of which were dismissed. The decision of
the lower court was finally enforced with the private respondents being ejected from portions of the
subject lots they occupied. Before he died, Antonio Nazareno caused the approval by the Bureau of
Lands of the survey plan designated as Plan Csd-106-00571 with a view to perfecting his title over the
accretion area being claimed by him. Before the approved survey plan could be released to the applicant,
it was protested by private respondents before the Bureau of Lands. The report of the Land Investigator,
made in compliance with the order of the District Land Officer, recommended the Survey Plan MSI-10-
06-000571-D (Lot 36302, Cad. 237) in the name of Antonio Nazareno be cancelled and that private
respondents be directed to file appropriate public application. Based on the report, the Regional Director
of the Bureau of Lands rendered a decision ordering an amendment to the survey plain of Nazareno by
segregating therefrom the areas occupied by the private respondents. Antonio Nazareno filed a motion
for reconsideration with the Undersecretary of Natural Resources and OIC of the Bureau of Lands; which
was denied.The petitioners, Desamparada vda. De Nazareno and Leticia Tapia Nazero filed a case before
the RTC, for the annulment of the verification, report and recommendation, decision and order of the
Bureau of Lands regarding the parcel of land. The RTC dismissed the complaint for failure to exhaust
administrative remedies, resulting to the finality of the administrative decision of the Bureau of Lands.
On appeal, the Court of Appeals affirmed the decision of the RTC dismissing the complaint. Hence, the
petition.

Issue: Whether or not the subject land is public land.
Held: Petitioners claim that the subject land is private land being an accretion to his titled property,
applying Article 457 of the Civil Code which provides: 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.
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In the case of Meneses v. CA, this Court held that accretion, as a mode of acquiring property under Art.
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 or rivers (or the
sea coast). These are called the rules on alluvion which if present in a case, give to the owners of lands
adjoining the banks of rivers or streams any accretion gradually received from the effects of the current
of waters.
The application of the rules on alluvion cannot be made in the present case as the first and second
requirements of the rules were not met. Thus, the Nazarenos cannot claim the rights of a riparian
owner. By their own admission, the accretion was formed by the dumping of boulders, soil and other
filling materials on portions of the Balacanas Creek and the Cagayan River bounding their land. It cannot
be claimed, therefore, that the accumulation of such boulders, soil and other filling materials was
gradual and imperceptible, resulting from the action of the waters or the current of the Balacanas Creek
and the Cagayan River.
In Hilario v. City of Manila, this Court held that the word current indicates the participation of the body
of water in the ebb and flow of waters due to high and low tide. Petitioners submission not having met
the first and second requirements of the rules on alluvion, they cannot claim the rights of a riparian
owner. Petitioners are estopped from denying the public character of the subject land, as well as the
jurisdiction of the Bureau of Lands when the late Antonio Nazareno filed his Miscellaneous Sales
Application MSA (G-6) 571. The mere filing of said Application constituted an admission that the land
being applied for was public land, having been the subject of Survey Plan MSI-10-06-000571-D which
was conducted as a consequence of Antonio Nazarenos Miscellaneous Sales Application wherein said
land was described as an orchard. Said description by Antonio Nazareno was controverted by the
findings of the ocular inspection that said land actually covers a dry portion of Balacanas Creek and a
swampy portion of Cagayan River. In Republic v. CA, it was ruled that the requirement that the deposit
should due to the effect of the current of the river is indispensable. This excludes from Article 457 of
the Civil Code all deposits caused by human intervention. Putting it differently, alluvion must be the
exclusive work of nature. Thus, in Tiongco v. Director of Lands, et al., where the land was not formed
solely by the natural effect of the water current of the river bordering said land but is also the
consequence of the direct and deliberate intervention of man, it was deemed a man-made accretion
and, as such, part of the public domain.
In the present case, the subject land was the direct result of the dumping of sawdust by the Sun Valley
Lumber Co. consequent to its sawmill operations. As the accretion site was the result of the late Antonio
Nazarenos labor consisting in the dumping of boulders, soil and other filling materials into the Balacanas
Creek and Cagayan River bounding his land, the same would still be part of the public domain.

Jagualing vs CA, 194 SCRA 607
Facts: Eduave claims that she inherited a parcel of land from her parents, which later increased in size
due to erosion caused by typhoon Ineng. In 1973 Jagualing asked her permission to plant corn and
bananas provided that they prevent squatters to come to the area.
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. In
the amicable settlement the heirs of Antonio Factura (Jagualing), ceded a portion of the land with an
area of 1,289 square meters more or less to Eduave.
15

Later, Jagualing denied the claim of ownership of Eduave, and asserted that they are the real owners
of the land in litigation containing an area of 18,000 square meters more or less. According to them,
they acquired the land by acquisitive prescription since they have occupied the land since 1969. They
presented tax declarations and photos of actual occupation to prove claim of prescription.
Eduave filed an action to quiet title and/or remove a cloud over the property in question against
Jagualing. RTC dismissed the complaint for failure of Eduave to establish by preponderance of evidence
their claim of ownership over the land in litigation and that the land is a delta thus is part of public
domain not susceptible of appropriation.
The CA found that the island was formed by the branching off of the river and subsequent thereto the
accumulation of alluvial deposits. Basing its ruling on Articles 463 and 465 of the Civil Code the Court
of Appeals reversed the decision of the trial court, declared private respondents as the lawful and true
owners of the land subject of this case and ordered petitioners to vacate the premises and deliver
possession of the land to private respondents.
Issue: Whether or not Jagualing acquired the island thru prescription?
Held: No.
From the evidence thus submitted, CA had sufficient basis for the finding that the property of Eduave
actually existed and was identified prior to the branching off or division of the river. The CA, therefore,
properly applied Article 463 of the Civil Code which allows the ownership over a portion of land separated
or isolated by river movement to be retained by the owner thereof prior to such separation or isolation.
The parcel of land in question is part of an island that formed in a non-navigable and non-flotable 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. In this regard the CA also 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 private respondents, 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.
It is well-settled that 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.
However, Jagualing failed to prove adverse possession of the land for the required period and their
possession cannot be considered in good faith since by their admission they have recognized Eduaves
ownership over the land. Thus the land still belongs to Eduave.
Islands formed by accretion belong to the riparian owner nearest to its margin. However such accretion
may be lost to third parties thru prescription.

Agustin vs IAC
Facts: Private respondents, Maria Melad and Pablo Binuyag are among those who are occupying the
western bank of the Cagayan River while on the eastern bank is owned by petitioner Eulogio Agustin.
From 1919 to 1968, the Cagayan river has eroded the lands on the eastern bank including Agustins Lot
depositing alluvium on the land possessed by Pablo Binuyag. In 1968, after a typhoon which caused a
16

big flood, the Cagayan River changed its course and returned it to its 1919 bed and it cut through the
lands of respondents whose lands were transferred on the eastern side. To cultivate the lands they had
to cross the river. When they were cultivating said lands, (they were planting corn) Agustin accompanied
by the mayor and some policemen claimed the land and drove them away. So Melad and Binuyag filed
separate complaints for recovery of their lots and its accretions. The Trial Court held ordered Agustin
et. al to vacate the lands and return them to respondents. On appeal, the IAC affirmed in toto the
judgment thus the case at bar.
Issue: Whether or not private respondents own the accretion and such ownership is not affected by
the sudden and abrupt change in the course of the Cagayan River when it reverted to its old bed
Held: YES
Art. 457 states that the owner of the lands adjoining river banks own the accretion which they gradually
receive from the effects of the currents of the waters. Accretion benefits a riparian owner provided that
these elements are present: 1) deposit be gradual and imperceptible 2) it resulted from the effects of
the current of the water and 3) the land is adjacent to the river bank. When the River moved from 1919
to 1968, there was alluvium deposited and it was gradual and imperceptible.
Accretion benefits the riparian owner because these lands are exposed to floods and other damage due
to the destructive force of the waters, and if by virtue of law they are subject to encumbrances and
various kinds of easements, it is only just that such risks or dangers should in some way be compensated
by the right of accretion. Also, respondents ownership over said lots was not removed when due to the
sudden and abrupt change in the course of the river; their accretions were transferred to the other side.
Art. 459 states when the current of a river x x x segregates from an estate on its bank a known portion
of land and transfers it to another estate, the owner of segregated portion retains ownership provided
he removes the same w/in 2 years. And Art. 463 states 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
ownership. He also retains it if a portion of land is separated from the estate by the current.

Tuason vs CA
http://www.lawphil.net/judjuris/juri1987/jan1987/gr_l_48297_1987.html

Javier vs Veridiano
ACTION FOR DETERMINATION OF OWNERSHIP
A final judgment on forcible entry or unlawful detainer is NOT a bar against to an action for
determination of ownership. A judgment rendered in a case for recovery of possession is conclusive
only as to possession, not ownership. It is not a bar against an action for determination of ownership.
Facts: Petitioner bought a land on a subdivision by filing a Miscellaneous Sales Application. Pending the
approval of the sale, Ben Babol entered a portion adjacent to the land being bought by Petitioner.
Petitioner claims that the occupied land by Babol is part of his land so he filed a forcible entry case.
However, the trial court found Petitioner wrong and so sustained the possession of Babol. Later on,
Babol would sell this portion to private Respondent. In the meantime, the application was approved and
a TCT was delivered to Petitioner. This motivated the Petitioner to demand the land again, this time
from Respondent, and this time on the basis of ownership. He filed a complaint for quieting of title and
17

recovery of possession. Respondent countered that the first case on forcible entry constituted res
judicata against the second complaint.
Issue: W/N the first case on forcible entry was res judicata against the second case on quieting of title
Held: No! Once again, for res judicata to arise, four requisites must concur: Final judgment, Court with
competent jurisdiction, judgment based on merits, identity of parties and cause of action. The Court
said that in the two cases, there were identity of parties because Respondent, having acquired the
contested land by sale and tradition, is a successor in interest.
However, there was no identity of the causes of action. In forcible entry, the only issue is prior
possession and not ownership. In accion reivindicatoria, the issue is the ownership. The Court held that
the second case was actually an accion reivindicatoria as Petitioner set up title for herself, prayed that
Respondent to be ejected and that she be declared the owner. Thus a final judgment on forcible entry
or detainer is NOT a bar against to an action for determination of ownership.

Caezo vs Bautista
Facts: Petitioners are the registered owner[s] of a parcel of land with an area of One Hundred Eighty
Six(186) square meters, covered by Transfer Certificate of Title (TCT) No. 32911. Respondents are the
registered owners of a parcel of land, containing an area of One Hundred Eighty One (181) square
meters, covered by Transfer Certificate of Title (TCT) No. 31727. Both parcels of land are located at
Coronado Heights, Barangka Ibaba, Mandaluyong City and registered with the Registry of Deeds of
Mandaluyong City. Said lots are located adjacent to each other. When petitioners started the
construction of a building on their lot, they discovered that their lot was encroached upon by the
structures built by respondents without their consent. The three (3) surveys conducted confirmed the
fact of encroachment. However, despite oral and written demands, respondents failed and refused to
remove the disputed structures. Petitioners filed a complaint before the RTC for the issuance of a writ
of demolition. For failure to file an Answer with the extended period granted, petitioners presented
evidence ex-parte. The RTC issued the writ of demolition. The Court of Appeals dismissed the complaint
since the last demand was made on 27 March 2000, or more than a year before the filing of the
complaint, the spouses Caezo should have filed a suit for recovery of possession and not for the
issuance of a writ of demolition. Hence, this petition.
Issue: Whether the Honorable Court of Appeals gravely erred in stating that the petitioners should
have filed recovery of possession and not writ of demolition.
Held: The Supreme Court ruled that while the case was inaccurately captioned as an action for a "Writ
of Demolition with Damages" it was in reality an action to recover a parcel of land or an
accion reivindicatoria under Article 434 of the Civil Code. Accion reivindicatoria seeks the recovery of
ownership and includes the jus utendi and the jus fruendi brought in the proper regional trial court.
Accion reivindicatoria is an action whereby plaintiff alleges ownership over a parcel of land and seeks
recovery of its full possession. The petitioners were able to establish their ownership of the encroached
property. Aside from testimonial evidence, the spouses Caezo were also able to present documentary
and object evidence which consisted of photographs, transfer certificates of title, and a relocation survey
plan. Given these reasons, the Court ruled in favor of petitioners. The Supreme Court reversed the
decision of the Court of Appeals and affirmed that of the trial court.

Vda. De Roxas vs Our Ladys Foundation
18

http://www.lawphil.net/judjuris/juri2013/mar2013/gr_182378_2013.html

Ballatan vs CA
Facts: Petitioner constructed a house and found out that Go was encroaching on
her land. A relocation survey was then conducted and it was found out that her total land area
was decreased while the land of Yao increased.
Held:Where a person had no knowledge that he encroached on his neighbours
lot, he is deemed a builder in good faith until the time the latter is informed of his encroachment
upon the latters property.