Republic of the Philippines

SUPREME COURT
Manila
EN BANC
October 24, 1955
G.R. No. L-8139
BELEN UY TAYAG and JESUS B.
TAYAG, petitioners,
vs.
ROSARIO YUSECO, JOAQUIN C.
YUSECO and THE COURT OF
APPEALS, respondents.

Pelaez and Jalandoni for

petitioners.
Yuseco, Abdon, Yuseco and
Narvasa for respondents.

MONTEMAYOR, J.:

This is an appeal by certiorari by

petitioners Belen Uy Tayag and her
husband Jesus B. Tayag from the

decision of the Court of Appeals of

April 23, 1954, affirming the decision
of the Court of First Instance of
Manila. The facts in this case as may
be gathered from the records and as
found by the Court of Appeals may be
briefly stated as follows. In and prior
to the year 1930 Atty. Joaquin C.
Yuseco had been rendering
professional services to Maria Lim,
owner of lots 11-A and 11-B, block
2251 of the Government Subdivision
known as Hacienda de San Lazaro
covered by transfer certificates of
title Nos. 36400 and 36401 of the
Register of Deeds of Manila. To show
her appreciation of the service
rendered to her Maria offered the two
lots to Atty. Yuseco and his wife
Rosario Yuseco for them to build on,
and accepting the offer, the Yusecos
built a house and an annex for
servants quarters on the two lots
which improvements at present may
be reasonably valued at P50,000.
Although Atty. Yuseco claims that the
two lots were donated to him, he
could exhibit no evidence of said
donation and the certificates of title
already mentioned remained in the
name of Maria. There is reason to
believe that at least during her
lifetime and while she remained
owner of the two lots, it was her
desire to have the Yusecos occupy

the land free. But to go through the

formalities and to legalize the
possession of the two lots, after the
house and the annex were built, there
was executed a lease contract to the
effect that the lease was to run for a
period of five years, with a rental of
P120 a year; that the owner of the
lots was to pay all land taxes, and
that failure to pay the rent when due
would be sufficient cause for the
recission of the contract. This
agreement was noted on the
certificates of title.

On November 29, 1945, a few days

before her death, Maria sold the two
lots to her daughter Belen Uy married
to Jesus B. Tayag for and in
consideration of the sum of P4,000.
The new owners in 1946 asked the
Yusecos to remove their houses from
the land because Belen and her
husband planned to build their own
house on the two lots, or else pay a
monthly rent of P120. Because of the
failure of the Yusecos to comply with
the demand, Belen assisted by her
husband filed an action of ejectment
in the Municipal Court of Manila which
later rendered judgment for the
plaintiffs and against the defendants
"for the restitution of the premises

described in the complaint and for

the recovery of a monthly rental of
P100 from November 30, 1945, up to
the date of restitution, and for cost."
On appeal by the defendants to the
Court of First Instance of Manila, the
latter rendered judgment, the
dispositive part of which reads as
follows:

Wherefore judgment is hereby

rendered declaring the plaintiff, Belen
Uy Tayag, to be entitled to the
possession of the two parcels of land
described in the complaint upon
payment by her to the defendants of
the sum of P50,000, which is the
value of the two houses they had
built thereon; but in the event said
plaintiff shall not be in a position to
pay said amount within 90 days from
the date this decision shall become
final, the defendants are hereby
declared to be entitled to purchase
the two parcels of land in question for
the sum P10,000, within 90 days from
the date the defendants shall have
failed to buy the house. In the
meantime, the two parcels of land
without any obligation thereof. No
pronouncement is hereby made as to
costs.

On appeal by the plaintiffs to the

Court of Appeals said court found that
the Yusecos were builders in good
faith under article 448 of the new
Civil Code; and that as such builders
in good faith, they cannot be required
to remove their house and the annex
unless they were paid the value
thereof. The Court of Appeals further
approved P50,000 and P10,000 as the
reasonable values of the house and
the two lots, respectively, as found by
the Court of First Instance and that
the Yusecos as builders in good faith
will begin to pay rent only when the
plaintiffs as owners of the land are
unable or choose not to exercise their
right to purchase the land, but in the
present case, neither partly has
expressed his willingness or inability
to exercise the right corresponding to
him under article 448 of the new Civil
Code, hence the payment of rent is
not in order. The Court of Appeals
affirmed the decision of the Court of
First Instance.

Appellants Belen and her husband

Jesus Tayag filed the present petition
for review of the decision of the Court

of Appeals, and in their brief assign

the following errors:

The Court of Appeals committed a

grave error of law when it decided an
issue foreign to that raised in an
ejectment case, for in so doing it
acted without jurisdiction over the
subject matter.

II

Granting, arguendo, that there was

jurisdiction to determine an issue
other than that raised in an ejectment
case, the Court of Appeals committed
a grave error of law in holding that
the rights of Belen Uy Tayag and
Jesus B. Tayag, owners of the land,
and those of Rosario Yuseco and
Joaquin C. Yuseco, owner of the
building, should be resolved in
accordance with the provisions of
Article 448 (formerly Article 361) of
the Civil Code of the Philippines.

III

Granting, further, for the sake of

argument only, that Article 448 of the
Civil Code of the Philippines should
govern the rights of the parties
herein, the Court of Appeals gravely
abused its discretion and committed
a serious error of law when it affirmed
the judgment of the trial court which,
in effect, compels the owner of the
land to sell it to the owner of the
building.

IV

The Court of Appeals gravely erred in

holding that the petitioners Belen Uy
Tayag and Jesus B. Tayag shall be
entitled to the possession of the land
described in the complaint upon
payment of the sum of P50,000 but in
the event that they are not in a
position to pay said amount within 90
days from the date the decision shall
have become final, the respondents
Rosario Yuseco and Joaquin C. Yuseco
shall be entitled to purchase the land
in question for the sum of P10,000.

Petitioners claim that the Court of

First Instance and the Court of
Appeals lacked jurisdiction to decide
the case as they did for the reason
that the only issue involved in an
ejectment case is actual possession
and that under Rule 72, section 6, the
only judgment that may be rendered
in such a case is for the defendant to
recover costs in the event that the
court find that the complaint is not
true, or if it finds the complaint to be
true to render judgment for the
plaintiff for the restitution of the
premises, for the sum justly due as
arrears of rent or as reasonable
compensation for the use and
occupation of the premises, and for
costs. But according to petitioners, in
spite of this legal provision both
courts went further and applied the
provision of article 448 of the new
Civil Code.

In theory, and speaking of ordinary

ejectment cases, petitioners may be
right; that is to say, if the lessee or
occupant has not built anything on
the premises, payment of rent would
be a valid and satisfactory solution of
the problem; but where the occupant

has built on the land, especially

where said building is substantial and
valuable, the courts even in
ejectment cases are bound to take
cognizance of said fact and when
they find that the construction or
planting had been effected in good
faith, instead of dismissing the
complaint and suggesting to the
parties to observe and follow the
provisions of article 361 or article 448
of the old and the new Civil Code of
the Philippines, respectively, and if
they cannot agree, to file a new
action, not only to enforce or defend
the respective rights of the parties
but to assess the value of the land
and of the improvement as well, the
courts in order to avoid multiplicity of
actions and to administer practical
and speedy justice may, as was done
in this case, apply the provisions of
the Civil Code relative to builders
specially since there is no question as
to the ownership of the land as shown
by the certificates of title, and the
ownership of the buildings.

Petitioners insist that the relation

between them and the respondents is
that of lessor and lessee and in
support of their contention they point
to the contract of lease between

Maria Lim and the Yusecos executed

in 1930. As already stated, the Court
of Appeals found respondents to be
builders in good faith and that finding
is conclusive. In connection with said
finding, we are of the opinion that the
Yusecos in the mistaken belief that
the two lots were being given to them
free constructed the improvements in
question, and that as already stated,
the execution and registration of the
contract of lease was a mere
formality to legalize the occupation of
the lots. Despite the belief of the
Yusecos about the lots being donated
to them, there is every reason to
believe that what Maria Lim intended
was to keep the title to the land but
allow the Yusecos to occupy the same
free, at least as long as she kept said
title. This arrangement would appear
to have been known to Belen, Maria's
daughter, when the two lots were
transferred to her a few days before
Maria died, because as observed by
the Court of Appeals although the
Yusecos had paid no rent since the
year 1930 when they constructed the
two buildings, Belen in 1946, one
year after the land was transferred to
her, demanded rents not for the
period of 15 or 16 years but only from
1946. This action of hers neither
supports nor strengthens her theory
that the Yusecos since 1930 were

mere lessees and continued to be

such after Belen acquired the lots in
question.

It will be remembered that the

construction in good faith was
effected in 1930 and that good faith
of the builders may be considered as
ended in 1946 when the demand for
rent was made. It is, therefore, clear
that Art. 361 of the old Civil Code
instead of article 448 of the new Civil
Code is applicable for the reason that
the new Civil Code did not go into
effect until 1950. Article 361 of the
old Civil Code reads as follows:

Art. 361. The owner of land on which

anything has been built, sown, or
planted in good faith, shall be entitled
to appropriate the things so built,
sown or planted, upon paying the
compensation mentioned in Article
453 and 454, or to compel the person
who has built or planted to pay him
the value of the land, and the person
who sowed thereon to pay the proper
rent therefor.

The above-quoted legal provision is

clear and it is now up to the parties,
particularly the petitioners to act and
make their choice. Since the Court of
Appeals has found that neither party
has expressed its desire or
willingness to do the thing or things
which by law they are authorized or
compelled to perform, the courts
cannot disturb their present status
and naturally, payment of rent by
respondent for the present, is not in
order.

Petitioners question the correctness

of the amount of P50,000 fixed by the
trial court and approved by the Court
of Appeals, as the value of the
improvements, claiming that under
article 546 of the new Civil Code
(taken from article 453 of the old Civil
Code) they (petitioners) as owners of
the land have the option of either
refunding the amount spent for the
construction of the two buildings, said
to be only P18,000 or "paying him the
increase in value which the thing has
acquired by reason thereof." The
contention of petitioners is well taken.

Affirming the decision of the Court of

Appeals in so far as it finds and

declares respondents to be
possessors in good faith, let this case
be remanded to the trial court for
further proceedings, particularly to
give an opportunity to plaintiffspetitioners to exercise their choice
and option; and for purposes of said
choice and option the trial court will
admit evidence and make a finding as
to the amount of the useful
expenditures or "the increase in value
which the thing has acquired by
reason thereof", under article 453 of
the old Civil Code, to be refunded or
paid by the petitioners should they
choose to appropriate the buildings;
"the value of the land" under article
361 of the same Code, to be paid by
the defendants-respondents in case
plaintiffs-petitioner elect to compel
them to buy the land. No costs.

Paras, C. J., Bengzon, Padilla, Reyes,

A., Jugo, Bautista Angelo, Labrador,
Concepcion, and Reyes, J. B. L., JJ.,
concur.

G.R. No. L-175, Ignacio, Ignacio

and Ignacio v. Hilario, Dres and
Natividad, 76 Phil. 605
Republic of the Philippines

SUPREME COURT
Manila

EN BANC

April 30, 1946

G.R. No. L-175

DAMIAN IGNACIO, FRANCISCO
IGNACIO and LUIS IGNACIO,
petitioners,
vs.
ELIAS HILARIO and his wife
DIONISIA DRES, and FELIPE
NATIVIDAD, Judge of First
Instance of Pangasinan,
respondents.

Leoncio R. Esliza for petitioners.

Mauricio M. Monta for
respondents.

MORAN, C.J.:

This is a petition for certiorari arising

from a case in the Court of First
Instance of Pangasinan between the
herein respondents Elias Hilario and
his wife Dionisia Dres as plaintiffs,
and the herein petitioners Damian,
Francisco and Luis, surnamed Ignacio,
as defendants, concerning the
ownership of a parcel of land, partly
rice-land and partly residential. After
the trial of the case, the lower court,
presided over by Hon. Alfonso Felix,
rendered judgment holding plaintiffs
as the legal owners of the whole
property but conceding to defendants
the ownership of the houses and
granaries built by them on the
residential portion with the rights of a
possessor in good faith, in
accordance with article 361 of the
Civil Code. The dispositive part of the
decision, hub of this controversy,
follows:

Wherefore, judgment is hereby

rendered declaring:

(1) That the plaintiffs are the owners

of the whole property described in
transfer certificate of title No. 12872

(Exhibit A) issued in their name, and

entitled to the possession of the
same;

(2) That the defendants are entitled

to hold the position of the residential
lot until after they are paid the actual
market value of their houses and
granaries erected thereon, unless the
plaintiffs prefer to sell them said
residential lot, in which case
defendants shall pay the plaintiffs the
proportionate value of said residential
lot taking as a basis the price paid for
the whole land according to Exhibit B;
and

(3) That upon defendant's failure to

purchase the residential lot in
question, said defendants shall
remove their houses and granaries
after this decision becomes final and
within the period of sixty (60) days
from the date that the court is
informed in writing of the attitude of
the parties in this respect.

No pronouncement is made as to
damages and costs.

Once this decision becomes final, the

plaintiffs and defendants may appear
again before this court for the
purpose of determining their
respective rights under article 361 of
the Civil Code, if they cannot come to
an extra-judicial settlement with
regard to said rights.

Subsequently, in a motion filed in the

same Court of First Instance but now
presided over by the herein
respondent Judge Hon. Felipe
Natividad, the plaintiffs prayed for an
order of execution alleging that since
they chose neither to pay defendants
for the buildings nor to sell to them
the residential lot, said defendants
should be ordered to remove the
structure at their own expense and to
restore plaintiffs in the possession of
said lot. Defendants objected to this
motion which, after hearing, was
granted by Judge Natividad. Hence,
this petition by defendants praying
for (a) a restraint and annulment of
the order of execution issued by
Judge Natividad; (b) an order to
compel plaintiffs to pay them the sum
of P2,000 for the buildings, or sell to
them the residential lot for P45; or

(c), a rehearing of the case for a

determination of the rights of the
parties upon failure of extra-judicial
settlement.

The judgment rendered by Judge Felix

is founded on articles 361 and 453 of
the Civil Code which are as follows:

ART. 361. The owner of land on which

anything has been built, sown or
planted in good faith, shall have the
right to appropriate as his own the
work, sowing or planting, after the
payment of the indemnity stated in
articles 453 and 454, or to oblige the
one who built or planted to pay the
price of the land, and the one who
sowed, the proper rent.

ART. 453. Necessary expenses shall

be refunded to every possessor; but
only the possessor in good faith may
retain the thing until such expenses
are made good to him.

Useful expenses shall be refunded to

the possessor in good faith with the
same right of retention, the person

who has defeated him in the

possession having the option of
refunding the amount of the
expenses or paying the increase in
value which the thing may have
acquired in consequence thereof.

The owner of the building erected in

good faith on a land owned by
another, is entitled to retain the
possession of the land until he is paid
the value of his building, under article
453. The owner of the land, upon the
other hand, has the option, under
article 361, either to pay for the
building or to sell his land to the
owner of the building. But he cannot,
as respondents here did, refuse both
to pay for the building and to sell the
land and compel the owner of the
building to remove it from the land
where it is erected. He is entitled to
such remotion only when, after
having chosen to sell his land, the
other party fails to pay for the same.
But this is not the case before us.

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 not to sell
the land, is null and void, for it
amends substantially the judgment
sought to be executed and is,
furthermore, offensive to articles 361
and 453 of the Civil Code.

There is, however, in the decision of

Judge Felix a question of procedure
which calls for the clarification, to
avoid uncertainty and delay in the
disposition of cases. In that decision,
the rights of both parties are well
defined under articles 361 and 453 of
the Civil Code, but it fails to
determine the value of the buildings
and of the lot where they are erected
as well as the periods of time within
which the option may be exercised
and payment should be made, these
particulars having been left for
determination apparently after the
judgment has become final. This
procedure is erroneous, for after the
judgment has become final, no
additions can be made thereto and
nothing can be done therewith except
its execution. And execution cannot
be had, the sheriff being ignorant as
to how, for how much, and within
what time may the option be
exercised, and certainly no authority

is vested in him to settle these

matters which involve exercise of
judicial discretion. Thus the judgment
rendered by Judge Felix has never
become final, it having left matters to
be settled for its completion in a
subsequent proceeding, matters
which remained unsettled up to the
time the petition is filed in the instant
case.

For all the foregoing, the writ of

execution issued by Judge Natividad
is hereby set aside and the lower
court ordered to hold a hearing in the
principal case wherein it must
determine the prices of the buildings
and of the residential lot where they
are erected, as well as the period of
time within which the plaintiffsrespondents may exercise their
option either to pay for the buildings
or to sell their land, and, in the last
instance, the period of time within
which the defendants-petitioners may
pay for the land, all these periods to
be counted from the date the
judgment becomes executory or
unappealable. After such hearing, the
court shall render a final judgment
according to the evidence presented
by the parties.

,.
The costs shall be paid by plaintiffsrespondents.
, J.:
Ozaeta, Paras, Jaranilla, Feria, De
Joya, Pablo, Perfecto, Hilado, Bengzon
and Briones, JJ., concur.

G.R. No. , 136 SCRA 415

Republic of the Philippines
SUPREME COURT
Manila

This case is about the jurisdiction of

the Regional Trial Court to fix the
compensation due to the owner of a
mineral land for prospecting or
exploring therein. Raquel Enriquez,
Ma. Ramona Arenillo and Emily Sta.
Ana are the registered co- owners of
a parcel of land with an area of 24
hectares located at Barrio Gata,
Lahuy Island, Caramoan, Camarines
Sur.

The instant certiorari and prohibition

case was filed by the Lahuy company
and Wespar because Judge Pajares
refused to dismiss the complaint on
the grounds of non-exhaustion of
administrative remedies, lack of
jurisdiction, res judicata and
prescription.

We impleaded the Director of Mines

and Geo-Sciences who in his
comment dated March 18, 1985
confirmed the opinion of the bureau's
senior legal officer, Roberto R. Blanco,
and the view of the petitioners that
the issues in Civil Case No. 84-470
are within his jurisdiction He cited the
pertinent laws and regulations.

EN BANC

DECISION

April 30, 1985

G.R. No. , ,
vs.

On August 23, 1984 they sued in Civil

Case No. 84-470 of the Regional Trial
Court of Camarines Sur Rajah Lahuy
Mining Company and West Pacific
Rich Minerals for the payment of just
compensation or rental due to them
as surface owners as the sine qua
non for the grant of authority to
conduct mining operations on the
island.

Presidential Decree No. 512, which

took effect on July 19, 1974, declares
prospecting and other mining
operations to be of public use and
benefit. It establishes the basis, and
prescribes the rules and procedures,
relative to the acquisition and use of
surface rights in mineral prospecting,
development and exploitation and
gives protection and compensation to
surface owners. It provides:

SEC. 2. Subject to prior notification,

prospectors or claimants of mineral
lands shall not be prevented from
entry into private lands by surface
owners and occupants when
prospecting or exploring therein:

Provided, That any damage done to

the property of the surface owner
shall be properly compensated:

Provided, further, That to guarantee

such compensation to the surface
owner, the prospector or claimowner
shall post a bond with the Bureau of
Mines and Geo-Sciences in an amount
to be fixed by the Director of Mines
based on the type of property and the
prevailing price of lands in the area
where prospecting and other mining
act cities are to be conducted and
with surety or sureties satisfactory to
the Director of Mines. The decision of
the Director of Mines may be
appealed within five (5) days from
receipt thereof to the Secretary of
Natural Resources, whose decision
shall be final.

The Mineral Resources Development

Decree of 1974, Presidential Decree
No. 463, prescribes a modern system
of administration of mineral lands and
promotes and encourages the
development and exploitation thereof.
As amended by Presidential Decree
No. 1385, effective May 25, 1978, it
provides:

SEC. 12. Entry into Public and Private

Lands. ? Subject to the- provisions of
Presidential Decree No. 512, a
qualified person and/or his authorized
representative shall not be prevented
from entry into private lands by
surface owners and/or occupants
thereof when prospecting, exploring
and exploiting for minerals therein.
No prospecting, exploration and
exploitation of mineral resources
inside a forest concession shall be
allowed unless proper notice has
been served upon the licensee
thereof.

Tile above legal provisions should be

read in connection with Consolidated
Mines Administrative Order (CMAO)
which provides.

SEC. 10. Entry into lands. ? The

prospector, locator, claimowner or
mining operator shall not be
prevented from entry into private
lands for the purpose of prospecting,
locating, exploration, development
and exploitation of mining claims
containing metallic ores, upon prior
written notification sent to and duly
received by the surface owner of the
land and occupant thereof. However,
if the surface owner of the land and
occupant thereof (a) refuses to allow
the prospector, locator, claimowner or
mining operator entry into the land
despite his receipt of the written
notification; or (b) refuses to receive
said written notification; or (c) cannot
be found, the prospector, locator,
claimowner or mining operator shall
notify the Director of such fact, and
attaching thereto a copy of the
written notification. (Sec. 1. MRD-15.)

SEC. 11. Posting of the bond ? In all

cases mentioned in Section 10 above,
the prospector, locator, claimowner or
mining operator shall post a bond
with the Bureau of Mines in the
amount to be fixed by the Director
based on the type of the land and the
value of the trees, plants and other
existing improvements thereon shall

be the basis of the compensation of

the surface owner of the land and
occupant thereof in the appropriate
cases mentioned in Sec. 12. The
order of the Director may be
appealed within five (5) days from
receipt thereof to the secretary
whose decision shall be final. The
appeal, however, shall not stay the
Order. (Sec. 1, MRD-15.)

Presidential Decree No. 512 provides

for the manner of compensating the
surface owner in this wise:

SEC. 3. The owner of a titled property

within which mineral development or
exploitation is undertaken shall be
entitled to at least one-third (1/3) of
the total royalty due the claimowner
from the operator based on the
prevailing standard royalty in the
area where said mining operation is
being undertaken, or one percent (1
%) of the value of the gross output of
minerals therein where there is no
prevailing standard royalty or in any
other case where no royalty payment
is involved or has been arranged:

Provided, That such landowner may

choose to receive payment for any
damage caused to his property and
compensation for his land at the
prevailing market price or assessed
value, whichever is higher, plus five
percent (5%) of the royalty due the
claimowner on the value of gross
output of metallic minerals therein:

Provided, further, That if the right of

the surface owner to his land is based
on incomplete land titles, as
homesteads, sales, leases and other
forms of land right not perfected
under the torrens system, the surface
right compensation shall be one- fifth
(1/5) of the total royalty due the
claimowner from the operator, or
damages and payment of the land
plus three percent (3%) of the royalty
due the said claimowner, or sixtenths (6/10) of one percent (1%) of
the value of gross output as above
stated:

Provided, finally, That the rate of

royalty herein set shall apply only in
cases of the exploration,
development and exploitation of
metallic ores. Metallic ores shall be
those containing metals, such as

gold, copper, silver, iron, nickel and

other minerals which the Director of
Mines may determine as such by
regulation.

Section 3 is implemented in the

following provisions of the CMAO:

SEC. 12. Compensation of the Surface

Owner and Occupant. ? In the
absence of an agreement, the surface
owner of the land and occupant
thereof shall be entitled to select one
of the following compensations:

A. For titled lands:

(1) In the case of prospecting,

location or exploration of mining
claim-the rentals for use and
occupancy of the land plus the value
of trees, plants and other
improvements that are damaged or
destroyed, or

(2) In the case of developments and

exploitation of mining claims at the

option of the surface owner and

occupant (a) one-third (1/3) of the
royalty due the claimowner based on
the prevailing standard of royalty in
the area, or when there is no
prevailing standard of royalty, etc. (b)
damage to the trees, plants and other
improvements plus five percent (5%)
of the royalty due the claimowner; or
(c) sale of the land at the fair market
value of the land or its assessed
value, whichever is higher.

B.. For land with incomplete titles:

(1) In case of prospecting, location or

exploration of mining claims the
rental for the use and occupancy of
the land plus the value of trees,
plants and other improvements that
are damaged or destroyed, or

(2) In the case of developments and

exploitation of mining claims ? at the
option of the surface owner and
occupant (a) one-fifth (1/5) of the
royalty due the claimowner from the
mining operator, or (b) the value of
the trees, plants and other
improvements that are damaged or

destroyed plus three percent (3%) of

the royalty due the claimowner, or (c)
six-tenths (6/1 0) of one percent (1%)
of the value of the gross output, or
(d) the fair market value of his rights
to the land.

The compensation referred to above

based on royalty shall be payable by
the claimowner, while the incomplete
title to lands referred to in
subparagraph B shall mean those
possessory rights which can ripen
into rights of ownership registerable
under Torrens System.

SEC. 13. Voluntary Agreements.? The

voluntary agreement between a
surface owner and occupant and the
prospector, locator, claimowner or
mining operator permitting the latter
to enter into and use his land shall be
registered with the Mines Regional
Office and the Office of the Register
of Deeds concerned. The said
agreement shall be binding upon the
parties, their heirs, successors and
assigns (Sec. 1, MRD-15).

SEC. 14. Compensation in Cases of

Non-Metallic Ores. ? The rate of
compensation, royalty, or payment
for damages to be paid to the land
owner in cases of the exploration,
development, exploitation of nonmetallic ores extracted within his land
shall be fixed by the Director as he
may deem after proper hearing of the
parties concerned.

We hold that the Bureau of Mines and

Geo-Sciences under its organic law,
Presidential Decree No. 1281, has
jurisdiction to determine the
compensation payable to the surface
owners. The Regional Trial Court has
no authority to make that
determination in the first instance.

To expedite matters, the complaint of

respondents Raquel Enriquez, et al.,
of which the Bureau of Mines and
Geo-Sciences had already been
furnished, should be indorsed to its
Regional Director in the Bicol Region
for hearing in accordance with its
Office circular No. MRD 44, series of
1985.

WHEREFORE, the petition is granted.

The order denying the order of
dismissal is reversed and set aside.
The Regional Court is permanently
enjoined from hearing Civil Case No.
84-470. No costs.

LEONOR GRANA and JULIETA

TORRALBA, petitioners,
vs.
THE COURT OF APPEALS, AURORA
BONGATO and JARDENIO
SANCHEZ, respondents.

SO ORDERED.
Tranquilino O. Calo, Jr. for
petitioners.
Makasiar (Chairman), Abad Santos,
Escolin and Cuevas, JJ., concur.

Concepcion Jr., J., took no part.

E.D. Mercado, J.V. Ong and J.T.

Gonzales for respondents.

GUTIERREZ DAVID, J.:

Republic of the Philippines

SUPREME COURT

This is a petition to review on

certiorari a decision of the Court of
Appeals.

Manila

EN BANC

G.R. No. L-12486

31, 1960

August

court rendered judgment declaring

the plaintiffs, herein respondents,
owners of the land in controversy and
ordering petitioners to vacate and
deliver it to said respondents and to
pay a monthly rental of P10.00 from
the filing of the complaint until they
actually vacate the same, plus
attorney's fees and costs. The
decision, on appeal, having been
affirmed by the Court of Appeals with
the only modification of disallowing
the award for attorney's fees,
petitioners brought the case to this
Court through the present petition for
review.

Leonor Grana and Julieta Torralba,

defendants below and herein
petitioners, were on April 13, 1951
sued by Aurora Bongato and Jardenio
Sanchez, respondents herein, before
the Court of First Instance of Agusan,
for the recovery of 87 square meters
of residential land. After trial, the

The record discloses that sometime in

1909 a cadastral survey of Butuan,
Agusan, was made by the Bureau of
Lands. In that survey, the parcel of
land here in question was included as
part of the lot belonging to Gregorio
Bongato and Clara Botcon for which
Original Certificate of Title No. RO-72
(138) was issued in their favor on
February 12, 1923. On November 25,
1933, this lot was purchased by the
spouses Marcos Bongato and Eusebia
More, and upon their death, the land
was inherited by the respondents
Aurora Bongato and Jardenio
Sanchez, the former being the

daughter of Marcos Bongato by his

first marriage while the latter is the
son of Eusebia More also by her first
marriage.

Petitioners claim that the lands in

Butuan were subsequently
resurveyed due to conflicts and
overlapping of boundaries. In that
resurvey (TS-65 Butuan Cadastre),
Gregorio Bongato's lot, according to
petitioners, was identified as Lot No.
311 and that of Isidaria Trillo, their
predecessor in interest, as Lot No.
310. Citing the fact that Original
Certificate of Title No. RO-72 (138)
covers 295 square meters of land,
while the sketch plan of the second
cadastral survey of Butuan shows
that Lot No. 311 has only 230 square
meters, petitioners maintain that it is
the latter area properly belongs to
respondents and that the land in
question is part of the adjoining land,
Lot No. 310, which belonged to their
predecessor in interest.

Petitioners' stand is untenable. No

proof was presented to show that the
first survey was erroneous or that it
included part of the contigous land of
petitioners' predecessor in interest as

part of the lot now covered by

Original Certificate of Title No. RO-72
(138). Note that the difference in area
between the land covered by said
title and Lot No. 311 of the resurvey
plan is 65 square meters while the
area of the land in dispute if 87
square meters. And what is more, the
alleged sketch plan of the resurvey
was not presented in evidence.

Upon the other hand, it is not

disputed that the land in question is
part of the lot covered by the Torrens
title issued way back in 1923 in the
name of respondents' predecessor in
interest. Said title has not been
contested up to the present, and,
therefore, has become inconvertible
evidence of the ownership of the land
covered by it. Well settled is the rule
that a Torrens certificate of title
becomes conclusive and indefeasible
after the lapse of the period within
which it may be impugned (Reyes, et
al. vs. Borbon, et al., 50 Phil., 791;
Yumul vs. Rivera, et al., 64 Phil., 13).

Petitioners' contention that the Court

of Appeals erred in not granting their
motion for new trial on the ground of
newly discovered evidence, likewise,

cannot be sustained. The new

evidence sought to be introduced was
the sketch plan of the second survey,
which, with the employment of
reasonable diligence would have
easily been discovered and produced
at the trial. Anyway, even if
presented at the result of the case. If
a subsequent certificate of title
cannot be permitted to prevail over a
previous Torrens title (Reyes, et al, vs.
Borbon, et al., supra) with more
reason should a resurvey plan not to
be allowed to alter or modify such
title so as to make the area of the
land therein described agree with
that given in the plan. (See
Government of the Philippines vs.
Arias, 36 Phil., 195).

Although without any legal and valid

claim over the land in question,
petitioners, however, were found by
the Court of Appeals to have
constructed a portion of their house
thereon in good faith. Under Article
361 of the old Civil Code (Article 448
of the new), the owner of the land on
which anything has been built in good
faith shall have the right to
appropriate as his own faith shall
have the right to appropriate as his
own the building, after payment to

the builder of necessary and useful

expenses, and in the proper case,
expenses for pure luxury or mere
pleasure, or to oblige the builder to
pay the price of the land.
Respondents, as owners of the land,
have therefore the choice of either
appropriating the portion of
petitioners' house which is on their
land upon payment of the proper
indemnity to petitioners, or selling to
petitioners that part of their land on
which stands the improvement. It
may here be pointed out that it would
be impractical for respondents to
choose to exercise the first
alternative, i.e., buy that portion of
the house standing on their land, for
in that event the whole building
might be rendered useless. The more
workable solution, it would seem, is
for respondents to sell to petitioners
that part of their land on which was
constructed a portion of the latter's
house. If petitioners are unwilling or
unable to buy, then they must vacate
the land and must pay rentals until
they do so. Of course, respondents
cannot oblige petitioners to buy the
land if its value is considerably more
than that of the aforementioned
portion of the house. If such be the
case, then petitioners must pay
reasonable rent. The parties must
come to an agreement as to the

conditions of the lease, and should

they fail to do so, then the court shall
fix the same. (Article 361, old Civil
Code; Article 448 of the new).

In this connection, the appellate court

erred in ordering petitioners to pay
monthly rentals of P10.00 from the
date of filing of the complaint until
they actually vacate said land. A
builder in good faith may not be
required to pay rentals. He has a right
to retain the land on which he has
built in good faith until he is
reimbursed the expenses incurred by
him. (Miranda vs. Fadullon, et al., 97
Phil., 801; 51 Off. Gaz., 6226, see also
Martinez vs. Baganus, 28 Phil., 500;
De Guzman vs. De la Fuente, 55 Phil.,
501; Kasilag vs. Rodriguez, Off. Gaz.,
Supp., August 16, 1941, p. 247).

Petitioners further contend that he

complaint should have been
dismissed for nonjoinder of an
indispensable party, it being alleged
that their mother Maria Cupin, who
owns the land in question as part of
her Lot No. 310, has not been made a
party defendant in the case. This
contention, which was not raised in
the trial court, deserves scant

consideration. Petitioners clearly

asserted ownership over the land in
dispute as well as over Lot No. 310 in
their answer to the complaint. They
are consequently estopped from
alleging otherwise.

As to petitioners' assertion that they

should have been awarded damages
alleged to have been suffered by
them in their counterclaim, suffice it
to say that petitioners failed to prove
that they suffered any damage at all
by reason of the filing of the
complaint. Indeed, in the light of the
view we have taken of the case, they
could not have substantiated their
claim for damages.

In view of the foregoing, the appealed

decision is modified in the sense that
respondents are hereby directed to
exercise within 30 days from this
decision their option to either buy the
portion of the petitioners' house on
their land or sell to said petitioners
the portion of their land and
petitioners are unwilling or unable to
buy, then they must vacate the same
and must pay reasonable rent of
P10.00 monthly from the time
respondents made their choice up to

the time they actually vacate the

premises. But if the value of the eland
is considerably more than the value
of the improvement, then petitioners
may elect to rent the land, in which
case the parties shall agree upon the
terms of a lease. Should they
disagree, the court of origin is hereby
instructed to intervene and fix the
terms thereof. Petitioners shall pay
reasonable rent of P10.00 monthly up
to the time the parties agree on the
terms of the lease or until the curt
fixes such terms.

So ordered without pronouncement

as to costs.

Paras, C.J., Bengzon, Bautista Angelo,

Labrador, Concepcion, Reyes, J.B.L.,
Barrera and Dizon, JJ., concur

G.R. No. 74761

1990

November 6,

NATIVIDAD V. ANDAMO and

EMMANUEL R. ANDAMO,
petitioners,
vs.
INTERMEDIATE APPELLATE COURT
(First Civil Cases Division) and
MISSIONARIES OF OUR LADY OF
LA SALETTE, INC., respondents.

Lope E. Adriano for petitioners.

Padilla Law Office for private

respondent.

The pivotal issue in this petition for

certiorari, prohibition and mandamus
is whether a corporation, which has
built through its agents, waterpaths,
water conductors and contrivances
within its land, thereby causing
inundation and damage to an
adjacent land, can be held civilly
liable for damages under Articles
2176 and 2177 of the Civil Code on
quasi-delicts such that the resulting
civil case can proceed independently
of the criminal case.

The antecedent facts are as follows:

Petitioner spouses Emmanuel and

Natividad Andamo are the owners of
a parcel of land situated in Biga
(Biluso) Silang, Cavite which is
adjacent to that of private
respondent, Missionaries of Our Lady
of La Salette, Inc., a religious
corporation.

SUPREME COURT
Manila

THIRD DIVISION

FERNAN, C.J.:

Within the land of respondent

corporation, waterpaths and
contrivances, including an artificial
lake, were constructed, which
allegedly inundated and eroded

petitioners' land, caused a young

man to drown, damaged petitioners'
crops and plants, washed away costly
fences, endangered the lives of
petitioners and their laborers during
rainy and stormy seasons, and
exposed plants and other
improvements to destruction.

In July 1982, petitioners instituted a

criminal action, docketed as Criminal
Case No. TG-907-82, before the
Regional Trial Court of Cavite, Branch
4 (Tagaytay City), against Efren
Musngi, Orlando Sapuay and Rutillo
Mallillin, officers and directors of
herein respondent corporation, for
destruction by means of inundation
under Article 324 of the Revised Penal
Code.

Subsequently, on February 22, 1983,

petitioners filed another action
against respondent corporation, this
time a civil case, docketed as Civil
Case No. TG-748, for damages with
prayer for the issuance of a writ of
preliminary injunction before the
same court. 1

On March 11, 1983, respondent

corporation filed its answer to the
complaint and opposition to the
issuance of a writ of preliminary
injunction. Hearings were conducted
including ocular inspections on the
land. However, on April 26, 1984, the
trial court, acting on respondent
corporation's motion to dismiss or
suspend the civil action, issued an
order suspending further hearings in
Civil Case No, TG-748 until after
judgment in the related Criminal Case
No. TG-907-82.

Resolving respondent corporation's

motion to dismiss filed on June 22,
1984, the trial court issued on August
27, 1984 the disputed order
dismissing Civil Case No. TG-748 for
lack of jurisdiction, as the criminal
case which was instituted ahead of
the civil case was still unresolved.
Said order was anchored on the
provision of Section 3 (a), Rule III of
the Rules of Court which provides that
"criminal and civil actions arising
from the same offense may be
instituted separately, but after the
criminal action has been commenced
the civil action cannot be instituted
until final judgment has been
rendered in the criminal action." 2

Petitioners appealed from that order

to the Intermediate Appellate Court. 3

On February 17, 1986, respondent

Appellate Court, First Civil Cases
Division, promulgated a decision 4
affirming the questioned order of the
trial court. 5 A motion for
reconsideration filed by petitioners
was denied by the Appellate Court in
its resolution dated May 19, 1986. 6

Directly at issue is the propriety of

the dismissal of Civil Case No. TG-748
in accordance with Section 3 (a) of
Rule 111 of the Rules of Court.
Petitioners contend that the trial
court and the Appellate Court erred in
dismissing Civil Case No. TG-748
since it is predicated on a quasidelict. Petitioners have raised a valid
point.

It is axiomatic that the nature of an

action filed in court is determined by
the facts alleged in the complaint as
constituting the cause of action. 7
The purpose of an action or suit and

the law to govern it, including the

period of prescription, is to be
determined not by the claim of the
party filing the action, made in his
argument or brief, but rather by the
complaint itself, its allegations and
prayer for relief. 8 The nature of an
action is not necessarily determined
or controlled by its title or heading
but the body of the pleading or
complaint itself. To avoid possible
denial of substantial justice due to
legal technicalities, pleadings as well
as remedial laws should be liberally
construed so that the litigants may
have ample opportunity to prove their
respective claims. 9

Quoted hereunder are the pertinent

portions of petitioners' complaint in
Civil Case No. TG-748:

4)
That within defendant's land,
likewise located at Biga (Biluso),
Silang, Cavite, adjacent on the right
side of the aforesaid land of plaintiffs,
defendant constructed waterpaths
starting from the middle-right portion
thereof leading to a big hole or
opening, also constructed by
defendant, thru the lower portion of
its concrete hollow-blocks fence

situated on the right side of its

cemented gate fronting the provincial
highway, and connected by
defendant to a man height interconnected cement culverts which
were also constructed and lain by
defendant cross-wise beneath the tip
of the said cemented gate, the leftend of the said inter-connected
culverts again connected by
defendant to a big hole or opening
thru the lower portion of the same
concrete hollowblocks fence on the
left side of the said cemented gate,
which hole or opening is likewise
connected by defendant to the
cemented mouth of a big canal, also
constructed by defendant, which runs
northward towards a big hole or
opening which was also built by
defendant thru the lower portion of
its concrete hollow-blocks fence
which separates the land of plaintiffs
from that of defendant (and which
serves as the exit-point of the
floodwater coming from the land of
defendant, and at the same time, the
entrance-point of the same
floodwater to the land of plaintiffs,
year after year, during rainy or
stormy seasons.

5)
That moreover, on the middleleft portion of its land just beside the
land of plaintiffs, defendant also
constructed an artificial lake, the
base of which is soil, which utilizes
the water being channeled thereto
from its water system thru interconnected galvanized iron pipes (No.
2) and complimented by rain water
during rainy or stormy seasons, so
much so that the water below it
seeps into, and the excess water
above it inundates, portions of the
adjoining land of plaintiffs.

6)
That as a result of the
inundation brought about by
defendant's aforementioned water
conductors, contrivances and
manipulators, a young man was
drowned to death, while herein
plaintiffs suffered and will continue to
suffer, as follows:

a)
Portions of the land of
plaintiffs were eroded and converted
to deep, wide and long canals, such
that the same can no longer be
planted to any crop or plant.

b)
Costly fences constructed by
plaintiffs were, on several occasions,
washed away.

c)
During rainy and stormy
seasons the lives of plaintiffs and
their laborers are always in danger.

d)
Plants and other
improvements on other portions of
the land of plaintiffs are exposed to
destruction. ... 10

A careful examination of the

aforequoted complaint shows that the
civil action is one under Articles 2176
and 2177 of the Civil Code on quasidelicts. All the elements of a quasidelict are present, to wit: (a)
damages suffered by the plaintiff, (b)
fault or negligence of the defendant,
or some other person for whose acts
he must respond; and (c) the
connection of cause and effect
between the fault or negligence of
the defendant and the damages
incurred by the plaintiff. 11

Clearly, from petitioner's complaint,

the waterpaths and contrivances built
by respondent corporation are
alleged to have inundated the land of
petitioners. There is therefore, an
assertion of a causal connection
between the act of building these
waterpaths and the damage
sustained by petitioners. Such action
if proven constitutes fault or
negligence which may be the basis
for the recovery of damages.

In the case of Samson vs. Dionisio, 12

the Court applied Article 1902, now
Article 2176 of the Civil Code and
held that "any person who without
due authority constructs a bank or
dike, stopping the flow or
communication between a creek or a
lake and a river, thereby causing loss
and damages to a third party who,
like the rest of the residents, is
entitled to the use and enjoyment of
the stream or lake, shall be liable to
the payment of an indemnity for loss
and damages to the injured party.

While the property involved in the

cited case belonged to the public
domain and the property subject of
the instant case is privately owned,

the fact remains that petitioners'

complaint sufficiently alleges that
petitioners have sustained and will
continue to sustain damage due to
the waterpaths and contrivances built
by respondent corporation. Indeed,
the recitals of the complaint, the
alleged presence of damage to the
petitioners, the act or omission of
respondent corporation supposedly
constituting fault or negligence, and
the causal connection between the
act and the damage, with no preexisting contractual obligation
between the parties make a clear
case of a quasi delict or culpa
aquiliana.

It must be stressed that the use of

one's property is not without
limitations. Article 431 of the Civil
Code provides that "the owner of a
thing cannot make use thereof in
such a manner as to injure the rights
of a third person." SIC UTERE TUO UT
ALIENUM NON LAEDAS. Moreover,
adjoining landowners have mutual
and reciprocal duties which require
that each must use his own land in a
reasonable manner so as not to
infringe upon the rights and interests
of others. Although we recognize the
right of an owner to build structures

on his land, such structures must be

so constructed and maintained using
all reasonable care so that they
cannot be dangerous to adjoining
landowners and can withstand the
usual and expected forces of nature.
If the structures cause injury or
damage to an adjoining landowner or
a third person, the latter can claim
indemnification for the injury or
damage suffered.

Article 2176 of the Civil Code imposes

a civil liability on a person for damage
caused by his act or omission
constituting fault or negligence, thus:

Article 2176. Whoever by act or

omission causes damage to another,
there being fault or negligence, is
obliged to pay for the damage done.
Such fault or negligence, if there is no
pre-existing contractual relation
between the parties, is called a quasidelict and is governed by the
provisions of this chapter.

Article 2176, whenever it refers to

"fault or negligence", covers not only
acts "not punishable by law" but also

acts criminal in character, whether

intentional and voluntary or
negligent. Consequently, a separate
civil action lies against the offender in
a criminal act, whether or not he is
criminally prosecuted and found
guilty or acquitted, provided that the
offended party is not allowed, (if the
tortfeasor is actually charged also
criminally), to recover damages on
both scores, and would be entitled in
such eventuality only to the bigger
award of the two, assuming the
awards made in the two cases vary.
13

The distinctness of quasi-delicta is

shown in Article 2177 of the Civil
Code, which states:

Article 2177. Responsibility for fault

or negligence under the preceding
article is entirely separate and
distinct from the civil liability arising
from negligence under the Penal
Code. But the plaintiff cannot recover
damages twice for the same act or
omission of the defendant.

According to the Report of the Code

Commission "the foregoing provision
though at first sight startling, is not
so novel or extraordinary when we
consider the exact nature of criminal
and civil negligence. The former is a
violation of the criminal law, while the
latter is a distinct and independent
negligence, which is a "culpa
aquiliana" or quasi-delict, of ancient
origin, having always had its own
foundation and individuality, separate
from criminal negligence. Such
distinction between criminal
negligence and "culpa extracontractual" or "cuasi-delito" has
been sustained by decisions of the
Supreme Court of Spain ... 14

In the case of Castillo vs. Court of

Appeals, 15 this Court held that a
quasi-delict or culpa aquiliana is a
separate legal institution under the
Civil Code with a substantivity all its
own, and individuality that is entirely
apart and independent from a delict
or crime a distinction exists
between the civil liability arising from
a crime and the responsibility for
quasi-delicts or culpa extracontractual. The same negligence
causing damages may produce civil
liability arising from a crime under

the Penal Code, or create an action

for quasi-delicts or culpa extracontractual under the Civil Code.
Therefore, the acquittal or conviction
in the criminal case is entirely
irrelevant in the civil case, unless, of
course, in the event of an acquittal
where the court has declared that the
fact from which the civil action arose
did not exist, in which case the
extinction of the criminal liability
would carry with it the extinction of
the civil liability.

In Azucena vs. Potenciano, 16 the

Court declared that in quasi-delicts,
"(t)he civil action is entirely
independent of the criminal case
according to Articles 33 and 2177 of
the Civil Code. There can be no
logical conclusion than this, for to

subordinate the civil action

contemplated in the said articles to
the result of the criminal prosecution
whether it be conviction or
acquittal would render
meaningless the independent
character of the civil action and the
clear injunction in Article 31, that his
action may proceed independently of
the criminal proceedings and
regardless of the result of the latter."

WHEREFORE, the assailed decision

dated February 17, 1986 of the then
Intermediate Appellate Court
affirming the order of dismissal of the
Regional Trial Court of Cavite, Branch
18 (Tagaytay City) dated August 17,
1984 is hereby REVERSED and SET
ASIDE. The trial court is ordered to
reinstate Civil Case No. TG-748

entitled "Natividad V. Andamo and

Emmanuel R. Andamo vs.
Missionaries of Our Lady of La Salette
Inc." and to proceed with the hearing
of the case with dispatch. This
decision is immediately executory.
Costs against respondent corporation.

SO ORDERED.

Gutierrez, Jr. and Bidin, JJ., concur.

Feliciano, J., is on leave.