# 32. TECHNOGAS PHIL. v.

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
RULING: Petition was granted.
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:

He was really unaware of the encroachment basing on the fact presented by both sides.
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.

#38. PADA KILARIO VS. CA FACTS:

- Jacinto Pada had six children - he died intestate - His estate included a parcel of land of residential and coconut
land located at Poblacion, Matalom, Leyte - Cadastral Lot No. 5581 with an area of 1,301.92 square meters

- It is the northern portion of Cadastral Lot No. 5581 which is the subject of the instant controversy. - half-brother,
Feliciano Pada, obtained permission from him to build a house on the northern portion of Cadastral Lot No. 5581 -
Feliciano died - son Pastor continued living in the house - Petitioner Verona Pada-Kilario - one of Pastor’s children
living in that house since 1960 - May, 1951, the heirs of Jacinto Pada entered into an extra-judicial partition of his
estate - they executed a private document which they, however, never registered in the Office of the Registrar of
Deeds of Leyte. - It was to both Ananias and Marciano, represented by his daughter, Maria, that Cadastral Lot No.
5581 was allocated during the said partition.

When Ananias died, his daughter, Juanita, succeeded to his right as co-owner of said property. - thereafter - Juanita
Pada sold to Engr. Ernesto Paderes, the right of his father, Ananias, as co-owner of Cadastral Lot No. 5881. -
November 17, 1993, it was the turn of Maria Pada to sell the co-ownership right of his father, Marciano. Private
respondent, who is the first cousin of Maria, was the buyer. - Private respondent demanded that petitioner spouses
vacate the northern portion of Cadastral Lot No. 5581 so his family can utilize the said area. - AMICABLE
SETTLEMENT FAILED - July 24, 1995, the heirs of Amador Pada executed a Deed of Donation[9] transferring to
petitioner Verona Pada-Kilario, their respective shares as coowners of Cadastral Lot No. 5581. - Petitioner filed their
answer averring that the northern portion of Cadastral Lot No. 5581 had already been donated to them by the heirs
of Amador Pada. - Contended that the extra-judicial partition of the estate of Jacinto Pada executed in 1951 was
invalid and ineffectual - no special power of attorney - effectuated only through a private document

ISSUE: WON Petitioners where builder in good faith.

WON Petitioners can be ejected from the premises.

HELD: 1st - NO - petitioners were in possession of the subject property by sheer tolerance of its owners, they knew
that their occupation of the premises may be terminated any time. - Persons who occupy the land of another at the
latter's tolerance or permission, without any contract between them, is necessarily bound by an implied promise
that they will vacate the same upon demand, failing in which a summary action for ejectment is the proper remedy
against them. - they cannot be considered possessors nor builders in good faith. - Article 448 and 456 of the CC apply
only to a possessor in good faith, i.e., one who builds on land with the belief that he is the owner thereof. - Neither
did the promise of Concordia, Esperanza and Angelito Pada that they were going to donate the premises to
petitioners convert them into builders in good faith for at the time the improvements were built on the premises,
such promise was not yet fulfilled, i.e., it was a mere expectancy of ownership that may or may not be realized. -
Even as that promise was fulfilled, the donation is void for Concordia, Esperanza and Angelito Pada were not the
owners of Cadastral Lot No. 5581.

Additional Info. - Petitioners are estopped from impugning the extrajudicial partition executed by the heirs of Jacinto
Pada after explicitly admitting in their Answer that they had been occupying the subject property since 1960 without
ever paying any rental as they only relied on the liberality and tolerance of the Pada family. Their admissions are
evidence of a high order and bind them insofar as the character of their possession of the subject property is
concerned. - The belated act of Concordia, Esperanza and Angelito, who are the heirs of Amador Pada, of donating
the subject property to petitioners - produced no legal effect - In the said partition, what was allocated to Amador
Pada was not the subject property which was a parcel of residential land in Sto. Nino, Matalom, Leyte, but rather,
one-half of a parcel of coconut land in the interior of Sto. Nino St., Sabang, Matalom, Leyte and one-half of a parcel
of rice land in Itum, Sta. Fe, Matalom, Leyte. - The donation made by his heirs to petitioners of the subject property,
thus, is void for they were not the owners thereof. At any rate it is too late in the day for the heirs of Amador Pada to
repudiate the legal effects of the 1951 extrajudicial partition as prescription and laches have equally set in. - No law
requires partition among heirs to be in writing and be registered in order to be valid. - The requirement in Sec. 1,
Rule 74 of the Revised Rules of Court that a partition be put in a public document and registered, has for its purpose
the protection of creditors and the heirs themselves against tardy claims. - petitioners cannot be said to be entitled
to the value of the improvements that they built on the said lot.

# 43. BERNARDO vs. CATALINO BATACLAN

Doctrine:
The Civil Code confirms certain time-honored principles of the law of property. One of these is the principle
of accession whereby the owner of property acquires not only that which it produces but that which is united
to it either naturally or artificially.
Whatever is built, planted or sown on the land of another, and the improvements or repairs made thereon,
belong to the owner of the land (art. 358). Where, however, the planter, builder, 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 to the owner of the land.
Facts:
1. Bernardo learned when he entered into the premises of the property purchased from Pastor Samonte
that the latter authorised Catalino Bataclan to make improvements thereon. In a civil case to secure
 possession, the court ruled that Bataclan was a builder and possessor in good faith and was entitled
to reimbursement for the works and improvements,
2. The court gave the plaintiff 30 days within which to choose between the sale of the land or to buy the
works. Bernardo decided to sell the land to the defendant but the latter informed the court that he is
unable to pay the sum required. The court then awarded the respondent 30 days to purchase the land
or else the property will be sold in a public auction.
3. In the auction sale, Toribio Teodoro was the highest bidder for 8,000 Pesos. The purchaser sought
judicial remedy for the possession of the property.
Issue:
W/N the defendant lost his right to retain the property pending payment for indemnity.
Decision:
The Court ruled that the right to retain the property has already been lost. Due to the failure and inability of
the defendant to pay the purchase price the subject property was sold in a public auction which Bernardo
asked for, without any protest from Bataclan. Therefore, the court found no reason to keep the property in
the possession of the defendant.
the Court explained that Article 448 provides a just and equitable solution to the impracticability of creating
"forced co-ownership" 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 to pay the proper
rent. The owner of the land is allowed to exercise the said options because his right is older and because, by
the principle of accession, he is entitled to the ownership of the accessory thing.

#44. SALVACION MIRANDA, vs. ESTEBAN FADULLON

MONTEMAYOR, J.:

The present appeal was first taken to the Court of Appeals. Later by resolution of the said court it was certified to
us under section 17, paragraph 6 of the Judiciary Act of 1948, as amended, the said Tribunal being of the
opinion that the case involved only questions of law. The facts as may be gathered from the pleadings filed by
the parties may be briefly stated as follows. In the year 1939 one Lucio Tio was the owner of a parcel of land, lot
1589-J of the Banilad Estate, Cebu, under Transfer Certificate of Title No. 10548. On December 29, 1939, a
power of attorney in favor of one Esteban Fadullon executed by Lucio Tio was registered in the land records of
Cebu City and annotated on the same certificate of title. In the year 1946, on the strength of the said power of
attorney Fadullon to make the repurchase within this period, the Segarras about ten days after the expiration of
the period filed a sword petition for the consolidation of their ownership and registered said petition in the office
of the Register of Deeds on May 15, 1946. Apprised of the sale of his property, Lucio Tio on June 4, 1946, filed a
complaint in the Court of First Instance of Cebu, Civil Case No. 181 to annul the sale. Service of summons was
made upon the Segarras on June 10, 1946. After hearing the trial court rendered judgment annulling the sale.
The Segarras appealed to the Court of Appeals under CA—G. R. No.6550-R and the said Tribunal affirmed the
appealed decision and further required the Segarras to pay plaintiff the reasonable rentals on the property from
the filing of the action until said property shall have been returned to plaintiff. Upon the decision becoming final
the corresponding writ of execution was issued directing the Sheriff to put plaintiff Tio in possession of the lot. It
turned out however that during the possession of the property by the Segarras they had introduced
improvements thereon consisting of a building of three rooms and a storage room, and one artesian well, with
tower and water tank and a cement flooring covering about one-third of the lot which according to the Segarras
cost them P5,300. They then filed a motion with the trial court claiming that they were possessors in good faith of
the lot in question, and that they had introduced the improvements aforementioned in good faith and asked the
court to order the plaintiff to pay for the said improvements valued at P5,300 or to allow them to buy the land
should the plaintiff decide not to pay for the improvements. On August 28, 1952, the trial court issued the
following order:

The attorney for the plaintiff has been accordingly served with copy of defendant's motion of July 31,
1952, filed through counsel.
 As prayed for, without opposition, the plaintiff is hereby ordered to either pay the defendant spouses,
Dionisio Segarra and Clemencia N. Segarra (possessors in good faith) the sum of P5,300, value of the
building erected on the land in question, or otherwise allow said defendants to purchase the
aforementioned lot.

The plaintiff filed a motion for reconsideration claiming that the Segarras were possessors and builders in bad
faith and so were not entitled to reimbursement for the value of the improvements; that the reason he (plaintiff)
did not file an opposition to the motion of the defendants asking for reimbursement was that he thought that the
trial court was sufficiently informed and impressed with the bad faith with which defendants bought the land and
introduced improvements thereon and that it would consequently deny their motion; and in support of his motion
for reconsideration plaintiff quoted portions of the decision of the trial court and the Court of Appeals. Upon the
denial of his motion for reconsideration, he took the present appeal.

After a careful review of the record we agree with the plaintiff-appellant. The trial court in its decision declaring
the sale of the land to the defendants null and void and commenting on the alleged good faith of defendants in
buying the property said the following:

There are two circumstances which seem to stubbornly belie the professed good faith on the part of the
Segarras in buying this property; namely. the circumstances of the power-of-attorney appearing on the
back of the title as of five or six years previous and the other circumstances of the comparatively limited
period of one month granted vendor Fadullon to redeem the property. Above all these, is the further
circumstance that the said property had already been mortgaged in favor of the Cebu Mutual Building
and Loan Association by virtue of that power-of-attorney.

While the evidence did not disclose a collusion or conspiracy between Fadullon and the Segarras, yet,
considering the short period of one month within which to redeem and the surrounding circumstances,
the possibility of such collusion lingers.

Obviously there was in this transaction a prevailing intention of railroading the property into a new
ownership as may be proven by the fact that said purchasers filed a sworn petition for consolidating their
ownership barely ten days after the expiration of thirty days, that is, on April 13, 1946, and registered
with the office of Register of Deeds for Cebu twelve days thereafter, or on May 15, 1946.

The Court of Appeals in its decision affirming that of the trial court said:

The Segarra spouses maintain that they are purchasers in good faith. We will now examine the record
on this point. The alleged power of attorney executed by the late Lucio Tio in favor of appellant Fadullon
was registered in the land record of the Register of Deeds of Cebu Citly and annotated at the back of
Transfer Certificate of Title No. 10548 on December 29, 1939. On the same date, the deed of mortgage
in favor of the Cebu Mutual Building and Loan Association was annotated in the said Torrens title
(Exhibits 1 and 1-B). This encumbrance alone should have been sufficient to put the Segarra spouses
upon an inquiry as to the authority of Fadullon to sell to them the same property six years later. For
instance, the Segarras could have asked themselves this question: Did not the mortgage of P400 serve
the purpose for which the power of attorney was executed?

The Segarras did not require Fadullon to produce his power of attorney. While it is true that said power
of attorney is annotated at the back of the Torrens title of Tio, it was still incumbent upon the Segarras to
ascertain the scope and authority of Fadullon under said power of attorney. Fadullon executed the sale
with the right to repurchase within the extraordinary short period of 30 days. This circumstance, again,
should have placed the Segarras on their guards, knowing, as they did, that they were dealing with an
agent under a power of attorney executed before the war. These unusual circumstances would seem to
engender in our minds the possibility of collusion between the appellants, to hasten the registration of
the title of the Segarras to the land in dispute . . .

. . . the transfer of dominion on the property in question to the Segarras was null and void and of no
effect. The new Certificate of Torrens Title No. 392 on the property now in the name of the Segarras is
hereby ordered cancelled and that a new one issued in the name of Lucio Tio and his wife Salvacion
Miranda; ordering the Segarras to return the possession of said property to plaintiff;

The defendants Segarras are furthermore required to pay plaintiff the reasonable rentals on the property
from the filing of this action until such time as the said property shall have been returned to plaintiff . . ."
Although neither the trial court nor the Court of Appeals did expressly say and in so many words that the
defendants-appellees were possessors in bad faith, from a reading of their decisions particularly those we have
just quoted, one can logically infer that that was the conclusion of the two courts, or to say it more mildly, that the
defendants were not possessors in good faith. Moreover, the very fact that the Court of Appeals sentenced the
defendants to pay rentals is an indication, even proof that defendants were considered possessors and builders
in bad faith, or at least that they were not possessors and builders in good faith. 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. Possibly he might be required to pay rental only when the owner of
the land chooses not to appropriate the improvement and requires the builder in good faith to pay for the land,
but that the builder is unwilling or unable to buy the land, and then they decide to leave things as they are and
assume the relation of lessor and lessee, and should they disagree as to the amount of the rental then they can
go to the court to fix that amount. Furthermore, plaintiff-appellant in her brief (page 7) says without denial or
refutation on the part of defendants-appellees that they (defendants) applied for a building permit to construct
the improvements in question on December 4, 1946, and the permit was granted on January 11, 1947, all this
about seven months after they received the summons on June 10, 1946, meaning to say that the improvements
were introduced long after their alleged good faith as possessors had ended.

In view of the foregoing, the appealed order of August 28, 1952 and the order of October 15, 1952, denying
plaintiff's motion for reconsideration are set aside. With costs against appellees.

#45. DAMIAN IGNACIO, , vs. ELIAS HILARIO 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 plaintiffs-respondents 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 plaintiffs-respondents.