PRINCESS RACHEL DEV’T. CORP. and BORACAY ENCLAVE CORP.

, petitioners
vs. HILL VIEW MARKETING CORP. ET AL., respondents
G.R. No. 222482 | June 2, 2020 | J. REYES, JR., J.

FACTS:
Petitioner Princess Rachel Development Corporation filed a Complaint for Accion
Publiciana and Damages against respondents Hillview, Stefanie and Robert to expunge
claims for damages representing reasonable rentals. PRDC has been in physical
possession of the said properties as early as May 1996 and has religiously paid its
realty taxes. It has been found out that Hillview, which owns the adjoining property, has
encroached an area. Respondents have built condominium units (Alargo Residences)
on the encroached area without the knowledge and consent PRDC. PRDC alleged that
the construction of the buildings on the encroached area was done in bad faith as the
respondents have full knowledge of the territorial boundaries of their respective
properties. PRDC sent respondents a demand letter requesting them to vacate the
subject premises, but they ignored it.

Respondents counter that PRDC did not have prior physical possession over the
disputed area and that there is no manifestation of PRDC's claim of possession over the
area in controversy as there was no noticeable mark or boundary which delineated the
adjoining properties. Respondents contend that Hillview is both a buyer and builder in
good faith, having bought the land free from any liens or encumbrances, and having
constructed structures within the premises of the land which they bought from the Tirols.

ISSUE: Whether or not Hillview is a builder in bad faith.

RULING:
Yes. Hillview is a builder in bad faith.

It is clear that to be deemed a builder in good faith, it is essential that a person asserts
title to the land on which he builds that he be a possessor in the concept of owner, and
that he be unaware that there exists in his title or mode of acquisition any flaw which
invalidates it. In this case, however, the encroachment is substantial, visible to the
naked eye and not merely negligible which Hillview could no longer assert ignorance to
such accusation.

Hillview was informed of the intrusion but still proceeded with the development. He took
advantage of the vacant lot of PRDC and proceeded with the construction which
remained unhampered without the knowledge of PRDC. As a large party developer,
Hillview could have easily dispensed and verified the definite boundaries of the property
it sought to improve to avoid encroachment.

The Court held that Hillview was not unaware that it possesses the encroached portion
improperly or wrongfully. Thus, evidence shows that Hillview is a builder in bad faith.