NPC v. Ibrahim, et al.

, - Eminent Domain
G.R. No. 168732, June 29, 2007

The NPC constructed underground tunnels on the property of the respondents without
their knowledge and consent and without any expropriation proceeding. It contended
that it constructed an easement on the property. Was there taking of the property
considering that the owners were deprived of their beneficial use and enjoyment of the
same, hence, entitled to just compensation?

Yes. The manner in which the easement was created by the NPC, violated the due process
rights of the owners as it was without notice and indemnity to them and did not go through
proper expropriation proceedings. NPC could have, at any time, validly exercised the power
of eminent domain to acquire the easement over the property as this power encompasses not
only the taking or appropriation of title to and possession of the expropriated property but
likewise covers even the imposition of a mere burden upon the owner of the condemned
property. (Rep. v. PLDT, 136 Phil. 20 (1969)). Significantly, though, landowners cannot be
deprived of their right over their land until expropriation proceedings are instituted in court.
The court must then see to it that the taking is for public use, that there is payment of just
compensation and that there is due process of law.

In disregarding this procedure and failing to recognize the owners’ ownership of the sub-
terrain portion, NPC took a risk and exposed itself to greater liability with the passage of
time. It must be emphasized that the acquisition of the easement is not without
expense. The underground tunnels imposed limitations on the owners’ use of the property
for an indefinite period and deprived them of its ordinary use. The owners are clearly
entitled to the payment of just compensation. Notwithstanding the fact that NPC only
occupied the sub-terrain portion, it is liable to pay not merely an easement fee but
rather the full compensation for the land. This is so because, the nature of the easement
practically deprived the owners of its normal beneficial use. The owners, as the owners of
the property thus expropriated, are entitled to a just compensation which should be neither
more nor less, whenever it is possible to make the assessment, than the money equivalent of
said property. (NPC v. Ibrahim, et al., G.R. No. 168732, June 29, 2007).

Valuation of the property.

NPC contended that if ever it is liable, it should be made to pay the value of the land
from the time it constructed the tunnels. Is the contention correct? Why?

No. To it to use the date it constructed the tunnels as the date of valuation would be grossly
unfair. First, it did not enter the land under warrant or color of legal authority or with intent to
expropriate the same. It did not notify the owners and wrongly assumed that it had the right
to dig the tunnels under their property. Secondly, the improvements introduced in no way
contributed to an increase in the value of the land. The valuation should be based at the
time of the discovery of the construction of the underground tunnels. (NPC v. Ibrahim, et
al., G.R. No. 168732, June 29, 2007).

It is undisputed that there is a legal easement of right-of-way in favor of the Republic. Andaya’s
transfer certificates of title contained the reservation that the lands covered thereby are subject
to the provisions of the Land Registration Act and the Public Land Act. Section 112 of the Public
Land Act provides that land granted by patent shall be subject to a right-of-way not exceeding
60 meters in width for public highways, irrigation ditches, aqueducts, and other similar works of
the government or any public enterprise, free of charge, except only for the value of the
improvements existing thereon that may be affected. In view of this, the Court of Appeals
declared that all Republic needs to do is to enforce such right without having to initiate
expropriation proceedings and without having to pay any just compensation. Hence, the
Republic may appropriate the 701 square meters necessary for the construction of the
floodwalls without paying for it. Is the Republic liable for just compensation if in enforcing the
legal easement of right-of-way of a property, the remaining area would be rendered unusable
and uninhabitable?

Yes, it is liable to pay consequential damages if in enforcing the legal easement on Andaya’s property,
the remaining area would be rendered unusable and uninhabitable. “Taking”, in the exercise of the
power of eminent domain, occurs not only when the government actually deprives or dispossess
the property owner of his property or of its ordinary use, but also when there is a practical
destruction or material impairment of the value of his property. Using this standard, there was
undoubtedly a taking of the remaining area of Andaya’s property. True, no burden was imposed
thereon and Andaya still retained title and possession of the property. But, the nature and the effect of
the floodwalls would deprive Andaya of the normal use of the remaining areas. It would prevent
ingress and egress to the property and turn it into a catch basin for the floodwaters coming from the
Agusan River.
For this reason, Andaya is entitled to payment of just compensation, which must be neither more
nor less than the monetary equivalent of the land. One of the basic principles enshrined in our
Constitution is that no person shall be deprived of his private property without due process of law;
and in expropriation cases, an essential element of due process is that there must be just
compensation whenever private property is taken for public use. Noteworthy, Section 9, Article III of
our Constitution mandates that private property shall not be taken for public use without just
compensation. (Rep. v. Lim, G.R. No. 161656, June 29, 2005, 462 SCRA 265; Rep. v. Andaya, G.R. No.
160656, June 15, 2007).

CABAL V CABAL
Petitioners: HEIRS OF MARCELINO CABAL, represented by VICTORIA CABAL
Respondents: SPOUSES LORENZO CABAL and ROSITA CABAL

Facts:
During his lifetime, Marcelo Cabal was the owner of a parcel of land situated at Barrio
Palanginan, Iba, Zambales, described as Lot G and covered by Original Certificate of Title
(OCT) No. 29 of the Regristry of Deeds of Zambales. Sometime in 1954, Marcelo died, survived
by his wife and his children. It appears that sometime in 1949, five years before he died,
Marcelo allowed his son, Marcelino, to build his house on a portion of the lot. Since then,
Marcelino resided thereon. Later, Marcelino’s son also built his house on the disputed property.

In 1964, Marcelo’s heirs extra-judicially settled among themselves the lot into undivided equal
shares and TCT No. T-8635 was issued in their names. Daniel sold a portion of his undivided
share to spouses Oscar Marete and Clarita Ebue. On September 12, 1976, the heirs subdivided
Lot G into Lot G-1 in favor of Marcelino, resulting in the issuance of TCT No. T-22656; and Lot
G-2 in favor of Higinia, Daniel, Natividad, Juan, Cecilio, Margarita, Lorenzo, Lauro and
Anacleto, resulting in the issuance of TCT No. 22657.

On March 1, 1977, Marcelino mortgaged his share, as described under TCT No. 22656, to the
Rural Bank of San Antonio (Zambales), Inc.

In the interim, based on a consolidated subdivision plan, it was revealed that Marcelino and his
son occupied and built their houses on an area located on the southernmost portion of another
lot and not the adjacent lot designated to him. The spouses Lorenzo and Rosita Cabal
(respondents) confronted Marcelino on this matter which resulted to an agreement to a re-
survey and swapping of lots for the purpose of reconstruction of land titles. However, the
agreed resurvey and swapping of lots did not materialize.

Hence, respondents filed a complaint for Recovery of Possession with Damages against
Marcelino. They alleged that Marcelino introduced improvements in bad faith on their land
with knowledge that the adjacent lot is titled in his name. Marcelino contends that respondents
have no cause of action against him because he has been in possession in good faith since 1949
with the respondents’ knowledge and acquiescence. He further avers that acquisitive
prescription has set in.

The MTC rendered a decision in favor of Marcelino, directing the respondents herein to
relinquish the possession of said property. MTC reasoned that prescription or the length of time
by which Marcelino has held or possessed the property has barred the respondents from filing a
claim.

Respondents filed an appeal which was granted by the RTC. In reversing the MTC, the RTC
held that Marcelino’s possession was in the concept of a co-owner and therefore prescription
does not run in his favor; that his possession, which was tolerated by his co-owners, does not
ripen into ownership.

Marcelino then filed a petition for review with the CA which affirmed the decision of the RTC
in toto. Marcelino’s counsel filed an MR but the CA denied it.

Hence this petition.

Issue:

Whether or not the lot where Marcelino built his house was co-owned by Marcelo’s children.

Ruling:

The Court rules in favor of the petitioners.

No. The lot where Marcelino built his house was not co-owned by Marcelo’s children.

It is undisputed that Marcelino built his house on the disputed property in 1949 with the
consent of his father. Marcelino has been in possession of the disputed lot since then with the
knowledge of his co-heirs, such that even before his father died in 1954, when the co-ownership
was created, his inheritance or share in the co-ownership was already particularly designated or
physically segregated. Thus, even before the lot was subdivided in 1976, Marcelino already
occupied the disputed portion and even then co-ownership did not apply over the disputed lot.
Elementary is the rule that there is no co-ownership where the portion owned is concretely
determined and identifiable, though not technically described, or that said portion is still
embraced in one and the same certificate of title does make said portion less determinable or
identifiable, or distinguishable, one from the other, nor that dominion over each portion less
exclusive, in their respective owners.

Thus, since Marcelino built a house and has been occupying the disputed portion since 1949,
with the consent of his father and knowledge of the co-heirs, it would have been just and
equitable to have segregated said portion in his favor and not one adjacent to it.
 I. Dispositive Portion

WHEREFORE, the instant petition is GRANTED. The assailed Decision and Resolution of the
Court of Appeals in CA-G.R. SP No. 64729 are REVERSED and SET ASIDE. The case is
REMANDED to the court of origin for further proceedings to determine the facts essential to the
proper application of Article 448 in relation to Articles 546 and 548 of the Civil Code.

No pronouncement as to costs.

[ G.R. No. L-57288. April 30, 1984

LEONILA SARMIENTO, PETITIONER, VS. HON. ENRIQUE A. AGANA,
DISTRICT JUDGE, COURT OF FIRST INSTANCE OF RIZAL, SEVENTH
JUDICIAL DISTRICT, BRANCH XXVIII, PASAY CITY, AND SPOUSES
ERNESTO VALENTINO AND REBECCA LORENZO-VALENTINO,
RESPONDENTS.

Doctrine: The landowner on which a building has been constructed in good

faith by another has the option to buy the building or sell his land to the
builder, he cannot refuse to exercise either option.

Facts: Before Ernesto Valentino and Rebecca Lorenzo wed, Rebecca’s

mother offered a lot in Paranaque that they could build their house on. In
1967, they finally built their home which cost about PhP8,000- 10,000,
thinking that someday, the lot would be transferred to them in their name.
It turns out, though, that the lot was owned by the Spouses Santos who, in
turn, sold the same to Leonila Sarmiento in 1974. A year later, Sarmiento
ordered the Valentinos to vacate their lot, then eventually filed and
Ejection Suit against them.

Municipal Court: The Municipal Court found that private respondents had
built the residential house in good faith, and, disregarding the testimony of
Ernesto, that it had a value of P20,000.00. It then ordered Ernesto and wife
to vacate the land after Sarmiento has paid them the mentioned sum of
P20,000.00.
CFI: But the case was then elevated to the CFI of Pasay (w/ Agana as Judge),
and pursuant to Art.448 of the CC (March 1979), the Court ordered
Sarmiento to exercise the option in 60 days to pay Ernesto 40,000 as the
value of the house or to let them purchase the land for 25,000. Sarmiento
was not able to exercise this option, and the CFI allowed Ernesto to deposit
the 25,000 purchase price with the Court.
This is the hub of the controversy. Sarmiento then instituted the instant
certiorari proceedings.
ISSUES:
(1) Whether or not Ernesto and his wife were builders in good faith.
(2) Whether or not the land owner Sarmiento can be compelled to exercise
either option: to buy the building or to sell the land.
HELD:
(1) Yes. We agree that Ernesto and wife were builders in good faith in view
of the peculiar circumstances under which they had constructed the
residential house. As far as they knew, the land was owned by Ernesto’s
mother-in-law who, having stated they could build on the property, could
reasonably be expected to later on give them the land.
In regards to builders in good faith, Article 448 of the Code provides:
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.
(2) Yes. Because Ernesto and his wife were clearly in good faith, Sarmiento
was required to exercise either of 2 options: to purchase the house or to sell
the land to them. In this case, based on the value decided by CFI of Pasay.
She is compelled by law to exercise either option. Not choosing either is a
violation of the law.
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 (now Article 546). The owner, of the land.
upon, the other hand, has the option, under article 361 (now Article 448),
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.
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 nor 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 (now Article 448) and 453 (now Article 546) of the
Civil Code. (Ignacio vs. Hilario, 76 Phil. 605, 608 [1946]).
WHEREFORE, the Petition for Certiorari is hereby ordered dismissed,
without pronouncement as to costs.

G.R. No. L-32974 July 30, 1979

BARTOLOME ORTIZ, Petitioner, vs. HON. UNION C. KAYANAN, in his capacity as

Judge of the Court of First Instance of Quezon, Branch IV; ELEUTERIO
ZAMORA, QUIRINO COMINTAN, VICENTE FERRO, AND GREGORIO
PAMISARAN, Respondents.

Facts:
The lot in controversy was formerly owned by Martin Dolorico II, Ortiz’s
ward, who later on died
leaving behind the said lot. Ortiz continued the cultivation and possession
of the property. The heir of Martin Dolorico II executed an affidavit
relinquishing his rights over the property in favor of defendants Quirino
Comintan and Eleuterio Zamora.
Comintan and Zamora filed their respective sales applications but Ortiz
protested alleging that he should be given preference to purchase the lot
inasmuch as he is the actual occupant and has been in continuous
possession of the same.
The respondent court ruled that Comintan and Zamora should reimburse
Ortiz for the improvements introduced and the latter was given the right to
retain the property until after he has been fully paid therefor, without
interest since he enjoys the fruits of the property in question.
Respondent Court then appointed respondent Vicente Ferro, Clerk of Court,
as Receiver to collect tolls on a portion of the property used as a diversion
road. It maintained that the tolls collected by the plaintiff on an
unimproved portion naturally belong to the defendants, following the
doctrine on accretion. A Writ of Execution was issued after private
respondent Quirino Comintan had Bled the required bond.
Ortiz filed the instant petition contending that since said judgment
declared the petitioner a possessor in good faith, he is entitled to the
payment of the value of the improvements introduced by him on the whole
property, with right to retain the land until he has been fully paid such
value. He likewise averred that no payment for improvements has been
made and, instead, a bond therefor had been filed by defendants (private
respondents), which, according to petitioner, is not the payment envisaged
in the decision which would entitle private respondents to the possession of
the property.
It is the position of petitioner that all the fruits of the property, including
the tolls collected by him from the passing vehicles, which according to the
trial court, belongs to petitioner and not to defendant/private respondent
Quirino Comintan, in accordance with the decision itself, which decreed
that the fruits of the property shall be in lieu of interest on the amount to be
paid to petitioner as reimbursement for improvements.
He further contends that so long as the aforesaid amount decreed in the
judgment representing the expenses for clearing the land and the value of
the coconuts and fruit trees planted by him remains unpaid, he can
appropriate for his exclusive benefit all the fruits which he may derive from
the property, without any obligation to apply any portion thereof to the
payment of the interest and the principal of the debt.
Issue:
WON petitioner is still entitled to retain for his own exclusive benefit all the
fruits of the property,
such as the tolls collected by him.
Ruling:
No.
There is no question that a possessor in good faith is entitled to the fruits
received before the possession is legally interrupted. Possession in good
faith ceases or is legally interrupted from the moment defects in the title
are made known to the possessor, by extraneous evidence or by the filing of
an action in court by the true owner for the recovery of the property.
Hence, all the fruits that the possessor may receive from the time he is
summoned in court, or when he answers the complaint, must be delivered
and paid by him to the owner or lawful possessor.
According to Manresa, the right of retention is, therefore, analogous to that
of a pledge, if the property retained is a movable, and to that of antichresis,
if the property held is immovable. This construction appears to be in
harmony with similar provisions of the civil law which employs the right of
retention as a means or device by which a creditor is able to obtain the
payment of a debt.
In a pledge if the thing pledged earns or produces fruits, income, dividends
or interests, the creditor shall compensate what he receives with those
which are owing him. In the same manner, in a contract of antichresis, the
creditor acquires the right to receive the fruits of an immovable of his
debtor with the obligation to apply them to the payment of the interest, if
owing, and thereafter to the principal of Applying the afore-cited principles
to the case at bar, petitioner cannot appropriate for his own exclusive
benefit the tolls which he collected from the property retained by him. It
was his duty under the law, after deducting the necessary expenses for his
administration, to apply such amount collected to the payment of the
interest, and the balance to the payment of the principal of the obligation.
We hold, therefore, that the disputed tolls, after deducting petitioner's
expenses for administration, belong to Quirino Comintan, owner of the land
through which the toll road passed, further considering that the same was
on portions of the property on which petitioner had not introduced any
improvement. The trial court itself clarified this matter when it placed the
toll road under receivership. The omission of any mention of the tolls in the
decision itself may be attributed to the fact that the tolls appear to have
been collected after the rendition of the judgment of the trial court.