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Case on rent and mortgage.

Philippine National Bank, Petitioner, vs.


Spouses Bernard and Cresencia Maranon, Respondents
G.R. No. 189316, July 01, 2013
Facts: The case is a petition for review on certiorari under Rule 45 of the Rules of
Court. The antecedent events being the Spouses Maranon, owner of a piece of real
property, erected with a building occupied by various tenants. Said subject property
was among the properties mortgaged by spouses Montealegre to PNB as a security
for a loan. Spouses Montealegre, through a falsified Deed of Sale, acquired title to
the property and used the propertys title which was purportedly registered in the
name of Emelie Montealegre. However, due to failure to pay the loan, said property
was foreclosed by PNB, and upon auction, was thereafter acquired by the same
bank, PNB. Spouses Maranon filed before the RTC a complaint for Annulment of
Title, Reconveyance and Damages against spouses Montealegre. Judgment of RTC
was rendered in favour of spouses Maranon, and also stipulated that the Real Estate
Mortgage lien of PNB shall stay and be respected. Such decision prompted PNB to
also seek for entitlement to the fruits of the property such as rentals paid by the
tenants.
Issue: Whether or not is PNB entitled to fruits of the disputed property.
Ruling: No. Rent is a civil fruit that belongs to the owner of the property producing
it by right of accession. The rightful recipient of the disputed rent in this case should
be thus the owner of the lot at the time the rent accrued. It is beyond question that
spouses Maranon never lost ownership over the subject lot, and that technically,
there is no juridical tie created by a valid mortgage contract that binds PNB to the
subject lot because the mortgagors Montealegre were not the true owners. PNBs
lien as a mortgagee in good faith pertains to the subject lot alone and not on the
erected building which was not foreclosed and still remained to be a property of
Maranon. Thus, PNBs claim for the rents paid by the tenants has no basis.

G.R. No. 170677 : October 24, 2012


VSD REALTY & DEVELOPMENT CORPORATION, Petitioner, v. UNIWIDE SALES, INC.
and DOLORES BAELLO TEJADA,Respondents.
PERALTA, J.:
FACTS:
Petitioner VSD Realty and Development Corporation (VSD) filed a Complaint for annulment
of title and recovery of possession of property against respondents Uniwide Sales, Inc.
(Uniwide) and Dolores Baello (Baello) with the RTC.
VSD alleged that it is the registered owner of a parcel of land in Caloocan City, wherein

VSD purchased the said property from Felisa D. Bonifacio. VSD proved the identity of the
land it is claiming through the technical description contained in its title, TCT No. T-285312;
the derivative title of Felisa D. Bonifacio, TCT No. 265777; the technical description included
in the official records of the subject lot in the Register of Deeds of Caloocan City; and the
verification survey conducted by Geodetic Engineer Evelyn Celzo of the DENR-NCR.
On the other hand, Baello countered that the subject property was bequeathed to her
through a will by her adoptive mother as approved by the probate court. Therafter, she
entered into a Contract of Lease with respondent Uniwide. As a consequence of the lease
agreement, Uniwide constructed in good faith a building worth at least P200,000,000.00 on
the said property.
The RTC ruled in favor of VSD. On appeal, the CA reversed the RTC. Hence, this petition.
ISSUES:
I. Whether or not VSD is entitled to recovery of possession of the subject property?
II. Whether or not Uniwide, as a lessee, is entitled to recover the amount of improvements
introduced to the land?
HELD: The petition has merit.
CIVIL LAW: accion reivindicatoria; builder in good faith
Article 434 of the Civil Code provides that to successfully maintain an action to recover the
ownership of a real property, the person who claims a better right to it must prove two (2)
things: first, the identity of the land claimed, and; second, his title thereto. In regard to the
first requisite, in an accion reinvindicatoria, the person who claims that he has a better right
to the property must first fix the identity of the land he is claiming by describing the location,
area and boundaries thereof. Hutchison v. Buscas held: "It bears stress that in an action to
recover real property, the settled rule is that the plaintiff must rely on the strength of his title,
not on the weakness of the defendants title. This requirement is based on two (2) reasons:
first, it is possible that neither the plaintiff nor the defendant is the true owner of the property
in dispute, and second, the burden of proof lies on the party who substantially asserts the
affirmative of an issue for he who relies upon the existence of a fact should be called upon
to prove that fact."
In this case, petitioner proved his title over the property in dispute as well as the identity of
the said property; hence, it is entitled to recover the possession of the property from
respondents.

SECOND ISSUE: Uniwide is not entitled to recover from VSD the cost of its
improvement on the land.
It is noted that when the contract of lease was executed, Uniwide was unaware that the
property leased by it was owned by another person other than Dolores Baello.
Nevertheless, Uniwide cannot avail of the rights of a builder in good faith under Article 448
of the Civil Code, in relation to Article 546 of the same Code, which provides for full
reimbursement of useful improvements and retention of the premises until reimbursement is
made, as the said provisions apply only to a possessor in good faith who builds on land with
the belief that he is the owner thereof. It does not apply where ones only interest is that of a
lessee under a rental contract. Parilla v. Pilar held: "Articles 448 of the Civil Code, in relation
to Article 546 of the same Code, applies only to a possessor in good faith, i.e., one who
builds on land with the belief that he is the owner thereof. It does not apply where ones only
interest is that of a lessee under a rental contract; otherwise, it would always be in the
power of the tenant to improve his landlord out of his property."
Petition is GRANTED.

Dream Village Neighborhood Association Inc., Represented by its


Incumbent President, Greg Seriego, Petitioner, vs. Bases Conversion
Development Authority, Respondent
G.R. No. 192896, July 24, 2013
Facts: Dream Village, composed of more than 2,000 families have been occupying
the disputed lot continuously, exclusively and notoriously since the year 1985. Said
lot used to be a part of the Hacienda de Maricaban, which was subsequently
purchased by the government of the United States of America (USA) and was
converted to Fort William McKinley. Later on, USA transferred 30 hectares of it to the
Manila Railroad Company, while the rest were still in the name of US Government.
Finally, on December of 1956, the US government ceded Fort William McKinley to
the Republic of the Philippines (RP) and was renamed Fort Bonifacio, reserved for
military purposes. On January 1986, President Marcos Issued Proclamation No. 2476
declaring certain portions of Fort Bonifacio alienable and disposable, thus allowing
sale to the settlers of home lots in Upper Bicutan, Lower Bicutan, Signal Village, and
Western Bicutan. President Corazon Aquino on the other hand amended the
proclamation of Pres. Marcos and limited the lots which were open for disposition.
On March of 1992, the Bases conversion and Development Authority (BCDA) was
created to oversee and accelerate the conversion of Clark and Military Reservations

to productive civilian uses, which then authorized the President of the Philippines to
sell the lands covered in whole or in part, specifically to raise capital for the BCDA.
BCDA asserted its title to Dream Village owing to the fact that BCDAs titles over
Fort Bonifacio are valid and commercially valuable to the agency, however, due to
the passage of time, was contended to have been abandoned to Dream Village, and
that BCDAs right over it has already prescribed.
Issue: Whether the area occupied by Dream Village is susceptible of acquisition by
prescription.

Ruling: No. Property of the State or any of its subdivisions not patrimonial in
character shall not be the object of prescription (Art.1113, NCC). Also, under Article
422 of the Civil Code, public domain lands become patrimonial property only if there
is a declaration that these are alienable or disposable, together with an express
government manifestation that the property is already patrimonial or no longer
retained for public service or the development of national wealth. Only when the
property has become patrimonial can the prescriptive period for the acquisition of
property of the public dominion begin to run. It is also stipulated under PD 1529 that
before the acquisitive prescription can commence, the property must expressly
declared by the State that it is no longer intended for public service or the
development of national wealth, and that absent such express declaration, the land
remains to be property of public dominion. Subsequent proclamations over vast
portions of Maricaban exempted the lot where Dream Village was situated from
being open for disposition, thus Fort Bonifacio remains a property of public
Dominion of the State because although declared alienable and disposable, it is
reserved for some public service or development of national wealth, and thus, the
acquisitive prescription asserted by Dream Village has not even begun to run. Thus,
the area occupied by Dream Village is still not susceptible of acquisition by
prescription.