Beruflich Dokumente
Kultur Dokumente
, plaintiff-appellee,
vs.
TALISAY-SILAY MILLING CO., ET AL., defendants-appellees.
THE PHILIPPINE NATIONAL BANK, intervenor-appellant.
ROMUALDEZ, J.:
This proceeding originated in a complaint filed by the Bachrach
Motor Co., Inc., against the Talisay-Silay Milling Co., Inc., for the
delivery of the amount P13,850 or promissory notes or other
instruments or credit for that sum payable on June 30, 1930, as
bonus in favor of Mariano Lacson Ledesma; the complaint further
prays that the sugar central be ordered to render an accounting of
the amounts it owes Mariano Lacson Ledesma by way of bonus,
dividends, or otherwise, and to pay the plaintiff a sum sufficient to
satisfy the judgment mentioned in the complaint, and that the sale
made by said Mariano Lacson Ledesma be declared null and void.
The Philippine National Bank filed a third party claim alleging a
preferential right to receive any amount which Mariano Lacson
Ledesma might be entitled to from the Talisay-Silay Milling Co. as
bonus, because that would be civil fruits of the land mortgaged to
said bank by said debtor for the benefit of the central referred to, and
by virtue of a deed of assignment, and praying that said central be
ordered to delivered directly to the intervening bank said sum on
account of the latter's credit against the aforesaid Mariano Lacson
Ledesma.
The corporation Talisay-Silay Milling Co., Inc., answered the
complaint stating that of Mariano Lacson Ledesma's credit, P7,500
belonged to Cesar Ledesma because he had purchased it, and
praying that it be absolved from the complaint and that the proper
party be named so that the remainder might be delivered.
Cesar Ledesma, in turn, claiming to be the owner by purchase in
good faith an for a reconsideration of the P7,500 which is a part of
or income, for the adjectives "otras" and "analogas" agree with the
noun "rentas," as do also the other
adjectives"perpetuas" and "vitalicias." That is why we say that by
"civil fruits" the Civil Code understands one of three and only three
things, to wit: the rent of a building, the rent of land, and certain kinds
of income.
As the bonus in question is not rent of a building or of land, the only
meaning of "civil fruits" left to be examined is that of "income."
Assuming that in broad juridical sense of the word "income" it might
be said that the bonus in question is "income" under article 355 of
the Civil Code, it is obvious to inquire whether it is derived from the
land mortgaged by Mariano Lacson Ledesma to the appellant bank
for the benefit of the central; for it is not obtained from that land but
from something else, it is not civil fruits of that land, and the bank's
contention is untenable.
It is to be noted that the said bonus bears no immediate, but only a
remote accidental relation to the land mentioned, having been
granted as compensation for the risk of having subjected one's land
to a lien in favor of the bank, for the benefit of the entity granting said
bonus. If this bonus be income or civil fruits of anything, it is income
arising from said risk, or, if one chooses, from Mariano Lacson
Ledesma's generosity in facing the danger for the protection of the
central, but certainly it is not civil fruits or income from the mortgaged
property, which, as far as this case is concerned, has nothing to do
with it. Hence, the amount of the bonus, according to the resolution
of the central granting it, is not based upon the value, importance or
any other circumstance of the mortgaged property, but upon the total
value of the debt thereby secured, according to the annual balance,
which is something quite distinct from and independent of the
property referred to.
Finding no merit in this appeal, the judgment appealed from is
affirmed, without express finding as to costs. So ordered.
Art. 1324, Civil Code; see also Atkins, Kroll & Co. vs.
Cua, 102 Phil. 948, holding that this rule is
applicable to a unilateral promise to sell under Art.
1479, modifying the previous decision in South
Western Sugar vs. Atlantic Gulf, 97 Phil. 249; see
also Art. 1319, Civil Code; Rural Bank of Paraaque,
Inc. vs. Remolado, 135 SCRA 409; Sanchez vs.
Rigos, 45 SCRA 368). The right to withdraw,
however, must not be exercised whimsically or
arbitrarily; otherwise, it could give rise to a damage
claim under Article 19 of the Civil Code which
ordains that "every person must, in the exercise of
his rights and in the performance of his duties, act
with justice, give everyone his due, and observe
honesty and good faith."
(2) If the period has a separate consideration, a
contract of "option" deemed perfected, and it would
be a breach of that contract to withdraw the offer
during the agreed period. The option, however, is an
independent contract by itself; and it is to be
distinguished from the projected main agreement
(subject matter of the option) which is obviously yet
to be concluded. If, in fact, the optioner-offeror
withdraws the offer before its acceptance (exercise
of the option) by the optionee-offeree, the latter may
not sue for specific performance on the proposed
contract ("object" of the option) since it has failed to
reach its own stage of perfection. The optionerofferor, however, renders himself liable for damages
for breach of the opinion. . .
In the light of the foregoing disquisition and in view of the
wording of the questioned provision in the two lease
contracts involved in the instant case, we so hold that no
option to purchase in contemplation of the second paragraph
for some time, and then sold, without prior notice to Mayfair,
the entire Claro M Recto property to Equatorial.
Since Equatorial is a buyer in bad faith, this finding renders
the sale to it of the property in question rescissible. We
agree with respondent Appellate Court that the records bear
out the fact that Equatorial was aware of the lease contracts
because its lawyers had, prior to the sale, studied the said
contracts. As such, Equatorial cannot tenably claim to be a
purchaser in good faith, and, therefore, rescission lies.
. . . Contract of Sale was not voidable but
rescissible. Under Article 1380 to 1381(3) of the Civil
Code, a contract otherwise valid may nonetheless
be subsequently rescinded by reason of injury to
third persons, like creditors. The status of creditors
could be validly accorded the Bonnevies for they had
substantial interests that were prejudiced by the sale
of the subject property to the petitioner without
recognizing their right of first priority under the
Contract of Lease.
According to Tolentino, rescission is a remedy
granted by law to the contracting parties and even to
third persons, to secure reparation for damages
caused to them by a contract, even if this should be
valid, by means of the restoration of things to their
condition at the moment prior to the celebration of
said contract. It is a relief allowed for the protection
of one of the contracting parties and even third
persons from all injury and damage the contract may
cause, or to protect some incompatible and preferent
right created by the contract. Rescission implies a
contract which, even if initially valid, produces a
lesion or pecuniary damage to someone that justifies
its invalidation for reasons of equity.
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
It should be noted that prior to partition, all the co-owners hold the
property in common dominion but at the same time each is an owner
of a share which is abstract and undetermined until partition is
effected. As cited in Eusebio vs. Intermediate Appellate Court, 8 "an
undivided estate is co-ownership by the heirs."
As co-owners, the parties may have unequal shares in the common
property, quantitatively speaking. But in a qualitative sense, each coowner has the same right as any one of the other co-owners. Every
co-owner is therefore the owner of the whole, and over the whole he
exercises the right of dominion, but he is at the same time the owner
of a portion which is truly abstract, because until division is effected
such portion is not concretely determined. 9
Petitioner Florencio, in his first assignment of error, asseverates that
the court a quo erred in applying Article 448 of the Civil Code, since
this article contemplates a situation wherein the land belongs to one
person and the thing built, sown or planted belongs to another. In the
instant case, the land in dispute used to be owned in common by the
contending parties.
Article 448 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.
Whether or not the provisions of Article 448 should apply to a builder
in good faith on a property held in common has been resolved in the
Thus, in Quemuel vs. Olaes, 13 the Court categorically ruled that the
right to appropriate the works or improvements or to oblige the
builder to pay the price of the land belongs to the landowner.
As to the third assignment of error, the question on the price to be
paid on the land need not be discussed as this would be premature
inasmuch as petitioner Florencio has yet to exercise his option as the
owner of the land.
WHEREFORE, the decision appealed from is hereby MODIFIED as
follows: Petitioner Florencio Ignao is directed within thirty (30) days
from entry of judgment to exercise his option to either appropriate as
his own the portions of the houses of Juan and Isidro Ignao
occupying his land upon payment of indemnity in accordance with
Articles 546 and 548 of the Civil Code, or sell to private respondents
the 101 square meters occupied by them at such price as may be
agreed upon. Should the value of the land exceed the value of the
portions of the houses that private respondents have erected
thereon, private respondents may choose not to buy the land but
they must pay reasonable rent for the use of the portion of
petitioner's land as may be agreed upon by the parties. In case of
disagreement, the rate of rental and other terms of the lease shall be
determined by the trial court. Otherwise, private respondents may
remove or demolish at their own expense the said portions of their
houses encroaching upon petitioner's land. 14 No costs.
SO ORDERED.
FILIPINAS COLLEGES, INC., plaintiff-appellee,
vs.
MARIA GARCIA TIMBANG, ET AL., defendants.
-----------------------------G.R. No. L-12813
vs.
MARIA GERVACIO BLAS, defendant-appellee.
De Guzman and Fernandez for appellee Filipinas Colleges, Inc.
San Huan, Africa and Benedicto for appellant Maria Garcia Timbang.
Nicanor S. Sison for appellee Maria Gervacio Blas.
BARRERA, J.:
This is an appeal taken from an order of the Court of First Instance of
Manila dated May 10, 1957 (a) declaring the Sheriff's certificate of
sale covering a school building sold at public auction null and void
unless within 15 days from notice of said order the successful
bidders, defendants-appellants spouses Maria Garcia Timbang and
Marcelino Timbang, shall pay to, appellee Maria Gervacio Blas
directly or through the Sheriff of Manila the sum of P5,750.00 that the
spouses Timbang had bid for the building at the Sheriff's sale; (b)
declaring the other appellee Filipinas Colleges, Inc. owner of
24,500/3,285,934 undivided interest in Lot No. 2-a covered by
certificate of tile No 45970, on which the building sold in the auction
sale is situated; and (c) ordering the sale in public auction of the said
undivided interest of the Filipinas Colleges, Inc., in lot No. 2-a
aforementioned to satisfy the unpaid portion of the judgment in favor
of appellee Blas and against Filipinas Colleges, Inc. in the amount of
P8,200.00 minus the sum of P5,750.00 mentioned in (a) above.
The order appealed from is the result of three motions filed in the
court a quo in the course of the execution of a final judgment of the
Court of Appeals rendered in 2 cases appealed to it in which the
spouses Timbang, the Filipinas Colleges, Inc., and Maria Gervacio
Blas were the parties. IN that judgment of the Court of Appeals, the
respective rights of the litigants have been adjudicated as
follows:1wphl.nt
(1) Filipinas Colleges, Inc. was declared to have acquired
the rights of the spouses Timbang in and to lot No. 2-a
mentioned above and in consideration thereof, Filipinas
they are the highest bidder in their own auction sale, they now claim
they acquired title to the building without necessity of paying in cash
on account of their bid. In other words, they in effect pretend to retain
their land and acquire the house without paying a cent therefor.
This contention is without merit. This Court has already held
in Matias vs. The Provincial Sheriff of Nueva Ecija(74 Phil., 326) that
while it is the inveriable practice, dictated by common sense, that
where the successful bidder is the execution creditor himself, he
need not pay down the amount of the bid if it does not exceed the
amount of his judgement, nevertheless, when their is a claim by a
third-party, to the proceeds of the sale superior to his judgment
credit, the execution creditor, as successful bidder, must pay in cash
the amount of his bid as a condition precedent to the issuance to him
of the certificate of sale. In the instant case, the Court of Appeals has
already adjudged that appellee Blas is entitled to the payment of the
unpaid balance of the purchase price of the school building. Blas is
actually a lien on the school building are concerned. The order of the
lower court directing the Timbang spouses, as successful bidders, to
pay in cash the amount of their bid in the sum of P5,750.00 is
therefore correct.
With respect to the order of the court declaring appellee Filipinas
Colleges, Inc. part owner of the land to the extent of the value of its
personal properties sold at public auction in favor of the Timbang,
this Court Likewise finds the same as justified, for such amount
represents, in effect, a partial payment of the value of the land. If this
resulted in the continuation of the so-called involuntary partnership
questioned by the difference between P8,200.00 the unpaid
balance of the purchase price of the building and the sum of
P5,750.00 amount to be paid by the Timbangs, the order of the
court directing the sale of such undivided interest of the Filipinas
Colleges, Inc. is likewise justified to satisfy the claim of the appellee
Blas.
Considering that the appellant spouses Marcelino Timbang and
Maria Garcia Timbang may not voluntarily pay the sum of P5,750.00
On April 15, 1978, the private respondent filed his comment on the
petition alleging that the same has already become moot and
academic for two reasons: first, fire gutted not only the house of the
private respondent but the majority of the houses in Tambunting
Estate; and second, as a result of the said fire, the then First Lady
and Metro Manila Governor Imelda R. Marcos has placed the
disputed area under her Zonal Improvement Project, thereby
allowing the victims of the fire to put up new structures on the
premises, so that the willingness and readiness of the petitioner to
exercise the alleged option can no longer be exercised since the
subject-matter thereof has been extinguished by the fire.
Furthermore, the President of the Philippines has already issued a
Presidential Decree for the expropriation of certain estates in Metro
Manila including the Tambunting Estate. Therefore, the beneficient
and humanitarian purpose of the Zonal Improvement Project and the
expropriation proceeding would be defeated if petitioner is allowed to
exercise an option which would result in the ejectment of the private
respondent.
On December 28, 1980, Presidential Decree (P.D.) No. 1669 was
issued providing for the expropriation of the Tambunting Estate.
However, this decree was challenged before this Court in G.R. No,
55166 entitled The "Elisa R. Manotok, et al. v. National Housing
Authority, et al." Hence, we decided to hold the decision on this
petition pending the resolution of the above entitled case.
On May 21, 1987, the Court rendered a decision in the Elisa
Manotok case (Manotok v. National Housing Authority, 150 SCRA 89)
ruling that P.D. 1669 is unconstitutional for being violative of the due
process clause. Thus, since the present petition has not been
rendered moot and academic by the decision in said case, we will
now decide on its merits.
As stated earlier, the petitioner argues that since the judgment of the
trial court has already become final, it is entitled to the execution of
the same and that moreover, since the house of the private
respondent was gutted by fire, the execution of the decision would
304.) We find, however, that the defendant has lost his right
of retention. In obedience to the decision of this court in
G.R. No. 37319, the plaintiff expressed his desire to require
the defendant to pay for the value of the land. The said
defendant could have become owner of both land and
improvements and continued in possession thereof. But he
said he could not pay and the land was sold at public
auction to Toribio Teodoro. The law, as we have already
said, requires no more than that the owner of the land
should choose between indemnifying the owner of the
improvements or requiring the latter to pay for the land.
When he failed to pay for the land, the defendant herein lost
his right of retention.chanroblesvirtualawlibrary chanrobles
virtual law library
The sale at public auction having been asked by the plaintiff
himself (p. 22, bill of exceptions) and the purchase price of
P8,000 received by him from Toribio Teodoro, we find no
reason to justify a rapture of the situation thus created
between them, the defendant-appellant not being entitled,
after all, to recover from the plaintiff the sum of
P2,212.chanroblesvirtualawlibrary chanrobles virtual law
library
The judgment of the lower court is accordingly modified by
eliminating therefrom the reservation made in favor of the
defendant-appellant to recover from the plaintiff the sum of
P2,212. In all the respects, the same is affirmed, without
pronouncement regarding costs. So
ordered.chanroblesvirtualawlibrary chanrobles virtual law
library
Heirs of Durano v UY
they appealed the same to the Secretary of Justice, who called for
another investigation to be jointly conducted by the Special
Prosecutor and the Office of the City Fiscal of Danao City. During the
course of said joint investigation, respondents Hermogenes Tito and
Salvador Dayday again lodged a complaint with the Office of the
President, airing the same charges of landgrabbing. The
investigations on this new complaint, jointly conducted by the
3rd Philippine Constabulary Zone and the Citizens Legal Assistance
Office resulted in the finding that (petitioners) should not be held
answerable therefor.[2]
Petitioners further alleged in their complaint before the CFI that
during the course of the above investigations, respondents kept
spreading false rumors and damaging tales which put petitioners into
public contempt and ridicule.[3]
In their Answer, respondents lodged their affirmative defenses,
demanded the return of their respective properties, and made
counterclaims
for
actual,
moral
and
exemplary
damages.Respondents stated that sometime in the early part of
August 1970 and months thereafter they received mimeographed
notices dated August 2, 1970 and signed by the late Ramon Durano,
Sr., informing them that the lands which they are tilling and residing
in, formerly owned by the Cebu Portland Cement Company
(hereafter, Cepoc), had been purchased by Durano & Co., Inc. The
notices also declared that the lands were needed by Durano & Co.
for planting to sugar and for roads or residences, and directed
respondents to immediately turn over the said lands to the
representatives of the company. Simultaneously, tall bamboo poles
with pennants at the tops thereof were planted in some areas of the
lands and metal sheets bearing the initials RMD were nailed to
posts.
As early as the first week of August 1970, and even before
many of the respondents received notices to vacate, men who
identified themselves as employees of Durano & Co. proceeded to
bulldoze the lands occupied by various respondents, destroying in
shock that the damage and dispossession has caused. [5] Thus, in
addition to the dismissal of the complaint, respondents demanded
actual damages for the cost of the improvements they made on the
land, together with the damage arising from the dispossession itself;
moral damages for the anguish they underwent as a result of the
high-handed display of power by petitioners in depriving them of their
possession and property; as well as exemplary damages, attorneys
fees and expenses of litigation.
Respondents respective counterclaims --- referring to the
improvements destroyed, their values, and the approximate areas of
the properties they owned and occupied --- are as follows:
a) TEOFISTA ALCALA - Tax Declaration No. 00223; .2400
ha.; bulldozed on August, 10, 1970. Improvements
destroyed consist of 47 trees, 10 bundles beatilis
firewood and 2 sacks of cassava, all valued at
P5,437.00. (Exh. B, including submarkings)
b) FAUSTINO ALATAN and VALERIANA GARRO - Tax
Declaration No. 30758; .2480 ha.; Tax Declaration No.
32974; .8944 ha.; Tax Declaration No. 38908; .8000 ha.;
Bulldozed on September 9, 1970; Improvements
destroyed consist of 682 trees, a cornfield with one
cavan per harvest 3 times a year, valued at
P71,770.00; Bulldozed on March 13, 1971; 753 trees,
1,000 bundles beatilis firewood every year, valued at
P29,100.00; Cut down in the later part of March, 1971 22 trees, 1,000 bundles beatilis firewood every year, 6
cavans corn harvest per year, valued at P1,940.00 or a
total value of P102,810.00. (Exh. C, including
submarkings)
c) ANDREA MATA DE BATULAN - Tax Declaration No.
33033; .4259 has.; bulldozed on September 11,
1970. Improvements destroyed consist of 512 trees and
The trial court and later, the Court of Appeals, took note of the
following portions of affidavits submitted by petitioners:
Durano Sugar Mills. Owner of the properties, subject of the complaint, was
Cepoc.
xxx City Fiscal Jesus Navarro said that in August, 1967, he issued
subpoenas to several tenants in Cahumayhumayan upon representation by
Cepoc, the latter protesting failure by the tenants to continue giving Cepoc
its share of the corn produce. He learned from the tenants that the reason
why they were reluctant and as a matter of fact some defaulted in giving
Cepoc its share, was that Uy Bing Sepulveda made similar demands to them
for his share in the produce, and that they did not know to whom the shares
should be given.
The persons who eventually tilled the Cepoc properties were merely
allowed to do cultivation if planted to corn, and for Cepoc to be given a
share, which condition was complied with by all including the
counterclaimants. He even possessed one parcel which he planted to
coconuts, jackfruit trees and other plants. (Exh. 51, Records, pp. 383-384)
Moreover,
petitioners
reliance
on
the Madrideo and Medida cases is misplaced. In the Madrideo case,
the predecessors-in-interest of the Llorente Group sold the disputed
property to the Alcala Group, who in turn sold the same to the
spouses Maturgo. The RTC adjudged the spouses Maturgo
purchasers in good faith, such that they could retain their title to the
property, but held that the Lllorente Group was unlawfully divested of
its ownership of the property by the Alcala Group. The Alcala Group
appealed this decision to the Court of Appeals, who denied the
appeal and ordered the reinstatement in the records of the Registry
of Deeds of the Original Certificates of Title of the predecessors-ininterest of the Llorente Group. In setting aside the decision of the
Court of Appeals, this Court held that no relief may be afforded in
favor of the Llorente Group to the prejudice of the spouses Maturgo,
who --- the Court carefully emphasized --- were third parties to the
appeal, being neither appellants nor appellees before the Court of
Appeals, and whose title to the disputed property was confirmed by
the RTC. The application of the ruling in Madrideo to the instant case
bears no justification because it is clear that petitioners, in appealing
the RTC decision, impleaded all the herein respondents.
Meanwhile, in the Medida case, petitioners (who were the
appellees before the Court of Appeals) sought the reversal of a
finding of the RTC before the Supreme Court. The Court explained
that since petitioners failed to appeal from the RTC decision, they --as appellees before the Court of Appeals --- could only argue for the
purpose of sustaining the judgment in their favor, and could not ask
for any affirmative relief other than that granted by the court
below. The factual milieu in Medida is different from that of the
instant case, where the return of the properties to respondents was
not an affirmative relief sought by respondents but an independent
determination of the Court of Appeals proceeding from its findings
that respondents were long-standing possessors in the concept of
owner while petitioners were builders in bad faith. Certainly, under
such circumstances, the Court of Appeals is not precluded from
modifying the decision of the RTC in order to accord complete relief
to respondents.
Since petitioners knew fully well the defect in their titles, they
were correctly held by the Court of Appeals to be builders in bad
faith.
The Civil Code provides:
Art. 449. He who builds, plants or sows in bad faith on the land of
another, loses what is built, planted or sown without right of
indemnity.
Art. 450. The owner of the land on which anything has been built,
planted or sown in bad faith may demand the demolition of the work,
or that the planting or sowing be removed, in order to replace things in
their former condition at the expense of the person who built, planted
or sowed; or he may compel the builder or planter to pay the price of
the land, and the sower the proper rent.
Art. 451. In the cases of the two preceding articles, the landowner is
entitled to damages from the builder, planter or sower.
Based on these provisions, the owner of the land has three
alternative rights: (1) to appropriate what has been built without any
obligation to pay indemnity therefor, or (2) to demand that the builder
remove what he had built, or (3) to compel the builder to pay the
value of the land.[32] In any case, the landowner is entitled to
damages under Article 451, abovecited.
We sustain the return of the properties to respondents and the
payment of indemnity as being in accord with the reliefs under the
Civil Code.
On petitioners fifth assignment of error that respondents had not
proved the existence of improvements on the property by
preponderance of evidence, and that the damages awarded by the
lower courts were excessive and not actually proved, the Court notes
that the issue is essentially factual. Petitioners, however, invoke
civil) from those properties that the owner of the land reasonably
expected to obtain. We sustain the view of the lower courts that the
disparity between respondents affidavits and their tax declarations on
the amount of damages claimed should not preclude or defeat
respondents right to damages, which is guaranteed by Article
451.Moreover, under Article 2224 of the Civil Code:
Temperate or moderate damages, which are more than nominal but
less than compensatory damages, may be recovered when the court
finds that some pecuniary loss has been suffered but its amount
cannot, from the nature of the case, be proved with certainty.
We also uphold the award of litigation expenses and attorneys
fees, it being clear that petitioners acts compelled respondents to
litigate and incur expenses to regain rightful possession and
ownership over the disputed property.[34]
The last issue presented for our resolution is whether petitioners
could justifiably invoke the doctrine of separate corporate personality
to evade liability for damages. The Court of Appeals applied the wellrecognized principle of piercing the corporate veil, i.e., the law will
regard the act of the corporation as the act of its individual
stockholders when it is shown that the corporation was used merely
as an alter ego by those persons in the commission of fraud or other
illegal acts.
The test in determining the applicability of the doctrine of
piercing the veil of corporate fiction is as follows:
1. Control, not mere majority or complete stock control, but
complete domination, not only of finances but of policy
and business practice in respect to the transaction
attacked so that the corporate entity as to this
transaction had at the time no separate mind, will or
existence of its own;
The instant case arose from a dispute over forty-two (42) square
meters of residential land belonging to petitioners. The parties herein are
owners of adjacent lots located at Block No. 3, Poinsettia Street, Araneta
University Village, Malabon, Metro Manila. Lot No. 24, 414 square meters
in area, is registered in the name of petitioners Eden Ballatan and spouses
Betty Martinez and Chong Chy Ling. [2] Lots Nos. 25 and 26, with an area
of 415 and 313 square meters respectively, are registered in the name of
respondent Gonzalo Go, Sr.[3] On Lot No. 25, respondent Winston Go, son
of Gonzalo Go, Sr., constructed his house. Adjacent to Lot No. 26 is Lot
No. 27, 417 square meters in area, and is registered in the name of
respondent Li Ching Yao.[4]
In 1985, petitioner Ballatan constructed her house on Lot No.
24. During the construction, she noticed that the concrete fence and side
pathway of the adjoining house of respondent Winston Go encroached on
the entire length of the eastern side of her property.[5] Her building
contractor informed her that the area of her lot was actually less than that
described in the title. Forthwith, Ballatan informed respondent Go of this
discrepancy and his encroachment on her property. Respondent Go,
however, claimed that his house, including its fence and pathway, were built
within the parameters of his father's lot; and that this lot was surveyed by
Engineer Jose Quedding, the authorized surveyor of the Araneta Institute of
Agriculture (AIA), the owner-developer of the subdivision project.
Petitioner Ballatan called the attention of the AIA to the discrepancy of
the land area in her title and the actual land area received from them. The
AIA authorized another survey of the land by Engineer Jose N. Quedding.
In a report dated February 28, 1985, Engineer Quedding found that the
lot area of petitioner Ballatan was less by a few meters and that of
respondent Li Ching Yao, which was three lots away, increased by two (2)
meters. Engineer Quedding declared that he made a verification survey of
Lots Nos. 25 and 26 of respondents Go in 1983 and allegedly found the
boundaries to have been in their proper position.He, however, could not
explain the reduction in Ballatan's area since he was not present at the time
respondents Go constructed their boundary walls.[6]
2) Third-party defendant Li Ching Yao is hereby ordered to pay defendantsappellants the reasonable value of the thirty-seven (37) square meters of the
latter's lot at the time of its taking; and
LET THE RECORD of the case be remanded to the Regional Trial Court of
Malabon for further proceedings and reception of evidence for the
determination of the reasonable value of Lots Nos. 24 and 26.
SO ORDERED."[9]
Hence, this petition. Petitioners allege that:
"RESPONDENT COURT OF APPEALS ERRED ON QUESTIONS OF
LAW AND GRAVELY ABUSED ITS DISCRETION AMOUNTING TO
LACK OF JURISDICTION WHEN:
1. IT APPLIED EQUITY OR EQUITABLE SOLUTIONS TO THE
INSTANT CASE IN UTTER DISREGARD AND IN VIOLATION OR
GROSS IGNORANCE OF EXISTING LAWS AND JURISPRUDENCE
VESTING BASIC PROPERTY RIGHTS TO HEREIN PETITIONERS.
RESPONDENT COURT HAS NO POWER TO APPLY/USE EQUITY IN
THE PRESENCE OF EXISTING LAWS TO THE CONTRARY.
[14]
Accordingly, the court may expunge those claims for damages, or allow,
on motion, a reasonable time for amendment of the complaint so as to
allege the precise amount of damages and accept payment of the requisite
legal fees.[15] If there are unspecified claims, the determination of which
may arise after the filing of the complaint or similar pleading, the additional
filing fee thereon shall constitute a lien on the judgment award. [16] The same
rule also applies to third-party claims and other similar pleadings. [17]
In the case at bar, the third-party complaint filed by respondents Go
was incorporated in their answer to the complaint. The third-party
complaint sought the same remedy as the principal complaint but added a
prayer for attorney's fees and costs without specifying their amounts, thus:
"ON THE THIRD PARTY COMPLAINT
1. That summons be issued against Third-Party Defendants Araneta Institute
of Agriculture, Jose N. Quedding and Li Ching Yao;
2. That after hearing, they be sentenced to indemnify the Third-Party
Plaintiffs for whatever is adjudged against the latter in favor of the
Plaintiffs;
3. That Third-Party Defendants be ordered to pay attorney's fees as may be
proved during trial;
4. That Third-Party Defendants be ordered to pay the costs.
Other just and equitable reliefs are also prayed for."[18]
The Answer with Third-Party Complaint was admitted by the trial
court without the requisite payment of filing fees, particularly on the Go's
prayer for damages.[19] The trial court did not award the Go's any
damages. It dismissed the third-party complaint. The Court of Appeals,
however, granted the third-party complaint in part by ordering third-party
defendant Jose N. Quedding to pay the Go's the sum ofP5,000.00 as
attorney's fees.
All the parties are presumed to have acted in good faith. Their rights
must, therefore, be determined in accordance with the appropriate
provisions of the Civil Code on property.
Article 448 of the Civil 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,[27] 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."
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
building, planting or sowing, after payment to the builder, planter or sower
of the necessary and useful expenses, and in the proper case, expenses for
pure luxury or mere pleasure. The owner of the land may also oblige the
builder, planter or sower to purchase and pay the price of the land. If the
owner chooses to sell his land, the builder, planter or sower must purchase
the land, otherwise the owner may remove the improvements thereon. The
builder, planter or sower, however, is not obliged to purchase the land if its
value is considerably more than the building, planting or sowing. In such
case, the builder, planter or sower must pay rent to the owner of the land. If
the parties cannot come to terms over the conditions of the lease, the court
must fix the terms thereof. The right to choose between appropriating the
improvement or selling the land on which the improvement stands to the
builder, planter or sower, is given to the owner of the land.[28]
Article 448 has been applied to improvements or portions of
improvements built by mistaken belief on land belonging to the adjoining
owner.[29] The facts of the instant case are similar to those inCabral v.
Ibanez,[30] to wit:
"[P]laintiffs Geronima Zabala and her husband Justino Bernardo,
constructed their house in the belief that it was entirely within the area of
their own land without knowing at that time that part of their house was
occupying a 14-square meter portion of the adjoining lot belonging to the
defendants, and that the defendants Bernardo M. Cabral and Mamerta M.
Cabral were likewise unaware of the fact that a portion of plaintiff's house
was extending and occupying a portion of their lot with an area of 14 square
meters. The parties came to know of the fact that part of the plaintiff's house
was occupying part of defendant's land when the construction of plaintiff's
house was about to be finished, after a relocation of the monuments of the
two properties had been made by the U.S. Army through the Bureau of
Lands, according to their 'Stipulation of Facts,' dated August 17, 1951.
On the basis of these facts, we held that:
"The Court, therefore, concludes that the plaintiffs are builders in good faith
and the relative rights of the defendant Mamerta Cabral as owner of the land
and of the plaintiffs as owners of the building is governed by Article 361 of
the Civil Code (Co Tao v. Joaquin Chan Chico, 46 Off. Gaz.5514). Article
361 of the old Civil Code has been reproduced with an additional provision
in Article 448 of the new Civil Code, approved June 18, 1949."[31]
Similarly, in Grana and Torralba v. Court of Appeals,[32] we held that:
"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 the building, after payment to the builder of
necessary or 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
estate taxes on his land but has been deprived of the use of a portion of this
land for years. It is but fair and just to fix compensation at the time of
payment.[34]
Article 448 and the same conditions abovestated also apply to
respondents Go as owners and possessors of their land and respondent Li
Ching Yao as builder of the improvement that encroached on thirty-seven
(37) square meters of respondents Go's land.
IN VIEW WHEREOF, the decision of respondent Court of Appeals
is modified as follows:
(1) Petitioners are ordered to exercise within thirty (30) days from
finality of this decision their option to either buy the portion of respondents
Go's improvement on their Lot No. 24, or sell to said respondents the
portion of their land on which the improvement stands. If petitioners elect to
sell the land or buy the improvement, the purchase price must be at the
prevailing market price at the time of payment. If buying the improvement
will render respondents Go's house useless, then petitioners should sell the
encroached portion of their land to respondents Go. If petitioners choose to
sell the land but respondents Go are unwilling or unable to buy, then the
latter must vacate the subject portion and pay reasonable rent from the time
petitioners made their choice up to the time they actually vacate the
premises. But if the value of the land is considerably more than the value of
the improvement, then respondents Go may elect to lease the land, in which
case the parties shall agree upon the terms of the lease.Should they fail to
agree on said terms, the court of origin is directed to fix the terms of the
lease.
From the moment petitioners shall have exercised their option,
respondents Go shall pay reasonable monthly rent up to the time the parties
agree on the terms of the lease or until the court fixes such terms.
creditors, B, C, and D, how can the need arise for determining which
of the three creditors shall be paid first or whether they shall be paid
out of the proceeds of a specific property?
2. It is undenied and undeniable that the appellant furnished lumber
and construction materials to the Insular Farms, Inc. (the appellee's
predecessor-in-interest) which the latter used in the construction of
the six buildings. Likewise unchallenged is the lower court's factual
finding that out of the total procurement price of P15,000, the amount
of P4,710.18 remains outstanding and unpaid by the Insular Farms,
Inc. The appellant is therefore an unpaid furnisher of materials.
Whether there exists a materialman's lien over the six buildings in
favor of the appellant, is a question we do not here decide. To our
mind the application by analogy of the rules of accession would
suffice for a just adjudication.
Article 447 of the Civil Code1 provides:
The owner of the land who makes thereon personally or
through another, plantings, constructions or works with the
materials of another, shall pay their value; and, if he acted in
bad faith, he shall also be obliged to the reparation of
damages. The owner of the materials shall have the right to
remove them only in case he can do so without injury to the
work constructed, or without the plantings, constructions or
works being destroyed. However, if the landowner acted in
bad faith, the owner of the materials may remove them in
any event with a right to be indemnified for damages.
The abovequoted legal provision contemplates a principal and an
accessory, the land being considered the principal, and the plantings,
constructions or works, the accessory. The owner of the land who in
good faith whether personally or through another makes
constructions or works thereon, using materials belonging to
somebody else, becomes the owner of the said materials with the
obligation however of praying for their value.2The owner of the
materials, on the other hand, is entitled to remove them, provided no
only the president of the Insular Farms, Inc. but also a director and
counsel of the appellee.
During the trial of civil case D-775 the Insular Farms, Inc. was
represented by Attorney Amado Santiago, Jr. of the law firm of J.
Antonio Araneta. The latter was one of the counsels of the Pacific
Farms, Inc. The appellee cannot claim ignorance of the pendency of
civil case D-775 because the Insular Farms, Inc. was defended by
the same lawyer from the same law firm that commenced the
present action. J. Antonio Araneta, as counsel for the Pacific Farms,
Inc., cannot close his eyes to facts of which he as president of the
Insular Farms, Inc. had actual knowledge. Significantly, exhibit 1
(supra) itself shows that the Insular Farms, Inc. and the Pacific
Farms, Inc. were housed in adjacent rooms (nos. 304 and 303,
respectively), of the same building, the Insular Life Building, as early
as March 21, 1958.
It is reasonable therefore to conclude that the appellee, through its
director and counsel, J. Antonio Araneta, knew about the unpaid
balance of the purchase price of the lumber and construction
materials supplied or furnished by the appellant to the Insular Farms,
Inc.
Parenthetically, it is likewise worth our attention that despite the
appellee's knowledge of the suit instituted by the appellant against
the Insular Farms, Inc. (the appellee's predecessor-in-interest) for
the recovery of the unpaid balance of the purchase price of the
lumber and materials used in the construction of its six buildings, it
merely folded its arms in disinterest and waited, so to speak. Not
until a decision was rendered therein in favor of the appellant, a writ
of execution issued, and the six buildings levied upon by the sheriff,
did it file a third-party claim over the levied buildings. In the face of
the knowledge that its predecessor-in-interest had not fully paid for
the lumber and construction materials used in the six buildings it had
purchased, its natural and expected reaction should have been to
intervene in the suit filed by the appellant against the Insular Farms,
Inc. and hold the latter to account for breach of the warranties
deemed included in the deed of absolute sale conveying said
building to it.
The petitioner challenged the validity of the auction sale in Civil Case
No. Q-41470 before the RTC of Quezon City. In its decision of 8
February 1989, the RTC dismissed the complaint, but as to the
private respondents' claim that the sale included the apartment
building, it held that the issue concerning it was "not a subject of the .
. . litigation." In resolving the private respondents' motion to
reconsider this issue, the trial court held that there was no legal basis
for the contention that the apartment building was included in the
sale. 3
No pronouncement as to costs.
PEDRO P. PECSON, petitioner,
vs.
COURT OF APPEALS, SPOUSES JUAN NUGUID and ERLINDA
NUGUID, respondents.
Both parties then appealed the decision to the Court of Appeals. The
case was docketed as CA-G.R. CV No. 2931. In its decision of 30
April 1992, 4 the Court of Appeals affirmed in toto the assailed
decision. It also agreed with the trial court that the apartment building
was not included in the auction sale of the commercial lot. Thus:
Indeed, examining the record we are fully convinced
that it was only the land without the apartment
building which was sold at the auction sale, for
plaintiff's failure to pay the taxes due thereon. Thus,
in the Certificate of Sale of Delinquent Property To
Purchaser (Exh. K, p. 352, Record) the property
subject of the auction sale at which Mamerto
Nepomuceno was the purchaser is referred to as Lot
No. 21-A, Block No. K-34, at Kamias, Barangay
Piahan, with an area of 256.3 sq. m., with no
mention whatsoever, of the building thereon. The
same description of the subject property appears in
the Final Notice To Exercise The Right of
Redemption (over subject property) dated
September 14, 1981 (Exh. L, p. 353, Record) and in
the Final Bill of Sale over the same property dated
April 19, 1982 (Exh. P, p. 357, Record). Needless to
say, as it was only the land without any building
which Nepomuceno had acquired at the auction
sale, it was also only that land without any building
which he could have legally sold to the
Nuguids. Verily, in the Deed of Absolute Sale of
Registered Land executed by Mamerto
Nepomuceno in favor of the Nuguids on October 25,
Thus in strict point of law, Article 448 is not apposite to the case at
bar. Nevertheless, we believe that the provision therein on indemnity
may be applied by analogy considering that the primary intent of
Article 448 is to avoid a state of forced co-ownership and that the
parties, including the two courts below, in the main agree that Articles
448 and 546 of the Civil Code are applicable and indemnity for the
improvements may be paid although they differ as to the basis of the
indemnity.
Article 546 does not specifically state how the value of the useful
improvements should be determined. The respondent court and the
private respondents espouse the belief that the cost of construction
of the apartment building in 1965, and not its current market value, is
sufficient reimbursement for necessary and useful improvements
made by the petitioner. This position is, however, not in consonance
with previous rulings of this Court in similar cases. In Javier
vs. Concepcion, Jr., 14 this Court pegged the value of the useful
improvements consisting of various fruits, bamboos, a house and
camarin made of strong material based on the market value of the
said improvements. In Sarmiento vs. Agana, 15 despite the finding
that the useful improvement, a residential house, was built in 1967 at
a cost of between eight thousand pesos (P8,000.00) to ten thousand
pesos(P10,000.00), the landowner was ordered to reimburse the
builder in the amount of forty thousand pesos (P40,000.00), the
value of the house at the time of the trial. In the same way, the
landowner was required to pay the "present value" of the house, a
useful improvement, in the case ofDe Guzman vs. De la
Fuente, 16 cited by the petitioner.
The objective of Article 546 of the Civil Code is to administer justice
between the parties involved. In this regard, this Court had long ago
stated in Rivera vs. Roman Catholic Archbishop of Manila 17 that the
said provision was formulated in trying to adjust the rights of the
owner and possessor in good faith of a piece of land, to administer
complete justice to both of them in such a way as neither one nor the
other may enrich himself of that which does not belong to him.
Guided by this precept, it is therefore the current market value of the
improvements which should be made the basis of reimbursement. A
contrary ruling would unjustly enrich the private respondents who
would otherwise be allowed to acquire a highly valued income-
SO ORDERED.
TECHNOGAS v CA
The parties in this case are owners of adjoining lots in
Paraaque, Metro Manila. It was discovered in a survey that a portion
of a building of petitioner, which was presumably constructed by its
predecessor-in-interest, encroached on a portion of the lot owned by
private respondent. What are the rights and obligations of the
parties? Is petitioner considered a builder in bad faith because, as
held by respondent Court, he is presumed to know the metes and
bounds of his property as described in his certificate of title? Does
petitioner succeed into the good faith or bad faith of his predecessorin-interest which presumably constructed the building?
These are the questions raised in the petition for review of the
Decision[1] dated August 28, 1992, in CA-G.R. CV No. 28293 of
respondent Court[2] where the disposition reads:[3]
WHEREFORE, premises considered, the Decision of the Regional Trial
Court is hereby reversed and set aside and another one entered 1. Dismissing the complaint for lack of cause of action;
2. Ordering Tecnogas to pay the sum of P2,000.00 per month as reasonable
rental from October 4, 1979 until appellee vacates the land;
3. To remove the structures and surrounding walls on the encroached area;
4. Ordering appellee to pay the value of the land occupied by the two-storey
building;
5. Ordering appellee to pay the sum of P20,000.00 for and as attorneys fees;
6. Costs against appellee.
D.
Quite contrary to respondent Uys reasoning, petitioner Tecnogas continues
to be a builder in good faith, even if it subsequently built/repaired the
walls/other permanent structures thereon while the case a quowas pending
and even while respondent sent the petitioner many letters/filed cases
thereon.[12]
D. (E.)
The amicable settlement between the parties should be interpreted as a
contract and enforced only in accordance with its explicit terms,
and not over and beyond that agreed upon; because the courts do nothave
the power to create a contract nor expand its scope.[13]
E. (F.)
As a general rule, although the landowner has the option to choose between:
(1) buying the building built in good faith, or (2) selling the portion of his
land on which stands the building under Article 448 of the Civil Code;
the first option is not absolute, because an exception thereto, once it would
be impractical for the landowner to choose to exercise the first alternative,
i.e. buy that portion of the house standing on his land, for the whole
building might be rendered useless. The workable solution is for him to
select the second alternative, namely, to sell to the builder that part of his
land on which was constructed a portion of the house.[14]
Private respondent, on the other hand, argues that the petition
is suffering from the following flaws:[15]
C.
The respondent courts citation of the twin cases of Tuason & Co. v.
Lumanlan and Tuason & Co. v. Macalindong is not the judicial authority for
a boundary dispute situation between adjacent torrens titled lot owners, as
the facts of the present case do not fall within nor square with the involved
principle of a dissimilar case.[11]
1. It did not give the exact citations of cases decided by the Honorable
Supreme Court that allegedly contradicts the ruling of the Hon.
Court of Appeals based on the doctrine laid down in Tuason vs.
Lumanlan case citing also Tuason vs. Macalindong case (Supra).
2. Assuming that the doctrine in the alleged Co Tao vs. Chico case is
contradictory to the doctrine in Tuason vs. Lumanlan and Tuason
vs. Macalindong, the two cases being more current, the same
should prevail.
Further, private respondent contends that the following unmistakably point
to the bad faith of petitioner: (1) private respondents purchase of the two
lots, was ahead of the purchase by petitioner of the building and lot from
Pariz Industries; (2) the declaration of the General Manager of Tecnogas
that the sale between petitioner and Pariz Industries was not registered
because of some problems with China Banking Corporation; and (3) the
Deed of Sale in favor of petitioner was registered in its name only in the
month of May 1973.[16]
The Courts Ruling
The petition should be granted.
Good Faith or Bad Faith
Respondent Court, citing the cases of J. M. Tuason & Co., Inc.
vs. Vda. de Lumanlan[17] and J. M. Tuason & Co., Inc. vs.
Macalindong,[18] ruled that petitioner cannot be considered in good
faith because as a land owner, it is presumed to know the metes and
bounds of his own property, specially if the same are reflected in a
properly issued certificate of title. One who erroneously builds on the
adjoining lot should be considered a builder in (b)ad (f)aith, there
being presumptive knowledge of the Torrens title, the area, and the
extent of the boundaries.[19]
We disagree with respondent Court. The two cases it relied
upon do not support its main pronouncement that a registered owner
of land has presumptive knowledge of the metes and bounds of its
own land, and is therefore in bad faith if he mistakenly builds on an
adjoining land. Aside from the fact that those cases had factual
moorings radically different from those obtaining here, there is
nothing in those cases which would suggest, however remotely, that
vs. Ibanez [S.C.] 52 Off. Gaz. 217; Marfori vs. Velasco, [C.A.] 52 Off. Gaz.
2050).
The private respondents insistence on the removal of the
encroaching structures as the proper remedy, which respondent
Court sustained in its assailed Decisions, is thus legally flawed. This
is not one of the remedies bestowed upon him by law. It would be
available only if and when he chooses to compel the petitioner to buy
the land at a reasonable price but the latter fails to pay such price.
[33]
This has not taken place. Hence, his options are limited to: (1)
appropriating the encroaching portion of petitioners building after
payment of proper indemnity, or (2) obliging the latter to buy the lot
occupied by the structure. He cannot exercise a remedy of his own
liking.
Neither is petitioners prayer that private respondent be ordered
to sell the land[34] the proper remedy. While that was dubbed as the
more workable solution in Grana and Torralba vs. The Court of
Appeals, et al.,[35] it was not the relief granted in that case as the
landowners were 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 on
which it stands.[36] Moreover, in Grana and Torralba, the area
involved was only 87 square meters while this case involves 520
square meters[37]. In line with the case of Depra vs. Dumlao,[38] this
case will have to be remanded to the trial court for further
proceedings to fully implement the mandate of Art. 448. It is a rule of
procedure for the Supreme Court to strive to settle the entire
controversy in a single proceeding leaving no root or branch to bear
the seeds of future litigation.[39]
Petitioner, however, must also pay the rent for the property
occupied by its building as prescribed by respondent Court from
October 4, 1979, but only up to the date private respondent serves
notice of its option upon petitioner and the trial court; that is, if such
option is for private respondent to appropriate the encroaching
structure. In such event, petitioner would have a right of retention
which negates the obligation to pay rent. [40] The rent should however
continue if the option chosen is compulsory sale, but only up to the
actual transfer of ownership.
The award of attorneys fees by respondent Court against
petitioner is unwarranted since the action appears to have been filed
in good faith. Besides, there should be no penalty on the right to
litigate.[41]
WHEREFORE, premises considered, the petition is hereby
GRANTED and the assailed Decision and the Amended Decision are
REVERSED and SET ASIDE. In accordance with the case of
Depra vs. Dumlao,[42] this case is REMANDED to the Regional Trial
Court of Pasay City, Branch 117, for further proceedings consistent
with Articles 448 and 546 [43] of the Civil Code, as follows:
The trial court shall determine:
a) the present fair price of private respondents 520 square-meter area of
land;
b) the increase in value (plus value) which the said area of 520
square meters may have acquired by reason of the
existence of the portion of the building on the area;
c) the fair market value of the encroaching portion of the building; and
d) whether the value of said area of land is considerably more
than the fair market value of the portion of the building
thereon.
2. After said amounts shall have been determined by competent evidence,
the regional trial court shall render judgment as follows:
a) The private respondent shall be granted a period of
fifteen (15) days within which to exercise his option
preparation of the lot plan. These amounts were paid prior to Kees
taking actual possession of Lot 8. After the preparation of the lot plan
and a copy thereof given to Kee, CTTEI through its employee,
Zenaida Octaviano, accompanied Kees wife, Donabelle Kee, to
inspect Lot 8. Unfortunately, the parcel of land pointed by Octaviano
was Lot 9. Thereafter, Kee proceeded to construct his residence, a
store, an auto repair shop and other improvements on the lot.
After discovering that Lot 9 was occupied by Kee, Jardinico
confronted him. The parties tried to reach an amicable settlement,
but failed.
On January 30, 1981, Jardinicos lawyer wrote Kee, demanding
that the latter remove all improvements and vacate Lot 9. When Kee
refused to vacate Lot 9, Jardinico filed with the Municipal Trial Court
in Cities, Branch 3, Bacolod City (MTCC), a complaint for ejectment
with damages against Kee.
Kee, in turn, filed a third-party complaint against petitioner and
CTTEI.
The MTCC held that the erroneous delivery of Lot 9 to Kee was
attributable to CTTEI. It further ruled that petitioner and CTTEI could
not successfully invoke as a defense the failure of Kee to give notice
of his intention to begin construction required under paragraph 22 of
the Contract to Sell on Installment and his having built a sari-sari
store without. the prior approval of petitioner required under
paragraph 26 of said contract, saying that the purpose of these
requirements was merely to regulate the type of improvements to be
constructed on the lot[3].
However, the MTCC found that petitioner had already rescinded
its contract with Kee over Lot 8 for the latters failure to pay the
installments due, and that Kee had not contested the rescission. The
rescission was effected in 1979, before the complaint was
instituted. The MTCC concluded that Kee no longer had any right
over the lot subject of the contract between him and
13. The Vendee hereby declares that prior to the execution of his contract
he/she has personally examined or inspected the property made subjectmatter hereof, as to its location, contours, as well as the natural condition of
the lots and from the date hereof whatever consequential change therein
made due to erosion, the said Vendee shall bear the expenses of the
necessary fillings, when the same is so desired by him/her.[11]
The rule is that the principal is responsible for the acts of the
agent, done within the scope of his authority, and should bear the
damage caused to third persons. [14] On the other hand, the agent
who exceeds his authority is personally liable for the damage. [15]
CTTEI was acting within its authority as the sole real estate
representative of petitioner when it made the delivery to Kee. In
acting within its scope of authority, it was, however, negligent. It is
this negligence that is the basis of petitioners liability, as principal of
CTTEI, per Articles 1909 and 1910 of the Civil Code.
on the negligence of its agent. On the other hand, what the deed of
sale regulates are the reciprocal rights of Kee and Jardinico; it
stressed that they had reached an agreement independent of the
outcome of the case.
Petitioner further assails the following holding of the Court of
Appeals:
2. Third-party defendants C.T. Torres Enterprises, Inc. and Pleasantville
Development Corporation are solidarily liable under the following
circumstances:
a. If Eldred Jardinico decides to appropriate the improvements
and, thereafter, remove these structures, the third-party
defendants shall answer for all demolition expenses and the
value of the improvements thus destroyed or rendered
useless;
b. If Jardinico prefers that Kee buy the land, the third-party
defendants shall answer for the amount representing the
value of Lot 9 that Kee should pay to Jardinico.[18]
Petitioner contends that if the above holding would be carried
out, Kee would be unjustly enriched at its expense. In other words,
Kee would be -able to own the lot, as buyer, without having to pay
anything on it, because the aforequoted portion of respondent Courts
Decision would require petitioner and CTTEI jointly and solidarily to
answer or reimburse Kee there for.
We agree with petitioner.
granted him under Articles 448, 546 and 548 of the New Civil Code is
deleted, in view of the deed of sale entered into by Kee and
Jardinico, which deed now governs the rights of Jardinico and Kee
as to each other. There is also no further need, as ruled by the
appellate Court, to remand the case to the court of origin for
determination of the actual value of the improvements and the
property (Lot 9), as well as for further proceedings in conformity with
Article 448 of the New Civil Code.
WHEREFORE, the petition is partially GRANTED. The Decision
of the Court of Appeals is hereby MODIFIED as follows:
(1) Wilson Kee is declared a builder in good faith;
(2) Petitioner Pleasantville Development Corporation and
respondent C.T. Tones Enterprises, Inc. are declared
solidarily liable for damages due to negligence;
however, since the amount and/or extent of such
damages was not proven during the trial, the same
cannot now be quantified and awarded;
(3) Petitioner Pleasantville Develpment Corporation and
respondent C.T. Torres Enterprises, Inc. are ordered
to pay in solidum the amount of P3,000.00 to
Jardinico as attorneys fees, as well as litigation
expenses; and
(4) The award of rentals to Jardinico is dispensed with.
SO ORDERED.
GEMINIANO VS CA
This petition for review on certiorari has its origins in Civil Case
No. 9214 of Branch 3 of the Municipal Trial Court in Cities (MTCC) in
Dagupan City for unlawful detainer and damages.The petitioners ask
the Court to set aside the decision of the Court of Appeals affirming
the decision of Branch 40 of the Regional Trial Court (RTC) of
Dagupan City, which, in turn, reversed the MTCC; ordered the
petitioners to reimburse the private respondents the value of the
house in question and other improvements; and allowed the latter to
retain the premises until reimbursement was made.
It appears that Lot No. 3765-B-1 containing an area of 314
square meters was originally owned by the petitioners' mother,
Paulina Amado vda. de Geminiano. On a 12-square-meter portion of
that lot stood the petitioners' unfinished bungalow, which the
petitioners sold in November 1978 to the private respondents for the
sum of P6,000.00, with an alleged promise to sell to the latter that
portion of the lot occupied by the house. Subsequently, the
petitioners' mother executed a contract of lease over a 126 squaremeter portion of the lot, including that portion on which the house
stood, in favor of the private respondents for P40.00 per month for a
period of seven years commencing on 15 November 1978. [1] The
private respondents then introduced additional improvements and
registered the house in their names. After the expiration of the lease
contract in November 1985, however, the petitioners' mother refused
to accept the monthly rentals.
It turned out that the lot in question was the subject of a suit,
which resulted in its acquisition by one Maria Lee in 1972. In 1982,
Lee sold the lot to Lily Salcedo, who in turn sold it in 1984 to the
spouses Agustin and Ester Dionisio.
On 14 February 1992, the Dionisio spouses executed a Deed of
Quitclaim over the said property in favor of the petitioners. [2] As such,
the lot was registered in the latter's names.[3]
On 9 February 1993, the petitioners sent, via registered mail, a
letter addressed to private respondent Mary Nicolas demanding that
she vacate the premises and pay the rentals in arrears within twenty
days from notice.[4]
created,[15] and may be asserted not only by the original lessor, but
also by those who succeed to his title.[16]
Being mere lessees, the private respondents knew that their
occupation of the premises would continue only for the life of the
lease. Plainly, they cannot be considered as possessors nor builders
in good faith.[17]
In a plethora of cases,[18] this Court has held that Article 448 of
the Civil Code, in relation to Article 546 of the same Code, which
allows full reimbursement of useful improvements and retention of
the premises until reimbursement is made, 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 one's 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.
Anent the alleged promise of the petitioners to sell the lot
occupied by the private respondents' house, the same was not
substantiated by convincing evidence. Neither the deed of sale over
the house nor the contract of lease contained an option in favor of
the respondent spouses to purchase the said lot. And even if the
petitioners indeed promised to sell, it would not make the private
respondents possessors or builders in good faith so as to be covered
by the provisions of Article 448 of the Civil Code. The latter cannot
raise the mere expectancy of ownership of the aforementioned lot
because the alleged promise to sell was not fulfilled nor its existence
even proven. The first thing that the private respondents should have
done was to reduce the alleged promise into writing, because under
Article 1403 of the Civil Code, an agreement for the sale of real
property or an interest therein is unenforceable, unless some note or
memorandum thereof be produced. Not having taken any steps in
order that the alleged promise to sell may be enforced, the private
respondents cannot bank on that promise and profess any claim nor
color of title over the lot in question.
GRIO-AQUINO, J.:
The Cagayan River separates the towns of Solana on the west and
Tuguegarao on the east in the province of Cagayan. According to the
unrebutted testimony of Romeo Rigor, Geodetic Engineer of the
Bureau of Lands, in 1919 the lands east of the river were covered by
the Tuguegarao Cadastre. In 1925, Original Certificate of Title No.
5472 was issued for land east of the Cagayan River owned by
defendant-petitioner Eulogio Agustin (Exh. 2-Agustin).
As the years went by, the Cagayan River moved gradually eastward,
depositing silt on the western bank. The shifting of the river and the
siltation continued until 1968.
In 1950, all lands west of the river were included in the Solana
Cadastre. Among these occupying lands covered by the Solana
Cadastre were plaintiffs-private respondents, namely, Pablo Binayug,
who has been in possession of Lots 3349, 7876, 7877, 7878, 7879,
7875, 7881, 7882, 7883, 7884, 7885, 7891 and 7892, and Maria
Melad, who owns Lot 3351 (Exh. 3-Binayug; Exh. B-Melad). Pablo
Binayug began his possession in 1947. An area of eight (8) hectares
was planted to tobacco and corn while 12 hectares were overgrown
with talahib (Exh. C-1 Binayug.) Binayug's Homestead Application
No. W-79055 over this land was approved in 1959 (Exh. B-Binayug).
Binayug's possession was recognized in the decision in Civil Case
No. 101 (Exh. F-Binayug). On the other hand, as a result of Civil
Case No. 343-T, Macario Melad, the predecessor-in-interest of Maria
Melad and Timoteo Melad, was issued Original Certificate of Title No.
P-5026 for Lot 3351 of Cad. 293 on June 1, 1956.
In their petition for review of that decision, the petitioners allege that
the Court of Appeals erred:
1. in declaring that the land in question had become
part of private respondents' estate as a result of
accretion;
2. in declaring that the accretion to private
respondents' estate which used to pertain to
petitioners' estate cannot preclude the private
respondents from being the owners thereof; and
3. in declaring that the ownership of private
respondents over the accretion is not affected by the
sudden and abrupt change in the course of the
Cagayan River when it reverted to its old bed
The petition is unmeritorious and must be denied.
The finding of the Court of Appeals that there had been accretions to
the lots of the private respondents who did not lose the ownership of
such accretions even after they were separated from the principal
lots by the sudden change of course of the river, is a finding of fact
which is conclusive on this Court. That finding is supported by Art.
457 of the New Civil Code which provides:
Art. 457. To the owners of lands adjoining the banks
of rivers belong the accretion which they gradually
receive from the effects of the current of the waters.
(366)
Accretion benefits a riparian owner when the following requisites are
present: (1) that the deposit be gradual and imperceptible; (2) that it
resulted from the effects of the current of the water; and (3) that the
land where accretion takes place is adjacent to the bank of a river
(Republic vs. CA, 132 SCRA 514).
All these requisites of accretion are present in this case for, as the
trial court found:
. . . Cagayan River did move year by year from 1919
to 1968 or for a period of 49 years. Within this
period, the alluvium (sic) deposited on the other side
has become greater in area than the original lands of
the plaintiffs in both cases. Still the addition in every
year is imperceptible in nature, one could not discern
it but can be measured after the lapse of a certain
time. The testimonial evidence in these cases that
said Cagayan River moved eastward year by year is
overwhelming as against the denial of defendant
Eulogio Agustin alone. Cesar Caronan, one time
mayor of Solana, Cagayan, said so. Arturo Taguian
said so. Timoteo Melad said so. Francisco Ubina
said so. Geodetic Engineer Rigor impliedly said so
when he testified that when Solana Cadastre was
executed in 1950 it overlapped portions of
Tuguegarao Cadastre executed in 1919. This could
not have happened if that part of Tuguegarao
Cadastre was not eroded by the overflow of the
Cagayan River. These testimonies cannot be
destroyed by the denials of Vicente Cauilan, Marcelo
Agustin and Eulogio Agustin alone . . . . (p.
27, Rollo.)
The appellate court confirmed that the accretion on the western bank
of the Cagayan River had been going on from 1919 up to 1968 or for
a period of 49 years. It was gradual and imperceptible. Only when
Lot No. 3351, with an original area of 5 hectares described in the
free patent that was issued to Macario Melad in June 1956, was
resurveyed in 1968 did it become known that 6.6 hectares had been
added to it. Lot No. 3351, covered by a homestead patent issued in
June, 1950 to Pablo Binayug, grew from its original area of 18
hectares, by an additional 50 hectares through alluvium as the
Cagayan River gradually moved to the east. These accretions belong
to riparian owners upon whose lands the alluvial deposits were made
(Roxas vs. Tuason, 9 Phil. 408; Director of Lands vs. Rizal, 87 Phil.
806). The reason for this principle is because, if lands bordering on
streams are exposed to floods and other damage due to the
destructive force of the waters, and if by virtue of law they are
subject to encumbrances and various kinds of easements, it is only
just that such risks or dangers as may prejudice the owners thereof
should in some way be compensated by the right of accretion
(Cortes vs. City of Manila, 10 Phil. 567).itc-asl
The private respondents' ownership of the accretion to their lands
was not lost upon the sudden and abrupt change of the course of the
Cagayan River in 1968 or 1969 when it reverted to its old 1919 bed,
and separated or transferred said accretions to the other side (or
eastern bank) of the river. Articles 459 and 463 of the New Civil Code
apply to this situation.
Art. 459. Whenever the current of a river, creek or
torrent segregates from an estate on its bank a
known portion of land and transfers it to another
estate, the owner of the land to which the
segregated portion belonged retains the ownership
of it, provided that he removes the same within two
years.
Art. 463. Whenever the current of a river divides
itself into branches, leaving a piece of land or part
thereof isolated, the owner of the land retains his
ownership. He also retains it if a portion of land is
separated from the estate by the current. (Emphasis
supplied).
In the case at bar, the sudden change of course of the
Cagayan River as a result of a strong typhoon in 1968
caused a portion of the lands of the private respondents to
be "separated from the estate by the current." The private
The complaint also stated that sometime about the last week of
September and/or the first week of October 1982, when private
respondents were about to cultivate their "motherland" together with
its accretion, they were prevented and threatened by defendants
(petitioners herein) from continuing to do so. Named defendants in
said case are herein petitioners Leonida Cureg and Romeo, Pepito,
Hernando, Manuel, Antonio and Elpidio, all surnamed Carniyan,
surviving spouse and children, respectively, of Antonio Carniyan.
Further, the complaint stated that Antonio Carniyan was the owner of
a piece of land situated in Casibarag-Cajel, Cabagan, Isabela and
more particularly described as follows:
Fourth, We note Exhibit "20" (p. 273, Rollo) for petitioners which is
an order by the Director of Lands dated August 14,1980 in
connection with the Homestead Application of Democrata Aguila of
an accretion situated in Catabayungan, Cabagan, Isabela. Aguila's
application was disapproved because in an investigation conducted
by the Bureau of Lands of the area applied for which is an accretion,
the same was found to be occupied and cultivated by, among others,
Antonio Carniyan, who claimed it as an accretion to his land. It is
worthy to note that none of the private respondents nor their
predecessors-in-interest appeared as one of those found occupying
and cultivating said accretion.
On the other hand, the allegation of private respondents that they
were in possession of the "motherland" through their predecessorsin-interest had not been proved by substantial evidence. The
assailed decision of the respondent court, which affirmed the
decision of the trial court, stated that since the "motherland" exists, it
is alsopresumed that private respondents were in possession of the
"subject land" through their predecessors- in-interest since prior to
July 26, 1894. The trial court relied on the testimony of Soledad
Gerardo, one of the private respondents in this case, an interested
and biased witness, regarding their possession of the "motherland."
From her testimony on pedigree, the trial court presumed that the
source of the property, the late Francisco Gerardo, was in
possession of the same since prior to July 26, 1894 (pp. 137140, Rollo).
The foregoing considerations indubitably show that the alleged
"motherland" claimed by private respondents is nonexistent. The
"subject land" is an alluvial deposit left by the northward movement
of the Cagayan River and pursuant to Article 457 of the New Civil
Code:
To the owners of land adjoining the banks of river
belong the accretion which they gradually receive
from the effects of the current of the waters.
However, it should be noted that the area covered by OCT No. P19093 is only four thousand five hundred eighty four (4,584) square
meters. The accretion attached to said land is approximately five and
a half (5.5) hectares. The increase in the area of petitioners'land,
being an accretion left by the change of course or the northward
movement of the Cagayan River does not automatically become
registered land just because the lot which receives such accretion is
covered by a Torrens title. (See Grande v. Court of Appeals, L-17652,
June 30, 1962). As such, it must also be placed under the operation
of the Torrens System. ACCORDINGLY, the petition is hereby
GRANTED. The decision appealed from is REVERSED and SET
ASIDE and judgment is hereby rendered DISMISSING Civil Case
No. Br. III-373 for quieting of title and damages.
Costs against private respondents.
The antecedent facts in the instant case are as follows: The spouses
Ricardo Y. Ladrido and Leonor P. Ladrido were the owners of Lot No.
7511 of the Cadastral Survey of Pototan situated in barangay
Cawayan, Pototan, Iloilo. This lot contained an area of 154,267
square meters and was registered in the names of the spouses
under Transfer Certificate of Title No. T-21940 of the Register of
Deeds of Iloilo.
Spouses Rosendo H. Te and Ana Te were also the registered owners
of a parcel of land described in their title as Lot No. 7340 of the
Cadastral Survey of Pototan.
On September 6, 1973, Rosendo H. Te, with the conformity of Ana
Te, sold this lot to Angelica F. Viajar and Celso F. Viajar for P5,000. A
Torrens title was later issued in the names of Angelica F. Viajar and
Celso F. Viajar.
SO ORDERED.
ANGELICA VIAJAR and CELSO VIAJAR, plaintiffs-appellants,
vs.
COURT OF APPEALS, LEONOR P. LADRIDO, LOURDES
LADRIDO IGNACIO, EUGENIO P. LADRIDO and L P.
LADRIDO, defendants-appellees.
Ramon A. Gonzales for petitioner.
Miraflores Law Offices for respondents.
MEDIALDEA, J.:
This is a petition for review on certiorari of the decision of the Court
of Appeals dated December 29, 1986, in CA-G.R. CV No. 69942
entitled, "ANGELICA VIAJAR, et. al., Plaintiffs-Appellants, versus
LEONOR LADRIDO, et. al., Defendants-Appellees," affirming the
decision of the Court of First Instance (now Regional Trial Court) of
Iloilo dated December 10, 1981.
Later, Angelica F. Viajar had Lot No. 7340 relocated and found out
that the property was in the possession of Ricardo Y. Ladrido.
Consequently, she demanded its return but Ladrido refused.
On February 15, 1974, Angelica F. Viajar and Celso F. Viajar
instituted a civil action for recovery of possession and damages
against Ricardo Y. Ladrido. This case was docketed as Civil Case
No. 9660 of the Court of First Instance of Iloilo. Summoned to plead,
defendant Ladrido filed his answer with a counterclaim. Plaintiffs filed
their reply to the answer.
Subsequently, the complaint was amended to implead Rosendo H.
Te as another defendant. Plaintiffs sought the annulment of the deed
of sale and the restitution of the purchase price with interest in the
event the possession of defendant Ladrido is sustained. Defendant
Te filed his answer to the amended complaint and he counter
claimed for damages. Plaintiffs answered the counterclaim.
During the pendency of the case, plaintiff Celso F. Viajar sold his
rights over Lot No. 7340 to his mother and co-plaintiff, Angelica F.
Not satisfied with the decision, the plaintiffs appealed to the Court of
Appeals and assigned the following errors:
I.
THE LOWER COURT ERRED IN NOT HOLDING
THAT PLAINTIFFS ARE ENTITLED TO LOT B
APPEARING IN EXHIBIT "4" AND TO ONE-HALF
() OF LOT A IN THE SAID EXHIBIT "4."
II
THE LOWER COURT ERRED IN NOT AWARDING
DAMAGES TO PLAINTIFFS (p. 42, Rollo).
As earlier stated, the Court of Appeals affirmed the decision of the
court a quo. Plaintiffs (the petitioners herein) now come to Us
claiming that the Court of Appeals palpably erred in affirming the
decision of the trial court on the ground that the change in the course
of the Suague River was gradual and not sudden.
In the decision appealed from, the Court of Appeals held:
This appeal is not impressed with merit.
Article 457 of the New Civil Code provides that:
Art. 457. To the owners of lands
adjoining the banks of rivers belong
the accretion which they gradually
receive from the effects of the
current of the waters.
The presumption is that the change in the course of
the river was gradual and caused by accretion and
erosion (Martinez Canas vs. Tuason, 5 Phil. 668;
claim that the subject land is private land being an accretion to his
titled property, applying Article 457 of the Civil Code which provides:
"To the owners of lands adjoining the banks of rivers belong the accretion
which they gradually receive from the effects of the current of the waters."
In the case of Meneses v. CA,[2] this Court held that accretion,
as a mode of acquiring property under Art. 457 of the Civil Code,
requires the concurrence of these requisites: (1) that the deposition
of soil or sediment be gradual and imperceptible; (2) that it be the
result of the action of the waters of the river (or sea); and (3) that the
land where accretion takes place is adjacent to the banks or rivers
(or the sea coast). These are called the rules on alluvion which if
present in a case, give to the owners of lands adjoining the banks of
rivers or streams any accretion gradually received from the effects of
the current of waters.
For petitioners to insist on the application of these rules on
alluvion to their case, the above-mentioned requisites must be
present. However, they admit that the accretion was formed by the
dumping of boulders, soil and other filling materials on portions of the
Balacanas Creek and the Cagayan River bounding their land. [3] It
cannot be claimed, therefore, that the accumulation of such
boulders, soil and other filling materials was gradual and
imperceptible, resulting from the action of the waters or the current of
the Balacanas Creek and the Cagayan River. In Hilario v. City of
Manila,[4] this Court held that the word "current" indicates the
participation of the body of water in the ebb and flow of waters due to
high and low tide. Petitioners' submission not having met the first and
second requirements of the rules on alluvion, they cannot claim the
rights of a riparian owner.
In any case, this court agrees with private respondents that
petitioners are estopped from denying the public character of the
subject land, as well as the jurisdiction of the Bureau of Lands when
the late Antonio Nazareno filed his Miscellaneous Sales Application
MSA (G-6) 571.[5] The mere filing of said Application constituted an
admission that the land being applied for was public land, having
been the subject of Survey Plan No. MSI-10-06-000571-D
(Equivalent to Lot No. 36302, Cad-237) which was conducted as a
consequence of Antonio Nazareno's Miscellaneous Sales Application
wherein said land was described as an orchard. Said description by
Antonio Nazareno was, however, controverted by respondent Labis
in his investigation report to respondent Hilario based on the findings
of his ocular inspection that said land actually covers a dry portion of
Balacanas Creek and a swampy portion of Cagayan River. The
investigation report also states that except for the swampy portion
which is fully planted to nipa palms, the whole area is fully occupied
by a part of a big concrete bodega of petitioners and several
residential houses made of light materials, including those of private
respondents which were erected by themselves sometime in the
early part of 1978.[6]
Furthermore, the Bureau of Lands classified the subject land as
an accretion area which was formed by deposits of sawdust in the
Balacanas Creek and the Cagayan river, in accordance with the
ocular inspection conducted by the Bureau of Lands. [7] This Court
has often enough held that findings of administrative agencies which
have acquired expertise because their jurisdiction is confined to
specific matters are generally accorded not only respect but even
finality.[8] Again, when said factual findings are affirmed by the Court
of Appeals, the same are conclusive on the parties and not
reviewable by this Court.[9]
It is this Court's irresistible conclusion, therefore, that the
accretion was man-made or artificial. In Republic v. CA,[10] this Court
ruled that the requirement that the deposit should be due to the effect
of the current of the river is indispensable. This excludes from Art.
457 of the Civil Code all deposits caused by human
intervention. Putting it differently, alluvion must be the exclusive work
of nature. Thus, in Tiongco v. Director of Lands, et al., [11] where the
land was not formed solely by the natural effect of the water current
of the river bordering said land but is also the consequence of the
direct and deliberate intervention of man, it was deemed a manmade accretion and, as such, part of the public domain.
In the case at bar, the subject land was the direct result of the
dumping of sawdust by the Sun Valley Lumber Co. consequent to its
sawmill operations.[12] Even if this Court were to take into
consideration petitioners' submission that the accretion site was the
result of the late Antonio Nazareno's labor consisting in the dumping
of boulders, soil and other filling materials into the Balacanas Creek
and Cagayan River bounding his land, [13] the same would still be part
of the public domain.
Having determined that the subject land is public land, a
fortiori, the Bureau of Lands, as well as the Office of the Secretary of
Agriculture and Natural Resources have Jurisdiction over the same
in accordance with the Public Land Law. Accordingly, the court a
quo dismissed petitioners' complaint for non-exhaustion of
administrative remedies which ruling the Court of Appeals affirmed.
However, this Court agrees with petitioners that administrative
remedies have been exhausted. Petitioners could not have intended
to appeal to respondent Ignacio as an Officer-in-Charge of the
Bureau of Lands. The decision being appealed from was the
decision of respondent Hilario who was the Regional Director of The
Bureau of Lands. Said decision was made "for and by authority of
the Director of Lands."[14] It would be incongruous to appeal the
decision of the Regional Director of the Bureau of Lands acting for
the Director of the Bureau of Lands to an Officer-In-Charge of the
Bureau of Lands.
In any case, respondent Rolleo Ignacio's official designation
was "Undersecretary of the Department of Agriculture and Natural
Resources." He was only an "Officer-In-Charge" of the Bureau of
Lands. When he acted on the late Antonio Nazareno's motion for
reconsideration by affirming or adopting respondent's Hilario's
decision, he was acting on said motion as an Undersecretary on
behalf of the Secretary of the Department. In the case of Hamoy v.
3. The lower court erred in not ordering the registration of the and is
controversy in favor of applicants-appellants [private respondents].
4. The lower court erred in not finding that the applicants-appellants
[private respondents] are entitled to eject the oppositor-appellee
[petitioners]."[7]
On appeal, the respondent court reversed the findings of the
court a quo and granted the petition for registration of the subject
property but excluding therefrom fifty (50) meters from corner 2
towards corner 1; and fifty meters (50) meters from corner 5 towards
corner 6 of the Psu-175181.
The respondent appellate court explained the reversal in this
wise:
"The paramount issue to be resolved in this appeal as set forth by the parties
in their respective briefs is whether or not the land sought to be registered is
accretion or foreshore land, or, whether or not said land was formed by the
action of the two rivers of Talisay and Bulacan or by the action of the
Manila Bay. If formed by the action of the Talisay and Bulacan rivers, the
subject land is accretion but if formed by the action of the Manila Bay then
it is foreshore land.
xxx
It is undisputed that applicants-appellants [private respondents] owned the
land immediately adjoining the land sought to be registered. Their property
which is covered by OCT No. 6830 is bounded on the east by the Talisay
River, on the west by the Bulacan River, and on the north by the Manila
Bay. The Talisay and Bulacan rivers come from inland flowing downstream
towards the Manila Bay. In other words, between the Talisay River and the
Bulacan River is the property of applicants with both rivers acting as the
boundary to said land and the flow of both rivers meeting and emptying into
the Manila Bay.The subject land was formed at the tip or apex of appellants'
[private respondents'] land adding thereto the land now sought to be
registered.
This makes this case quite unique because while it is undisputed that the
subject land is immediately attached to appellants' [private respondents']
land and forms the tip thereof, at the same time, said land immediately faces
the Manila Bay which is part of the sea. We can understand therefore the
confusion this case might have caused the lower court, faced as it was with
the uneasy problem of deciding whether or not the subject land was formed
by the action of the two rivers or by the action of the sea. Since the subject
land is found at the shore of the Manila Bay facing appellants' [private
respondents'] land, it would be quite easy to conclude that it is foreshore
and therefore part of the patrimonial property of the State as the lower court
did in fact rule x x x .
xxx
It is however undisputed that appellants' [private respondents'] land lies
between these two rivers and it is precisely appellants' [private respondents']
land which acts as a barricade preventing these two rivers to meet. Thus,
since the flow of the two rivers is downwards to the Manila Bay the
sediments of sand and silt are deposited at their mouths.
It is, therefore, difficult to see how the Manila Bay could have been the
cause of the deposit thereat for in the natural course of things, the waves of
the sea eat the land on the shore, as they suge [sic] inland. It would not
therefore add anything to the land but instead subtract from it due to the
action of the waves and the wind. It is then more logical to believe that the
two rivers flowing towards the bay emptied their cargo of sand, silt and clay
at their mouths, thus causing appellants' [private respondents'] land to
accumulate therein.
However, our distinguished colleage [sic], Mr. Justice Serrano, do [sic] not
seem to accept this theory and stated that the subject land arose only when x
x x Pascual planted 'palapat' and 'bakawan' trees thereat to serve as a
boundary or strainer. But we do not see how this act of planting trees by
Pascual would explain how the land mass came into being. Much less will it
prove that the same came from the sea.Following Mr. Justice Serrano's
argument that it were the few trees that acted as strainers or blocks, then the
land that grew would have stopped at the place where the said trees were
planted. But this is not so because the land mass went far beyond the
boundary, or where the trees were planted.
On the other hand, the picture-exhibits of appellants' [private respondents']
clearly show that the land that accumulated beyond the so-called boundary,
as well as the entire area being applied for is dry land, above sea level, and
bearing innumerable trees x x x. The existence of vegetation on the land
could only confirm that the soil thereat came from inland rather than from
the sea, for what could the sea bring to the shore but sand, pebbles, stones,
rocks and corrals? On the other hand, the two rivers would be bringing soil
on their downward flow which they brought along from the eroded
mountains, the lands along their path, and dumped them all on the northern
portion of appellants' [private respondents'] land.
In view of the foregoing, we have to deviate from the lower court's
finding. While it is true that the subject land is found at the shore of the
Manila Bay fronting appellants' [private respondents'] land, said land is not
foreshore but an accretion from the action of the Talisay and Bulacan
rivers. In fact, this is exactly what the Bureau of Lands found out, as shown
in the following report of the Acting Provincial Officer, Jesus M. Orozco, to
wit:
'Upon ocular inspection of the land subject of this registration made on June
11, 1960, it was found out that the said land is x x x sandwitched [sic] by
two big rivers x x x These two rivers bring down considerable amount of
soil and sediments during floods every year thus raising the soil of the land
adjoining the private property of the applicant [private respondents]. About
four-fifth [sic] of the area applied for is now dry land whereon are planted
palapat trees thickly growing thereon. It is the natural action of these two
rivers that has caused the formation of said land x x x subject of this
registration case.It has been formed, therefore, by accretion. And having
been formed by accretion, the said land may be considered the private
property of the riparian owner who is the applicant herein [private
respondents'] x x x .
In view of the above, the opposition hereto filed by the government should
be withdrawn, except for the portion recommended by the land investigator
Because of this report, no less than the Solicitor General representing the
Bureau of Lands withdrew his opposition dated March 25, 1960, and
limited 'the same to the northern portion of the land applied for,
compromising a strip 50 meters wide along the Manila Bay, which should
be declared public land as part of the foreshore' x x x.[8]
'Bay. An opening into the land where the water is shut in on all sides except
at the entrance; an inlet of the sea; an arm of the sea, distinct from a river, a
bending or curbing of the shore of the sea or of a lake.' 7 C.J. 10131014."[17]
The disputed land, thus, is an accretion not on a river bank but
on a sea bank, or on what used to be the foreshore of Manila Bay
which adjoined private respindents' own tract of land on the northern
side. As such, the applicable law is not Article 457 of the Civil Code
but Article 4 of the Spanish Law of Waters of 1866.
The process by which the disputed land was formed, is not
difficult to discern from the facts of the case. As the trial court
correctly observed:
"A perusal of the survey plan x x x of the land subject matter of these cases
shows that on the eastern side, the property is bounded by Talisay River, on
the western side by Bulacan River, on the southern side by Lot 1436 and on
the northern side by Manila Bay. It is not correct to state that the Talisay and
Bulacan Rivers meet a certain portion because the two rivers both flow
towards Manila Bay. The Talisay River is straight while the Bulacan River
is a little bit meandering and there is no portion where the two rivers meet
before they end up at Manila Bay. The land which is adjacent to the
property belonging to Pascual cannot be considered an accretion [caused by
the action of the two rivers].
Applicant Pascual x x x has not presented proofs to convince the Court that
the land he has applied for registration is the result of the settling down on
his registered land of soil, earth or other deposits so as to be rightfully be
considered as an accretion [caused by the action of the two rivers]. Said Art.
457 finds no applicability where the accretion must have been caused by
action of the bay."[18]
The conclusion formed by the trial court on the basis of the
foregoing observation is that the disputed land is part of the
foreshore of Manila Bay and therefore, part of the public domain.The
respondent appellate court, however, perceived the fact that
petitioners' own land lies between the Talisay and Bulacan Rivers, to
be basis to conclude that the disputed land must be an accretion
formed by the action of the two rivers because private respondents'
own land acted as a barricade preventing the two rivers to meet and
that the current of the two rivers carried sediments of sand and silt
downwards to the Manila Bay which accumulated somehow to a 14hectare land. These conclusions, however, are fatally incongruous in
the light of the one undisputed critical fact: the accretion was
deposited, not on either the eastern or western portion of private
respondents' land where a river each runs, but on the northern
portion of petitioners' land which adjoins the Manila Bay. Worse,
such conclusions are further eroded of their practical logic and
consonance with natural experience in the light of Sulpicio Pascual's
admission as to having planted palapat and bakawan trees on the
northern boundary of their own land. In amplification of this, plainly
more reasonable and valid are Justice Mariano Serrano's
observations in his dissenting opinion when he stated that:
"As appellants' (titled) land x x x acts as a barricade that prevents the two
rivers to meet, and considering the wide expanse of the boundary between
said land and the Manila Bay, measuring some 593.00 meters x x x it is
believed rather farfetched for the land in question to have been formed
through 'sediments of sand and salt [sic] . . . deposited at their [rivers']
mouths.' Moreover, if 'since the flow of the two rivers is downwards to the
Manila Bay the sediments of sand and silt are deposited at their mouths,'
why then would the alleged cargo of sand, silt and clay accumulate at the
northern portion of appellants' titled land facing Manila Bay instead of
merely at the mouths and banks of these two rivers? That being the case, the
accretion formed at said portion of appellants' titled [land] was not caused
by the current of the two rivers but by the action of the sea (Manila Bay)
into which the rivers empty.
The conclusion x x x is not supported by any reference to the evidence
which, on the contrary, shows that the disputed land was formed by the
action of the sea. Thus, no less than Sulpicio Pascual, one of the heirs of the
original applicant, testified on cross-examination that the land in dispute
was part of the shore and it was only in 1948 that he noticed that the land
was beginning to get higher after he had planted trees thereon in 1948. x x x
x x x it is established that before 1948 sea water from the Manila Bay at
high tide could reach as far as the dike of appellants' fishpond within their
titled property, which dike now separates this titled property from the land
in question. Even in 1948 when appellants had already
planted palapat and bakawan trees in the land involved, inasmuch as these
trees were yet small, the waves of the sea could still reach the dike. This
must be so because in x x x the survey plan of the titled property approved
in 1918, said titled land was bounded on the north by Manila Bay. So
Manila Bay was adjacent to it on the north. It was only after the planting of
the aforesaid trees in 1948 that the land in question began to rise or to get
higher in elevation.
The trees planted by appellants in 1948 became a sort of strainer of the sea
water and at the same time a kind of block to the strained sediments from
being carried back to the sea by the very waves that brought them to the
former shore at the end of the dike, which must have caused the shoreline to
recede and dry up eventually raising the former shore leading to the
formation of the land in question."[19]
In other words, the combined and interactive effect of the planting of
palapat and bakawan trees, the withdrawal of the waters of Manila
Bay eventually resulting in the drying up of its former foreshore, and
the regular torrential action of the waters of Manila Bay, is the
formation of the disputed land on the northern boundary of private
respondents' own tract of land.
The disputed property is an accretion on a sea bank, Manila Bay being an
inlet or an arm of the sea; as such, the disputed property is, under Article 4
of the Spanish Law of Waters of 1866, part of the public domain.
At the outset, there is a need to distinguish between Manila Bay
and Laguna de Bay.
possibly the legislative departments have the right and the power to
make the declaration that the lands so gained by action of the sea is
no longer necessary for purposes of public utility or for the cause of
establishment of special industries or for coast guard services.
[26]
Petitioners utterly fail to show that either the executive or
legislative department has already declared the disputed land as
qualified, under Article 4 of the Spanish Law of Waters of 1866, to be
the property of private respondents as owners of the estates
adjacent thereto.
WHEREFORE, the instant Petition for Review is hereby
GRANTED.
The decision of the Intermediate Appellate Court (now Court of
Appeals) in CA G.R. No. 59044-R dated November 29, 1978 is