445

phil sugar estate dev vs poizat –fighter

where Gabriela Andrea de Coster (Coster) executed a general power of attorney authorizing her
husband, Juan Poizat (Poizat), to obtain a loan and to secure the same with mortgage, pledge or
personal securities. Although the real estate mortgage mentioned that it was entered also in Poizat’s
capacity as attorney-in-fact of Coster, Poizat signed the contract in his own name without any indication
that he also signed it as the attorney-in-fact of his wife. The Supreme Court ruled that while Poizat may
have had the authority to borrow money and mortgage the real property of his wife, the law specifies
how and in what manner it must be done, and the stubborn fact remains that, as to the transaction in
question, that power was never exercised;

Caltex phil inc vs felias- master

Spouses Juliano and Eulalia Felias donated Lot No.

107 to their daughter, Felisa Felias (Private

Respondent) on March 31, 1928.

March 26, 1941: Trial court held that in a

case against respondent‘s husband (Simeon Sawamoto), he had to pay Texas Company (Phil.) Inc. a sum
of P661.94 plus legal interest and attorney‘s fees.A writ of execution was issued to the provincial sheriff
who levied upon Lot No. 107 together with the improvements and a small

parcel of coconut land and sold these at a public auction to

Texas Company now Caltex (Phil.) Inc.Provincial Sherrif executed a final deed of sale which was duly
recorded on a TCT.Felisa filed an action, declaring herself the owner of the 2 parcels of land.

RTC:Sale of Lot. No. 107 is null and void

Sale of coconut land is NOT. It rightfully belongs to Caltex.

Both parties appealed and

CA declared that:Lot. No. 107 belongs to Felisa and ordered the Register of Deeds to Cancel the entry of
the levy the certificate of sale and the deed of sale by the sheriff. Caltex is still the exclusive owner of

the small parcel of coconut land.

Issues:

What is the status and ownership of Lot 107

of the cadastral survey of the City of

Agusan a the time it was levied upon

and later sold by the Sheriff?

Held:

IT EXCLUSIVELY BELONGS TO FELISA

FELIAS.

Ratio:

It was discovered by the CA that it was donated by

her parents to her, it is her paraphernal property.

(exclusively owned by her)

It was sold by the Sheriff who believed it to be

conjugal property as stipulated in Art 1404 of the OCC

and Art. 158 of the new Civil Code (this is a 1960

Francisco muñoz v ramirez-ninja

FACTS:

Respondent-spouses mortgaged a residential lot (which the wife inherited) to the GSIS to secure a
housing loan (200k). Thereafter, they used the money loaned to construct a residential house on said
lot.

It is alleged that MUNOZ granted the spouses a 600k loan, which the latter used to pay the debt to GSIS.
The balance of the loan (400k) will be delivered by MUNOS upon surrender of the title over the property
and an affidavit of waiver of rights (over the property) to be executed by the husband. While the
spouses were able to turn over the title, no affidavit was signed by the husband. Consequently, MUNOZ
refused to give the 400k balance of the loan and since the spouses could no longer return the 200k
(which was already paid to GSIS), MUNOZ kept the title over the property and subsequently, caused the
issuance of a new one in his own name.

The spouses then filed a case for the annulment of the purported sale of the property in favor of
MUNOZ. The RTC ruled that the property was the wife’s exclusive paraphernal property (since she
inherited it from her father) and as such, the sale is valid even without the husband’s consent.

The CA reversed and ruled that while the property was originally exclusive paraphernal property of the
wife, it became conjugal property when it was used as a collateral for a housing loan that was paid
through conjugal funds. Hence, the sale is void.

ISSUE (1): Is the property paraphernal or conjugal?

RULING: PARAPHERNAL. As a general rule, all property acquired during the marriage is presumed to be
conjugal unless the contrary is proved. In this case, clear evidence that the wife inherited the lot from
her father has sufficiently rebutted this presumption of conjugal ownership. Consequently, the
residential lot is the wife’s exclusive paraphernal property (pursuant to Article 92 and 109 of FC).

It was error for the CA to apply Article 158 of the CC and the ruling on Calimlim-Canullas. True,
respondents were married during the effectivity of the CC and thus its provisions should govern their
property relations. With the enactment of the FC however, the provisions of the latter on conjugal
partnership of gains superseded those of the CC. Thus, it is the FC that governs the present case and not
the CC. And under Article 120 of the FC (which supersedes Article 158 of the CC), when the cost of the
improvement and any resulting increase in the value are more than the value of the property at the time
of the improvement, the entire property shall belong to the conjugal partnership, subject to
reimbursement; otherwise, the property shall be retained in ownership by the owner-spouse, likewise
subject to reimbursement for the cost of improvement.

In this case, the husband only paid a small portion of the GSIS loan (60k). Thus, it is fairly reasonable to
assume that the value of the residential lot is considerably more than the contribution paid by the
husband. Thus, the property remained the exclusive paraphernal property of the wife at the time she
contracted with MUNOZ; the written consent of the husband was not necessary.

ISSUE (2): Was the transaction a sale or equitable mortgage?

RULING: EQUITABLE MORTGAGE. Under Article 1602 of the CC, a contract is presumed an equitable
mortgage when: (a) price of sale with right to repurchase is unusually inadequate; (b) vendor remains in
possession as lessee or otherwise; (c) upon or after the expiration of the right to repurchase, another
instrument extending the period of redemption is executed; (d) purchase retains for himself a part of
the purchase price; (e) vendor binds himself to pay the taxes on the thing sold; and, (f) in any other case
it may be fairly inferred that the real intention of the parties is for the transaction to secure the payment
of a debt.

In this case, considering that (a) the spouses remained in possession of the property (albeit as lessees
thereof); (b) MUNOZ retained a portion of the ‘purchase price’ (200k); (c) it was the spouses who paid
real property taxes on the property; and, (d) it was the wife who secure the payment of the principal
debt with the subject property — the parties clearly intended an equitable mortgage and not a contract
of sale.
447

Pacific farms v esguerra fighter

Facts:

Carried Lumber Company sold and delivered lumber and construction materials to the Insular Farms,
Inc. which the latter used in the construction of the aforementioned six buildings at its compound.
However, the value of the materials was not paid by Insular Farms, Inc.

Company instituted civil case with the Court of First Instance of Pangasinan to recover the said unpaid
balance from the Insular Farms, Inc. Trial court rendered judgment sustaining the Company's claim. The
judgment debtor did not appeal; so the corresponding writ of execution was issued.

PacificFarms, Inc.filed a third party claim, asserting ownership over levied buildings which it acquired
from Insular Farms. Thereafter, sheriff proceeded with public auction.

Meanwhile,PacificFarms filed a complaint against the Company and the sheriff with the court a quo,
praying that judgment be rendered, (a) declaring null and void the levy and judicial sale of the six
buildings, and (b) adjudging the defendants jointly and severally liable to the plaintiff in the sum of
P2,000 by way of actual damages and for such amount as the court may deem proper and just to impose
by way of exemplary damages and for costs of the suit.

Trial Court annulled the levy but denied claim for actual and exemplary damages.

Issue:

Whether or not the appellant acted correctly in bringing an action against the Insular Farms, Inc. and
enforcing its right of reimbursement.

Held:

Yes, the appellant acted correctly in bringing an action (D-775) against the Insular Farms, Inc. and
enforcing its right of reimbursement through the execution of the final judgment it obtained in the said
case against the six buildings in the possession of the appellee who now stands to benefit therefrom. It
follows, as a necessary corollary, that the sale at public auction conducted by the defendant sheriff of
the six buildings described in the certificate of sale dated February 12, 1962, exhibit 7, was valid and
effective.

Also, the application by analogy of the rules of accession would suffice for a just adjudication.

Article 447 of the Civil Code 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.2 The owner of the materials, on the other hand, is entitled to
remove them, provided no substantial injury is caused to the landowner. Otherwise, he has the right to
reimbursement for the value of his materials.

Martin v martin master

Balagui siblings sold the two parcels of land to Feliciano(Pet) and Florentino Martin(Res). Balugui
brought an action against the Martins for damages because of their failure to comply with the
conditions of the sale. But, the said action was terminated by a compromise agreement between the
Martins.

The CA, nothwithstanding the claim of Pet that he had not known of such and agreement and did not
sign it, it was found that he did sign the agreement.The compromise agreement was to transform the
original sale made in favor of the Martins. On Jan 8, 1946, Balagui sold the parcels of land to de la
Cruz(Res).

CA reversed the ruling of CFI, which declared that the compromise agreement was null and void. Pet
contend that CA erred in declaring that the compromise agreement had the effect of converting the
previous contract of sale into one loan secured by a mortgage. Moreover, failing to make a finding on
the rights and obligations of the pet, w/ respect to the houses built on the land in good faith

I: WON there was a compromise agreement.

Yes. Pet did sign the Compromise Agreement, finding by the CA, is binding to us. The parties to the
compromise agreement signed and executed the same willingly and voluntarily, and should, therefore,
be bound by its terms.

CA is silent on the rights and obligations of the parties with respect to the said houses pet built. The CA
found that the houses were built after October 31,1930, after Feliciano Martin had returned the amount
of P600 that Florentino Martin had contributed to the purchase money. At the time of the construction,
therefore, the petitioner had already become the rightful possessor of the land, having, besides,
declared them for tax purposes

No claim is made by any of the parties’ respondents that the construction of the houses had been made
in bad faith. The compromise agreement did not specify within what period of time Feliciano Martin was
to enjoy the possession and use of the lands in question. Neither has there been any evidence submitted
to show that the building of the houses was prohibited by the original owners of the land or by the
subsequent purchaser. A portion of the land was residential, so its use could only be enjoyed by the
building of a house thereon. So we must find as a fact that the building of the houses was made in good
faith and in the exercise of the rights granted to Feliciano Martin by the compromise agreement.
"Art. 361. The owner of land on which anything has been built, sown, or planted, in good faith, shall be
Reentitled to appropriate the thing so built, sown, or planted, upon paying the indemnification
mentioned in Articles 453 and 454, or to compel the person who has built or planted to pay him the
value of the land, and the person who sowed thereon to pay the proper rent therefor.

Res who had become the owner by purchase of the lands in question, should be given, as he is hereby
given, the choice either to pay for the value of the houses, or require the petitioner herein to pay for the
value of the land.

448

Benedicto v villaflores ninja

n 1980, Maria Villaflores (Maria) sold a portion of Lot 2-A to her nephew, respondent Antonio Villaflores
(Antonio). Antonio then took possession of the portion sold to him and constructed a house thereon.
Twelve (12) years later, or on August 15, 1992, Maria executed in favor of Antonio a Kasulatan ng
Bilihang Tuluyan covering the entire Lot 2-A. However, Antonio did not register the sale or pay the real
property taxes for the subject land.

On August 31, 1994, Maria sold the same Lot 2-A to Filomena, evidenced by a Kasulatan ng Bilihang
Tuluyan. Filomena registered the sale on September 6, 1994. Since then Filomena paid the real property
taxes for the subject parcel of land.

After trial, the RTC sustained Filomena’s ownership who was the one who registered the sale in good
faith. It rejected Antonio’s allegation of bad faith on the part of Filomena because no sufficient evidence
was adduced to prove it. This finding was affirmed by the CA.

Issue

Whether Antonio is a possessor in good faith.

Ruling

The Court sustained the finding that Antonio is a builder in good faith.

Under Article 448, a landowner is given the option to either appropriate the improvement as his own
upon payment of the proper amount of indemnity, or sell the land to the possessor in good faith. Anent
to this, Article 546 provides that a builder in good faith is entitled to full reimbursement for all the
necessary and useful expenses incurred; it also gives him right of retention until full reimbursement is
made. The objective of Article 546 of the Civil Code is to administer justice between the parties involved.
Guided by this precept, it is therefore the current market value of the improvements which should be
made the basis of reimbursement.

However, in spite of its finding of good faith on the part of Antonio by the RTC it did not order the
reimbursement of the necessary and useful expenses he incurred. Hence, the CA correctly ordered the
remand of the case for further proceedings.

Pedro angeles v pascual fighter

Property; builder in good faith. Article 448 of the Civil Code contemplates a person building, or sowing,
or planting in good faith on land owned by another. The law presupposes that the land and the building
or plants are owned by different persons, like here. The RTC and CA found and declared Angeles to be a
builder in good faith. We cannot veer away from their unanimous conclusion, which can easily be drawn
from the fact that Angeles insists until now that he built his house entirely on his own lot. Good faith
consists in the belief of the builder that the land he is building on is his and in his ignorance of a defect
or flaw in his title.

With the unassailable finding that Angeles’ house straddled the lot of Pascual, and that Angeles had built
his house in good faith, Article 448 of the Civil Code, which spells out the rights and obligations of the
owner of the land as well as of the builder, is unquestionably applicable. Consequently, the land being
the principal and the building the accessory, preference is given to Pascual as the owner of the land to
make the choice as between appropriating the building or obliging Angeles as the builder to pay the
value of the land. Contrary to the insistence of Angeles, therefore, no inconsistency exists between the
finding of good faith in his favor and the grant of the reliefs set forth in Article 448 of the Civil Code

Pnb v de jesus master

It would appear that on 10 June 1995,respondent filed a complaint against petitioner before the
Regional Trial Court of Occidental Mindoro for recovery of ownership and possession, with damages,
over the questioned property. In his complaint, respondent stated that he had acquired aparcel of land
situated in Mamburao, Occidenta lMindoro, with an area of 1,144 square meters covered by TCT No. T-
17197, and that on 26 March1993, he had caused a verification survey of the property and discovered
that the northern portion of the lot was being encroached upon by a building of petitioner to the extent
of 124 square meters.Despite two letters of demand sent by respondent,petitioner failed and refused to
vacate the area.Petitioner, in its answer, asserted that whenit acquired the lot and the building
sometime in 1981 from then Mayor Bienvenido Ignacio, the encroachment already was in existence and
to remedy the situation, Mayor Ignacio offered to sel lthe area in question (which then also belonged to
Ignacio) to petitioner at P100.00 per square meter which offer the latter claimed to have accepted. The
sale, however, did not materialize when, without the knowledge and consent of petitioner, Mayor
Ignacio later mortgaged the lot to the Development Bank of the Philippines. He also contends that he is
a builder in good faith.
ISSUE:Whether or not being a builder in good faith matters under article 448.

HELD:Article 448, of the Civil Code refers to apiece of land whose ownership is claimed by two or more
parties, one of whom has built some works (or sown or planted something) and not to a case where the
owner of the land is the builder, sower, or planter who then later loses ownership of the land by sale or
otherwise for, else wise stated, “where the true owner himself is the builder of works on his own land,
the issue of good faith or bad faith is entirely irrelevant.

Geminiano v ca ninja

The lot in question was originally owned by the mother of the petitioner. Petitioner sold their unfinished
bungalow to the respondents for P6,000, with a promise to sell the lot to the latter. The property was
later leased to the respondents for 7 years starting November 1978 for P40 a month as evidenced by
their written lease contract. The respondents built their house and introduced some improvements in
the lot. In 1985 petitioner’s mother refused receiving monthly rentals. It turned out that the lot in
question was subject to litigation which resulted to its acquisition by Maria Lee which was sold to
Salcedo, who further sold to Dionisio spouses. The property eventually came back to the petitioner
when the Dinisio spouses executed a Deed of Quitclaim over the said property in favor of the
petitioners. As such, the lot was registered in the latter’s names. (petitioners never lost possession of
the land because Lee and company never issued a writ of possession against them).

In 1993, petitioners wrote a letter to respondents demanding them to vacate the premises and when
the latter refused, petitioners filed in court. Respondents claim that they should be entitled to buy the
land because of the promise of the petitioners to sell them the land and because they were builders in
Good faith. The courts now are deciding which one to use: Art. 448 regarding builders and land owners
in good faith or Art. 1678 regarding lessee in good faith who can be reimbursed half of the expenses of
the improvements if the LO chooses to appropriate them and that such lessee have the right to retain in
the premises until fully reimbursed.

ISSUES:

1) Whether or not the respondents were builders in Good faith?

2) Whether Art 448 or 1678 should be applied?

RULING:

1) No, they were not builders in good faith. The respondents knew that their stay would end after the
lease contract expires. They can’t bank on the promise, which was not in writing, of the petitioners that
the latter will sell the land to them. According to 1403, an agreement for the sale of real property or an
interest therein is unenforceable, unless some note or memorandum thereof be produced. Other than
the alleged promise by petitioner, respondents had no other evidence to prove their claim.

2) They are mere lessees in good faith; therefore Art 1678 may apply if the lessor chooses to appropriate
the improvements. But since the petitioners refused to exercise that option, the private respondents
can’t compel them to reimburse the one-half value of the house and improvements. Neither can they
retain the premises until reimbursement is made. The private respondents’ sole right then is to remove
the improvements without causing any more impairment upon the property leased than is necessary.

Natl housing v grace bptst chrch- figher

On June 13, 1986, Respondent GraceBaptist Church wrote a letter to NHA manifesting their intent to
purchase Lot 4 and 17 of the GeneralMariano Alvarez Resettlement Project in Cavite. Thelatter granted
request hence respondent entered intopossession of the lots and introduced improvementsthereon.On
February 22, 1991, NHA passed aresolution approving the sale of the subject lots torespondent Church
for 700 per square meter, a totalof P430,500. respondents were duly informed.On April 8, 1991,
respondent churchtendered a check amounting to P55,350 contendingthat this was the agreed price.
NHA avers stating thatthe price now (1991) is different from before (1986).The trial court rendered a
decision in favour of NHA stating that there was no contract of sale,ordering to return the said lots to
NHA and to payNHA rent of 200 pesos from the time it tookpossession of the lot.Respondent Church
appealed to the CAwhich affirms the decision of RTC regarding “nocontract of sale” but modifying it by
ordering NHA toexecute the sale of the said lots to Church for 700 per square, with 6% interest per
annum from March1991. Petitioner NHA filed a motion for reconsideration which was denied. Hence
thispetition for review on certiorariISSUE:WON NHA can be compelled to sell the lots under market
value?HELD:No, because the contract has not beenperfected

The Church despite knowledge that itsintended contract of sale with the NHA had not beenperfected
proceeded to introduce improvements onthe land. On the other hand, NHA knowingly grantedthe
Church temporary use of the subject propertiesand did not prevent the Church from
makingimprovements thereon. Thus the Church and NHA,who both acted in bad faith shall be treated as
if theywere both in good faith. In this connection Art 448provides: “

the owner of the land in 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 theone 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 theland and 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, on case of disagreement, court shall fix

Sps nuguid v ca master

FACTS:Pedro P. Pecson owned a commercial lot onwhich he built a four-door two-storey

apartmentbuilding. For failure to pay realty taxes, the lot wassold at public auction by the City Treasurer
toMamerto Nepomuceno, who in turn sold it for P103,000 to the spouses Juan and Erlinda
Nuguid.Pecson challenged the validity of the auctionsale before the RTC of Quezon City, the RTC
upheldthe spouses’ title but declared that the four-door two-storey apartment building was not
included in theauction sale. This was affirmed by the CA and by theSC.The Nuguids became the
uncontestedowners of commercial lot. The Nuguid spousesmoved for delivery of possession of the lot
and theapartment building.ISSUE:WON the Nuguids should reimburse Pecson for thebenefits derived
from the apartment building.HELD: YES.Since petitioners opted to appropriate theimprovement for
themselves as early as June 1993

when they applied for a writ of execution despiteknowledge that the auction sale did not include
theapartment building, they could not benefit from thelot’s improvement, until they reimbursed the
improver in full, based on the current market value of theproperty.Under Article 448, the landowner is
giventhe option, either to appropriate the improvement ashis own upon payment of the proper amount
of indemnity or to sell the land to the possessor in goodfaith. Relatedly, Article 546 provides that a
builder ingood faith is entitled to full reimbursement for all thenecessary and useful expenses incurred;
it also giveshim right of retention until full reimbursement ismade.The right of retention is considered as
oneof the measures devised by the law for the protectionof builders in good faith. Its object is to
guarantee fulland prompt reimbursement as it permits the actualpossessor to remain in possession
while he has notbeen reimbursed (by the person who defeated him inthe case for possession of the
property) for thosenecessary expenses and useful improvements madeby him on the thing
possessed.Given the circumstances of the instant casewhere the builder in good faith has been
clearlydenied his right of retention for almost half a decade,we find that the increased award of rentals
by theRTC was reasonable and equitable. The petitionershad reaped all the benefits from the
improvementintroduced by the respondent during said period,without paying any amount to the latter
asreimbursement for his construction costs andexpenses. They should account and pay for suchbenefits

Carascosso v ca ninja

In March 1972, El Dorado Plantation Inc, through board member Lauro Leviste, executed a Deed of Sale
with Carrascoso. The subject of the sale was a 1825 hectare of land. It was agreed that Carrascoso is to
pay P1.8M. P290K would be paid by Carrascoso to PNB to settle the mortgage placed on the said land.
P210k would be paid directly to Leviste. The balance of P1.3M plus 10% interest would be paid over the
next 3 years at P519k every 25th of March. Leviste also assured that there were no tenants hence the
land does not fall under the Land Reform Code. Leviste allowed Carrascoso to mortgage the land which
the latter did.
Carrascoso obtained a total of P1.07M as mortgage and he used the same to pay the down payment
agreed upon in the contract. Carrascoso defaulted from his obligation which was supposed to be settled
on March 25, 1975. Leviste then sent him letters to make good his end of the contract otherwise he will
be litigated.

In 1977, Carrascoso executed a Buy and Sell Contract with PLDT. The subject of the sale was the same
land sold to Carrascoso by Leviste but it was only the 1000 sq m portion thereof. The land is to be sold at
P3M. Part of the terms and conditions agreed upon was that Carrascoso is to remove all tenants from
the land within one year. He is also given a 6 month extension in case he’ll need one. Thereafter, PLDT
will notify Carrascoso if whether or not PLDt will finalize the sale. PLDT gained possession of the land.

El Dorado filed a civil case against Carrascoso. PLDT intervened averring that it was a buyer in good faith.
The RTC ruled in favor of Carrascoso. CA reversed the RTC ruling.

ISSUE: What is the nature of each contract?

HELD: The contract executed between El Dorado and Carrascoso was a contract of sale. It was perfected
by their meeting of the minds and was consummated by the delivery of the property to Carrascoso.
However, El Dorado has the right to rescind the contract by reason of Carrascoso’s failure to perform his
obligation.

A contract of sale is a reciprocal obligation. The seller obligates itself to transfer the ownership of and
deliver a determinate thing, and the buyer obligates itself to pay therefor a price certain in money or its
equivalent. The non-payment of the price by the buyer is a resolutory condition which extinguishes the
transaction that for a time existed, and discharges the obligations created thereunder. Such failure to
pay the price in the manner prescribed by the contract of sale entitles the unpaid seller to sue for
collection or to rescind the contract.

The contract between Carrascoso and PLDT is a contract to sell. This is evidenced by the terms and
conditions that they have agreed upon that after fulfillment of Carrascoso’s obligation PLDT has “to
notify Carrascoso of its decision whether or not to finalize the sale.”

Carrascoso also averred that there was a breach on El Dorado’s part when it comes to warranty.
Carrascoso claimed that there were tenants on the land and he spent about P2.9M relocating them. The
SC ruled that Carrascoso merely had a bare claim without additional proof to support it.

Requisites of Express warranty in a Contract of Sale

(1) the express warranty must be an affirmation of fact or any promise by the seller relating to the
subject matter of the sale;

(2) the natural tendency of such affirmation or promise is to induce the buyer to purchase the thing; and

(3) the buyer purchases the thing relying on such affirmation or promise thereon.

Sps rasadas v estenor fighter

FACTS:The dispute centers on a parcel of land withan situated in Ilagan, Isabela. Respondent filed
aComplaint For Recovery Of Ownership AndPossession With Damages against. The complaintwas
docketed and tried by the RTC of Ilagan. In thesame complaint, respondent asserted that he was
theowner of the subject property, which was then in thepossession of petitioners. The RTC decided in
favor of petitioners. The CA reversed the judgment of theRTC and declared respondent as the owner of
thesubject property. Thereafter, a Writ of Execution andWrit of Demolition was issued against
petitioners,

who were ordered to demolish their houses,structures, and improvements on the property.Petitioners
alleged that they were entitled to just compensation relating to the value of the housesthey had built on
the property, owing to their purported status as builders in good faith. Theyclaimed that the CA decision
did not declare them asbuilders in bad faith, and thus, they were entitled tobe reimbursed of the value
of their houses beforethese could be demolished. They posited that withoutsuch reimbursement, they
could not be ejected fromtheir houses.ISSUE:WON petitioners are in good faith.HELD: NO.The father of
the petitioners (and their predecessor-in-interest) had already known that hedid not own the property,
and that his stay thereinwas merely out of tolerance. Such conclusion in factbolstered the eventual
conclusion that respondentswere the owners of the land and that petitionersshould vacate the
same.These premises remaining as they are, it isclear that petitioners are not entitled to the
justcompensation they seek through the presentcomplaint. Under Article 448 of the Civil Code,
thebuilder in bad faith on the land of another loses whatis built without right to indemnity. Petitioners
were inbad faith when they built the structures as they hadknown that the subject property did not
belong tothem

Rosales v castellfort master

FACTS:Spouses-petitioners Rodolfo V. Rosales and Lily Rosqueta-Rosales (petitioners) are the registered
owners of a parcel of land with an area of approximately 315 square meters, covered by Transfer
Certificate of Title (TCT) No. 36856[4] and designated as Lot 17, Block 1 of Subdivision Plan LRCPsd-
55244 situated in Los Baños, Laguna.On August 16, 1995, petitioners discovered that a house was being
constructed on their lot,without their knowledge and consent, by respondent Miguel Castelltort
(Castelltort).It turned out that respondents Castelltortand his wife Judith had purchased a lot, Lot 16 of
the same Subdivision Plan, from respondent Lina Lopez-Villegas (Lina) through her son-attorney-in-fact
ReneVillegas (Villegas) but that after a survey thereof by geodetic engineer Augusto Rivera, he pointed
to Lot17 as the Lot 16 the Castelltorts purchased.Negotiations for the settlement of the case thus
began,with Villegas offering a larger lot near petitioners’ lot in the same subdivision as a replacement
thereof. In the alternative, Villegas proposed to pay the purchas eprice of petitioners’ lot with legal
interest. Bothproposals were, however, rejected by petitioners whose counsel, by letter of August 24,
1995, directed Castelltort to stop the construction of and demolish his house and any other structure he
may have built thereon, and desist from entering the lot.Petitioners subsequently filed on September 1,
1995 a complaint for recovery of possession and damages with prayer for the issuance of a restraining
order and preliminary injunction against spouses-respondents Miguel and Judith Castelltort before
theRTC of Calamba, Laguna, docketed as Civil Case No.2229-95-C.

ISSUE:Under Art 448, who has the right of option?

HELD:

Under the foregoing provision (Art 448), the landowner can choose between appropriating the building
by paying the proper indemnity or obliging the builder to pay the price of the land, unless its value is
considerably more than that of the structures, in which case the builder in good faith shall pay
reasonable rent.[34] If the parties cannot come to terms over the conditions of the lease, the court must
fix the termsthereof. The choice belongs to the owner of the land,a rule that accords with the principle
of accession, i.e.,that the accessory follows the principal and not the other way around. Even as the
option lies with the landowner, the grant to him, nevertheless, is preclusive. The landowner cannot
refuse to exercise either option and compel instead the owner of the building to remove it from the
land.The raison d’etre for this provision has been enunciated thus:Where the builder, planter or sower
has acted in good faith, a conflict of rights arises between the owners, and it becomes necessary to
protect the owner of the improvements without causing injustice to the owner of the land. In view of
the impracticability of creating a state of forcedco-ownership, the law has provided a justsolution by
giving the owner of the land the option to acquire the improvements after payment of the proper
indemnity, or to oblige the builder or planter to pay for the land an dthe sower the proper rent. He
cannot refuse to exercise either option. It is the owner of the land who is authorized to exercise the
option, because his right is older, and because, by the principle of accession, he is entitled to the
ownership of the accessory thing

Muñoz v ramirez ninja

Respondent-spouses mortgaged a residential lot (which the wife inherited) to the GSIS to secure a
housing loan (200k). Thereafter, they used the money loaned to construct a residential house on said
lot.

It is alleged that MUNOZ granted the spouses a 600k loan, which the latter used to pay the debt to GSIS.

The balance of the loan (400k) will be delivered by MUNOS upon surrender of the title over the property
and an affidavit of waiver of rights (over the property) to be executed by the husband.

While the spouses were able to turn over the title, no affidavit was signed by the husband.
Consequently, MUNOZ refused to give the 400k balance of the loan and since the spouses could no
longer return the 200k (which was already paid to GSIS), MUNOZ kept the title over the property and
subsequently, caused the issuance of a new one in his own name.

The spouses then filed a case for the annulment of the purported sale of the property in favor of
MUNOZ.

The RTC ruled that the property was the wife’s exclusive paraphernal property (since she inherited it
from her father) and as such, the sale is valid even without the husband’s consent.

The CA reversed and ruled that while the property was originally exclusive paraphernal property of the
wife, it became conjugal property when it was used as a collateral for a housing loan that was paid
through conjugal funds. Hence, the sale is void.

ISSUE (1): Is the property paraphernal or conjugal?

RULING:

PARAPHERNAL. As a general rule, all property acquired during the marriage is presumed to be conjugal
unless the contrary is proved.
In this case, clear evidence that the wife inherited the lot from her father has sufficiently rebutted this
presumption of conjugal ownership. Consequently, the residential lot is the wife’s exclusive paraphernal
property (pursuant to Article 92 and 109 of FC).

It was error for the CA to apply Article 158 of the CC and the ruling on Calimlim-Canullas. True,
respondents were married during the effectivity of the CC and thus its provisions should govern their
property relations. With the enactment of the FC however, the provisions of the latter on conjugal
partnership of gains superseded those of the CC.

Thus, it is the FC that governs the present case and not the CC. And under Article 120 of the FC (which
supersedes Article 158 of the CC), when the cost of the improvement and any resulting increase in the
value are more than the value of the property at the time of the improvement, the entire property shall
belong to the conjugal partnership, subject to reimbursement; otherwise, the property shall be retained
in ownership by the owner-spouse, likewise subject to reimbursement for the cost of improvement.

In this case, the husband only paid a small portion of the GSIS loan (60k).

Thus, it is fairly reasonable to assume that the value of the residential lot is considerably more than the
contribution paid by the husband. Thus, the property remained the exclusive paraphernal property of
the wife at the time she contracted with MUNOZ; the written consent of the husband was not
necessary.

ISSUE (2): Was the transaction a sale or equitable mortgage?

RULING:

EQUITABLE MORTGAGE. Under Article 1602 of the CC, a contract is presumed an equitable mortgage
when: (a) price of sale with right to repurchase is unusually inadequate; (b) vendor remains in
possession as lessee or otherwise; (c) upon or after the expiration of the right to repurchase, another
instrument extending the period of redemption is executed; (d) purchase retains for himself a part of
the purchase price; (e) vendor binds himself to pay the taxes on the thing sold; and, (f) in any other case
it may be fairly inferred that the real intention of the parties is for the transaction to secure the payment
of a debt.In this case, considering that (a) the spouses remained in possession of the property (albeit as
lessees thereof); (b) MUNOZ retained a portion of the ‘purchase price’ (200k); (c) it was the spouses who
paid real property taxes on the property; and, (d) it was the wife who secure the payment of the
principal debt with the subject property — the parties clearly intended an equitable mortgage and not a
contract of sale.

Vsd realty v uniwide sales fighter

449

Del Rosario v. sps manuel 2004

he petition raises the following issues: (1) whether or not the MTC has jurisdiction over the ejectment
case; and (2) whether or not petitioner is a builder in good faith, hence, entitled to reimbursement
under Article 448 of the Civil Code.
Petitioner claimed that the trial court has no jurisdiction over the case considering that there is no
allegation in the complaint that respondents have prior physical possession of the lot and that they were
ousted therefrom by force, threat, strategy or stealth.

Prior physical possession is not always a condition sine qua non in an ejectment case. We must
distinguish the two kinds of ejectment, namely, forcible entry and unlawful detainer. In forcible entry,
the plaintiff is deprived of physical possession of his land or building by means of force, intimidation,
threat, strategy or stealth. In this light, he must allege and prove prior physical possession. In illegal
detainer, the defendant unlawfully withholds possession after the expiration or termination of his right
thereto under any contract, express or implied.[4] What respondents filed is a complaint for unlawful
detainer. Prior physical possession is not required. Hence, respondents need not allege the same in
their complaint.

As found by the trial court, petitioner’s possession of the land was by mere tolerance of the
respondents. We have held in a number of cases that one whose stay is merely tolerated becomes a
deforciant occupant the moment he is required to leave.[5] He is bound by his implied promise, in the
absence of a contract, that he will vacate upon demand.[6]

Anent the second issue, petitioner is not a builder in good faith. Considering that he occupies the land
by mere tolerance, he is aware that his occupation of the same may be terminated by respondents any
time.

Sps. Rasdas v. Estenor 2005

Facts: Respondents filed a complaint for recovery of ownership and possession with damages against
petitioners for a parcel of land with an area of 703 square meters in Isabela. The petitioners had built a
house on the disputed lot.

The Court of Appeals ruled in favor of the respondents. The petitioners were late in appealing the
decision. The CA decision had already become final and executory and a writ of execution and
demolition had already been issued against them.

The petitioners conceded that they did not own the lot but alleged that they were entitled to
reimbursement for the value of the house they constructed. Furthermore, they alleged that even if they
were builders in bad faith, the respondent was an owner in bad faith and that the case should be
treated as if both parties were in good faith.

The respondent, on the other hand, argued res judicata in that the issue had already been ruled upon by
the CA finding them builders in bad faith and thereby builders in bad faith.
Issue: Is the petition barred by res judicata such that petitioners are no longer entitled to
reimbursement for their house on respondent’s lot?

Held: Although there was some error in the process followed by the lower courts, the petition is barred
by res judicata. The CA found that the occupancy by the petitioners was merely tolerated by the
respondent, who was verbally begged by the father of the petitioners to allow them to remain on the
disputed lot as the petitioners were still studying. As for the respondent being an owner in bad faith, the
matter was raised only in its petition to the Supreme Court and could not be entertained as a matter of
procedure. Furthermore, nothing in the rulings of the lower courts even supports such a proposition.

Lumungo v. Usman

Dominga Usman sold and transfers her rights in and to the 3 lots in question to Jose Angeles.The latter
made the purchase with the knowledgethat the property was already in dispute by Atty.Usman,
husband of Dominga, and by the plaintiffs.Angeles, upon taking possession of the land, plantedthe same
with coconuts, which, together with thosealready planted by Dominga Usman, numbered about3,000,
most of which are now fruit-bearing. In short,Angeles was a purchaser and a builder in bad
faith.ISSUE:Whether or not Angeles is entitled to reimbursementfor the coconuts tree he planted on the
property inlitigation.HELD:

PROPERTY CASE DIGESTS

No. It should be noted that said trees areimprovements, not "necessary expenses of preservation,"
which a builder, planter or sower inbad faith may recover under Arts. 452 and 546, firstparagraph, of the
Civil Code. The facts and findingsof both the trial court and the Court of Appeals leaveno room for doubt
that Jose Angeles was a purchaser and a builder in bad faith.

The provision applicable tothis case is, accordingly, Article 449 of the Civil Code,which provides that, "he
who builds, plants or sows inbad faith on the land of another, loses what is built,planted or sown
without right to indemnity."

453

Municipality of Oas v. roa

UNICIPALITY OF OAS V. ROA7 PHIL. 20

FACTS:The Municipality brought the action for therecovery of a tract of land in the pueblo of
Oas,claiming that it was a part of the public square of saidtown, while Roa alleged that he was the
owner of theproperty. The defendant admitted in writing that heknew that the land is owned by the
Municipality andthat Jose Castillo, whom he bought the property didnot own the land. When Roa
constructed asubstantial building on the property in question after he “acquired” the property from
Castillo, theMunicipality did not oppose the construction.ISSUE:Whether or not the municipality owns
the land.HELD:Yes.

The defendant was not a purchaser ingood faith. The plaintiff, having permitted the erectionby the
defendant of a building on the land withoutobjection, acted in bad faith. The rights of the partiesmust,
therefore, be determined as if they both hadacted in good faith. To the case are applicable
thoseprovisions of the Civil Code which relate to theconstruction by one person of a building upon
landbelonging to another. Article 364 (now Art.453) of theCivil Code is as follows: "When there has been
badfaith, not only on the part of the person who built,sowed, or planted on another's land, but also on
thepart of the owner of the latter, the rights of both shallbe the same as if they had acted in good faith.”
TheSupreme declared that the Municipality is the owner of the land and that it has the option of buying
thebuilding thereon, which is the property of thedefendant, or of selling to him the land on which
itstands