PROPERTY PERSONAL NOTES

ACCESSION, QUIETING OF TITLE,

AND CO-OWNERSHIP

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ACCESSION DEFINITION:

The right by virtue of which the owner of the thing becomes the owner of everything that the things may produce or
which may be inseparable united or incorporated thereto, either naturally or artificially.

GE: ACCESSION IS NOT THE SAME AS FRUITS.

Article 440. The ownership of property gives the right by accession to everything which is produced thereby,
or which is incorporated or attached thereto, either naturally or artificially. (353)

● Spouses Gulla vs. Labrador, et al, G.R. No. 149418*, July 27, 2006 [. The petition is partially
meritorious, the plaintiffs-respondents Labradors tried to evict the Gullas from a salvage area
fronting the sea, which the Court said was public dominion and not accretion. Hence, the Labradors
did not have any right to evict the Gullas from the disputed property and no right to collect rentals
from them since the Labradors could not have owned rights to the foreshore and salvage area, which
are parts of the public domain. Art. 440 did not apply Lot A is part of the public domain, hence,
beyond commerce and not capable of being registered. It is within the salvage zone fronting the
China Sea as well as the property covered by OCT No. P-13350 in the name of respondents. Article
440, which states that "[t]he ownership of property gives the right by accession to everything which is
produced thereby, or which is incorporated or attached thereto, either naturally or artificially" does
not apply, considering that Lot A is a foreshore land adjacent to the sea which is alternately covered
and left dry by the ordinary flow of the tides. It is public domain, not available for private ownership
until declared by the government to be no longer needed for public use. Respondents have no
possessory right over the property unless upon application, the government, through the then Bureau
of Lands, had granted them a permit.]

Gist: Article 440 of the civil code does not apply to Lot A in this case, which is a foreshore and salvage zone
fronting the China sea by accretion since is it part of public domain.

Osorio v. Osorio, 440, 41 Phil 531 After the death of the father of the plaintiff, his estate was distributed.
The mother of plaintiff was given as her share 610 shares of stock of a shipping firm. Before the
distribution of the estate of the deceased, the mother of plaintiff donated one-half of the shares to
plaintiff. This donation was duly accepted by plaintiff. After the death of plaintiff's mother, the other
heirs of the mother claimed that the shares of stock should go to the estate of the mother because the
donation was void inasmuch as it was a donation of future property. Defendants also argued that
assuming that the donation was valid, still the dividends of the shares should not be considered as
included in the donation.

● HELD: The shares which were the subject of the donation cannot be considered as future property
because the predecessor in interest had died and his heirs acquired a right to succeed him from the
moment of his death. Donation valid. As to the dividends, of the profits of the shares, they belong to

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 the plaintiff on the principle that ownership of property gives the right by accession to all that it
produces, or is united or incorporated thereto, naturally or artificially.

Gist: The dividends of the share of stock of one-half of the shipping firm belong to the donee based on
accession, property right gives the rights to all that it produces, united or incorporated, naturally or
artificially.

Article 441. To the owner belongs:

(1) The natural fruits;
(2) The industrial fruits;
(3) The civil fruits. (354)
DMN: Bonus – not fruits.

FRUITS: Juridically, fruits include all the profits of or income from a thing, in accordance with its economic
purpose, so long as they do not bring about any essential alteration thereof.

GR: Owner of property is owner of fruits.

XPNS:

1. Possessor in Good Faith

2. Usufruct
3. Lease
4. Antichresis

NATURAL FRUITS: GR: Owner of property is owner of fruits.

XPNS:

1. Possessor in Good Faith

2. Usufruct
3. Lease
4. Antichresis

Article 442. Natural fruits are the spontaneous products of the soil, and the young and other products of
animals.

Industrial fruits are those produced by lands of any kind through cultivation or labor.

Civil fruits are the rents of buildings, the price of leases of lands and other property and the amount of
perpetual or life annuities or other similar income. (355a)

Article 443. He who receives the fruits has the obligation to pay the expenses made by a third person in their
production, gathering, and preservation. (356) [DMN: Applies to bad faith and good faith third persons.]
(Why? What’s the rationale for this?)

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TLN:

USUAL EXPENSES COVERED:

1. Must be dedicated to the annual production and not for the improvement of the property;
2. Must not be unnecessary, excessive, or for pure luxury, but must be of such the amount naturally required
by the condition of the work or the cultivation made.

TLN: Art. 443 does not make any distinction between possessor in good faith and bad faith. What it seeks to
prevent is unjust enrichment at the expense of another. This article is just provides the right even to planter, gatherer,
or sower in BAD faith right to be reimbursed for their expenses.

TLN: Only those that remain after paying the expenses for their production, gathering, and preservation, can be
considered as fruits.

Agnes, et al, v. Republic, GRN 156022, 7/6/15 [Calauit Island residents sued successfully for the reversion to them
of possession of portions of Calauit Island based on a newly issued CADT. What is the nature of possessions and
properties? What are their role in the life of individuals and communities? Beyond the issue of legal title, why do
people fight for land? The issuance of the CADT under the IPRA superseded the original cause of action and

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rendered moot and academic. But think of the implications and the social dimensions this case provides a light
on. Property is life, not just for individuals but for entire communities, cultures and peoples.]

Note: P.D 1578 then RA 8731.

Establishing the Distinction between meus and tuus (

Pierson v. Post - Supreme Court of New York. 3 Caines 175 (1805)

[Occupation, pursuit, capture, possession, control – how did these figure in the decision? Regardless of the
jurisdiction, and this was decided in 1805 America, when animals formed a huge part of the daily survival of people
in the country (as opposed to the city), what rights are said to come from control of something wild?

Principle: An Ferae Naturae (Wild animals) must be intercepted and killed to acquire ownership over it. Here, it is
Pierson, the who killed the fox, not Post, which owns the fox.

Article 444. Only such as are manifest or born are considered as natural or industrial fruits.
With respect to animals, it is sufficient that they are in the womb of the mother, although unborn. (357)

With respect to animals, it is sufficient that they are in the womb of the mother, although unborn. (357) Article 445.
Whatever is built, planted or sown on the land of another and the improvements or repairs made thereon,
belong to the owner of the land, subject to the provisions of the following articles. (358)

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Gaboya v. Cui, GRN L-19614, 3/27/71

Principle: An owner cannot transfer the ownership of a property and be the usfructuary (jus in re aliena) thereof
since the two are separate rights.

Gist: Estate petitioner Don Mariano Cui, widower, as owner of three lots situated in the City of Cebu with a total
area of 2,658 square meters. In 1946, Don Cui sold said three lots to three of his children named Rosari, Mercedes
and Antonio each for P64,000. Because Rosario for lack of funds was unable to pay her corresponding share of the
purchase price, the sale to her was cancelled and the one-third of the property corresponding to her was returned to
the vendor Don Cui. These three lots are commercial. The improvements thereon were destroyed during the last
Pacific War so that at the time of the sale in 1946, there were no buildings or any other improvements on them.
Because of the sale of these lots undivided and because of the cancellation of the sale to one of the three original
vendees, Don Mariano and his children Mercedes and Antonio became co-owners of the property.

Ruling: The SC ruled reserved right of usufruct in favor of the Don Mariono did not the rentals of the building
subsequently constructed on the vacant lots, but that it did entitle the usufructuary to receive a reasonable
rental for the portion of the land occupied in the building at P1,858.00 per month.

The rentals for the land and buildings from November, 1947 to 29 July 1952 before Don Mariano died amounted to
P100,088.80.

There was no preponderant evidence that Don Marianohad ever waived his right of usufruct, as contended by the
defendant.

Article 446. All works, sowing, and planting are presumed made by the owner and at his expense, unless the
contrary is proved. (359)

TLN: Includes the placing of industrial machinery.

GR: Building built on the land of the owner is presumed to be his.

XPN: If building is built on a conjugal property is property of the spouses under Art. 160 FC.

Article 447. 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. (360a)

Article 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

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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. (361a)

TLN: Remember, the owner of the materials used by another does not become a part owner of the thing constructed
with his materials, but is only entitled to recover their value.

BAD FAITH: An owner in bad faith under 453 if he allowed another to use materials to his property under his
presence. With knowledge and forbearance, and without opposition from him.

NOTE

453: Refers to the bad faith of the owner of the land.

526: Refers ro bad faith of a possessor in reference to the land.

● Tecnogas Philippines Manufacturing Corporation v. Court of Appeals and Eduardo Uy, 268 SCRA 5, 22
(1997). [F]

Principle: It is presumed that possession continues to be enjoyed in the same character in which it was acquired,
until the contrary is proved. Good faith consists in the belief of the builder that the land he is building on is his, and
his ignorance of any defect or flaw in his title. Hence, such good faith, by law, passed on to Pariz's successor,
petitioner in this case.

Good Faith: The belief of the builder that the land he is building on is his, and his ignorance of any defect or flaw in
his title.

Gist: Technogas Philippines Manufacturing Corporaion and Eduardo Uy in this case are owners of adjoining lots in
Parañaque, Metro Manila. It was discovered in a survey, that a portion of a building of Technogas, which was
presumably constructed by its predecessor-in-interest Pariz industries, encroached on a portion of the lot owned by a
Eduardo Uy.

Ruling: Under Art. 448, the obvious benefit to the builder under this article is that, instead of being outrightly
ejected from the land, he can compel the landowner to make a choice between the two options: (1) to appropriate the
building by paying the indemnity required by law, or (2) sell the land to the builder. The landowner cannot refuse to
exercise either option and compel instead the owner of the building to remove it from the land.

Application to the case: In the first place, there is no sufficient showing that petitioner was aware of the
encroachment at the time it acquired the property from Pariz Industries. We agree with the trial court that various
factors in evidence adequately show petitioner's lack of awareness thereof. In any case, contrary proof has not
overthrown the presumption of good faith under Article 527 of the Civil Code. In fact, private respondent Eduardo
Uy himself was unaware of such intrusion into his property until after 1971 when he hired a surveyor, following his
purchase of another adjoining lot, to survey all his newly acquired lots. Upon being apprised of the encroachment,

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petitioner immediately offered to buy the area occupied by its building — a species of conduct consistent with good
faith.

In the second place, upon delivery of the property by Pariz Industries, as seller, to the petitioner, as buyer, the latter
acquired ownership of the property. Consequently and as earlier discussed, petitioner is deemed to have stepped into
the shoes of the seller in regard to all rights of ownership over the immovable sold, including the right to compel the
private respondent to exercise either of the two options provided under Article 448 of the Civil Code.

● Depra v. Dumlao, GRN. L-57348, 5/16/85, 136 SCRA 475. [landowner’s right is older]

Principle: In view of the impracticality of creating a state of forced co-ownership, the law has provided a just
solution by giving the owner of the land the option:

1. To acquire the improvements after payment of the proper indemnity, or

2. to oblige the builder or planter to pay for the land and the sower to pay the proper rent.

NOTE: 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.

Gist: Sometime in 1972, when DUMLAO constructed his house on his lot, the kitchen thereof had encroached on an
area of thirty four (34) square meters of DEPRA's property, After the encroachment was discovered in a relocation
survey of DEPRA's lot made on November 2,1972, his mother, Beatriz Depra after writing a demand letter asking
DUMLAO to move back from his encroachment, filed an action for Unlawful Detainer on February 6,1973 against
DUMLAO in the Municipal Court of of Dumangas.

Rosales v. Castelltort 509 Phil. 137, 147 (2005). GRN 157044 10/10/05

Principle: The deliberate breach in the veracity of testimony as the ownership of property of the building permits
required by law is an unmitigated manifestation of bad faith.

Gist:

In 1995, spouses-petitioners Rodolfo and Lily Rosqueta-Rosales discovered that their house Lot No. 17 was
being constructed on their lot, without their knowledge and consent, by respondent Castelltort.

It turned out that respondents Castelltort and 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 Rene Villegas (Villegas)
but that after a survey thereof by geodetic engineer Augusto Rivera, he pointed to Lot 17 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 purchase price of
petitioners' lot with legal interest. Both proposals were, however, rejected by petitioners whose counsel 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.

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Petitioners subsequently filed 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 the
RTC of Calamba, Laguna.

In the complaint, the Castelltorts claimed in their Answer with Counterclaim that they were builders in good faith.

Ruling: There is no well-founded belief of ownership by the defendants of the land upon which they built their
house. The title or mode of acquisition upon which they based their belief of such ownership stemmed from a
Contract to Sell (Exhibit "P") of which they were not even parties, the designated buyer being Elizabeth Yson Cruz
and the sale even subjected to the judicial reconstitution of the title. And by their own actions, particularly defendant
Miguel Castelltort, defendants betrayed this very belief in their ownership when realizing the inutility of anchoring
their ownership on the basis of the Contract of Sale, defendant Miguel Castelltort in his testimony declared
Elizabeth Yson Cruz as his wife despite an admission in their answer that they are the spouses named as defendants
and which declaration is an utter falsehood as the Contract to Sell itself indicates the civil status of said Elizabeth
Yson Cruz to be single.

Even if we are to concede that defendants built their house in good faith on account of the representation of
attorney-in-fact Rene Villegas, their failure to comply with the requirements of the National Building Code,
particularly the procurement of a building permit, stained such good faith and belief.

This deliberate breach is an unmitigated manifestation of bad faith. And from the evidence thus adduced, we hold
that defendants and the intervenor were equally guilty of negligence which led to the construction of the defendants'
house on plaintiffs' property and therefore jointly and severally liable for all the damages suffered by the plaintiffs.

Spouses Macasaet v. Spouses Macasaet, 482 Phil. 853, 871-872 (2004)

Principle: Those who occupy the land of another at the latter’s tolerance or permission, without any contract
between them, are necessarily bound by an implied promise that the occupants will vacate the property upon
demand. A summary action for ejectment is the proper remedy to enforce this implied obligation. The unlawful
deprivation or withholding of possession is to be counted from the date of the demand to vacate.

Gist: Petitioners Ismael and Teresita Macasaet and Respondents Vicente and Rosario Macasaet are first-degree
relatives. Ismael is the son of respondents, and Teresita is his wife.

In 1997, the parents filed with the Municipal Trial Court in Cities (MTCC) of Lipa City an ejectment suit against the
children. Respondents alleged that they were the owners of two (2) parcels of land covered by, situated at
Banay-banay, Lipa City; that by way of a verbal lease agreement, Ismael and Teresita occupied these lots in March
since 1992 and used them as their residence and the situs of their construction business; and that despite repeated
demands, petitioners failed to pay the agreed rental of ₱500 per week.

Ismael and Teresita denied the existence of any verbal lease agreement. They claimed that respondents had invited
them to construct their residence and business on the subject lots in order that they could all live near one another,
employ Marivic (the sister of Ismael), and help in resolving the problems of the family.

They added that it was the policy of respondents to allot the land they owned as an advance grant of inheritance in
favor of their children. Thus, they contended that the lot covered by TCT No. T-103141 had been allotted to Ismael
as advance inheritance. On the other hand, the lot covered by TCT No. T-78521 was allegedly given to petitioners as
payment for construction materials used in the renovation of respondents’ house.

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The MTCC ruled in favor of respondents and ordered petitioners to vacate the premises. It opined that Ismael and
Teresita had occupied the lots, not by virtue of a verbal lease agreement, but by tolerance of Vicente and Rosario.

RTC: upheld the findings of the MTCC. However, allowed respondents to appropriate the building and other
improvements introduced by petitioners, after payment of the indemnity provided for by Article 448 in relation to
Articles 546 and 548 of the Civil Code.

Ruling: The instant case is factually similar to Javier v. Javier. In that case, this Court deemed the son to be in good
faith for building the improvement (the house) with the knowledge and consent of his father, to whom belonged the
land upon which it was built. Thus, Article 448 was applied. The established facts of this case show that
respondents fully consented to the improvements introduced by petitioners. In fact, because the children occupied
the lots upon their invitation, the parents certainly knew and approved of the construction of the improvements
introduced thereon. Thus, petitioners may be deemed to have been in good faith when they built the structures on
those lots.

TOLERATION (TOLENTINO): The act or practice of permitting or enduring something not wholly approved of.

Article 449. He who builds, plants or sows in bad faith on the land of another, loses what is built, planted or
sown without right to indemnity. (362)
Lose everything…except for necessary expenses (which the landowner would have incurred himself)

Article 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. (363a)

Remedies of an OWNER against a builder, planter or sower in BAD FAITH:

(1) To appropriate what has been built, planted, or sown, without any obligation to pay indemnity therefore;
(2) To ask the builder, planter, or sower to remove what he has built, planted, or sown;
(3) To compel teh builder or planter to pay

Article 451. In the cases of the two preceding articles, the landowner is entitled to damages from the builder,
planter or sower. (n) (BUILDER IN BAD FAITH).

Art. 452. The builder, planter or sower in bad faith is entitled to reimbursement for the necessary expenses of
preservation of the land. (n)

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TLN:

Necessary Expenses: If the builder, planter or sower in bad faith has made necessary expenses for the preservation
of the land itself, he is entitled to reimbursement.

Ratio: The builder, planter, or sower in bad faith loses the accessory or improvement, but he cannot be deprived of
his right to collect what he has spent to preserve the principal.

Art. 453. If there was bad faith, not only on the part of the person who built, planted or sowed on the land of
another, but also on the part of the owner of such land, the rights of one and the other shall be the same as
though both had acted in good faith.
It is understood that there is bad faith on the part of the landowner whenever the act was done with
his knowledge and without opposition on his part. (354a)

Ratio: Based on Partidas, a person who knowingly allows himself to be deceived may not complain as a deceived
person. The bad faith of one party extinguishes and neutralizes the bad faith of the other.

BUILDER IN BAD FAITH DEFINITION: A person who builds, plants, or sows, knowing that the land does not
belong to him and he/she has no right to build, plant, or sow thereon.

LANDOWNERS IN BAD FAITH: A person who purchases a piece of land, knowing the a construction made in
good faith by third party exists thereon, and the same only pays for the price of the land but not of the construction,
he places himself in the position of an owner of land who has acted in bad faith.

EFFECT IF OWNER OF MATERIALS IS IN BAD FAITH: Art. 449 applies and he/she shall have the same
position as a BPS in bad faith. The same shall lose his materials without right to indemnity since it the BPS was
made with owner of materials’s tacit consent.

Art. 454. When the landowner acted in bad faith and the builder, planter or sower proceeded in good faith,
the provisions of article 447 shall apply. (n)

LANDOWNER IN BAD FAITH: This means that the building, planting, or sowing was made in the presence of
the landowner and with his knowledge and without his

Art. 455. If the materials, plants or seeds belong to a third person who has not acted in bad faith, the owner of
the land shall answer subsidiarily for their value and only in the event that the one who made use of them has
no property with which to pay.
This provision shall not apply if the owner makes use of the right granted by article 450. If the owner of the
materials, plants or seeds has been paid by the builder, planter or sower, the latter may demand from the
landowner the value of the materials and labor. (365a)

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NOTE: This article applies irrespective whether the landowner or BPS were in good or bad faith.

RATIO FOR THE SUBSIDIARILY LIABILITY OF THE LANDOWNER: because the landowner in this case
benefits from the materials, unless the landowner compels the BPS to remove the improvements under Art. 450.

EFFECT IF OWNER OF MATERIALS IS IN BAD FAITH: Art. 455 applies since all their rights will be
determined as if all of them acted in good faith.

EFFECT IF ALL THREE PARTIES ARE IN BAD FAITH: This article shall apply since their right will be
determined as if all of them acted in good faith.

NOTE: The subsidiary liability of the landowner only pertains to the value of the materials and not for damages,
which are only chargeable against the party in bad faith

● Gaboya v. Cui, GRN L-19614, 3/27/7

Gist: Estate petitioner Don Mariano Cui, widower, as owner of three lots situated in the City of Cebu with a total
area of 2,658 square meters. In 1946, Don Cui sold said three lots to three of his children named Rosari, Mercedes
and Antonio each for P64,000. Because Rosario for lack of funds was unable to pay her corresponding share of the
purchase price, the sale to her was cancelled and the one-third of the property corresponding to her was returned to
the vendor Don Cui. These three lots are commercial. The improvements thereon were destroyed during the last
Pacific War so that at the time of the sale in 1946, there were no buildings or any other improvements on them.
Because of the sale of these lots undivided and because of the cancellation of the sale to one of the three original
vendees, Don Mariano and his children Mercedes and Antonio became co-owners of the property.

Ruling: The SC ruled reserved right of usufruct in favor of the Don Mariono did not the rentals of the building
subsequently constructed on the vacant lots, but that it did entitle the usufructuary to receive a reasonable
rental for the portion of the land occupied in the building at P1,858.00 per month.

The rentals for the land and buildings from November, 1947 to 29 July 1952 before Don Mariano died amounted to
P100,088.80.

There was no preponderant evidence that Don Marianohad ever waived his right of usufruct, as contended by the
defendant.

Art. 456. In the cases regulated in the preceding articles, good faith does not necessarily exclude negligence,
which gives right to damages under article 2176. (n)

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. (336)

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REASONS FOR ALLUVION: If lands bordering on streams are exposed to floods and other damages due to the
destructive force of the waters, and if by virtue of law they are subject to encumbrances and various kinds of
servitudes, it is only just that such risks oe dangers as may prejudice the owners thereof should in some way be
compensated by the right of accretion.

REQUISITES OF ALLUVION: (GICA)

(1) Deposit be Gradual and Imperceptible;

(2) It made through the effects of the Current of the water;
(3) The land where accretion takes place is Adjacent to the banks of river;

BANKS OF A RIVER DEFINED: Refers to those lateral strips or zones of its bed which are washed by the stream
only during such high floods as do not cause inundations or to be reached by the river at high tide.

ALLUVION VS. AVULSION

ALLUVION AVULSION

(1) The deposit of the soil is gradual; (1) Sudden or abrupt process may be seen;

(2) Soil cannot be identified; (2) Identifiable and verifiable

(3) Belongs to the owner of property which it is (3) Belongs to the owner from whose property it was
attached to. detached.

Art. 458. The owners of estates adjoining ponds or lagoons do not acquire the land left dry by the natural
decrease of the waters, or lose that inundated by them in extraordinary floods. (367) (ALLUVION)

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. (368a)
(AVULSION)

● Gaboya v. Cui, GRN L-19614, 3/27/71

Principle: An owner cannot transfer the ownership of a property and be the usfructuary (jus in re aliena)
thereof since the two are separate rights.

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Gist: Estate petitioner Don Mariano Cui, widower, as owner of three lots situated in the City of Cebu with a total
area of 2,658 square meters. In 1946, Don Cui sold said three lots to three of his children named Rosari, Mercedes
and Antonio each for P64,000. Because Rosario for lack of funds was unable to pay her corresponding share of the
purchase price, the sale to her was cancelled and the one-third of the property corresponding to her was returned to
the vendor Don Cui. These three lots are commercial. The improvements thereon were destroyed during the last
Pacific War so that at the time of the sale in 1946, there were no buildings or any other improvements on them.
Because of the sale of these lots undivided and because of the cancellation of the sale to one of the three original
vendees, Don Mariano and his children Mercedes and Antonio became co-owners of the property.

Ruling: The SC ruled reserved right of usufruct in favor of the Don Mariono did not the rentals of the building
subsequently constructed on the vacant lots, but that it did entitle the usufructuary to receive a reasonable
rental for the portion of the land occupied in the building at P1,858.00 per month.

The rentals for the land and buildings from November, 1947 to 29 July 1952 before Don Mariano died amounted to
P100,088.80.

There was no preponderant evidence that Don Marianohad ever waived his right of usufruct, as contended by the
defendant.

● Rosales v. Castelltort, 509 Phil. 137, 147 (2005). GRN 157044 10/10/05 [Petitioners (Rosales) are the
registered owners of a parcel of land 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
Castelltort. Castelltort and his wife Judith had purchased a lot, Lot 16 of the same Subdivision Plan,
Lina Lopez-Villegas but that after a survey thereof by geodetic engineer Augusto Rivera, he pointed
to Lot 17 as the Lot 16 the Castelltorts purchased. X x x Generally, Article 448 of the Civil Code
provides that the payment of reasonable rent should be made only up to the date appellees serve
notice of their option as provided by law upon the appellants and the court a quo; that is, if such
option is for appellees to appropriate the encroaching structure. In such event, appellants would have
a right to retain the land on which they have built in good faith until they are reimbursed the
expenses incurred by them. This is so because the right to retain the improvements while the
corresponding indemnity is not paid implies the tenancy or possession in fact of the land on which it
is built, planted or sown.
● However, considering that appellants had ceased as builders in good faith at the time that appellant
Miguel was notified of appellees’ lawful title over the disputed property, the payment of reasonable
rent should accordingly commence at that time since he can no longer avail of the rights provided
under the law for builders in good faith.

Art. 460. Trees uprooted and carried away by the current of the waters belong to the owner of the land upon
which they may be cast, if the owners do not claim them within six months. If such owners claim them, they
shall pay the expenses incurred in gathering them or putting them in a safe place. (369a)

Art. 461. River beds which are abandoned through the natural change in the course of the waters ipso facto
belong to the owners whose lands are occupied by the new course in proportion to the area lost. However, the
owners of the lands adjoining the old bed shall have the right to acquire the same by paying the value thereof,
which value shall not exceed the value of the area occupied by the new bed. (370a)
Art. 462. Whenever a river, changing its course by natural causes, opens a new bed through a private estate,
this bed shall become of public dominion. (372a)

14
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. (374)
Art. 464. Islands which may be formed on the seas within the jurisdiction of the Philippines, on lakes, and on
navigable or floatable rivers belong to the State. (371a)
Art. 465. Islands which through successive accumulation of alluvial deposits are formed in non-navigable and
non-floatable rivers, belong to the owners of the margins or banks nearest to each of them, or to the owners of
both margins if the island is in the middle of the river, in which case it shall be divided longitudinally in
halves. If a single island thus formed be more distant from one margin than from the other, the owner of the
nearer margin shall be the sole owner thereof. (373a)

SECTION 3. - Right of Accession with Respect to Movable Property

Art. 466. Whenever two movable things belonging to different owners are, without bad faith, united in such a
way that they form a single object, the owner of the principal thing acquires the accessory, indemnifying the
former owner thereof for its value. (375)
Art. 467. The principal thing, as between two things incorporated, is deemed to be that to which the other has
been united as an ornament, or for its use or perfection. (376)
Art. 468. If it cannot be determined by the rule given in the preceding article which of the two things
incorporated is the principal one, the thing of the greater value shall be so considered, and as between two
things of equal value, that of the greater volume.
In painting and sculpture, writings, printed matter, engraving and lithographs, the board, metal, stone,
canvas, paper or parchment shall be deemed the accessory thing. (377)
Art. 469. Whenever the things united can be separated without injury, their respective owners may demand
their separation.
Nevertheless, in case the thing united for the use, embellishment or perfection of the other, is much more
precious than the principal thing, the owner of the former may demand its separation, even though the thing
to which it has been incorporated may suffer some injury. (378)
Art. 470. Whenever the owner of the accessory thing has made the incorporation in bad faith, he shall lose the
thing incorporated and shall have the obligation to indemnify the owner of the principal thing for the
damages he may have suffered.
If the one who has acted in bad faith is the owner of the principal thing, the owner of the accessory thing shall
have a right to choose between the former paying him its value or that the thing belonging to him be
separated, even though for this purpose it be necessary to destroy the principal thing; and in both cases,
furthermore, there shall be indemnity for damages.
If either one of the owners has made the incorporation with the knowledge and without the objection of the
other, their respective rights shall be determined as though both acted in good faith.(379a)
Art. 471. Whenever the owner of the material employed without his consent has a right to an indemnity, he
may demand that this consist in the delivery of a thing equal in kind and value, and in all other respects, to
that employed, or else in the price thereof, according to expert appraisal. (380)
Art. 472. If by the will of their owners two things of the same or different kinds are mixed, or if the mixture
occurs by chance, and in the latter case the things are not separable without injury, each owner shall acquire
a right proportional to the part belonging to him, bearing in mind the value of the things mixed or confused.
(381)

15
Art. 473. If by the will of only one owner, but in good faith, two things of the same or different kinds are
mixed or confused, the rights of the owners shall be determined by the provisions of the preceding article.
If the one who caused the mixture or confusion acted in bad faith, he shall lose the thing belonging to him
thus mixed or confused, besides being obliged to pay indemnity for the damages caused to the owner of the
other thing with which his own was mixed. (382)
Art. 474. One who in good faith employs the material of another in whole or in part in order to make a thing
of a different kind, shall appropriate the thing thus transformed as his own, indemnifying the owner of the
material for its value.
If the material is more precious than the transformed thing or is of more value, its owner may, at his option,
appropriate the new thing to himself, after first paying indemnity for the value of the work, or demand
indemnity for the material.
If in the making of the thing bad faith intervened, the owner of the material shall have the right to
appropriate the work to himself without paying anything to the maker, or to demand of the latter that he
indemnify him for the value of the material and the damages he may have suffered. However, the owner of the
material cannot appropriate the work in case the value of the latter, for artistic or scientific reasons, is
considerably more than that of the material. (383a)
Art. 475. In the preceding articles, sentimental value shall be duly appreciated. (n)

Tuatis v. Spouses Escol, et al. 619 Phil. 465, 483 (2009); GRN 175399, 10/27/09 (RIGHT OF CHOICE TO
OWNER UNDER ART.448)

Principle: The rule that the choice under Article 448 of the Civil Code belongs to the owner of the land is
in accord with the principle of accession and not with the builder of the building. The landowner cannot
refuse to exercise either option and compel instead the owner of the building to remove it from the land.

Ratio:

Since 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 forced co-ownership, the law has provided a just solution

(1) by giving the owner of the land the option to acquire the improvements after payment of the proper
indemnity,
(2) or to oblige the builder or planter to pay for the land and the 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.

Gist:

16
 ● Visminda Escol, the seller and Ophelia Tuatis, the buyer entered into a Deed of Sale by Installments, the
subject matter of which is a parcel of land in Sindangan.
● It provided that upon the failure of the buyer to pay the remaining balance within the time stipulated, he
shall return the land to the seller, and the seller shall return all the amounts paid by the buyer.
● Tuatis took possession of the land and constructed a residential building. Tuatis asserted that she paid
Visminda the remaining balance of P3000 in the presence of one Erik Selda and thereafter requested
Visminda to sign the absolute deed of sale.
● Visminda refused contending that the purchase price has not been fully paid.
● The RTC dismissed Tuatis’s complaint and also ruled that Tuatis constructed the building in bad faith for
she had knowledge of the fact that Visminda is still the absolute owner of the land and there was also bad
faith on the part of Visminda since she allowed the construction of the building without opposition on her
part. The rights of the parties must, therefore, be determined as if they both had acted in bad faith
● . Their rights in such cases are governed by Article 448 of the Civil Code. The Court of Appeals dismissed
the appeal by Tuatis which resulted to the finality of the appealed decision.
● Visminda filed a writ of execution. Tuatis then moved that the RTC issue an order allowing her to buy the
subject property and maintained that she has the right to choose between being indemnified for the value of
her building or buying from Visminda the parcel of land. During the pendency of the motion, the writ of
execution was enforced. Tuatis filed with the CA a petition for certiorari, prohibition and mandamus but the
same was denied hence this petition.

Ruling: Visminda’s Motion for Issuance of Writ of Execution cannot be deemed as an expression of her choice to
recover possession of the subject property under the first option, since the options under Article 448 of the Civil
Code and their respective consequences were also not clearly presented to her by the 19 April 1999 Decision of the
RTC. She must then be given the opportunity to make a choice between the options available to her after being duly
informed herein of her rights and obligations under both.

Benedicto v. Villaflores, GRN 185020, 10/6/10 (MARKET VALUE OF IMPROVEMENTS IS THE BASIS OF
REIMBURSEMENT)

Principle: 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.

Gist:

In 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.

17
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.

Ruling:

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

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.

Communities Cagayan, inc. v. Spouses Arsenio and Angeles Nanol, et al., 698 Phil. 648 663-664 (2012).

Principle:

A buyer in a contract to sell may be considered as an exception to the general rule under Ar. 448 that builders,
planter, or sowers in good faith, and hence are entitled to 50% of the improvements made thereon as settled by
jurisprudence.

Gist: Sometime in 1994, respondent-spouses Arsenio and Angeles Nanol entered into contract to Sell with petitioner
Communities Cagayan, Inc., whereby the former agreed to sell to respondent-spouses a house and Lots 17 and 19″
locate Block 16, Camella Homes Subdivision, Cagayan de Oro City, for the price of P 368,000.00.
Respondent-spouses, however, did not avail of petitioner’s inhouse financing due to its high interest rates.
Instead, they obtained a loan from Capitol Development Bank, a sister company of petitioner, using the
property as collateral. To facilitate the loan, a simulated sale over the property was executed by petitioner in
favor of respondent-spouses. Accordingly, titles were transferred in the names of respondent-spouses under
Transfer Certificates of Title (TCT) Nos. 105202 and 105203, and submitted to Capitol Development Bank for
loan processing. Unfortunately, the bank collapsed and closed before it could release the loan. Thus, on
November 30, 1997, respondent-spouses entered into another Contract to Sell with petitioner over the same
property for the same price of P 368,000.00. This time, respondent-spouses availed of petitioner’s in-house
financing thus, undertaking to pay the loan over four years, from 1997 to 2001. Sometime in 2000,
respondent Arsenio demolished the original house and constructed a three-story house allegedly valued at P
3.5 million, more or less. In July 2001, respondent Arsenio died, leaving his wife, herein respondent
Angeles, to pay for the monthly amortizations.

Ruling:

As a general rule, Article 448 on builders in good faith does not apply where there is a contractual relation
between the parties, such as in the instant case. The case falls within the ambit of exception of the law since in

18
this case the parties failed to attach a copy of the Contract to Sell. This Court has ruled that this provision
covers only cases in which the builders, sowers or planters believe themselves to be owners of the land or,
at least, to have a claim of title thereto. It does not apply when the interest is merely that of a holder, such as
a mere tenant, agent or usufructuary. Hence, good faith is identified by the belief that the land is owned; or
that – by some title – one has the right to build, plant, or sow thereon.

Department of Education v. Delfina C. Casibang, et al., GRN 192268, 1/27/16 (MARKET VALUE AS THE
BASIS IN APPLYING ART. 448)

Principle: The reckoning period for valuing the property in case the landowner exercised his rights in accordance
with Article 448 shall be the market value of the subject property at the time the landowner elected his choice.

Gist: Sometime in 1965, upon the request of the then Mayor Justo Cesar Caronan, Cepeda allowed the construction
and operation of a school on the western portion of his property. The school is now known as Solana North Central
School, operating under the control and supervision of the petitioner DepEd.

Despite Cepeda's death in 1983, the herein respondents and other descendants of Cepeda continued to tolerate the
use and possession of the property by the school.

Sometime between October 31, 2000 and November 2, 2000, the respondents entered and occupied a portion of the
property. Upon discovery of the said occupation, the teachers of the school brought the matter to the attention of the
barangay captain. The school officials demanded the respondents to vacate the property. However, the respondents
refused to vacate the property, and asserted Cepeda's ownership of the lot.

Ruling: Despite being a possessor by mere tolerance, the DepEd is considered a builder in good faith, since Cepeda
permitted the construction of building and improvements to conduct classes on his property. Hence, Article 448 may
be applied here. This Court finds a need to remand the case to the trial court to determine its value.

TOLERATED ACTS DEFINITION: Those which by reason of neighborliness or familiarity, the owner of
property allows his neighbor or another person to do on the property; they are generally those particular services or
benefits which one's property can give to another without material injury or prejudice to the owner, who permits
them out of friendship or courtesy."and, Tolentino continues, even though "this is continued for a long time, no right
will be acquired by prescription.
Heirs of Victorino Sarili v. lagrosa, 724 Phil. 608, 623 (2014) (BUILDER IN BAD FAITH UNDER ART. 449)

19
Principle:

A builder r who is aware of the defect of the title and does not exercise due diligence in inquiring the capacity of a
purported agent is not a builder in good faith. Hence, he/she is not entitled to indemnity under Art. 449.

BUILDER IN GOOD FAITH: A person asserts title to the land on which he builds, i.e., that he be a possessor in
concept of owner, and that he be unaware that there exists in his title or mode of acquisition any flaw which
invalidates it. An honest belief, the absence of malice and the absence of design to defraud or to seek an
unconscionable advantage. It implies honesty of intention, and freedom from knowledge of circumstances which
ought to put the holder upon inquiry.

Gist:

Respodent Pedro Lagrosa is the owner of a parcel of land situated in Caloocan City. He resided in California, USA
and during a vacation in the Philippines found that a new certificate of title was issued by the RD in the name of
Victorino Sarili by virtue of an alleged falsified document by Sps. Sarili and the RD. Sps. Sarili maintained that they
are innocent buyers for value having purchased the property from Ramon B. Rodriguez who possessed and
presented a Special Power of Attorney to sell/dispose the property.

Ruling: As for Sps. Sarili, they knew — or at the very least, should have known — from the very beginning that
they were dealing with a person who possibly had no authority to sell the subject property considering the palpable
irregularity in the subject SPA’s acknowledgment. Yet, relying solely on said document and without any further
investigation on Ramos’ capacity to sell, Sps. Sarili still chose to proceed with its purchase and even built a house
thereon. Based on the foregoing, it cannot be seriously doubted that Sps. Sarili were actually aware of a flaw or
defect in their title or mode of acquisition and have consequently built the house on the subject property in bad faith
under legal contemplation.

20
Mendoza v. De Guzman, 52 Phil. 164, 171 [1928]. (NECESSARY EXPENSES)

Principle:

Necessary expenses are those made for the preservation of the thing; those without which the thing would
deteriorate or be lost; those that augment the income of the things upon which they are expended. Among the
necessary expenditures are those incurred for cultivation, production, and upkeep.

Gist:
● Leandra Solis and her husband Bernardo Solis filed a case against Martin Mendoza for the recovery of a
piece of land in Tayabas, Philippines.
● Mendoza was absolved from the complaint and was granted possession of the land.
● In the cadastral proceedings, the land was adjudicated in favor of Martin Mendoza and Natalio Enriquez,
subject to the right of retention by Manuel de Guzman until he is indemnified for the improvements made
on the land.
● De Guzman obtained a writ of possession for the land and has had dominion over it since then.
● Mendoza and Enriquez filed a case to determine the value of the improvements made by De Guzman,
require him to account for the fruits received from the land, and seek restitution of possession.

Ruling:

The Supreme Court ruled in favor of the plaintiffs, affirming the decision of the lower court. The court confirmed
the following rulings made by the trial judge:

1. The value of the indemnity to be paid to De Guzman should be fixed according to the necessary and useful
expenses incurred by him in introducing improvements on the land.
2. The plaintiffs have the right to make their own improvements on the land upon payment to De Guzman,
who has the right to retain the land until the expenditures have been refunded.
3. De Guzman is obliged to render a detailed and just account of the fruits and other profits received from the
land.
4. The value of the fruits received by De Guzman should first be applied to the payment of the indemnity, and
any excess should be returned to the plaintiffs.

Depra v. Dumlao, GRN. L-57348, 5/16/85, 136 SCRA 475. (RIGHT OF CHOICE IS TO THE OWNER
UNDER ART. 448)

Principle: In view of the impracticality of creating a state of forced co-ownership, the law has provided a just
solution by giving the owner of the land the option:

3. To acquire the improvements after payment of the proper indemnity, or

4. to oblige the builder or planter to pay for the land and the sower to pay the proper rent.

NOTE: 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.

21
Gist: Sometime in 1972, when DUMLAO constructed his house on his lot, the kitchen thereof had encroached on an
area of thirty four (34) square meters of DEPRA's property, After the encroachment was discovered in a relocation
survey of DEPRA's lot made on November 2,1972, his mother, Beatriz Depra after writing a demand letter asking
DUMLAO to move back from his encroachment, filed an action for Unlawful Detainer on February 6,1973 against
DUMLAO in the Municipal Court of of Dumangas.

Spouses Macasaet v. Spouses Macasaet, 482 Phil. 853, 871-872 (2004)

Principle: Those who occupy the land of another at the latter’s tolerance or permission, without any contract
between them, are necessarily bound by an implied promise that the occupants will vacate the property upon
demand. A summary action for ejectment is the proper remedy to enforce this implied obligation. The unlawful
deprivation or withholding of possession is to be counted from the date of the demand to vacate.

Gist: Petitioners Ismael and Teresita Macasaet and Respondents Vicente and Rosario Macasaet are first-degree
relatives. Ismael is the son of respondents, and Teresita is his wife.

In 1997, the parents filed with the Municipal Trial Court in Cities (MTCC) of Lipa City an ejectment suit against the
children. Respondents alleged that they were the owners of two (2) parcels of land covered by, situated at
Banay-banay, Lipa City; that by way of a verbal lease agreement, Ismael and Teresita occupied these lots in March
since 1992 and used them as their residence and the situs of their construction business; and that despite repeated
demands, petitioners failed to pay the agreed rental of ₱500 per week.

Ismael and Teresita denied the existence of any verbal lease agreement. They claimed that respondents had invited
them to construct their residence and business on the subject lots in order that they could all live near one another,
employ Marivic (the sister of Ismael), and help in resolving the problems of the family.

They added that it was the policy of respondents to allot the land they owned as an advance grant of inheritance in
favor of their children. Thus, they contended that the lot covered by TCT No. T-103141 had been allotted to Ismael
as advance inheritance. On the other hand, the lot covered by TCT No. T-78521 was allegedly given to petitioners as
payment for construction materials used in the renovation of respondents’ house.

The MTCC ruled in favor of respondents and ordered petitioners to vacate the premises. It opined that Ismael and
Teresita had occupied the lots, not by virtue of a verbal lease agreement, but by tolerance of Vicente and Rosario.

RTC: upheld the findings of the MTCC. However, allowed respondents to appropriate the building and other
improvements introduced by petitioners, after payment of the indemnity provided for by Article 448 in relation to
Articles 546 and 548 of the Civil Code.

Ruling: The instant case is factually similar to Javier v. Javier. In that case, this Court deemed the son to be in good
faith for building the improvement (the house) with the knowledge and consent of his father, to whom belonged the
land upon which it was built. Thus, Article 448 was applied. The established facts of this case show that
respondents fully consented to the improvements introduced by petitioners. In fact, because the children occupied
the lots upon their invitation, the parents certainly knew and approved of the construction of the improvements
introduced thereon. Thus, petitioners may be deemed to have been in good faith when they built the structures on
those lots.

22
Pleasantville Developments Corporation v. CA, Kee and Jardinico

Principle:

A lot buyer who constructs improvements on the wrong property erroneously delivered by the owner’s agent, (C. T.
Torres) is a builder in good faith.

Gist:

Edith Robillo purchased from petitioner a parcel of land designated as Lot 9, Phase II and located at Taculing Road,
Pleasantville Subdivision, Bacolod City. In 1975, respondent Eldred Jardinico bought the rights to the lot from
Robillo. At that time, Lot 9 was vacant.

Upon completing all payments, Jardinico secured from the Register of Deeds of Bacolod City on December 19,
1978 Transfer Certificate of Title No. 106367 in his name. It was then that he discovered that improvements had
been introduced on Lot 9 by respondent Wilson Kee, who had taken possession thereof.

It appears that on March 26, 1974, Kee bought on installment Lot 8 of the same subdivision from C.T. Torres
Enterprises, Inc. (CTTEI), the exclusive real estate agent of petitioner. Under the Contract to Sell on Installment,
Kee could possess the lot even before the completion of all installment payments. On January 20, 1975, Kee paid
CTTEI the relocation fee of P50.00 and another P50.00 on January 27, 1975, for the preparation of the lot plan.
These amounts were paid prior to Kee's 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 Kee's 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, Jardinico's 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.

23
Ruling:

Petitioner fails to persuade this Court to abandon the findings and conclusions of the Court of Appeals that Kee was
a builder in good faith. Good faith consists in the belief of the builder that the land he is building on is his and his
ignorance of any defect or flaw in his title. And as good faith is presumed, petitioner has the burden of proving bad
faith on the part of Kee. At the time he built improvements on Lot 8, Kee believed that said lot was what he bought
from the petitioner. He was not aware that the lot delivered to him was not Lot 8. Thus, Kee's good faith. Petitioner
failed to prove otherwise.

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. Torres Enterprises, Inc. are declared
solidarily liable for damages due to negligence; however since the amount and/or extent of such damages was
proven during the trial, the same cannot now be quantified and awarded;

(3) Petitioner Pleasantville Development Corporation and respondent C.T. Torres Enterprises, Inc. are ordered to pay
in solidum the amount of P3,000.00 to Jardinico as attorney's fees, as well as litigation expenses; and

(4) The award of rentals to Jardinico is dispensed with.

24
Sarmiento v. Agana, GRN L-57288 4/30/84

Principle:

Gist:

Ruling:

[We agree that Ernesto and wife were builders in good faith in view of the peculiar circumstances under
which they had constructed the residential house. As far as they knew, the land was owned by Ernesto’s
mother-in-law who, having stated they could build on the property, could reasonably be expected to later on
give them the land.]

Racaza v. Susan Realty, 18 SCRA 1172

25
Principle:

Gist:

Ruling:

Moslems v. Soriano, 124 SCRA 190

Principle:

Gist:

Ruling:

Floreza v Evangelista, 96 SCRA 130

26
Principle:

Gist:

Ruling:

De Laureano v. Adil, 71 SCRA 148

Principle:

Gist:

Ruling:

MWSS V. CA, 143 SCRA 623

27
Principle:

Gist:

Ruling:

Sabido v. IAC 165 SCRA 498

Principle:

Gist:

Ruling:

28
Ysrael v. Madrid, 45 OG 2177

Principle:

Gist:

Ruling:

Bagtas v. CA, 176 SCRA 177

Principle:

Gist:

Ruling:
Government of the Philippines v. Colegio de San Jose, 53 Phil 423

29
Principle:

Gist:

Ruling:

(“RIPRAP”) Daclison v. Baytion, GRN 219811, 5/6/16 (REQUISITES FOR ACCRETION (457) AND WHAT
CONSTITITES AS IMPROVEMENT (445)

Principles:

(1)

Article 457 of the New Civil Code provides:

To the owners of lands adjoining the banks of rivers belongs the accretion which they gradually receive from
the effects of the current of the waters.

In other words, the following requisites must concur in order for an accretion to be considered, namely:

(1) that the deposit be gradual and imperceptible;

(2) that it be made through the effects of the current of the water; and,

(3) that the land where accretion takes place is adjacent to the banks of rivers.

(2) The word “thereon” under Art. 445 means that the improvement must be made, constructed or
introduced within or on th property, and not outside of it.

Gist:

30
Private respondingt Baytion is a co-owner of a parcel of land consisting of 1,500 square meters. The said
property was inherited by him and his siblings from their parents and, as agreed upon, was being
administered by him. As administrator, he leased portions of the property to Leonida Dela Cruz (Leonida)
who used it for her business of selling rocks, pebbles and similar construction materials.

When the lease of Nida expired sometime in May 2008, Daclison and other persons acting under her (Baytion)
took possession of the portion leased and occupied by Leonida without the prior knowledge and consent of
Baytion. Since then, Daclison had been occupying the contested portion and using it for his business of selling
marble and other finishing materials without paying anything to Baytion.

Upon learning of Daclison’s unauthorized entry into the subject portion of the property, sometime in June
2008, Baytion demanded that he vacate it. Despite oral and written demands to vacate, Daclison refused to do
so. This prompted Baytion to file the complaint for forcible entry and damages.

Ruling:

Baytion does not have the better right over the contested The disputed property was the filled-up portion
between the riprap constructed by the government and the property. Here, this contested portion cannot be
considered an accretion. To begin with, the land came about not by reason of a gradual and imperceptible
deposit.1âwphThe deposits were artificial and man-made and not the exclusive result of the current from the
creek adjacent to his property. Baytion failed to prove the attendance of the indispensable requirement that
the deposit was due to the effect of the current of the river or creek. Alluvion must be the exclusive work of
nature and not a result of human intervention.

Celestial v. Cachopero, GRN 142595, 20/25/03

Principle:

Gist:

Ruling:

Sps. Yu v. Topacio, GRN 216024, 9/18/19

31
Principle:

Gist:

Ruling:

Tandog v. Macapagal, GRN 144208, 9/11/07

Principle:

Gist:

Ruling:

Dolar v. Brgy. Lublub, GRN 152663, 11/8/05

32
Principle:

Gist:

Ruling:

Phil-Ville Development & Housing Corp. v. Bonifacio, GRN 167391, 6/8/11

Principle:

Gist:

Ruling:

Faja v. CA, GRN L-45045, 2/28/77

33
Principle:

Gist:

Ruling:

Mamadsual v. Moson, GRN 175375, 6/23/09

Principle:

Gist:

Ruling:

Metrobank v. Alejo, GRN 141970, 9/10/01

34
Principle:

Gist:

Ruling:

Jalandoni v. PNB, GRN 47579, 10/9/81 (ART. 478)

35
Principle: A court of equity will remove a cloud cast upon title to property by a lien, interest, or title which has
become barred by reason of laches or the running of the statute of limitations. This is the rule stated under Art. 478
of the Civil Code.

Gist: Eduardo Jalandoni was ordered to pay the Philippine National Bank the sum of P63,297.53 with interest by
virtue of a final judgment rendered by the Court of First Instance of Manila on March 31, 1959.
● Within five years from the entry of judgment, the sheriff of Silay City levied upon Jalandoni's property and
a Notice of Embargo was annotated on the property.
● No sale at public auction to satisfy the judgment was conducted or initiated by the bank.
● More than a decade later, on April 22, 1974, Jalandoni filed a petition for the cancellation of the levy on the
ground of prescription.
● The bank opposed the petition, arguing that the execution sale can be made beyond the ten-year period as
long as the levy was effected within five years from the entry of judgment.
● The court directed Jalandoni to ask the Manila court to quash the writ of execution on the ground of
prescription and refile his petition.
● Jalandoni then filed an action to quiet title or for the cancellation of the notice of embargo, arguing that the
levy had become inefficacious and constituted a cloud on his title

Ruling: We find that the "notice of embargo" annotated in 1964 on Jalandoni's title is no longer enforceable and has
become a cloud upon his title. Following the rule in the Ansaldo case, he and his heirs have a good cause of action
under article 476 of the Civil Code for the removal of that state encumbrance.

QUIETING OF TITLE: It is the action to remove clouds from title to real estate. It originates from equity
jurisprudence.

36
PURPOSE:
An adjucation that a claim of title to an interest in property, adverse to that the complainant, is invalid, so that the
complainant and those claiming under him may be forever afterward free from any danger of the hostile claim.

EQ: Why is it important? What are its objectives?

(1) The prevention of litigation;

(2) The protection of the true title and possession, and
(3) The real interest of both parties, and that of right and justice, which require that the precise state of the title be
known.

Action to quiet title Action to remove a cloud

An action to put an end to vexatious litigation in respect to Intended to procure the cancellation,
the property involved. delivery of, release of instrument,
encumbrance, or claim constitution. A clap,
on plaintiff’s title and which may be used to
injure or vex him in the enjoyment of title.
Plaintiff asserts his own estate and declares generally that the Paintifff not only declares his own title, but
defendant claims some estate in the land, without defining it, also avers the source and nature of the
and avers that the claim is without foundation, and calls on defendant’s claim, points out its defects, and
the defendant to set forth the nature of his claim, so that it prays that it be declared void.
may be determined by decree.

QUIETING TITLE ARE QUASI IN REM

TLN: The subject matter of an action to quiet title or remove cloud does not extend to personal property unless the
statute expressly so declares.

Examples of Cloud on title:

(1) A title or lien obtained by fraud, deceit or misrepresentation;

(2) Forged instrument
(3) Unauthorized or prohibited conveyances or encumbrances by incapacitated persons;
(4) Acquisitive title;
(5) Adverse possession.

Q: What does it mean that the Cloud on title must be substantial?

A: It the doubt as it may casts suspicion on the title or interest to which it is hostile and injurious to the reputation of
the one disposing it and the market value of the property.

37
Art. 477. Only legal or equitable title or interest of a person over a property, and not possession thereon is needed
since it is a remedy afforded to the person out of possession.

CO-OWNERSHIP

Sanchez-Roman:

“The right of common dominion which two or more persons have in a spiritual part of a thing, not materially or
physically divided.”

Manresa:

“Manifestaron of the private right of ownership, which instead of being exercised by the owner in an exclusive
manner over the things subject to it, is exercised by two or more owners and the undivided thing or right to which it
refers is one and the same.”

De Diego:
“Co-ownership is not a real right distinct from ownership, but is a mere form or manifestation of ownership.”

Characteristics of Co-ownership:

(1) Plurality of subjects (the co-owners);

(2) Unity of or material indivision, there is a single object. It is not materially divided. This is what binds the
co-owners;
(3) The existence of ideal shares (What defines the rights and obligations of the co-owners).
NOTE: Relationship of co-owners is fiduciary in character and attribute.

Causes of Co-Ownership:
(1) Law - (e.g. legal conjugal partnerships).
(2) Contracts -(e.g. An agreement where two parties agree to buy a piece of land whereby one pays for its purchase
price).
(3) Succession - (e.g. In intestate succession, the undivided properties of the heirs is transmitted to the surviving
heirs which become the new owners thereof).
(4) Foruitous event or chance - (e.g. commission, confusion, and discovery of hidden treasure by a stranger).
(5) Occupancy - (e.g. When two persons catch a wild beast).

Co-Ownership Joint Ownership

Heirs inherit the share of property Upon death of co-owner the surviving joint owners are
of the deceased co-owner surrogated in his rights or becomes the co-owners of the
same share in the property of the deceased co-owner.

38
Co-owner can dispose of his Cannot unless without consent of all co-owners since it is
UNDIVIDED share freely prejudicial to their rights.
Minority of one joint-owner does Minority of one joint-owner inures to the benefit of other
NOT inures to the benefit of other joint owners by PRESCRIPTION.
joint owners by PRESCRIPTION.

Co-Ownership Partnership
Last will testament or law Created by agreement or contract
Collective enjoyment and maintenance of utility and Profit driven
preservation of the thing owned
No Juridical personality Juridical personality exist
Period stipulation is void Period may be more than one year
Special authority is needed for representation Mutual representation of partners
There is freedom of disposition of each share in the Right is intransmissible to other partners
co-ownership without latter’s consent
Death of any co-owners does not result to extinguishment Death or incapacity of a partner extinguishes
partnership
Distribution of profits is invariable (Proportional pag Subject to stipulations on law on partnership
beneficial).

Art. 486. Limitation on Co-Owner’s Right:

(1) To the purpose for which it is intended;
(2) Without prejudice to the interests of the co-ownership;
(3) Without preventing the others co-owners from making use thereof according to their own rights.

Art. 488. Covers only NECESSARY EXPENSES.

TLN: EXPRESS RENUNCIATION for NECESSARY EXPENSES AND RENT IS ALLOWED.

Art. 494. No co-owner shall be obliged to remain in the co-ownership. Each co-owner may demand at any time the
partition of the thing owned in common, insofar as his share is concerned.

39
Nevertheless, an agreement to keep the thing undivided for a certain period of time, not exceeding ten years, shall be
valid. This term may be extended by a new agreement.

A donor or testator may prohibit partition for a period which shall not exceed twenty years.

Neither shall there be any partition when it is prohibited by law.

No prescription shall run in favor of a co-owner or co-heir against his co-owners or co-heirs so long as he expressly
or impliedly recognizes the co-ownership.

RULE FROM TLN:

While prescription among co-owners cannot take place when the acts of ownership exercised are vague and
uncertain, such prescription arises and produces all its effects when the acts of ownership do not have any doubt as
to the ouster of the rights of the other co-owners.

PARTITION DEFINED: A division between two or more persons of real and personal property which, they own
as co-partners, joint tenants or tenants in common, affected by the setting apart of such interests so that they may
enjoy and possess it in severalty.

PARTITION BY AGREEMENT: A partition by agreement may be made orally or in writing. An oral agreement
for the partition of the property owned in common is valid and enforceable upon parties. The Statute of Frauds has
no operation in this kind of agreements, for partition is not a conveyance of property but simply a segregation and
designation of that part of the property which belong to co-owners.

Panganiban v. Oamil, GRN 149313, 1/22/08

Principle:

Gist:

Ruling:

40
Rizal v. Navarro, GRN 151898, 3/14/12

Principle:

Gist:

Ruling:

41
Cruz v. Catapang, GRN 164110, 2/12/08

Principle:

Gist:

Ruling:

42
De Guia v. CA, GRN 120864, 10/8/03

Principle:

Gist:

Ruling:

43
Punsalan v. Boon Liat, 44 Phil. 320, 324 (1923).

Principle: Even if a co-owner sells the whole property as his, the sale will affect only his own share, but not those
of the other co-owners who did not consent to the sale.

Gist:

Ruling:

44
Enriquez v. Watson, 22 Phil 624 [lease, one co-owner was a minor, majority decision of lessors binding]

Principle:

The decision of a majority of the co-owners with regard to the management and better enjoyment of the things
owned in common is obligatory.

Gist:

Enriquez (Plaintiffs) were co-owners of a lot and a building leased to Watson (defendant) for a period of 12 years
with permission to renew the lease further for another 6 years. 7 of the plaintiffs were of age when they executed the
contract of lease. The other Enriquez (Plaintiffs) was then a minor but he was represented by his judicial guardian.
This action was brought to annul the lease contract on the ground that the lease was void and ineffective on the basis
of the minority of one of the co-owners at the time of the execution of the contract.

Ruling:

Plaintiffs did not claim that the contract of lease which was made for a period of more than 6 years prejudiced the
interests of the minor. In fact, all the co-owners, including the plaintiff in this case with the assistance of his
judicial guardian signed the contract of lease in favor of A.S. Watson & Co. for 18 years.

Under Direcion General doctrine: A contract of lease would be valid even if the minor co-owner was not represented
by a guardian. In this case, there is no question that the minor was represented by his judicial guardian, hence, there
can be no question with regard to the validity of the contract of lease.

NOTE: A contract of lease is merely an act of administration.

45
Melencio v. Dy Tiao Lay, 5 Phil 99 [act of leasing: would it be an act of administration or an act of ownership? –
Tolentino: depends.

Relevant provision:

Art. 492. For the administration and better enjoyment of the thing owned in common, the resolutions of the
majority of the co-owners shall be binding.

There shall be no majority unless the resolution is approved by the co-owners who represent the controlling
interest in the object of the co-ownership.

Should there be no majority, or should the resolution of the majority be seriously prejudicial to those
interested in the property owned in common, the court, at the instance of an interested party, shall order such
measures as it may deem proper, including the appointment of an administrator.

Whenever a part of the thing belongs exclusively to one of the co-owners, and the remainder is owned in
common, the preceding provision shall apply only to the part owned in common.

Principle:

TLN:

OLD CODE: If the lease of immovable property is for not more than 6 years, it constitutes an act of administration,
and resolution of the majority co-owners would be sufficient. On the other hand, if it is more than 6 years, it is
considered as an act of strict ownership, and the consent of ALL the co-owners is required.

PRESENT CODE:

Mere majority of the consent of co-owners does NOT constitute the contract of lease in the following instances:

(1) When the lease is recorded in theRegistry of Property;

(2) When the lease is for more than one year;

46
Basis: Art. 1648 (Registration of lease in the registry of property). Art. 1878 (Lease of a real property for more than
1 year).

Gist:

After the death of the owner of the land in question in 1905, his widow and three of his children executed a contract
of lease of the land in favor of the predecessor in interest of the defendant. The term of the lease was for 20 years,
extendible for the same period at the option of the lessee. Further, it was stipulated that at termination of the original
period of lease or its extension, the lessors might purchase all the building on the land at a price to be fixed by
experts appointed by the parties, but if the lessors should fail to take advantage of that privilege, the lease would
continue for another and further period of 20 years. The lease contract was signed by two of the co-heirs. In 1920,
the heirs made an extrajudicial partition of the inheritance, and among other things, the land here in question fell to
the share of the plaintiff herein. Plaintiffs brought this action to recover possession of the land leased to defendant.
They insisted that they had never known any knowledge of the existence of such a contract of lease and that the
contract was executed without their consent.

Ruling:

The case is factually materially different from the Enriquez v. Watson, only a SMALL MAJORITY of the co-owners
executed the lease in question of 6 years; in Enriques, the contract of lease was granted by ALL the co-owners for 18
years.
TLN: In determining majority, what is considered is the majority in INTEREST not in NUMBERS. Majority also
entails ABSOLUTE majority.

Basis: Art. 2075 of the Argentinian code.

Art. 493. Each co-owner shall have the full ownership of his part and of the fruits and benefits pertaining thereto,
and he may therefore alienate, assign or mortgage it, and even substitute another person in its enjoyment, except
when personal rights are involved. But the effect of the alienation or the mortgage, with respect to the co-owners,
shall be limited to the portion which may be allotted to him in the division upon the termination of the co-ownership.

NOTE: LIMITATION:

TLN: A co-owner cannot alienate rights which are purely personal

Examples:

1. Right to use
2. Right to habitation
3. To make a disposition of the thing different from what was agreed upon by the co-owners or adapted to its
nature;

TLN: Any co-owner may extinguish an encumbrance on their real right, such as easement or mortgage, because
everything that is beneficial to the community may represent the others.

47
Rodriguez v. CFI, 88 Phil. 417 (1951). [The ultimate authorities in civil law, recognized as such by the Court, agree
that co-owners such as respondents have over their part, the right of full and absolute ownership. Such right is the
same as that of individual owners which is not diminished by the fact that the entire property is co- owned with
others. That part which ideally belongs to them, or their mental portion, may be disposed of as they please,
independent of the decision of their co-owners. So we rule in this case. The respondents cannot be ordered to sell
their portion of the co-owned properties. “Each party is the sole judge of what is good for him.”]

Principle:

48
Gist:

Ruling:

Arambulo & Dela Cruz v. Nolasco, 189420, 3/26/14 [Can co-owners, can be compelled by the court to give their
consent to the sale of their shares in the co-owned properties.] Ruling that the trial court erred in its conclusion, the
Court of Appeals correctly relied on Article 493 in support of the finding that respondents cannot be compelled to
agree with the sale.
There is co-ownership whenever, as in this case, the ownership of an undivided thing, belongs to different persons.
Article 493: co-owner > full ownership of his part and of its fruits and benefits.
Article 493 > each as co-owner has full ownership of their parts can sell their fully owned part. The sale by the
petitioners of their parts shall not affect the full ownership by the respondents of the part that belongs to them.

49
Their part which petitioners will sell shall be that which may be apportioned to them in the division upon the
termination of the co-ownership. With the full ownership of the respondents remaining unaffected by petitioners’
sale of their parts, the nature of the property, as co-owned, likewise stays. In lieu of the petitioners, their vendees
shall be co-owners with the respondents. See Art. 493. Each co-owner shall have the full ownership of his part and
of the fruits and benefits pertaining thereto, and he may therefore alienate, assign or mortgage it[,] and even
substitute another person in its enjoyment, except when personal rights are involved. But the effect of the alienation
or [the] mortgage, with respect to the co-owners, shall be limited to the portion which may be allotted to him in the
division upon the termination of the co-ownership.
As early as 1923… held even if a co-owner sells the whole property as his, the sale will affect only his own share
but not those of the other co-owners who did not consent to the sale.

Principle:

Gist:

Ruling:

Bailon-Casilao v. Court of Appeals, 243 Phil. 888 (1988) [Consequently, by virtue of the sales made by Rosalia and
Gaudencio Bailon which are valid with respect to their proportionate shares, and the subsequent transfers which
culminated in the sale to private respondent Celestino Afable, the said Afable thereby became a co- owner of the
disputed parcel of land as correctly held by the lower court since the sales produced the effect of substituting the
buyers in the enjoyment thereof.]

Principle:

50
Gist:

Ruling:

Vda. De Castro v. Atienza, 53 SCRA 264 [lease of co-owned property – valid];

Principle: A co-owner may validly lease his undivided interest to a third party independently of other co-owners,
but the co-owner has no right to sell or alienate a concrete, specific or determinate part of the things owned in
common, because his right over the thing is represented by a quota or ideal portion without any physician
adjudication.

51
Gist:

Ruling:

Ramirez v. Bautista, 14 Phil 528 [Two fishponds, to marriages, two sets of children = co-owners. Sale by first
marriage children, illegal only as to the share of the second set of children.]

Principle:

52
Gist:

Ruling:

Aguilar v. CA, GRN 76351, 10/29/1993

Principle:

Gist:

53
Ruling:

Hrs. of Abalos v Bucal, GRN 156224, 2/19/08

Principle:

Gist:

54
Ruling:

Aguirre v. CA, GRN 122249, 1/29/04 [Remedy against sale or mortgage of entire co-owned property – partition,
not nullification]

Principle:

Gist:

55
Ruling:

Basa v. Aguilar, GRN L-30994, 9/30/82 [Legal Redemption – art. 1623] Article 1620. A co-owner of a thing may
exercise the right of redemption in case the shares of all the other co-owners or of any of them, are sold to a third
person. If the price of the alienation is grossly excessive, the redemptioner shall pay only a reasonable one.
Should two or more co-owners desire to exercise the right of redemption, they may only do so in proportion to the
share they may respectively have in the thing owned in common. (1522a)

Principle:

56
Gist:

Ruling:

PNB v. Hrs. of Militar, GRN 164801, 8/18/05

Principle:

Gist:

57
Ruling:

Hrs. of Juanita Padilla v. Magdua, GRN 176858, 9/15/10

Principle:

Gist:

58
Ruling:

De Luna v. Maningding, GRN L-46296, 9/24/91

Principle:

Gist:

59
Ruling:

Paz Galvez v. CA, GRN 157954, 3/24/06

Principle:

Gist:

60
Ruling:

Maglucot v. Maglucot, GRN 132518, 3/28/00 [estoppel – not a party but benefited]

Principle:

Gist:

61
Ruling:

Hrs. of Marasigan v. Marasigan, 156078, 3/14/08 [property division will be prejudicial, so SC ordered
reimbursement to other co-owners instead]

Principle:

Gist:

62
Ruling:

Land Bank v. Navarro, GRN 196264, 6/6/2019

Principle:

Gist:

63
Ruling:

Lanuza v. Luna, GRN 229775, 3/11/19 [Dynamics of partition]

Principle:

Gist:

64
Ruling:

65