Right to Accession:
2. Immovable Property;
Cases:
ZAPATA vs. DIRECTOR OF LANDS, 5 SCRA 335;
Hilario estate was bounded on the western side by the San Mateo River.
To prevent its entry into the land, a bamboo and lumber post dike or ditch was constructed
on the northwestern side. This was further fortified by a stonewall built on the northern side.
For years, these safeguards served their purpose.
1937 - an extraordinary flood occurred in the entire place including the neighboring barrios
and municipalities. The River destroyed the dike on the northwest, left its original bed and
meandered into the Hilario estate, segregating from the rest thereof a lenticular piece of land.
The disputed area is on the eastern side of this lenticular strip which now stands between the
old riverbed site and the newcourse."
1945 - U.S. Army opened a sand and gravel plant within the premises and started scraping,
excavating and extracting soil, gravel and sand from the nearby areas along the River. The
operations eventually extended northward into this strip of land.
A claim for damages was filed with the U.S. War Department by Luis Hidalgo, administrator
of Dr. Hilario’s estate. U.S. Army paid.
1947 - the plant was turned over to City of Manila, who took over its operations and continued
the extractions and excavations of gravel and sand from the strip of land along an area near
the River.
Hilario filed a complaint for injunction and damages against City Engineer of Manila, District
Engineer of Rizal, the Director of Public Works, and Engr. Bosuego, the Engineer-in-charge of
the plant.
Defendants' affirmed that the extractions were made from the riverbed.
Intervenors, Bureau of Mines and Atty. Maximo Calalang, were allowed to join the litigation.
Bureau of Mines complained that the disputed area was within the bed of the River so that
plaintiff should not only be enjoined from making extractions there from but should also be
ordered to pay the fees and penalties for the materials taken by him.
March 14, 1954 - Defendants filed a petition for injunction against plaintiff and intervenor
Calalang alleging and prayed that:
1. the latter have fence off the disputed area in contravention of an agreement had between
the latter and the Director of Public Works where¬in the defendants were allowed to continue
their operations but subject to the final outcome of the pending suit.
Plaintiff also converted his claim to one purely for damages directed against the City of Manila
and the Direc¬tor of Public Works, in the amount of P1,000,000.00, as the cost of materials
taken since 1949, as well as those to be extracted there from until they stop their operations.
Manila City denied ownership of the plant and claimed that the City Engineer acted merely as
a deputy of the Public Works Director.
The other defendants put up, as special defense, the agreement between plaintiff and the
Public Works Director, and asserted a P1.2 million counterclaim for damages against plaintiff.
The rest renewed the same defense: that the disputed area was part of the public domain,
since it was situated on the riverbanks.
November 3, 1954 - City Engineer of Manila filed a petition to delimit the area of excavation
and asked the lower court to authorize his men to extend their operations west of the
camachile tree in the disputed area. But, later DENIED
2. They are perpetually enjoined from extracting any sand or gravel from plaintiff's property
which is two-fifths northern portion of the disputed area.
None of the parties seemed to be satisfied so they all sought a reconsideration of the same.
ISSUE: W/N when a river, leaving its old bed, changes its original course and opens a new
one through private property, would the new riverbanks be considered as public ownership?
HELD:
SC set aside the decision and orders appealed from, and entered another judgment to the
effect that the City of Manila and the Director of Public Works, and his agent and employees,
are absolved of liability from extracting materials from subject property (of public domain);
Portion within the strip of land question declared not part of public domain and confirmed as
part of Hilario’s private property.
No Costs.
HELD:
1. Old Civil Code and Law of Waters of 1866 controlling law Since the change in the
course of the River took place in 1937, long before the present Civil Code took effect, the
question should be determined in accordance with the provisions of the old Civil Code and
those of the Law of Waters of 3 August 1866.
2. All riverbanks, as part of the riverbeds, are of public ownership Under the old Civil Law and
the Law of Waters, all riverbanks are of public ownership, including those formed when a river
leaves its old bed and opens a new course through a private estate. Artcile 339 of the old Civil
Code is very clear. Without any qualifications, it provides that “that devoted to public use,
such as roads, canals, rivers, torrents, ports and bridges constructed by the State, riverbanks,
shores, roadsteads, and that of a similar character” are property of public ownership. Further,
the riverbank is part of the riverbed. Article 73 of the Law of Waters which provides that the
phrase “banks of a river” is understood those lateral strips of zones of its beds which are
washed by the stream only during such high floods as do not cause inundations. The use of
the words “of its bed [de sus alveos] “ clearly indicates the intent of the law to consider the
banks for all legal purposes, as part of the riverbed. Thus, the banks of the River are part of
its bed. Since undeniably all beds of river are of public ownership, it follows that the banks,
which form part of them, are also of public ownership.
4. New bed, when river changes course, is of public ownership; Means to recover
Article 372 of the old Civil Code which provides that “whenever a navigable or floatable river
changes its course from natural causes and opens a new bed through a private estate, the
new bed shall be of public ownership, but the owner of the estate shall recover it in the event
that the waters leave it dry again either naturally or as the result of any work legally
authorized for this purpose.” Banks are not mentioned in the provision, as the nature of banks
follows that of the bed and the running water of the river.
All these constitute the river. American authorities are in accord with this view, as that “‘
River’ consists of water, bed and banks”; and that “A ‘river’ consists of water, a bed and
banks, these several parts constituting the river, the whole river. It is a compound idea; it
cannot exist without all its parts. Evaporate the water, and you have a dry hollow. If you
could sink the bed, instead of a river you would have a fathomless gulf. Remove the banks,
and you have, a boundless flood”
6. River is of public ownership, elements follow same nature of ownership; Law explicit
Since a river is but one compound concept, it should have only one nature, i.e., it should
either be totally public or completely private. Since rivers are of public ownership, it is implicit
that all the three component elements be of the same nature also. Still, the law expressly
makes all three elements public. Thus, riverbanks and beds are public under Artciles 339 and
407, respectively, of the Code, while the flowing waters are declared so under Articles 33,
par. 2 of the Law of Waters of 1866.
8. Article 553 of the old Civil Code does not intend to authorize private acquisition of river
banks but recognizes vested rights of riparian owners; History of ownership of River Banks
Article 553 was never intended to authorize the private acquisition of river banks, as this
would conflict with clear legislative policy enunciated in Article 339 of the Code that all
riverbanks were of public ownership. The article merely recognized and preserved the vested
rights of riparian owners who, because of prior law or custom, were able to acquire ownership
over the banks.
This was possible under the Siete Partidas which was promulgated in 1834. Under Law 6, Title
28, Partida 3, the banks of rivers belonged to the riparian owners, following the Roman Law
rule. But subsequent legislation radically changed this rule. By the Law of Waters of 3 August
1866, riverbanks became of public ownership, albeit impliedly only because considered part
of the bed which was public, by statutory definition. This law, while expressly repealing all
prior inconsistent laws, left undisturbed all vested rights then existing. Article 73 of the Law
of Waters of 1866 is the reconciliation effected between the private ownership of the banks
and the policy of the law to devote all banks to public Use. The easement would preserve the
private ownership of the banks and still effectuate the policy of the law. So, the easement in
Article 73 only recognized and preserved existing privately owned banks; it did not authorize
future private appropriation of riverbanks. Subsequently, the Law of Waters of 13 June 1879
reenacted Article 73 of the Law of Waters of 1866 and affirmed the public ownership of rivers
and their beds and the treatment of the banks as part of the bed. But nowhere in the law was
there any provision authorizing the private appropriation of the banks. The public nature of
riverbanks are obtained only by implication until the promulgation of the Civil Code of 1899,
which was explicit in Article 339 that riverbanks were declared public property since they were
destined for public use. Since the first paragraph of Article 36 of the Law of Waters if 1879
was reenacted in Article 553 of the Code, this article must also be understood not as
authorizing the private acquisition of riverbanks but only as recognizing the vested titles of
riparian owners who already owned the banks.
In the present case, since the new banks were formed when the river changed its course in
1937, the banks cannot be subjected to the provisions of the Siete Partidas, to claim private
ownership of the banks, as such was already superceded by then.
9. Legal definition applies with the legal order, distinction due to physical order cannot prevail
The conclusion made by the lower court that only the northern 2/5 of the disputed area
remained as plaintiff’s private property is predicated from the findings that the portion where
rice and corn were found in the ocular inspection of 15 June 1951, was on the northern 2/5
of the disputed area; that this cannot be a part of the bed because of the existence of
vegetation which could not have grown underwater, and that this portion is manmade. This
is bereft of evidence, as the unexcavated portion of the land is the southwestern ¼. Further,
American cases cannot be applied as these do not involve a similar statutory provision, unlike
in the Law of Waters, which defined “beds” and “banks” and considered the latter as part of
the former. That plants can and do grow on the banks which otherwise could not have grown
on the bed which is constantly subjected to the flow of the waters proves the distinction
between “beds” and “banks” in the physical order. However, in dealing with the legal order,
legal definitions prevail.
14. Floodings not accidental as they are annual; Government v. Colegio de San Jose does not
apply
Evidence shows that the River floods with annual regularity during the rainy season. These
floods can hardly be called “accidental”. The Colegio de San Jose case is not exactly in point.
What was mainly considered there was Article 74 of the Law of Waters relating to lakes, ponds
and pools. In the present case, none of these is involved.
15. Movement of the river not due to excavation and extraction of materials
The excavations and extractions of materials, even from the American period, have been
made only on the strip of land west of the River. Under the “following-the nature-of-things”
argument advanced by plaintiff, the River should have moved westward, where the level of
the ground had been lowered. But the movement has been in the opposite direction instead.
Therefore, it cannot be attributed to defendants’ operations. Moreover, Hilario’s own evidence
indicates that the movement eastward was all due to natural causes. The movement eastward
of the channel by as much as 31 meters, from 1950 to 1953, was due to two typhoons which
caused the erosion of the east bank and the depositing of materials on the west side which
increased its level from as much as .93 to 2 meters.
17. Extraction confined on the banks of the river and not beyond limits of the west bank to
invade his private estate; Hilario cannot recover damages from defendants
From 1947 to the early part of 1949, the defendants conducted their operations only in the
New Accretion Area along a narrow longitudinal zone contiguous to the watercourse then. This
zone, City Engineer Manila, is about 1 km. long and extends northward up to pt. 50.35.
However, no extractions nor excavations were undertaken west of this zone, i.e., above the
“temporary bank” line. This line is located east of the “secondary bank” line, the lateral
extremity of the west bank then. In the latter part of 1949, plaintiff prohibited the defendants
from extracting along the New Accretion Area and constructed a fence across the same. This
forced the defendants to go southeast of the “Excavated Area”. From 1954 to 1955,
defendants’ area of operation was still farther east of the New Accretion Area. They were.
working within a confined area along the west waterline, the northern and western boundaries
of which were 20 meters away east from the camachile tree. It appears sufficiently
established, therefore, that defendants have not gone beyond the receding western
extremities of the west riverbank. They have confined their extraction of gravel and sand only
from which the banks of the River, which constitute part of the public domain wherein they
had the right to operate. Plaintiff has not presented sufficient evidence that defendants have
gone beyond the limits of the west bank, as previously established, and have invaded his
private estate. He cannot, therefore, recover from them.
18. Plaintiff not denied of property without just compensation The Court does not declare
that the entire channel, i.e., all that space between the “secondary bank” line and the “primary
bank” line, has permanently become part of the riverbed. What is held is that at the time the
defendants made their extractions, the excavations were within the confines of the riverbanks
then. All that space to the west of said receding line” would still be part of plaintiff’s property
and also whatever portion adjoining the river is, at present, no longer reached by the non-
inundating ordinary floods. Further, it is not correct to say that plaintiff would be deprived of
his property without any compensation at all. Under Article 370 of the old Civil Code, the
abandoned bed of the old river belongs to the riparian owners either fully or in part with the
other riparian owners. And had the change occurred under the Civil Code of the Philippines,
plaintiff would even be entitled to all of the old bed in proportion to the area he has lost.
19. Defendants did not unjustly profit at plaintiff’s expense as they are not responsible for
the shifting of the river Defendants cannot be accused of unjustly profiting at plaintiff’s
expense. They were not responsible for the shifting of the river. It was due to natural causes
for which no one can be blamed. Furher, defendants were extracting from public property
then, under proper authorization. The government, through the defendants, may have been
enriched by chance, but not unjustly.
By 1958, a gradual accretion took place due to the action of the current of the river, and an
alluvial deposit of almost 20,000 sq.m. was added to the registered area. The Grandes filed
an action for quieting of title against the Calalungs, stating that they were in peaceful and
continuous possession of the land created by the alluvial deposit until 1948, when the
Calalungs allegedly trespassed into their property. The Calalungs, however, stated that they
were the rightful owners since prior to 1933.
The CFI found for the Grandes and ordered the Calalungs to vacate the premises and pay for
damages. Upon appeal to the CA, however, the decision was reversed.
ISSUE: W/N the alluvium deposited land automatically belongs to the riparian owners?
HELD:
Art. 457 dictates that alluvium deposits on land belong to the owners of the adjacent land.
However, this does not ipso jure become theirs merely believing that said land have become
imprescriptible. The land of the Grandes only specifies a specific portion, of which the alluvial
deposits are not included, and are thus, subject to acquisition by prescription. Since the
Calalungs proved that they have been in possession of the land since 1934 via two credible
witnesses, as opposed to the Grande’s single witness who claims that the Calalungs only
entered the land in 1948, the Calalungs have been held to have acquired the land created by
the alluvial deposits by prescription. This is because the possession took place in 1934, when
the law to be followed was Act 190, and not the New Civil Code, which only took effect in
1950.
Respondents counter that the their evidence shows that accretion happened without human
intervention and that the transfer of the dikes occurred only after.
ISSUE:
Whether accretion took place
HELD:
No, Alluvion must be the exclusive work of nature. There is not evidence that the addition to
said property was made gradually through the effects of the currents of the two rivers. The
lands in question total almost 4 hectares of land, which are highly doubtful to have been
caused by accretion. The lone witness testified that she observed an increase in the area in
1939, but the lots in question were not included in the survey of their adjacent property
conducted in 1940. They were also not included in the Cadastral Survey of the entire
Municipality of Maycauayan between the years 1958-1960. If the overseer was indeed telling
the truth, the accretion was sudden, not gradual. When the respondents transferred their
dikes towards the river beds, the dikes were meant for reclamation purposes and not to
protect their property from the destructive force of the waters of the river. The lots in question
were portions of the bed of the Meycauayan River and are therefore classified as public
property.
Registration denied, decisions appealed are reversed. Note: The lands sought were not even
dry land. The entire area was under one to two meters of water.
HELD
owner of the lower lands can not erect works that will impede or prevent such an
easement or charge, constituted and imposed by the law upon his estate for the
benefit of the higher lands belonging to different owners; neither
can the latter do anything to increase or extend the easement
o A 530. easement is a charge imposed upon
one estate for the benefit of another estate belonging to a different owner,
and the realty in favor of which the easement is established is called the
dominant estate, and the one charged with it the servient estate
Lands of Paraanan are lower – subject to easement of receiving and giving passage
to waters from higher lands, and Calalran lake
Easement not constituted by agreement –STATUTORY NATURE, imposed for cthe
common public utility
o A 552. Lower estates must receive the waters which naturally and without
the
intervention of man descend from the higher estates, as well as the stone or
earth which they cairy with them.
"Neither may the owner of the lower estate construct works preventing
this easement, nor the one of the higher estate works increasing the
burden.
o A563. he establishment, extent, form, and conditions of the easements of
waters to which this section refers shall be governed by the special law
relating thereto in everything not provided for in this code
o Special Law: Law of Waters of August 3,1866, article 111. Lands situated
at a lower level are subject to receive the waters that
flow naturally, without the work of man, from the higher lands
together with the stone or earth which they carry with them."
o A530, 552, 563, and Law of Waters of August 3,1866, article 111
Meneses, had no right to construct the works, nor the dam which blocks the
passage,
through his lands and the outlet to the Taliptip River, of the waters which flood
the higher lands of the plaintiffs; and having done so, to the detriment of the
easement charged on his estate, he has violated the law
While A338 authorizes every owner to enclose his estate by means of walls, ditches,
fences or any other device, this right is limited by
the easement imposed upon his estate.
His right to construct necessary works for fishpond subject to obligation to respect
statuory easement of waters upon his property, i.e., to give passage to and allow the
flow of the waters descending from the Calalaran Lake and from the land of the
plaintiffs through
his lands in Paraanan for their discharge into the Taliptip River
Conclusion:
Respondent ordered to emove any obstacle that may obstruct the free passage of
the waters
abstain from impeding, in any manner, the flow of the waters coming from the
higher lands
ISSUE:
Whether or not the subject land is a public land?
ARGUMENTS:
RULING:
The Court ruled that the subject land is part of the public domain since the accretion was
man-made or artificial. Under Article 457 of the Civil Code:
“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.”
But the Court provides the following requisites of accretion (Rules of Alluvion):
1. That the deposition of soil or sediment be gradual and imperceptible;
2. That it be the result of the action of the waters of the river (or sea); and
3. That the land where the accretion takes place is adjacent to the banks of rivers (or sea
coast).
In Republic v. CA, “the requirement that the deposit should be due to the effect of the current
of the river is indispensable”. In Hilario v. City of Manila, “the word “current” indicates the
participation of the body of water in the ebb and flow of waters due to high and low tide”.
Here, the subject land was the direct result of the dumping of sawdust by the Sun Valley
Lumber Co. consequent to its sawmill operations.
Carmelo informed Mayfair that it will sell the property to Equatorial. Mayfair made known its
interest to buy the property but only to the extent of the leased premises.
Notwithstanding Mayfair’s intention, Carmelo sold the property to Equatorial.
HELD:
The sale of the property should be rescinded because Mayfair has the right of first refusal.
Both Equatorial and Carmelo are in bad faith because they knew of the stipulation in the
contract regarding the right of first refusal.
The stipulation is a not an option contract but a right of first refusal and as such the
requirement of a separate consideration for the option, has no applicability in the instant case.
The consideration is built in the reciprocal obligation of the parties.
In reciprocal contract, the obligation or promise of each party is the consideration for that of
the other. (Promise to lease in return of the right to first refusal)
With regard to the impossibility of performance, only Carmelo can be blamed for not including
the entire property in the right of first refusal. Court held that Mayfair may not have the option
to buy the property. Not only the leased area but the entire property.
The lower court found that Yu-Chiocco contributed the labor, while the materials used
belonged to the estate of Yu-Chingco, and ruled that the estate of Yu-Chingco owned half of
the buildings.
The Supreme Court overturned the ruling, saying that even if the materials belonged to Yu-
Chingco, “it does not follow, as a conclusion of law, that the owner of the material thereby
became the owner of any part of the buildings.”
Instead, Liuanag should be paid for the materials that were used to construct the building.
It cited Art. 360 of the Civil Code, which says that a landowner who builds on his land using
the materials of another is obliged to pay for the value of the material. Saying that the
provision would also apply to a leasehold in real estate, the Court said Liuanag has a claim
for the value of the materials that were used in the construction of the building.
JUDGMENT: Ruling REVERSED. Case remanded to lower court with directions to enter
judgment in favor of defendant, without prejudice to present claim against the person or
estate bound to pay it.
2. Lumanlan argues that she had brought the property from one Pedro Deudor and that
there is a Compromise Agreement between Deudor and Tuason stating that she was one of
the buyers recognized therein.
3. CFI: Lower Court ruled in favor of Tuason, holding that it is the registered owner and
the question being purely one of possession. Lumanlan’s evidence (Compromise Agreement)
was completely immaterial.
ISSUE
Whether or not J.M. Tuason and Co., Inc is the rightful owner of the said land? – YES
HELD
1. A careful analysis of the compromise agreement will show that in no way did it obligate
Tuason to sell to those buyers the lots occupied by them at the price stipulated by the
Deudors, but at “the current prices and terms specified by the OWNERS (Tuason) in their
sales of lots. (See notes for paragraph 7 of compromise agreement)
2. Paragraph 7 also imports that these buyers of the Deudors must (1) “recognize the
title of the OWNERS (Tuason) over the property purportedly bought by them” and
from the Deudors, and (2) “sign, whenever possible, new contracts of purchase for
said property.” The agreement also states that “the sums paid by them to the
Deudors...shall be credited to the buyers.”
3. All that Tuason agreed to was to grant the Deudor buyers preferential right to purchase
“at current prices and terms” upon recognizing the title of Tuason and signing new contracts
and to credit to them for the amounts they had paid to the Deudors.
4. Lumanlan never claimed that she had signed a new contract with Tuason for the
puchase of the lot occupied. Instead of recognizing the title of Tuason as required by the
agreement, she used paragraph 6 of the agreement for her special defense, arguing that
Deudor and Tuason entered into the compromise agreement where Deudor and his co-
owners renouced, ceded, waived, and quitclaimed all their rights in the property in favor of
Tuason without her knowledge and consent. Now she does not rely on the compromise
agreement but she assails it. -_-
5. Without the compromise agreement, Lumanlan must justify her possession on the basis
of a pretended superiority of the Deudors’ old Spanish nformacion posesoria over Tuason’s
Certificate of Title No. 1267. But the Court has already ruled in previous cases that
Lumanlan is barred from assailing the decree of registration in favor of Tuason’s
predecessors 20 years after its issuance.
6. The agreement provides that the Deudor buyers should sign new contracts with it at
current prices specified for the sales of lots. Article 1474 of the Civil Code does not apply in
this case because Lumanlan is not a buyer from Tuason since there is no contract between
the two.
7. Lumanlan’s argument that she should be deemed a builder in good faith does not hold
water. In a related case (Tuason v Macalindong), the Court ruled that there being a
presumptive knowledge of the Torrents titles issued to Tuason, the buyer from the Deudors
cannot say now that she believer her vendor had rights of ownership over the lot purchaser.
She had chose to ignore the Torrens title of Tuason and relied instead upon the Deudor’s
claim of ownership, perhaps because such course appeared to her as more advantageous;
hence, she has only herself to blame for the consequences now that the Deudors' claim has
been abandoned by the Deudors themselves, and can not pretend good faith.
8. Lumanlan could have asked that she recover or be credited with the amounts paid by her
to the Deudors. Equity demands, however, that her right to claim such return, or to have
the amount offset against the sums she was sentenced to pay should be reserved.
DISPO
Petition granted. Decision of CA reversed. Decision of CFI reinstated. Costs against
Lumanlan.
NOTES
Paragraph 7 of the Compromise Agreement:
That the sales of the possessory rights claimed by the DEUDORS, are described in
the lists submitted by them to the OWNERS which are attached hereto marked
Annexes "B" and "C" and made part hereof. Whatever amounts may have been
collected by the DEUDORS on account thereof, shall be deducted from the total sum
of P1,201,063.00 to be paid to them. It shall be the joint and solidary obligation of
the DEUDORS to make the buyer of the lots purportedly sold by them to recognize
the title of the OWNERS over the property purportedly bought by them, and to make
them sign, whenever possible, new contracts of purchase for said property at the
current paces and terms specified by the OWNERS in their sales of lots in their
subdivision known at "Sta. Mesa Heights Subdivision." The DEUDORS HEREBY
advised the OWNERS that the buyer listed in Annex "B" herein with the annotation
"continue" shall buy the lots respectively occupied by them and shall sign contracts,
but the sums already paid by them to the DEUDORS amounting to P134,922.84
(subject to verification by the Court) shall be credited to the buyers and shall be
deducted from the sums to be paid to the DEUDORS by the OWNERS. The DEUDORS
also advise the OWNERS that, the buyers listed in Annex "C" herein with the
annotation "Refund" have decided not to continue with their former contracts or
purchases with the DEUDORS and the sums already paid by them to the DEUDORS
TOTALLING P101,182.42 (subject to verification by the Court) shall be refunded to
them by the OWNERS and deducted from the sums that may be due to the
DEUDORS from the OWNERS (J.M. Tuason & Co., Inc. vs. Jaramillo, L-18932, Sept.
30, 1963);
Where the price cannot be determined in accordance with the preceding articles, or
in any other manner, the contract is inefficacious. However, if the thing or any part
thereof has been delivered to and appropriated by the buyer, he must pay a
reasonable price therefor. What is a reasonable price is a question of fact dependent
on the circumstances of each particular case.
The 12-door commercial building was eventually constructed and the builder-owners thereof
Mercedes and Antonio received and continued to receive the rents thereof amounting to
P4,800 a month and paying therefrom the installments due for payment on the loan to the
Rehabilitation Finance Corporation.
The complaint alleges that the usufructuary right reserved in favor of Don Mariano Cui extends
to and includes the rentals of the building constructed by Antonio Cui and Mercedes Cui on
the land sold to them by their father; that the defendants retained those rentals for
themselves; that the usufructuary rights of the vendor were of the essence of the sale, and
their violation entitled him to rescind (or resolve) the sale. It prayed either for rescission with
accounting, or for delivery of the rentals of the building with interests, attorneys’ fees and
costs.
ISSUE: W/N the usufruct reserved by the vendor in the deed of sale, over the lots in question
that were at the time vacant and unoccupied, gave the usufructuary the right to receive the
rentals of the commercial building constructed by the vendees with funds borrowed from the
Rehabilitation and Finance Corporation, the loan being secured by a mortgage over the lots
sold?
W/N the failure of the vendees to pay over its rentals to the usufructuary entitled the latter
to rescind, or more properly, resolve the contract of sale?
Whether the action for rescission due to breach of the contract could still be enforced and was
not yet barred.
HELD:
Under the articles of the Civil Code on industrial accession by modification on the principal
land (Articles 445 to 456 of the Civil Code) such accession is limited either to buildings erected
on the land of another, or buildings constructed by the owner of the land with materials owned
by someone else.
Thus, Article 445, establishing the basic rule of industrial accession, prescribes that —
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.
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. (Emphasis supplied)
Articles 447 and 445, in turn, treat of accession produced by the landowner’s building,
planting and sowing “with the materials of another” and when “the materials, plants or seeds
belong to a third person other than the landowner or the builder, planter or sower.
Nowhere in these articles on industrial accession is there any mention of the case of landowner
building on his own land with materials owned by himself (which is the case of appellees
Mercedes and Antonio Cui).
The Civil Code itself limits the cases of industrial accession to those involving land and
materials belonging to different owners
The usufruct over the land did not entitle the usufructuary to either the gross or the net
income of the building erected by the vendees, but only to the rental value of the portion of
the land occupied by the structure (in so far as the usufructuary was prevented from utilizing
said portion), and that rental value was not liquidated when the complaints were filed in the
court below, hence, there was no default in its payment. Actually, this theory of appellants
fails to take into account that Don Mariano could not retain ownership of the land and, at the
same time, be the usufructuary thereof. His intention of the usufructuary rights in itself
imports that he was no longer its owner. For usufruct is essentially jus in re aliena; and to be
a usufructuary of one’s own property is in law a contradiction in terms, and a conceptual
absurdity.
Petitioner filed with the trial court motion for the approval of the petitioner’s exercise of option
and for satisfaction of judgment(that is final and executory) which was dismissed. Hence this
petition for mandamus. However, since there is a pending case (Manotok v. NHA) involving
the expropriation of the land in question it is better to suspend the current case til after the
outcome of the expropriation proceedings is done. Moreover, a fire engulfed the Tambunting
estate covering the disputed area of the land.The expropriation case was not granted and the
law that provided for such was declared unconstitutional.
Due to the fire, petitioner is contending that the execution of the decision must now involve
the delivery of possession.
ISSUE: W/N there should be a delivery of possession by the respondent to the petitioner?
HELD:
When the decision of the trial court became final and executory, it becomes incumbent upon
the respondent judge to issue the necessary writ for the execution of the same. Since the
improvements have been gutted by fire, and therefore, the basis for private respondent's
right to retain the premises has already been extinguished without the fault of the petitioner,
there is no other recourse for the private respondent but to vacate the premises and deliver
the same to the petitioner.
MWSS vs. CA, 143 SCRA 623;
FACTS: The City of Dagupan (CITY) filed a complaint against the former National Waterworks
and Sewerage Authority (NAWASA), now the Metropolitan Waterworks and Sewerage System
(MWSS), for recovery of the ownership and possession of the Dagupan Waterworks System.
NAWASA interposed as one of its special defenses R.A. 1383 which vested upon it the
ownership, possession and control of all waterworks systems throughout the Philippines and
as one of its counterclaims the reimbursement of the expenses it had incurred for necessary
and useful improvements amounting to P255,000.00. Judgment was rendered by the trial
court in favor of the CITY on the basis of a stipulation of facts. The trial court found NAWASA
to be a possessor in bad faith and hence not entitled to the reimbursement claimed by it.
ISSUE:
W/N MWSS has the right to remove all the useful improvements introduced by NAWASA to
the Dagupan Waterworks System, notwithstanding the fact that NAWASA was found to be a
possessor in bad faith?
HELD:
No, Article 449 of the Civil Code of the Philippines provides that "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." As a builder in bad faith, NAWASA lost whatever useful improvements it had made
without right to indemnity. Moreover, under Article 546 of said code, only a possessor in good
faith shall be refunded for useful expenses with the right of retention until reimbursed; and
under Article 547 thereof, only a possessor in good faith may remove useful improvements if
this can be done without damage to the principal thing and if the person who recovers the
possession does not exercise the option of reimbursing the useful expenses. The right given
a possessor in bad faith is to remove improvements applies only to improvements for pure
luxury or mere pleasure, provided the thing suffers no injury thereby and the lawful possessor
does not prefer to retain them by paying the value they have at the time he enters into
possession (Article 549).
Kee on the other hand bought on installments Lot 8 of the same subdivision from C.T. Torres
Enterprises, Inc. (CTTEI) which is the exclusive real estate agent of the petitioner. Under the
contract Kee was allowed to take possession of the property even before full payment of the
price. CTTEI through an employee, Zenaida Octaviano accompanied Kee’s wife Donabelle to
inspect Lot No. 8. Octaviano however mistakenly pointed towards Lot 9. Hence spouses Kee
had their residence, an auto repair shop, a store and other improvements constructed on the
wrong lot.
Upon discovery of the blunder both Kee and Jardinico tried to reach an amicable settlement
but they failed. Jardinico demanded that the improvements be removed but as Kee refused,
Jardinico filed a complaint for ejectment with damages against Kee at the Municipal Trial Court
in Cities (MTCC) of Bacolod City. Kee filed a third-party complaint against herein petitioner
and CTTEI.
The MTCC found that the error was attributable to CTTEI also since at present the contract
with Kee has rescinded for Kee’s failure to pay installments. Kee no longer had any right over
the subject property and must pay rentals for its use. The Regional Trial Court (RTC) of
Bacolod City ruled that petitioner and CTTEI were not at fault or were not negligent. It argued
that Kee was a builder in bad faith. Even if assuming that he was in good faith, he was no
longer so and must pay rentals from the time that he was given notice to vacate the lot. The
Court of Appeals ruled that Kee was a builder in good faith as he was unaware of the mix-up
when he constructed the improvements. It was in fact due to the negligence and wrongful
delivery of CTTEI which included its principal the herein petitioner. It further ruled that the
award of rental was without basis.
Pending the resolution of the case at the Court of Appeals Jardinico and Kee entered into a
deed of sale, wherein Lot 9 was sold to Kee. In the said deed a provision stating that
regardless of the outcome of the decision, such shall not be pursued by the parties and shall
be considered dismissed and without effect. The appellate court was not informed of this deal.
ISSUE: W/N a lot buyer who constructs improvements on the wrong property erroneously
delivered by the owner’s agent, a builder in good faith?
HELD:
Yes, Article 527 of the Civil Code provides the presumption that petitioner has the burden of
proving that Kee was a builder in bad faith. Kee may be made liable for the violation of the
contract with CTTEI but this may not be used as a basis of bad faith and as a sufficient ground
to negate the presumption of good faith.
Jardinico is presently only allowed to file a complaint for unlawful detainer. Good faith is based
on the belief of the builder that the land he is building on is his and his ignorance of any flaw
or defect in is title. Since at the time when Kee constructed his improvements on Lot 8, he
was not aware that it was actually Lot 9 that was delivered to him. Petitioner further contends
that Kee was negligent as a provision in the Contract of Sale on Installment stated that the
vendee must have personally examined the property and shall bear on his own the
consequential expenses in the changes that may happen thereon.
The court held that such provision cannot be interpreted as a waiver of the vendee’s right to
recover damages resulting from petitioner’s negligence. Such interpretation of the waiver is
contrary to law and public policy and cannot be allowed. Petitioner cannot claim and excuse
itself from liability by claiming that it was not directly involved in the delivery of the property.
The principal must be responsible for the acts of the agent done within the scope of his
authority. CTTEI was the sole real estate representative of the petitioner when the delivery
was made. Wilson Kee is therefore declared a builder in good faith. Petitioner and respondent
CTTEI are declared solidarily liable for damages due to negligence. The award of rentals to
Jardinico is dispensed with.