TECHNOGAS PHIL Vs CA

TECHNOGAS PHILIPPINES vs.
CA
G.R. No. 108894 February 10, 1997
PANGANIBAN, J.:
FACTS:
 The parties in this case are owners of adjoining lots in Parañ aque, 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, encroached on a portion of
the lot owned by private respondent Edward Uy.
 Upon learning of the encroachment or occupation by its buildings and wall of a
portion of private respondent’s land, the petitioner offered to buy from defendant
that particular portion of Uy’s land occupied by portions of its buildings and wall
with an area of 770 square meters, more or less, but the latter, however, refused the
offer
 The parties entered into a private agreement before a certain Col. Rosales in
Malacañ ang, wherein petitioner agreed to demolish the wall at the back portion of
its land thus giving to the private respondent possession of a portion of his land
previously enclosed by petitioner's wall.
 Uy later filed a complaint before the office of Municipal Engineer of Parañ aque,
Metro Manila as well as before the Office of the Provincial Fiscal of Rizal against
Technogas in connection with the encroachment or occupation by plaintiff's
buildings and walls of a portion of its land but said complaint did not prosper; so Uy
dug or caused to be dug a canal along Technogas’ wall, a portion of which collapsed
in June, 1980, and led to the filing by the petitioner of the supplemental complaint in
the above-entitled case and a separate criminal complaint for malicious mischief
against Uy and his wife which ultimately resulted into the conviction in court Uy's
wife for the crime of malicious mischief;
ISSUE: WON the petitioner is builder in good faith.
HELD: YES.
 We disagree with Respondent Court’s reliance on the cases of J.M. Tuason & Co., Inc.
vs. Vda. de Lumanlan and J.M. Tuason & Co., Inc. vs. Macalindong, in ruling that the
petitioner "cannot be considered in good faith" because as a land owner, it is
"presumed to know the metes and bounds of his own property, specially if the same
are reflected in a properly issued certificate of title. One who erroneously builds on
the adjoining lot should be considered a builder in (b)ad (f)aith, there being
presumptive knowledge of the Torrens title, the area, and the extent of the
boundaries." There is nothing in those cases which would suggest that bad faith is
Zenaida Resuma Razon
Property
Builder in Good Faith
imputable to a registered owner of land when a part of his building encroaches upon
a neighbor's land, simply because he is supposedly presumed to know the
boundaries of his land as described in his certificate of title,
 Article 527 of the Civil Code presumes good faith, and since no proof exists to show
that the encroachment over a narrow, needle-shaped portion of private
respondent's land was done in bad faith by the builder of the encroaching
structures, the latter should be presumed to have built them in good faith. 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. The good faith ceases from the
moment defects in the title are made known to the possessor, by extraneous
evidence or by suit for recovery of the property by the true owner.
 Consequently, the builder, if sued by the aggrieved landowner for recovery of
possession, could have invoked the provisions of Art. 448 of the Civil Code, which
reads:
The owner of the land on which anything has been built, sown or planted in
good faith, shall have the right to appropriate as his own the works, sowing or
planting, after payment of the indemnity provided for in articles 546 and 548,
or to oblige the one who built or planted to pay the price of the land, and the
one who sowed, the proper rent. However, the builder or planter cannot be
obliged to buy the land if its value is considerably more than that of the
building or trees. In such case, he shall pay reasonable rent, if the owner of the
land does not choose to appropriate the building or trees after proper
indemnity. The parties shall agree upon the terms of the lease and in case of
disagreement, the court shall fix the terms thereof.
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
 In view of the good faith of both petitioner and private respondent, their rights and
obligations are to be governed by Art. 448. Hence, his options are limited to: (1)
appropriating the encroaching portion of petitioner's building after payment of
proper indemnity, or (2) obliging the latter to buy the lot occupied by the structure.
He cannot exercise a remedy of his own liking
Property
Property

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TECHNOGAS PHILIPPINES vs.

G.R. No. 108894 February 10, 1997

ISSUE: WON the petitioner is builder in good faith.

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