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SYLLABI/SYNOPSIS

SECONDDIVISION

[G.R.No.125683.March2,1999]

EDEN BALLATAN and SPS. BETTY MARTINEZ and CHONG CHY LING,
petitioners, vs. COURT OF APPEALS, GONZALO GO, WINSTON GO, LI
CHING YAO, ARANETA INSTITUTE OF AGRICULTURE and JOSE N.
QUEDDING,respondents.
DECISION
PUNO,J.:

ThisisapetitionforreviewoncertiorariofthedecisionoftheCourtofAppealsdatedMarch25,1996
inCAG.R.CVNo.32472entitled"EdenBallatan,et.al.,plaintiffsappelleesv.GonzaloGoandWinston
Go,appellantsandthirdpartyplaintiffsappellantsv.LiChingYao,et.al.,thirdpartydefendants."[1]
Theinstantcasearosefromadisputeoverfortytwo(42)squaremetersofresidentiallandbelongingto
petitioners.ThepartieshereinareownersofadjacentlotslocatedatBlockNo.3,PoinsettiaStreet,Araneta
UniversityVillage,Malabon,MetroManila.LotNo.24,414squaremetersinarea,isregisteredinthename
ofpetitionersEdenBallatanandspousesBettyMartinezandChongChyLing.[2]LotsNos.25and26,withan
areaof415and313squaremetersrespectively,areregisteredinthenameofrespondentGonzaloGo,Sr.[3]
OnLotNo.25,respondentWinstonGo,sonofGonzaloGo,Sr.,constructedhishouse.AdjacenttoLotNo.
26isLotNo.27,417squaremetersinarea,andisregisteredinthenameofrespondentLiChingYao.[4]
In1985,petitionerBallatanconstructedherhouseonLotNo.24.Duringtheconstruction,shenoticed
thattheconcretefenceandsidepathwayoftheadjoininghouseofrespondentWinstonGoencroachedonthe
entirelengthoftheeasternsideofherproperty.[5]Herbuildingcontractorinformedherthattheareaofher
lot was actually less than that described in the title. Forthwith, Ballatan informed respondent Go of this
discrepancy and his encroachment on her property. Respondent Go, however, claimed that his house,
including its fence and pathway, were built within the parameters of his father's lot and that this lot was
surveyedbyEngineerJoseQuedding,theauthorizedsurveyoroftheAranetaInstituteofAgriculture(AIA),
theownerdeveloperofthesubdivisionproject.
PetitionerBallatancalledtheattentionoftheAIAtothediscrepancyofthelandareainhertitleandthe
actual land area received from them. The AIA authorized another survey of the land by Engineer Jose N.
Quedding.
InareportdatedFebruary28,1985,EngineerQueddingfoundthatthelotareaofpetitionerBallatanwas
lessbyafewmetersandthatofrespondentLiChingYao,whichwasthreelotsaway,increasedbytwo(2)
meters. Engineer Quedding declared that he made a verification survey of Lots Nos. 25 and 26 of
respondents Go in 1983 and allegedly found the boundaries to have been in their proper position. He,
however,couldnotexplainthereductioninBallatan'sareasincehewasnotpresentatthetimerespondents
Goconstructedtheirboundarywalls.[6]
On June 2, 1985, Engineer Quedding made a third relocation survey upon request of the parties. He
foundthatLotNo.24lostapproximately25squaremetersonitseasternboundary,thatLotNo.25,although
foundtohaveencroachedonLotNo.24,didnotlosenorgainanyareathatLotNo.26lostsomethree(3)
squaremeterswhich,however,weregainedbyLotNo.27onitswesternboundary.[7]Inshort,LotsNos.25,
26and27movedwestwardtotheeasternboundaryofLotNo.24.
Onthebasisofthissurvey,onJune10,1985,petitionerBallatanmadeawrittendemandonrespondents
Go to remove and dismantle their improvements on Lot No. 24. Respondents Go refused. The parties,
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includingLiChingYao,however,metseveraltimestoreachanagreementonthematter.
Failingtoagreeamicably,petitionerBallatanbroughttheissuebeforethebarangay.RespondentsGodid
notappear.Thus,onApril1,1986,petitionerBallataninstitutedagainstrespondentsGoCivilCaseNo.772
MNforrecoveryofpossessionbeforetheRegionalTrialCourt,Malabon,Branch169.TheGo'sfiledtheir
"AnswerwithThirdPartyComplaint"impleadingasthirdpartydefendantsrespondentsLiChingYao,the
AIAandEngineerQuedding.
On August 23, 1990, the trial court decided in favor of petitioners. It ordered the Go's to vacate the
subject portion of Lot No. 24, demolish their improvements and pay petitioner Ballatan actual damages,
attorney'sfeesandthecostsofthesuit.Itdismissedthethirdpartycomplaintagainst:(1)AIAafterfinding
that the lots sold to the parties were in accordance with the technical description and verification plan
coveredbytheirrespectivetitles(2)JoseN.Quedding,therebeingnoprivityofrelationbetweenhimand
respondentsGoandhiserroneoussurveyhavingbeenmadeattheinstanceofAIA,notthepartiesand(3)Li
ChingYaoforfailuretoprovethathecommittedanywronginthesubjectencroachment.[8]Thecourtmade
thefollowingdisposition:
"WHEREFORE,judgmentisherebyrenderedinfavoroftheplaintiffsandagainstthedefendants,ordering
thelatter:
1.Todemolishandremoveallimprovementsexistingandencroachingonplaintiff'slot
2.Toclear,vacateanddeliverpossessionoftheencroachedareatotheplaintiffs
3.Topayplaintiffsjointlyandseverallythefollowing:
a)P7,800.00fortheexpensespaidtothesurveyors
b)P5,000.00forplaintiffs'transportation
4.Topayplaintiffs,jointlyandseverally,attorney'sfeesequivalentto25%ofthecurrentmarketvalueofthe
subjectmatterinlitigationatthetimeofexecutionand
5.Topaythecostsofsuit.
ThethirdpartycomplaintfiledbythirdpartyplaintiffGonzaloGoandWinstonGoagainstthirdparty
defendantsAranetaInstituteofAgriculture,JoseN.QueddingandLiChingYaoisherebyDISMISSED,
withoutpronouncementastocosts.
SOORDERED."
RespondentsGoappealed.OnMarch25,1996,theCourtofAppealsmodifiedthedecisionofthetrial
court. It affirmed the dismissal of the thirdparty complaint against the AIA but reinstated the complaint
against Li Ching Yao and Jose Quedding. Instead of ordering respondents Go to demolish their
improvements on the subject land, the appellate court ordered them to pay petitioner Ballatan, and
respondentLiChingYaotopayrespondentsGo,areasonableamountforthatportionofthelotwhichthey
encroached,thevaluetobefixedatthetimeoftaking.ItalsoorderedJoseQueddingtopayrespondentsGo
attorney'sfeesofP5,000.00forhiserroneoussurvey.Thedispositiveportionofthedecisionreads:
"WHEREFORE,premisesconsidered,thedecisionappealedfromisherebyAFFIRMEDinsofarasthe
dismissalofthethirdpartycomplaintagainstAranetaInstituteofAgricultureisconcernedbutmodifiedin
allotheraspectsasfollows:
1)Defendantsappellantsareherebyorderedtopayplaintiffsappelleesthereasonablevalueofthefortytwo
(42)squaremetersoftheirlotatthetimeofitstaking
2)ThirdpartydefendantLiChingYaoisherebyorderedtopaydefendantsappellantsthereasonablevalue
ofthethirtyseven(37)squaremetersofthelatter'slotatthetimeofitstakingand
3)ThirdpartydefendantJoseN.Queddingisherebyorderedtopaytodefendantsappellantstheamountof
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P5,000.00.asattorney'sfees.
LETTHERECORDofthecaseberemandedtotheRegionalTrialCourtofMalabonforfurtherproceedings
andreceptionofevidenceforthedeterminationofthereasonablevalueofLotsNos.24and26.
SOORDERED."[9]
Hence,thispetition.Petitionersallegethat:
"RESPONDENTCOURTOFAPPEALSERREDONQUESTIONSOFLAWANDGRAVELYABUSED
ITSDISCRETIONAMOUNTINGTOLACKOFJURISDICTIONWHEN:
1.ITAPPLIEDEQUITYOREQUITABLESOLUTIONSTOTHEINSTANTCASEINUTTER
DISREGARDANDINVIOLATIONORGROSSIGNORANCEOFEXISTINGLAWSAND
JURISPRUDENCEVESTINGBASICPROPERTYRIGHTSTOHEREINPETITIONERS.
RESPONDENTCOURTHASNOPOWERTOAPPLY/USEEQUITYINTHEPRESENCEOF
EXISTINGLAWSTOTHECONTRARY.
2.UNDERTHEGUISEOFAPPLYINGEQUITYBUTINEFFECTAVERYAPPARENTPARTIALITY
ANDFAVORTORESPONDENTSGO,ITORDEREDPAYMENTOFTHEENCROACHEDAREAAT
THEVALUEATTHETIMEOFITSTAKINGANDNOTTHEVALUEATTHETIMEOFPAYMENT,
THEREBYENRICHINGTHEGO'SBUTDEPRIVINGPETITIONERSOFTHEFRUITSORINCREASE
INVALUEOFTHEIRPROPERTYTOWHICHTHEYAREENTITLEDUNDERTHELAWASTHE
REGISTEREDOWNERSWITHTORRENSTITLEINTHEIRNAMES.
3.WHENITDIDNOTDISMISSTHETHIRDPARTYCOMPLAINTDUETONONPAYMENTOF
ANYFILINGORDOCKETFEE.
4.WHENITDENIEDPETITIONERSTHERECOVERYOFTHENECESSARYEXPENSESIN
PROTECTINGTHEIRRIGHTSINTHISCASE."[10]
Petitioners question the admission by respondent Court of Appeals of the thirdparty complaint by
respondents Go against the AIA, Jose Quedding and Li Ching Yao. Petitioners claim that the thirdparty
complaintshouldnothavebeenconsideredbytheCourtofAppealsforlackofjurisdictionduetothirdparty
plaintiffs'failuretopaythedocketandfilingfeesbeforethetrialcourt.
Thethirdpartycomplaintintheinstantcasearosefromthecomplaintofpetitionersagainstrespondents
Go.Thecomplaintfiledwasforaccionpubliciana,i.e.,therecoveryofpossessionofrealpropertywhichisa
real action. The rule in this jurisdiction is that when an action is filed in court, the complaint must be
accompaniedbythepaymentoftherequisitedocketandfilingfees.[11]Inrealactions,thedocketandfiling
feesarebasedonthevalueofthepropertyandtheamountofdamagesclaimed,ifany.[12]Ifthecomplaintis
filedbutthefeesarenotpaidatthetimeoffiling,thecourtacquiresjurisdictionuponfullpaymentofthe
feeswithinareasonabletimeasthecourtmaygrant,barringprescription.[13] Wherethefeesprescribedfor
the real action have been paid but the fees of certain related damages are not, the court, although having
jurisdiction over the real action, may not have acquired jurisdiction over the accompanying claim for
damages.[14] Accordingly, the court may expunge those claims for damages, or allow, on motion, a
reasonabletimeforamendmentofthecomplaintsoastoallegethepreciseamountofdamagesandaccept
paymentoftherequisitelegalfees.[15]Ifthereareunspecifiedclaims,thedeterminationofwhichmayarise
afterthefilingofthecomplaintorsimilarpleading,theadditionalfilingfeethereonshallconstitutealienon
thejudgmentaward.[16]Thesamerulealsoappliestothirdpartyclaimsandothersimilarpleadings.[17]
Inthecaseatbar,thethirdpartycomplaintfiledbyrespondentsGowasincorporatedintheiranswerto
the complaint. The thirdparty complaint sought the same remedy as the principal complaint but added a
prayerforattorney'sfeesandcostswithoutspecifyingtheiramounts,thus:
"ONTHETHIRDPARTYCOMPLAINT
1.ThatsummonsbeissuedagainstThirdPartyDefendantsAranetaInstituteofAgriculture,JoseN.
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QueddingandLiChingYao
2.Thatafterhearing,theybesentencedtoindemnifytheThirdPartyPlaintiffsforwhateverisadjudged
againstthelatterinfavorofthePlaintiffs
3.ThatThirdPartyDefendantsbeorderedtopayattorney'sfeesasmaybeprovedduringtrial
4.ThatThirdPartyDefendantsbeorderedtopaythecosts.
Otherjustandequitablereliefsarealsoprayedfor."[18]
TheAnswerwithThirdPartyComplaintwasadmittedbythetrialcourtwithouttherequisitepaymentof
filing fees, particularly on the Go's prayer for damages.[19] The trial court did not award the Go's any
damages. It dismissed the thirdparty complaint. The Court of Appeals, however, granted the thirdparty
complaintinpartbyorderingthirdpartydefendantJoseN.QueddingtopaytheGo'sthesumofP5,000.00as
attorney'sfees.
Contrary to petitioners' claim, the Court of Appeals did not err in awarding damages despite the Go's
failuretospecifytheamountprayedforandpaythecorrespondingadditionalfilingfeesthereon.Theclaim
forattorney'sfeesreferstodamagesarisingafterthefilingofthecomplaintagainsttheGo's.Theadditional
filingfeeonthisclaimisdeemedtoconstitutealienonthejudgmentaward.[20]
TheCourtofAppealsfoundthatthesubjectportionisactuallyfortytwo(42)squaremetersinarea,not
fortyfive (45), as initially found by the trial court that this fortytwo (42) square meter portion is on the
entireeasternsideofLotNo.24belongingtopetitionersthatonthissaidportionisfoundtheconcretefence
andpathwaythatextendsfromrespondentWinstonGo'shouseonadjacentLotNo.25thatinclusiveofthe
subjectportion,respondentsGodidnotgainnorloseanyportionofLotsNos.25and26thatinstead,Lot
No. 27, on which respondent Li Ching Yao built his house, encroached on the land of respondents Go,
gainingintheprocessthirtyseven(37)squaremetersofthelatter'sland.[21]
WeholdthattheCourtofAppealscorrectlydismissedthethirdpartycomplaintagainstAIA.Theclaim
thatthediscrepancyinthelotareaswasduetoAIA'sfaultwasnotproved.The appellate court, however,
foundthatitwastheerroneoussurveybyEngineerQueddingthattriggeredthesediscrepancies.Anditwas
thissurveythatrespondentWinstonGorelieduponinconstructinghishouseonhisfather'sland.Hebuilthis
houseinthebeliefthatitwasentirelywithintheparametersofhisfather'sland.Inshort,respondentsGohad
noknowledgethattheyencroachedonpetitioners'lot.Theyaredeemedbuildersingoodfaith[22]untilthe
timepetitionerBallataninformedthemoftheirencroachmentonherproperty.[23]
Respondent Li Ching Yao built his house on his lot before any of the other parties did.[24] He
constructed his house in 1982, respondents Go in 1983, and petitioners in 1985.[25] There is no evidence,
muchless,anyallegationthatrespondentLiChingYaowasawarethatwhenhebuilthishouseheknewthat
aportionthereofencroachedonrespondentsGo'sadjoiningland.Goodfaithisalwayspresumed,andupon
himwhoallegesbadfaithonthepartofapossessorreststheburdenofproof.[26]
Allthepartiesarepresumedtohaveactedingoodfaith.Theirrightsmust,therefore,bedeterminedin
accordancewiththeappropriateprovisionsoftheCivilCodeonproperty.
Article448oftheCivilCodeprovides:
"Art.448.Theownerofthelandonwhichanythinghasbeenbuilt,sownorplantedingoodfaith,shallhave
therighttoappropriateashisowntheworks,sowingorplanting,afterpaymentoftheindemnityprovided
forinArticles546and548,[27]ortoobligetheonewhobuiltorplantedtopaythepriceoftheland,andthe
onewhosowedtheproperrent.However,thebuilderorplantercannotbeobligedtobuythelandifitsvalue
isconsiderablymorethanthatofthebuildingortrees.Insuchcase,heshallpayreasonablerent,iftheowner
ofthelanddoesnotchoosetoappropriatethebuildingortreesafterproperindemnity.Thepartiesshallagree
uponthetermsoftheleaseandincaseofdisagreement,thecourtshallfixthetermsthereof."
Theownerofthelandonwhichanythinghasbeenbuilt,sownorplantedingoodfaithshallhavethe
righttoappropriateashisownthebuilding,plantingorsowing,afterpaymenttothebuilder,planterorsower
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ofthenecessaryandusefulexpenses,andinthepropercase,expensesforpureluxuryormerepleasure.The
ownerofthelandmayalsoobligethebuilder,planterorsowertopurchaseandpaythepriceoftheland.If
theownerchoosestosellhisland,thebuilder,planterorsowermustpurchasetheland,otherwisetheowner
mayremovetheimprovementsthereon.Thebuilder,planterorsower,however,isnotobligedtopurchasethe
landifitsvalueisconsiderablymorethanthebuilding,plantingorsowing.Insuchcase,thebuilder,planter
orsowermustpayrenttotheowneroftheland.Ifthepartiescannotcometotermsovertheconditionsofthe
lease,thecourtmustfixthetermsthereof.The right to choose between appropriating the improvement or
sellingthelandonwhichtheimprovementstandstothebuilder,planterorsower,isgiventotheownerofthe
land.[28]
Article448hasbeenappliedtoimprovementsorportionsofimprovementsbuiltbymistakenbeliefon
land belonging to the adjoining owner.[29] The facts of the instant case are similar to those in Cabral v.
Ibanez,[30]towit:
"[P]laintiffsGeronimaZabalaandherhusbandJustinoBernardo,constructedtheirhouseinthebeliefthatit
wasentirelywithintheareaoftheirownlandwithoutknowingatthattimethatpartoftheirhousewas
occupyinga14squaremeterportionoftheadjoininglotbelongingtothedefendants,andthatthedefendants
BernardoM.CabralandMamertaM.Cabralwerelikewiseunawareofthefactthataportionofplaintiff's
housewasextendingandoccupyingaportionoftheirlotwithanareaof14squaremeters.Thepartiescame
toknowofthefactthatpartoftheplaintiff'shousewasoccupyingpartofdefendant'slandwhenthe
constructionofplaintiff'shousewasabouttobefinished,afterarelocationofthemonumentsofthetwo
propertieshadbeenmadebytheU.S.ArmythroughtheBureauofLands,accordingtotheir'Stipulationof
Facts,'datedAugust17,1951.
Onthebasisofthesefacts,weheldthat:
"TheCourt,therefore,concludesthattheplaintiffsarebuildersingoodfaithandtherelativerightsofthe
defendantMamertaCabralasownerofthelandandoftheplaintiffsasownersofthebuildingisgovernedby
Article361oftheCivilCode(CoTaov.JoaquinChanChico,46Off.Gaz.5514).Article361oftheoldCivil
CodehasbeenreproducedwithanadditionalprovisioninArticle448ofthenewCivilCode,approvedJune
18,1949."[31]
Similarly,inGranaandTorralbav.CourtofAppeals,[32]weheldthat:
"Althoughwithoutanylegalandvalidclaimoverthelandinquestion,petitioners,however,werefoundby
theCourtofAppealstohaveconstructedaportionoftheirhousethereoningoodfaith.UnderArticle361of
theoldCivilCode(Article448ofthenew),theownerofthelandonwhichanythinghasbeenbuiltingood
faithshallhavetherighttoappropriateashisownthebuilding,afterpaymenttothebuilderofnecessaryor
usefulexpenses,andinthepropercase,expensesforpureluxuryormerepleasure,ortoobligethebuilderto
paythepriceoftheland.Respondents,asownersoftheland,havethereforethechoiceofeither
appropriatingtheportionofpetitioners'housewhichisontheirlanduponpaymentoftheproper
indemnitytopetitioners,orsellingtopetitionersthatpartoftheirlandonwhichstandsthe
improvement.Itmayherebepointedoutthatitwouldbeimpracticalforrespondentstochooseto
exercisethefirstalternative,i.e.,buythatportionofthehousestandingontheirland,forinthatevent
thewholebuildingmightberendereduseless.Themoreworkablesolution,itwouldseem,isfor
respondentstoselltopetitionersthatpartoftheirlandonwhichwasconstructedaportionofthe
latter'shouse.Ifpetitionersareunwillingorunabletobuy,thentheymustvacatethelandandmust
payrentalsuntiltheydoso.Ofcourse,respondentscannotobligepetitionerstobuythelandifitsvalue
isconsiderablymorethanthatoftheaforementionedportionofthehouse.Ifsuchbethecase,then
petitionersmustpayreasonablerent.Thepartiesmustcometoanagreementastotheconditionsof
thelease,andshouldtheyfailtodoso,thenthecourtshallfixthesame."[33]
Inlightoftheserulings,petitioners,asownersofLotNo.24,maychoosetopurchasetheimprovement
made by respondents Go on their land, or sell to respondents Go the subject portion. If buying the
improvementisimpracticalasitmayrendertheGo'shouseuseless,thenpetitionersmayselltorespondents
GothatportionofLotNo.24onwhichtheirimprovementstands.IftheGo'sareunwillingorunabletobuy
thelot,thentheymustvacatethelandand,untiltheyvacate,theymustpayrenttopetitioners.Petitioners,
however,cannotcompelrespondentsGotobuythelandifitsvalueisconsiderablymorethantheportionof
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their house constructed thereon. If the value of the land is much more than the Go's improvement, then
respondentsGomustpayreasonablerent.Iftheydonotagreeonthetermsofthelease,thentheymaygoto
courttofixthesame.
IntheeventthatpetitionerselecttoselltorespondentsGothesubjectportionoftheirlot,thepricemust
befixedattheprevailingmarketvalueatthetimeofpayment.TheCourtofAppealserredinfixingtheprice
at the time of taking, which is the time the improvements were built on the land. The time of taking is
determinativeofjustcompensationinexpropriationproceedings.Theinstantcaseisnotforexpropriation.It
isnotatakingbythestateofprivatepropertyforapublicpurposeuponpaymentofjustcompensation.This
isacaseofanownerwhohasbeenpayingrealestatetaxesonhislandbuthasbeendeprivedoftheuseofa
portionofthislandforyears.Itisbutfairandjusttofixcompensationatthetimeofpayment.[34]
Article448andthesameconditionsabovestatedalsoapplytorespondentsGoasownersandpossessors
of their land and respondent Li Ching Yao as builder of the improvement that encroached on thirtyseven
(37)squaremetersofrespondentsGo'sland.
INVIEWWHEREOF,thedecisionofrespondentCourtofAppealsismodifiedasfollows:
(1)Petitionersareorderedtoexercisewithinthirty(30)daysfromfinalityofthisdecisiontheiroptionto
eitherbuytheportionofrespondentsGo'simprovementontheirLotNo.24,orselltosaidrespondentsthe
portion of their land on which the improvement stands. If petitioners elect to sell the land or buy the
improvement,thepurchasepricemustbeattheprevailingmarketpriceatthetimeofpayment.Ifbuyingthe
improvementwillrenderrespondentsGo'shouseuseless,thenpetitionersshouldselltheencroachedportion
of theirlandtorespondents Go.If petitioners choose to sell the land but respondents Go are unwilling or
unable to buy, then the latter must vacate the subject portion and pay reasonable rent from the time
petitionersmadetheirchoiceuptothetimetheyactuallyvacatethepremises.Butifthevalueofthelandis
considerablymorethanthevalueoftheimprovement,thenrespondentsGomayelecttoleasetheland,in
whichcasethepartiesshallagreeuponthetermsofthelease.Should they fail to agree on said terms, the
courtoforiginisdirectedtofixthetermsofthelease.
From the moment petitioners shall have exercised their option, respondents Go shall pay reasonable
monthlyrentuptothetimethepartiesagreeonthetermsoftheleaseoruntilthecourtfixessuchterms.
(2)RespondentsGoarelikewisedirectedtoexercisetheirrightsasownersofLotsNos.25and26,vis
avis respondent Li Ching Yao as builder of the improvement that encroached on thirty seven (37) square
metersofrespondentsGo'slandinaccordancewithparagraphoneabovementioned.
(3)TheDecisionoftheCourtofAppealsorderingEngineerQuedding,asthirdpartydefendant,topay
attorney's fees of P5,000.00 to respondents Go is affirmed. The additional filing fee on the damages
constitutesalienonthisaward.
(4)TheDecisionoftheCourtofAppealsdismissingthethirdpartycomplaintagainstAranetaInstitute
ofAgricultureisaffirmed.
SOORDERED.
Bellosillo,(Chairman),Mendoza,Quisumbing,andBuena,JJ.,concur.
[1]PennedbyJusticeCeliaLipanaReyesandconcurredinbyJusticesAlfredoL.BenipayoandCoronaIbaySomera.
[2]Exhibit"A,"FolderofPlaintiffs'Exhibits.
[3]Exhibits"1"and"2,"FolderofDefendantsGo'sExhibits.
[4]Exhibit"1,"FolderofDefendantLiChingYao'sExhibitsExhibit"4a,"FolderofExhibitsofAranetaInstituteofAgriculture.
[5]Exhibit"D,"FolderofPlaintiffs'Exhibits.
[6]Exhibit"1,"FolderofExhibitsQuedding.
[7]Exhibit"5,"FolderofDefendantsGo'sExhibitsDecisionoftheCourtofAppeals,p.3,Rollo,p.25.
[8]Decisionofthetrialcourt,p.11,CourtofAppealsRollo,p.86.
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[9]Rollo,p.44.
[10]Petition,p.4,Rollo,p.6.
[11]Tacayv.RTCofTagum,DavaodelNorte,180SCRA433,444[1989]SunInsuranceOffice,Ltd.(SIOL)v.Asuncion,170
SCRA274,285[1989]seealsoManchesterDevelopmentCorporationv.CourtofAppeals,149SCRA562,568569[1987].
[12]Tacayv.RTCofTagum,DavaodelNorte,supra,at440,444arealactionmaybecommencedorprosecutedwithoutan
accompanyingclaimfordamages.
[13]Id.
[14]OriginalDev't.andConstructionCorp.v.CourtofAppeals,202SCRA753,760[1991].
[15]Tacay,supra,at444OriginalDev't.andConstructionCorp.v.CourtofAppeals,supra,at760.
[16]OriginalDevelopmentCorporationv.CourtofAppeals,supra,at761.
[17]Tacay,supra,at441442SunInsuranceOfficeLtd.v.Asuncion,170SCRA274,285[1989].
[18]AnswerwithThirdPartyComplaint,p.7,Records,p.37.
[19]OrderdatedMay30,1986,Records,p.49.
[20]InSunInsuranceOffice,Ltd.(SIOL)v.Asuncion,supra,at279,itwasheldthattheManchesterruleanditsclarificationsare
proceduralrulesandmaybeappliedretroactivelytoactionspendingandundeterminedatthetimeoftheirpassage.Theinstant
casewaspendingatthetimeManchesterwaspromulgatedin1987.
[21]DecisionoftheCourtofAppeals,pp.1516,Rollo,pp.3738.
[22]Article526,CivilCodeprovides:
"Art.526.Heisdeemedapossessoringoodfaithwhoisnotawarethatthereexistsinhistitleormodeofacquisitionanyflaw
thatinvalidatesit."
[23]Article528,CivilCodeprovides:
"Art.528.Possessionacquiredingoodfaithdoesnotlosethischaracterexceptinthecaseandfromthemomentfactsexistwhich
showthatthepossessorisnotunawarethathepossessesthethingimproperlyorwrongfully."
[24]DecisionoftheCourtofAppeals,p.16,Rollo,p.38.
[25]Id.,atpp.1617,Rollo,pp.3839.
[26]Article527,CivilCode.
[27]Articles546and548provide:
"Art.546.Necessaryexpensesshallberefundedtoeverypossessorbutonlythepossessoringoodfaithmayretainthethinguntil
hehasbeenreimbursedtherefor.
Useful expenses shall be refunded only to the possessor in good faith with the same right of retention, the person who has
defeatedhiminthepossessionhavingtheoptionofrefundingtheamountoftheexpensesorofpayingtheincreasevaluewhich
thethingmayhaveacquiredbyreasonthereof."
"Art.548.Expensesforpureluxuryormerepleasureshallnotberefundedtothepossessoringoodfaithbuthemayremovethe
ornamentswithwhichhehasembellishedtheprincipalthingifitsuffersnoinjurythereby,andifhissuccessorinthepossession
doesnotprefertorefundtheamountexpended."
[28] Grana & Torralba v. Court of Appeals, 109 Phil. 260, 263 [1960]Acuna v. Furukawa Plantation Co., 93 Phil. 957, 961
[1953]Aringov.Arena,14Phil.263,269[1909].
[29] Grana and Torralba v. Court of Appeals, 109 Phil. 260, 263 [1960] Miranda v. Fadullon, 97 Phil. 801 [1955] Cabral v.
Ibanez,98Phil.140[1955].
[30]98Phil.140[1955].
[31]Id.,at142.
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BallatanvsCA:125683:March2,1999:J.Puno:SecondDivision

[32]109Phil.260[1960].
[33]Id.,at263264.
[34]SeeCabralv.Ibanez,supra,at143,wherethisCourtgavetheownerofthelandthirtydaystoelecteithertopurchasethe
improvement or sell the land and once having elected, the case was reset for admission of evidence on the value of the
improvement,orthevalueoftheland.Thisimpliesthatthepriceofthelandorimprovementwasfixeddefinitelynotatthetime
oftakingseealsoAringov.Arena,supra,at270.

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