FIRSTDIVISION

[G.R.No.149295.September23,2003.]

PHILIPPINENATIONALBANK,petitioner,vs.GENEROSODE
JESUS,representedbyhisAttorneyinFact,CHRISTIANDE
JESUS,respondent.

TheChiefLegalCounselforpetitioner.
RolandoV.Zubiriforprivaterespondent.

SYNOPSIS

RespondentGenerosodeJesusfiledacomplaintagainstpetitionerPhilippine
NationalBank(PNB)forrecoveryofownershipandpossessionoverthe
northernportionofthelotwhichheacquiredwhichwasbeingencroached
uponbyabuildingofthepetitioner.Initsanswer,petitionerassertedthat
whenitacquiredthelotandbuildingfromMayorBienvenidoIgnacio,the
encroachmentwasalreadyinexistenceandtoremedythesituation,Mayor
Ignacioofferedtoselltheareainquestionbutitdidnotmaterializewhen
MayorIgnaciomortgagedthelottotheDevelopmentBankofthePhilippines.
Aftertrial,thecourtaquodecidedinfavorofrespondent.Itwasaffirmedby
theCourtofAppeals.Inthispetition,thepetitionerclaimedthattheCourtof
AppealsgravelyerredinlawinadjudgingPNBasabuilderinbadfaithover
theencroachedpropertyinquestion. AcCTaD

TheCourtruledthatgiventhefindingsofboththetrialcourtandtheappellate
court,itshouldbeevidentenoughthatpetitionerwouldfallmuchtooshort
fromitsclaimofgoodfaith.Evidently,petitionerwasquiteaware,andindeed
advised,priortoitsacquisitionofthelandandbuildingfromIgnaciothatapart
ofthebuildingsoldtoitstoodonthelandnotcoveredbythelandconveyedto
it.Equallysignificantisthefactthatthebuilding,constructedonthelandby
Ignacio,hasinactualitybeenpartofthepropertytransferredtopetitioner.
Article448oftheCivilCodereferstoapieceoflandwhoseownershipis
claimedbytwoormoreparties,oneofwhomhasbuiltsomeworks(orsown
orplantedsomething)andnottoacasewheretheownerofthelandisthe
builder,sower,orplanterwhothenlaterlosesownershipofthelandbysaleor
otherwisefor,elsewherestated,"wherethetrueownerhimselfisthebuilderof
worksonhisownland,theissueofgoodfaithorbadfaithisentirelyirrelevant.
"PetitionerwasnotinavalidpositiontoinvoketheprovisionsofArticle448of
theCivilCode.Consequently,thedecisionoftheCourtofAppealswas
affirmed.

SYLLABUS

1. CIVILLAWPROPERTYBUILDERINGOODFAITHOPTIONOFTHE
LANDOWNERISPRECLUSIVE.Abuilderingoodfaithcan,...compelthe
landownertomakeachoicebetweenappropriatingthebuildingbypayingthe
properindemnityorobligingthebuildertopaythepriceoftheland.The
choicebelongstotheowneroftheland,arulethataccordswiththeprinciple
ofaccession,i.e.,thattheaccessoryfollowstheprincipalandnottheother
wayaround.Evenastheoptionlieswiththelandowner,thegranttohim,
nevertheless,ispreclusive.Hemustchooseone.Hecannot,forinstance,
compeltheownerofthebuildingtoinsteadremoveitfromtheland.Inorder,
however,thatthebuildercaninvokethataccruingbenefitandenjoyhis
correspondingrighttodemandthatachoicebemadebythelandowner,he
shouldbeabletoprovegoodfaithonhispart.
2. ID.ID.ID.ARTICLE448OFTHECIVILCODEREFERSTOAPIECE
OFLANDWHOSEOWNERSHIPISCLAIMEDBYTWOORMORE
PARTIES,ONEOFWHOMHASBUILTSOMEWORKS.Equallysignificant
isthefactthatthebuilding,constructedonthelandbyIgnacio,hasinactuality
beenpartofthepropertytransferredtopetitioner.Article448,oftheCivilCode
referstoapieceoflandwhoseownershipisclaimedbytwoormoreparties,
oneofwhomhasbuiltsomeworks(orsownorplantedsomething)andnotto
acasewheretheownerofthelandisthebuilder,sower,orplanterwhothen
laterlosesownershipofthelandbysaleorotherwisefor,elsewisestated,
"wherethetrueownerhimselfisthebuilderofworksonhisownland,the
issueofgoodfaithorbadfaithisentirelyirrelevant."
3. ID.ID.GOODFAITHELUCIDATED.Goodfaith,hereunderstood,
isanintangibleandabstractqualitywithnotechnicalmeaningorstatutory
definition,anditencompasses,amongotherthings,anhonestbelief,the
absenceofmaliceandtheabsenceofdesigntodefraudortoseekan
unconscionableadvantage.Anindividual'spersonalgoodfaithisaconceptof
hisownmindand,therefore,maynotconclusivelybedeterminedbyhis
protestationsalone.Itimplieshonestyofintention,andfreedomfrom
knowledgeofcircumstanceswhichoughttoputtheholderuponinquiry.The
essenceofgoodfaithliesinanhonestbeliefinthevalidityofone'sright,
ignoranceofasuperiorclaim,andabsenceofintentiontooverreachanother.
Appliedtopossession,oneisconsideredingoodfaithifheisnotawarethat
thereexistsinhistitleormodeofacquisitionanyflawwhichinvalidatesit.
4. ID.ID.ID.NOTPRESENTINCASEATBAR.Giventhefindingsof
boththetrialcourtandtheappellatecourt,itshouldbeevidentenoughthat
petitionerwouldfallmuchtooshortfromitsclaimofgoodfaith.Evidently,
petitionerwasquiteaware,andindeedadvised,priortoitsacquisitionofthe
landandbuildingfromIgnaciothatapartofthebuildingsoldtoitstoodonthe
landnotcoveredbythelandconveyedtoit.

DECISION

VITUG,J :
p

PetitionerPhilippineNationalBankdisputesthedecisionhandeddownbythe
CourtofAppealspromulgatedon23March2001inCAG.R.CVNo.56001,
entitled"GenerosoDeJesus,representedbyhisAttorneyinFact,Christian
DeJesus,versusPhilippineNationalBank."Theassaileddecisionhas
affirmedthejudgmentrenderedbytheRegionalTrialCourt,Branch44,of
Mamburao,OccidentalMindoro,declaringrespondentGenerosodeJesusas
beingthetrueandlawfulownerofthe124squaremeterportionoftheland
coveredbyTransferCertificateofTitle(TCT)No.T17197andordering
petitionerbanktovacatethepremises,todeliverpossessionthereofto
respondent,andtoremovetheimprovementthereon.
Itwouldappearthaton10June1995,respondentfiledacomplaintagainst
petitionerbeforetheRegionalTrialCourtofOccidentalMindoroforrecoveryof
ownershipandpossession,withdamages,overthequestionedproperty.Inhis
complaint,respondentstatedthathehadacquiredaparceloflandsituatedin
Mamburao,OccidentalMindoro,withanareaof1,144squaremeterscovered
byTCTNo.T17197,andthaton26March1993,hehadcausedaverification
surveyofthepropertyanddiscoveredthatthenorthernportionofthelotwas
beingencroacheduponbyabuildingofpetitionertotheextentof124square
meters.Despitetwolettersofdemandsentbyrespondent,petitionerfailed
andrefusedtovacatethearea.
Petitioner,initsanswer,assertedthatwhenitacquiredthelotandthebuilding
sometimein1981fromthenMayorBienvenidoIgnacio,theencroachment
alreadywasinexistenceandtoremedythesituation,MayorIgnacioofferedto
selltheareainquestion(whichthenalsobelongedtoIgnacio)topetitionerat
P100.00persquaremeterwhichofferthelatterclaimedtohaveaccepted.
Thesale,however,didnotmaterializewhen,withouttheknowledgeand
consentofpetitioner,MayorIgnaciolatermortgagedthelottothe
DevelopmentBankofthePhilippines.
Thetrialcourtdecidedthecaseinfavorofrespondentdeclaringhimtobethe
rightfulownerofthedisputed124squaremeterportionofthelotandordering
petitionertosurrenderpossessionofthepropertytorespondentandtocause,
atitsexpense,theremovalofanyimprovementthereon.
TheCourtofAppeals,onappeal,sustainedthetrialcourtbutitorderedtobe
deletedtheawardtorespondentofattorney'sfees,aswellasmoraland
exemplarydamages,andlitigationexpenses.
PetitionerwenttothisCourt,viaapetitionforreview,aftertheappellatecourt
haddeniedthebank'smotionforreconsideration,herenowcontendingthat
"1. THECOURTOFAPPEALSGRAVELYERREDINLAWIN
ADJUDGINGPNBABUILDERINBADFAITHOVERTHE
ENCROACHEDPROPERTYINQUESTION
"2. THECOURTOFAPPEALSGRAVELYERREDINLAWIN
NOTAPPLYINGINFAVOROFPNBTHEPROVISIONOFARTICLE
448OFTHECIVILCODEANDTHERULINGINTECHNOGAS
PHILIPPINESMANUFACTURINGCORP.VS.COURTOF
APPEALS,G.R.No.108894,February10,1997,268SCRA7."1

TheRegionalTrialCourtandtheCourtofAppealshavebothrejectedtheidea
thatpetitionercanbeconsideredabuilderingoodfaith.Inthecontextthat
suchtermisusedinparticularreferencetoArticle448,etseq.,oftheCivil
Code,abuilderingoodfaithisonewho,notbeingtheowneroftheland,
buildsonthatlandbelievinghimselftobeitsownerandunawareofanydefect
inhistitleormodeofacquisition.
ThevariousprovisionsoftheCivilCode,pertinenttothesubject,read:
"Article448.Theownerofthelandonwhichanythinghasbeenbuilt,
sown,orplantedingoodfaith,shallhavetherighttoappropriateas
hisowntheworks,sowingorplanting,afterpaymentoftheindemnity
providedforinArticles546and548,ortoobligetheonewhobuiltor
plantedtopaythepriceoftheland,andtheonewhosowed,the
properrent.However,thebuilderorplantercannotbeobligedtobuy
thelandifitsvalueisconsiderablymorethanthatofthebuildingor
trees.Insuchacase,heshallpayreasonablerent,iftheownerofthe
landdoesnotchoosetoappropriatethebuildingortreesafterproper
indemnity.Thepartiesshallagreeuponthetermsoftheleaseandin
caseofdisagreement,thecourtshallfixthetermsthereof."
"Article449.Hewhobuilds,plants,orsowsinbadfaithonthelandof
another,loseswhatisbuilt,plantedorsownwithoutrightto
indemnity."
"Article450.Theownerofthelandonwhichanythinghasbeenbuilt,
plantedorsowninbadfaithmaydemandthedemolitionofthework,
orthattheplantingorsowingberemoved,inordertoreplacethings
intheirformerconditionattheexpenseofthepersonwhobuilt,
plantedorsowedorhemaycompelthebuilderorplantertopaythe
priceoftheland,andthesowertheproperrent."

Abuilderingoodfaithcan,undertheforegoingprovisions,compelthe
landownertomakeachoicebetweenappropriatingthebuildingbypayingthe
properindemnityorobligingthebuildertopaythepriceoftheland.The
choicebelongstotheowneroftheland,arulethataccordswiththeprinciple
ofaccession,i.e.,thattheaccessoryfollowstheprincipalandnottheother
wayaround.2Evenastheoptionlieswiththelandowner,thegranttohim,
nevertheless,ispreclusive.Hemustchooseone.Hecannot,forinstance,
compeltheownerofthebuildingtoinsteadremoveitfromtheland.3Inorder,
however,thatthebuildercaninvokethataccruingbenefitandenjoyhis
correspondingrighttodemandthatachoicebemadebythelandowner,he
shouldbeabletoprovegoodfaithonhispart.
Goodfaith,hereunderstood,isanintangibleandabstractqualitywithno
technicalmeaningorstatutorydefinition,anditencompasses,amongother
things,anhonestbelief,theabsenceofmaliceandtheabsenceofdesignto
defraudortoseekanunconscionableadvantage.Anindividual'spersonal
goodfaithisaconceptofhisownmindand,therefore,maynotconclusively
bedeterminedbyhisprotestationsalone.Itimplieshonestyofintention,and
freedomfromknowledgeofcircumstanceswhichoughttoputtheholderupon
inquiry.4Theessenceofgoodfaithliesinanhonestbeliefinthevalidityof
one'sright,ignoranceofasuperiorclaim,andabsenceofintentionto
overreachanother.5Appliedtopossession,oneisconsideredingoodfaithif
heisnotawarethatthereexistsinhistitleormodeofacquisitionanyflaw
whichinvalidatesit.6
Giventhefindingsofboththetrialcourtandtheappellatecourt,itshouldbe
evidentenoughthatpetitionerwouldfallmuchtooshortfromitsclaimofgood
faith.Evidently,petitionerwasquiteaware,andindeedadvised,priortoits
acquisitionofthelandandbuildingfromIgnaciothatapartofthebuildingsold
toitstoodonthelandnotcoveredbythelandconveyedtoit.
Equallysignificantisthefactthatthebuilding,constructedonthelandby
Ignacio,hasinactualitybeenpartofthepropertytransferredtopetitioner.
Article448,oftheCivilCodereferstoapieceoflandwhoseownershipis
claimedbytwoormoreparties,oneofwhomhasbuiltsomeworks(orsown
orplantedsomething)andnottoacasewheretheownerofthelandisthe
builder,sower,orplanterwhothenlaterlosesownershipofthelandbysaleor
otherwisefor,elsewisestated,"wherethetrueownerhimselfisthebuilderof
worksonhisownland,theissueofgoodfaithorbadfaithisentirely
irrelevant."7
Infine,petitionerisnotinavalidpositiontoinvoketheprovisionsofArticle
448oftheCivilCode.TheCourtcommiserateswithpetitionerinitspresent
predicamentupontheotherhand,respondent,too,isentitledtohisrights
underthelaw,particularlyafterhavinglongbeendeprivedoftheenjoymentof
hisproperty.Nevertheless,theCourtexpresseshopethatthepartieswillstill
beabletocomeupwithanarrangementthatcanbemutuallysuitableand
acceptabletothem.
WHEREFORE,thedecisionoftheCourtofAppealsinCAG.R.CVNo.56001
isAFFIRMED.Nocosts.
SOORDERED.
Davide,Jr.,C.J.,YnaresSantiagoandCarpio,JJ.,concur.
Azcuna,J.,onsickleave.

Footnotes

1. Rollo,p.12.
2. Depravs.Dumlao,G.R.No.L57348,16May1985,136SCRA475.
3. Ignaciovs.Hilario,76Phil.605Sarmientovs.Agana,G.R.No.L57288,
30April1984,129SCRA122TecnogasPhilippinesManufacturingCorp.
vs.CourtofAppeals,G.R.No.108894,10February1997,268SCRA7.
4. Black'sLawDictionary,AbridgedFifthEdition,p.353.
5. Bernardovs.Bernardo,96Phil.202Negretevs.CFIofMarinduque,
G.R.No.L31267,24November1972,48SCRA113.
6. Article526,CivilCodeofthePhilippines.
7. Pecsonvs.CourtofAppeals,G.R.No.115814,26May1995,244SCRA
407.