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VOL. 193, JANUARY 18, 1991 17

Ignao vs. Intermediate Appellate Court

*
G.R. No. 72876. January 18, 1991.

FLORENCIO IGNAO, petitioner, vs. HON.

INTERMEDIATE APPELLATE COURT, JUAN IGNAO,
substituted by his Legal Heirs, and ISIDRO IGNAO,
respondents.

Co-ownership; Property; Art. 448, new Civil Code applies to

property held in common once it is partitioned.—In other words,
when the co-ownership is terminated by a partition and it appears
that the house of an erstwhile co-owner has encroached upon a
portion pertaining to another co-owner which was however made
in good faith, then the provisions of Article 448 should apply to
determine the respective rights of the parties.

Same; Same; When co-owned estate is partitioned, it is the co-

owner whose portion is encroached upon who has the option to sell
that portion or buy the improvement.—Petitioner’s second
assigned error is however well taken. Both the trial court and the
Appellate Court erred when they peremptorily adopted the
“workable solution” in the case of

_______________

* THIRD DIVISION.

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18 SUPREME COURT REPORTS ANNOTATED

Ignao vs. Intermediate Appellate Court

Grana vs. Court of Appeals, and ordered the owner of the land,
petitioner Florencio, to sell to private respondents, Juan and
Isidro, the part of the land they intruded upon, thereby depriving
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petitioner of his right to choose. Such ruling contravened the

explicit provisions of Article 448 to the effect that “(t)he owner of
the land xxx shall have the right to appropriate xxx or to oblige
the one who built xxx to pay the price of the land xxx.” The law is
clear and unambiguous when it confers the right of choice upon
the landowner and not upon the builder and the courts.

Same; Same; Same.—Wherefore, the decision appealed from

is hereby MODIFIED as follows: Petitioner Florencio Ignao is
directed within thirty (30) days from entry of judgment to exercise
his option to either appropriate as his own the portions of the
houses of Juan and Isidro Ignao occupying his land upon payment
of indemnity in accordance with Articles 546 and 548 of the Civil
Code, or sell to private respondents the 101 square meters
occupied by them at such price as may be agreed upon. Should the
value of the land exceed the value of the portions of the houses
that private respondents have erected thereon, private
respondents may choose not to buy the land but they must pay
reasonable rent for the use of the portion of petitioner’s land as
may be agreed upon by the parties. In case of disagreement, the
rate of rental and other terms of the lease shall be determined by
the trial court. Otherwise, private respondents may remove or
demolish at their own expense the said portions of their houses
encroaching upon petitioner’s land.

PETITION for certiorari to review the decision of the

Intermediate Appellate Court.

The facts are stated in the opinion of the Court.

     Dolorfino and Dominguez Law Offices for petitioner.
       Ambrosio Padilla, Mempin & Reyes Law Offices for
private respondents.

FERNAN, C.J.:

In this petition for review by certiorari, petitioner seeks the

reversal of the decision of the Intermediate Appellate Court
(now Court of Appeals) affirming in toto the decision of the
Court of First Instance of Cavite, ordering petitioner
Florencio Ignao to sell to private respondents Juan and
Isidro Ignao, that part of his property where private
respondents had built a
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VOL. 193, JANUARY 18, 1991 19

Ignao vs. Intermediate Appellate Court

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portion of their houses.

The antecedent facts are as follows:
Petitioner Florencio Ignao and his uncles private
respondents Juan Ignao and Isidro Ignao were co-owners of
a parcel of land with an area of 534 square meters situated
in Barrio Tabon, Municipality of Kawit, Cavite. Pursuant
to an action for partition filed by petitioner docketed as
Civil Case No. N-1681, the then Court of First Instance of
Cavite in a decision dated February 6, 1975 directed the
partition of the aforesaid land, alloting 133.5 square meters
or 2/8 thereof to private respondents Juan and Isidro, and
giving the remaining portion with a total area of 266.5
square meters to petitioner1 Florencio. However, no actual
partition was ever effected.
On July 17, 1978, petitioner instituted a complaint for
recovery of possession of real property against private
respondents Juan and Isidro before the Court of First
Instance of Cavite, docketed as Civil Case No. 2662. In his
complaint petitioner alleged that the area occupied by the
two (2) houses built by private respondents exceeded the
133.5 square meters previously alloted to them by the trial
court in Civil Case No. N-1681.
Consequently, the lower court conducted an ocular
inspection. It was found that the houses of Juan and Isidro
actually encroached upon a portion of the land belonging to
Florencio. Upon agreement of the parties, the trial court
ordered a licensed geodetic engineer to conduct a survey to
determine the exact area occupied by the houses of private
respondents. The survey subsequently disclosed that the
house of Juan occupied 42 square meters while that of
Isidro occupied 59 square meters of Florencio’s land or a
total of 101 square meters.
In its decision, the trial court (thru Judge Luis L. Victor)
ruled that although private respondents occupied a portion
of Florencio’s property, they should be considered builders
in good faith. The trial court took into account the decision
of the Court
2
of First Instance of Cavite in the action for
partition and quoted:

_______________

1 Record on Appeals, p. 5.
2 Civil Case No. N-1681.

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Ignao vs. Intermediate Appellate Court
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“xxx.Hence, it is the well-consired opinion of the Court that

although it turned out that the defendants had, before partition,
been in possession of more than what rightfully belongs to them,
their possession of what is in excess of their rightful share can at
worst be possession in good faith which exempts 3
them from being
condemned to pay damages by reason thereof.”

Furthermore, the trial court stated that pursuant to Article

448 of the Civil Code, the owner of the land (Florencio)
should have the choice to either appropriate that part of
the house standing on his land after payment of indemnity
or oblige the builders in good faith (Juan and Isidro) to pay
the price of the land. However, the trial court observed that
based on the facts of the case, it would be useless and
unsuitable for Florencio to exercise the first option since
this would render the entire houses of Juan and Isidro
worthless. The trial court then applied the ruling4
in the
similar case of Grana vs. Court of Appeals, where the
Supreme Court had advanced a more “workable solution”.
Thus, it ordered Florencio to sell to Juan and Isidro those
portions of his land respectively occupied by the latter. The
dispositive portion of said decision reads as follows:

“WHEREFORE, judgment is hereby rendered in favor of the

defendants and—

“(a) Ordering the plaintiff Florencio Ignao to sell to the

defendants Juan and Isidro Ignao that portion of his
property with an area of 101 square meters at P40.00 per
square meter, on which part the defendants had built
their houses; and
“(b) Ordering the said plaintiff to execute the necessary deed
of conveyance to the defendants in accordance with
paragraph
5
(a) hereof. “Without pronouncement as to
costs.”

Petitioner Florencio Ignao appealed to the Intermediate

Appellate Court. On August 27, 1985, the Appellate Court,6
Second Civil Cases Division, promulgated a decision,
affirming

_______________

3 Record on Appeals, p. 20, italics supplied.

4 109 Phil. 260.
5 Rollo, p. 35, Record on Appeal, p. 24.
6 Through Associate Justices Serafin E. Camilon, ponente, Crisolito
Pascual, Jose C. Campos, Jr. and Desiderio P. Jurado, concur-

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VOL. 193, JANUARY 18, 1991 21

Ignao vs. Intermediate Appellate Court

the decision of the trial court.

Hence the instant petition for review which attributes to
the Appellate Court the following errors:

“1. That the respondent Court has considered private

respondents builders in good faith on the land on
question, thus applying Art. 448 of the Civil Code,
although the land in question is still owned by the
parties in co-ownership, hence, the applicable
provision is Art. 486 of the Civil Code, which was
not applied.
“2. That, granting for the sake of argument that Art.
448 x x x is applicable, the respondent Court has
adjudged the working solution suggested in Grana
and Torralba vs. C.A. (109 Phil. 260), which is just
an opinion by way of passing, and not the judgment
rendered therein, which is in accordance with the
said provision of the Civil Code, wherein the owner
of the land to buy (sic) the portion of the building
within 30 days from the judgment or sell the land
occupied by the building.
“3. That, granting that private respondents could buy
the portion of the land occupied by their houses, the
price fixed
7
by the court is unrealistic and pre-war
price.”

The records of the case reveal that the disputed land with
an area of 534 square meters was originally owned by
Baltazar Ignao who married twice. In his first marriage, he
had four children, namely Justo (the father of petitioner
Florencio), Leon and private respondents Juan and Isidro.
In his second marriage, Baltazar had also four children but
the latter waived their rights over the controverted land in
favor of Justo. Thus, Justo owned 4/8 of the land which was
waived by his half-brothers and sisters plus his 1/8 share or
a total of 5/8. Thereafter, Justo acquired the 1/8 share of
Leon for P500.00 which he later sold to his son Florencio
for the same amount. When Justo died, Florencio inherited
the 5/8 share of his father Justo plus his 1/8 share of the
land which he bought or a total of 6/8 (representing 400.5
square meters). Private respondents, Juan and Isidro, on
the other hand, had 1/8 share (66.75 square meters) each of
the land or a total of 133.5 square meters.

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Before the decision in the partition case was

promulgated, Florencio sold 134 square meters of his share
to a certain Victa ring.

_______________

7 Rollo, pp. 9-10.

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22 SUPREME COURT REPORTS ANNOTATED

Ignao vs. Intermediate Appellate Court

for P5,000.00 on January 27, 1975. When the decision was

handed down on February 6, 1975, the lower court alloted
2/8 of the land to private respondents Juan and Isidro, or a
total of 133.5 square meters.
It should be noted that prior to partition, all the co-
owners hold the property in common dominion but at the
same time each is an owner of a share which is abstract
and undetermined until partition is effected.8
As cited in
Eusebio vs. Intermediate Appellate Court, “an undivided
estate is co-ownership by the heirs.”
As co-owners, the parties may have unequal shares in
the common property, quantitatively speaking. But in a
qualitative sense, each co-owner has the same right as any
one of the other co-owners. Every co-owner is therefore the
owner of the whole, and over the whole he exercises the
right of dominion, but he is at the same time the owner of a
portion which is truly abstract, because until division
9
is
effected such portion is not concretely determined.
Petitioner Florencio, in his first assignment of error,
asseverates that the court a quo erred in applying Article
448 of the Civil Code, since this article contemplates a
situation wherein the land belongs to one person and the
thing built, sown or planted belongs to another. In the
instant case, the land in dispute used to be owned in
common by the contending parties.
Article 448 provides:

“ART. 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 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,

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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

_______________

8 G.R. No. 72188, September 15, 1986, 144 SCRA 154.

9 Felices vs. Colegado, No. L-23374, September 30, 1970, 35 SCRA 173, 178.

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VOL. 193, JANUARY 18, 1991 23

Ignao vs. Intermediate Appellate Court

lease and in case of disagreement, the court shall fix the terms
thereof.”

Whether or not the provisions of Article 448 should apply

to a builder in good faith on a property held in common has
been resolved in the
10
affirmative in the case of Spouses del
Campo vs. Abesia, wherein the Court ruled that:

“The court a quo correctly held that Article 448 of the Civil Code
cannot apply where a co-owner builds, plants or sows on the land
owned in common for then he did not build, plant or sow upon
land that exclusively belongs to another but of which he is a co-
owner. The co-owner is not a third person under the
circumstances, and the situation is governed by the rules of co-
ownership.
“However, when, as in this case, the ownership is terminated by
the partition and it appears that the home of defendants overlaps
or occupies a portion of 5 square meters of the land pertaining to
plaintiffs which the defendants obviously built in good faith, then
the provisions of Article 448 of the new Civil Code should apply.
Manresa and Navarro Amandi agree that the said provision of the
Civil Code may apply even11when there is a co-ownership if good
faith has been established.”

In other words, when the co-ownership is terminated by a

partition and it appears that the house of an erstwhile co-
owner has encroached upon a portion pertaining to another
co-owner which was however made in good faith, then the
provisions of Article 448 should apply to determine the
respective rights of the parties.
Petitioner’s second assigned error is however well taken.
Both the trial court and the Appellate Court erred when
they peremptorily adopted the “workable
12
solution” in the
case of Grana vs. Court of Appeals, and ordered the owner
of the land, petitioner Florencio, to sell to private

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respondents, Juan and Isidro, the part of the land they

intruded upon, thereby depriving petitioner of his right to
choose. Such ruling contravened the explicit provisions of
Article 448 to the effect that “(t)he

_______________

10 No. L-49219, April 18, 1988, 160 SCRA 379.

11 Italics supplied.
12 Supra.

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24 SUPREME COURT REPORTS ANNOTATED

Ignao vs. Intermediate Appellate Court

owner of the land xxx shall have the right to appropriate

xxx or to oblige the one who built xxx to pay the price of the
land xxx.” The law is clear and unambiguous when it
confers the right of choice upon the landowner and not
upon the builder and the courts. 13
Thus, in Quemuel vs. Olaes, the Court categorically
ruled that the right to appropriate the works or
improvements or to oblige the builder to pay the price of
the land belongs to the landowner.
As to the third assignment of error, the question on the
price to be paid on the land need not be discussed as this
would be premature inasmuch as petitioner Florencio has
yet to exercise his option as the owner of the land.
WHEREFORE, the decision appealed from is hereby
MODIFIED as follows: Petitioner Florencio Ignao is
directed within thirty (30) days from entry of judgment to
exercise his option to either appropriate as his own the
portions of the houses of Juan and Isidro Ignao occupying
his land upon payment of indemnity in accordance with
Articles 546 and 548 of the Civil Code, or sell to private
respondents the 101 square meters occupied by them at
such price as may be agreed upon. Should the value of the
land exceed the value of the portions of the houses that
private respondents have erected thereon, private
respondents may choose not to buy the land but they must
pay reasonable rent for the use of the portion of petitioner’s
land as may be agreed upon by the parties. In case of
disagreement, the rate of rental and other terms of the
lease shall be determined by the trial court. Otherwise,
private respondents may remove or demolish at their own
expense the said 14portions of their houses encroaching upon
petitioner’s land. No costs.
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SO ORDERED.

     Gutierrez, Jr., Feliciano and Bidin, JJ., concur.

Decision modified.

_______________

13 G.R. No. L-11084, April 29, 1961, 1 SCRA 1159.

14 See Spouses del Campo vs. Abesia, No. L-49219, April 15, 1988, 160
SCRA 379.

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VOL. 193, JANUARY 18, 1991 25

Vill Transport Services, Inc. vs. Court of Appeals

Notes.—A person who obtains property through

mistake or fraud is by force of law considered a trustee of
an implied trust for the benefit of the person from whom
the property comes. (Tomas vs. Court of Appeals, 185 SCRA
627.)
Imprescriptibility of property inherited cannot be
invoked when a co-owner possessed the property as
exclusive owner. (Bicarme vs. Court of Appeals, 186 SCRA
294.)
Barron being a builder in good faith the house she built
cannot become the landowner’s property without proper
recompense. (Santos vs. Intermediate Appellate Court, 186
SCRA 694.)

——o0o——

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