GRANA V.

CA

Petitioners Leonor Grana and Julieta Torralba were sued by respondents Aurora Bongato and
Jardenio Sanchez, for the recovery of 87 square meters of residential land. After trial, the court
rendered judgment declaring respondents, owners of the land in controversy and ordering petitioners
to vacate and deliver it to said respondents and to pay a monthly rental until they actually vacate the
same.

The record discloses that sometime in 1909 a cadastral survey of Butuan, Agusan, was made by the
Bureau of Lands. In that survey, the parcel of land here in question was included as part of the lot
belonging to Gregorio Bongato and Clara Botcon for which Original Certificate of Title No. RO-72
(138) was issued in their favor on February 12, 1923. On November 25, 1933, this lot was purchased
by the spouses Marcos Bongato and Eusebia More, and upon their death, the land was inherited by
the respondents Aurora Bongato and Jardenio Sanchez. Petitioners, on the other hand claim that the
lands in Butuan were subsequently resurveyed due to conflicts and overlapping of boundaries. They
maintain that the land in question is part of the adjoining land, which belonged to their predecessor in
interest.

After trial, the court rendered judgment declaring Bongato and Sanchez owners of the land in
controversy and ordering Grana and Torralba to vacate and deliver it to the former and to pay a
monthly rental of P10.00 from the filing of the complaint until they actually vacate the same, plus
attorney’s fees and costs. The decision, on appeal, having been affirmed by the Court of Appeals with
the only modification of disallowing the award for attorney’s fees. Grana and Torralba brought the
case to the Supreme Court through a petition for review.

Issue:

Whether or not the trial court and appellate court erred in directing the petitioners to vacate the land
and deliver it to Bongato and sanchez and to pay a monthly rental until they vacate the same.

Ruling:

Yes. The Supreme Court directed the owners of the land to exercise their right of option since
petitioners were found by the Court of Appeals to have constructed a portion of their house thereon in
good faith.

Under Article 448 of the NCC, the owner of the land on which anything has been built in good faith
shall have the right to appropriate as his own the building, after payment to the builder of necessary
and useful expenses or selling to petitioners that part of their land on which stands the improvement.

Here, the court pointed out that it would be impractical for respondents to choose to exercise the first
alternative, i.e., buy that portion of the house standing on their land, for in that event the whole
building might be rendered useless. The more workable solution, it would seem, is for respondents to
sell to petitioners that part of their land on which was constructed a portion of the latter's house. If
petitioners are unwilling or unable to buy, then they must vacate the land and must pay rentals until
they do so. Of course, respondents cannot oblige petitioners to buy the land if its value is
considerably more than that of the aforementioned portion of the house. If such be the case, then
petitioners must pay reasonable rent. The parties must come to an agreement as to the conditions of
the lease, and should they fail to do so, then the court shall fix the same.

Notes:

In view of the foregoing, the appealed decision is modified in the sense that respondents are hereby
directed to exercise within 30 days from this decision their option to either buy the portion of the
petitioners' house on their land or sell to said petitioners the portion of their land and petitioners are
unwilling or unable to buy, then they must vacate the same and must pay reasonable rent of P10.00
monthly from the time respondents made their choice up to the time they actually vacate the
premises. But if the value of the eland is considerably more than the value of the improvement, then
petitioners may elect to rent the land, in which case the parties shall agree upon the terms of a lease.
Should they disagree, the court of origin is hereby instructed to intervene and fix the terms thereof.
Petitioners shall pay reasonable rent of P10.00 monthly up to the time the parties agree on the terms
of the lease or until the curt fixes such terms.
DEPRA V. DUMLAO

Plaintiff-appellee, Francisco Depra, is the owner of a parcel of land in the municipality of Dumangas,
Iloilo. Agustin Dumlao, defendant-appellant, owns an adjoining lot.

Sometime in 1972, when DUMLAO constructed his house on his lot, the kitchen thereof had
encroached on an area of thirty four (34) square meters of DEPRA's property, After the encroachment
was discovered his mother, Beatriz Depra after writing a demand letter asking DUMLAO to move
back from his encroachment and filed an action for Unlawful Detainer.

After trial, the Municipal Court found that DUMLAO was a builder in good faith, and applying Article
448 of the Civil Code, rendered judgment ordering a forced lease between the parties.

From the foregoing judgment, neither party appeal and that the judgment have lapsed into finality.
However, even then, DEPRA did not accept payment of rentals. As a consequence, DUMLAO
deposited such rentals with the Municipal Court.

On July 15,1974, DEPRA filed a Complaint for Quieting of Title against DUMLAO before the then
Court of First Instance of Iloilo, Branch IV (Trial Court), involving the very same 34 square meters,
which was the bone of contention in the Municipal Court. DUMLAO, in his Answer, admitted the
encroachment but alleged, in the main, that the present suit is barred by res judicata. On the other
hand, DEPRA claims that the Decision of the Municipal Court was null and void ab initio because its
jurisdiction is limited to the sole issue of possession, whereas decisions affecting lease, which is an
encumbrance on real property, may only be rendered by Courts of First Instance.

The CFI ruled on the matter and finally decided that DEPRA is "entitled to possession," without more,
of the disputed portion implying thereby that he is entitled to have the kitchen removed.

Issue:

Whether or not the CFI was correct in ruling that Depra is entitled to possession without more and
implying thereby that he is entitled to have the kitchen removed.

Ruling:

No. Pursuant to Article 448 of the NCC, DEPRA has the option either to pay for the encroaching part
of DUMLAO's kitchen, or to sell the encroached 34 square meters of his lot to DUMLAO. The good
faith of DUMLAO is part of the Stipulation of Facts. It was thus error for the Trial Court to have ruled
that DEPRA is "entitled to possession," without more, of the disputed portion implying thereby that he
is entitled to have the kitchen removed. He is entitled to such removal only when, after having
chosen to sell his encroached land, DUMLAO fails to pay for the same. 6 In this case, DUMLAO
had expressed his willingness to pay for the land, but DEPRA refused to sell.

The owner of the building erected in good faith on a land owned by another, is entitled to retain the
possession of the land until he is paid the value of his building, under article 453 (now Article 546).
The owner of the land, upon the other hand, has the option, under article 361 (now Article 448), either
to pay for the building or to sell his land to the owner of the building. But he cannot as respondents
here did refuse both to pay for the building and to sell the land and compel the owner of the building
to remove it from the land where it erected. He is entitled to such remotion only when, after having
chosen to sell his land. the other party fails to pay for the same (italics ours).

Notes:

It is the owner of the land who is authorized to exercise the option, because his right is older, and
because, by the principle of accession, he is entitled to the ownership of the accessory thing.
WHEREFORE, the judgment of the trial Court is hereby set aside, and this case is hereby ordered
remanded to the Regional Trial Court of Iloilo for further proceedings consistent with Articles 448 and
546 of the Civil Code