FIRST DIVISION
[G.R. No. 243834. September 29, 2021.]
FREDERIC DE BACKER AND PIERRE ZAPPAVIGNA, petitioners, vs.JUANA F. SHERMER JOINED BY HER HUSBAND RAYMOND SHERMER, respondent.
NOTICE
Sirs/Mesdames :
Please take notice that the Court, First Division, issued a Resolution datedSeptember 29, 2021which reads as follows:
"G.R. No. 243834 (Frederic De Backer and Pierre Zappavigna v. Juana F. Shermer joined by her husband Raymond Shermer) — The crux of controversy in this Petition for Review on Certiorari, 1 assailing the July 31, 2018 Decision 2 and December 17, 2018 Resolution 3 of the Court of Appeals in CA-G.R. CV No. 04328-MIN is whether Frederic De Backer (Frederic) and Pierre Zappavigna (Pierre) were builders in good faith or bad faith over the 1,653-square meter portion of land owned by Juana F. Shermer (Juana).
ANTECEDENTS
Frederic and Pierre organized Zafre Corporation (Zafre Corp.) for the establishment and operation of Kalinaw Resort in the island of Siargao. For this purpose, Frederic and Pierre bought Lot No. 3154, covered by Transfer Certificate of Title No. 13244, from Teodorico Ravelo (Teodorico) sometime in October 2005. In November 2005, a meeting was held — attended by Frederic, Pierre, Teodorico, Juana, Department of Environment and Natural Resources (DENR) Representative Nestor Espejon, owners of other adjoining properties, neighbors who are familiar with the area, and real estate agent Eric Uy — to define the perimeter of Lot No. 3154 and the adjacent lot (Lot No. 3153) belonging to Juana. After the meeting, the boundary of Lot Nos. 3153 and 3154 was established to be the line planted with coco wood opposite and close to each other, locally known as tinindak, reinforced with concrete posts and coconut trees. Believing that the lots' boundaries have been settled, Frederic and Pierre fenced Lot No. 3154 and started the construction of their beach resort. 4
According to Frederic and Pierre, the whole project was completed in n March 2006. For the entire duration of the development, Juana saw the construction works and did not protest nor attempt to stop it. However, after everything was done and already operational, Frederic and Pierre were shocked when Juana suddenly demanded P2,000,000.00 as annual rental for allegedly encroaching a portion of her lot. 5
Consequently, on November 9, 2006, Juana, joined by her husband, Raymond Shermer, filed a complaint for quieting of title and recovery of ownership and possession against Frederic, Pierre and Zafre Corp. She alleged that, sometime in August 2006, she noticed that Frederic and Pierre were constructing on the eastern portion of her property. Juana wasted no time and informed them of the encroachment. However, Frederic and Pierre ignored her. Juana then engaged the services of a geodetic engineer to perform a relocation survey. On October 6, 2006, the survey confirmed that Frederic and Pierre encroached 1,653 sq. m. of Juana's lot. Consequently, Juana demanded that Frederic and Pierre vacate her property. Despite this, Frederic and Pierre maintained that their construction works are all confined within their property, Lot No. 3154. 6 TIADCc
On March 28, 2016, the Regional Trial Court (RTC) ruled that Frederic and Pierre encroached on Juana's property, but were deemed to be builders in good faith, 7 ratiocinating as follows:
[T]he records clearly show that sometime in November 2005, before [De Backer and Pierre] started to introduce improvements on the questioned property, they had conducted a meeting attended by [Juana], Nestor Espejon of the DENR, Eric Uy [—] the real estate agent and neighbors who are knowledgeable of the boundary between [Lot Nos. 3153 and 3154] precisely to determine the boundary of said properties, and having agreed, including [Juana], that the boundary was the so called natural boundary, the "tinindak," [Frederic and Pierre] relied thereon and started construction on the bases thereof.
[Juana,] having attended the said meeting but failed to make any objections on the determination x x x of the properties x x x, has led [Frederic and Pierre] to believe that indeed that said boundary is the correct boundary. x x x.
Clearly, having just bought the questioned property, [Frederic and Pierre] being foreigners were not familiar with its boundaries and having relied on the determination made on the said meeting, and subsequently introducing improvement. On the basis thereof, the defendants clearly are builders in good faith. Being so, Article n 458 and 546 of the New Civil Code appl[ies] to the instant case. 8
Unsatisfied, Juana filed an appeal before the CA, imputing error on the RTC's finding that Frederic and Pierre are builders in good faith. 9 In its Decision dated July 31, 2018, the CA affirmed the RTC's judgment with modification in that Frederic and Pierre are builders in bad faith, 10 thus:
ACCORDINGLY, the appeal is PARTLY GRANTED. The Decision dated 28 March 2016 of the Regional Trial Court, 10th Judicial Region, Branch 31, Dapa, Surigao del Norte, in SCA 31-06, is AFFIRMED with MODIFICATION that Frederic De Backer, Pierre Zappavigna and Zafre, Inc. are builders in bad faith.
SO ORDERED. 11
The CA held that while the construction was still ongoing, Juana apprised Frederic and Pierre of the overlap in their properties, which fact was admitted by Frederic and Pierre during the pre-trial. Also, photographs show that the beach resort remained incomplete until July 2009. These facts were uncontroverted by Frederic and Pierre. Thus, the CA ruled as follows:
[Frederic and Pierre] were very much aware of the possibility of encroachment at the time they continued their construction projects. And, despite numerous requests from [Juana] to halt the works, [they] turned a deaf ear. They were, therefore, not free from any knowledge of circumstances which ought to put them upon solicitous inquiry vis-à-vis the 1,653 square meters of Lot 3153. They were, therefore, builders in bad faith. Consequently, they have no right to retain the construction projects until they are reimbursed for their necessary expenses as provided under Article 546 of the Civil Code.
As a corollary, [Juana has] the right to appropriate what has been built on the 1,653 square meters of Lot 3153, without any obligation to pay indemnity, pursuant to Article n 449 and 450 of the Civil Code, x x x.
xxx xxx xxx
The above disquisition leads to the question: can [Juana] compel [Frederic and Pierre] to pay proper rent?
They cannot. As expressly mentioned in Article 450, [Juana has] the right to either demand from [Frederic and Pierre], as builder in bad faith, the demolition of the structures erected on the 1,653 square meters of Lot 3153 or to compel the payment of the price of the encroached area. [Juana] cannot further demand the payment of rents since such right may only be demanded from a sower in bad faith. In consequence, [Juana's] prayer to direct or compel [Frederic and Pierre] the payment of P100.00 rent per square meter holds no water. 12
Arguing that they are likewise appellants before the CA, Frederic and Pierre moved for reconsideration. 13 They reiterated that it was Juana who acted in manifest bad faith and was out to enrich herself unjustly at their expense and injury. 14 In a Resolution, dated December 17, 2018, the CA denied the reconsideration. 15
Hence, this petition.
Frederic and Pierre maintains that they did not encroach upon Juana's property. The lower courts' ruling lacks basis since the Final Survey Report and Sketch Plan were not authenticated by the persons who issued them; thus, inadmissible for being hearsay. Frederic and Pierre likewise asserts that they are not builders in bad faith, and that it is Juana who is in bad faith and should be barred by estoppel for not raising her protest at the earliest opportunity. Juana witnessed the construction works on the land but never objected until after the beach resort was already in operation. Juana's acts constitute as an attempt to unjustly enrich herself to the prejudice and injury of Frederic and Pierre. 16 AIDSTE
In her Comment, 17 Juana averred that the RTC appointed three (3) commissioners, who rendered a Final Consolidated Commissioners' Report, stating that upon actual survey or inspection, they found that Frederic and Pierre encroached on Juana's property, covering an area of 1,653 sq. m. Frederic and Pierre's counsel did not object to the Report, which was eventually approved by the RTC. 18 Considering that no opposition was interposed by the parties, the RTC then admitted the Commissioners' Report as evidence sufficient to rule that Frederic and Pierre trespassed on Juana's property. 19 Juana also raised that the CA correctly concluded that Frederic and Pierre were in bad faith because it was proved that they were notified by Juana that their construction intruded into her property; yet, they still continued with the construction. 20
In their Reply, 21 Frederic and Pierre reiterated that they did not encroach on Juana's property and that they are builders in good faith.
THE COURT'S RULING
The petition is bereft of merit.
At the outset, we note that the RTC and the CA both found that there was preponderance of evidence that Frederic and Pierre encroached upon Lot No. 3153 owned by Juana. This factual issue is beyond the ambit of this Court's jurisdiction in a petition for review on certiorari. It is not this Court's task to go over the proofs presented below to ascertain that they were appreciated and weighed correctly, most especially when the trial court and the appellate court speak as one in their findings and conclusion. 22 It is well-settled that findings of facts of the CA are conclusive and binding on this Court, and carry even more weight when the CA affirms the factual findings of the trial court. 23 Stated differently, the findings of the CA, by itself, which are supported by substantial evidence, are almost beyond the power of review by this Court. Although this rule is subject to certain exceptions, 24 this Court finds none that is applicable in this case.
Nevertheless, it is necessary to determine Frederic and Pierre's good faith or bad faith as builders, as well as the parties' relative rights and obligations, since the RTC and the CA differed in their findings. On one hand, the RTC found them to be builders in good faith because Juana failed to object to the determination of the boundary made before construction was started. On the other hand, the CA found them in bad faith because Juana repeatedly demanded that they stop construction on account of encroachment on her property.
To be deemed a builder in good faith, it is essential that a person asserts title to the land on which he builds, i.e., he is a possessor in the concept of owner, and that he is unaware that there exists in his title or mode of acquisition any flaw that invalidates it. 25
The essence of good faith lies in an honest belief in the validity of one's right, ignorance of a superior claim, and absence of intention to overreach another. Meanwhile, bad faith contemplates a state of mind affirmatively operating with furtive design or some motive of self-interest or ill will for ulterior purposes. 26 Bad faith should be established by clear and convincing evidence since the law always presumes good faith. 27 Bad faith does not simply connote bad judgment or negligence. It imports a dishonest purpose or some moral obliquity and conscious doing of a wrong. It means breach of a known duty through some motive, interest or ill will that partakes of the nature of fraud. 28
In Pen Development Corporation v. Martinez Leyba, Inc., 29 respondent noticed that petitioners' construction of a fence seemed to encroach on its land. After verification by surveyors that petitioners' fence overlapped the property of the respondent, the latter sent a letter to petitioners informing them of the encroachment and requesting them to refrain from further intruding into respondent's property. The petitioners were declared liable to respondent for their obstinate refusal to abide by the repeated demands to cease and desist from continuing their construction upon the encroached area. While petitioners may have been innocent purchasers for value with respect to their land, they did not prove that they were equally innocent of encroaching upon respondent's lands. The evidence suggested otherwise — despite being apprised of the encroachment, petitioners turned a blind eye and deaf ear and continued to construct on the disputed area. They did not bother to conduct their own survey to put the issue to rest, and to avoid the possibility of being adjudged as builders in bad faith on the portion of the land claimed by the respondents. In the more recent case of Princess Rachel Development Corp. v. Hillview Marketing Corp., 30 the Court En Banc found that respondent was informed of its intrusion over 2,783 sq. m. of petitioners' property, but nevertheless proceeded with its development. Respondent's contention that it merely relied on the surveys prepared by an engineer was not given weight. As a result, petitioners were adjudged to have the right to appropriate what has been built on their property, without any obligation to pay indemnity. Due to its bad faith, respondent forfeited what it has built without any right to be paid indemnity. Likewise, respondent was denied the right to retain the encroached portion as the right of retention is afforded only to a possessor in good faith.
Applying the foregoing in this case, the CA correctly declared that Frederic and Pierre are builders in bad faith. The records show that construction of the beach resort was still ongoing when Juana notified them of their encroachment as early as August 2006. Yet, Frederic and Pierre ignored Juana and continued with the development. Thereafter, Juana employed the services of a geodetic engineer to conduct a relocation survey. After obtaining the survey results that confirmed Frederic and Pierre's invasion, Juana again notified them and advised them to vacate her property, but to no avail. Notably, way back in August 2006, Juana reached out to Frederic and Pierre regarding their impending boundary dispute. Despite being fully aware of their encroachment as of 2006, Frederic and Pierre continued construction for three more years, or until 2009, as evidenced by the photographs presented by Juana, showing the progress of the construction from July 2007 to July 2009. Frederic and Pierre's knowledge of the intrusion into the lot of Juana and their continued disregard of her notices is a clear indication of bad faith. AaCTcI
The following provisions of the Civil Code outline the rights of landowner and the liabilities of a builder in bad faith, to wit:
Art. 449. He who builds, plants or sows in bad faith on the land of another, loses what is built, planted or sown without right to indemnity.
Art. 450. The owner of the land on which anything has been built, planted or sown in bad faith may demand the demolition of the work, or that the planting or sowing be removed, in order to replace things in their former condition at the expense of the person who built, planted or sowed; or he may compel the builder or planter to pay the price of the land, and the sower the proper rent.
Art. 451. In the cases of the two preceding articles, the landowner is entitled to damages from the builder, planter or sower.
Art. 452. The builder, planter or sower in bad faith is entitled to reimbursement for the necessary expenses of preservation of the land.
Thus, Juana has the alternative rights against Frederic and Pierre: (1) to appropriate what has been built without any obligation to pay indemnity therefore, or (2) to demand that Frederic and Pierre remove what they had built, or (3) to compel Frederic and Pierre to pay the value of the land. In any case, Juana is entitled to damages. 31 However, actual damages cannot be awarded in favor of Juana because, other than mere allegations, she failed to offer evidence to warrant the grant of damages. Neither can temperate damages be given since there is no basis for the Court to conclude that Juana suffered pecuniary loss and that the amount of damages cannot be ascertained. 32 Nevertheless, Article 451 of the Civil Code guarantees the award of damages in favor of the landowner and as further punishment for the builder's bad faith. While Article 451 does not provide the basis for damages, the amount thereof should reasonably correspond with the value of the properties lost or destroyed as a result of the occupation in bad faith, as well as the fruits from those properties that the landowner reasonably expected to obtain. 33 Under Article 2221 of the Civil Code, nominal damages may be awarded in order that a right of the plaintiff, which has been violated or invaded by the defendant, may be vindicated or recognized, and not for the purpose of indemnifying the plaintiff for any loss suffered by him. Considering that Frederic and Pierre violated the property rights of Juana when they built on 1,653 sq. m. of Lot No. 3153, an award of nominal damages in the amount of P100,00.00 n is warranted. 34
Lastly, there is no merit in Frederic and Pierre's claim that Juana is estopped from questioning the intrusion in her property. A landowner may be in good faith or may be deemed in bad faith depending on the landowner's knowledge of the fact of encroachment. Article 453 of the Civil Code pertinently provides:
If there was bad faith, not only on the part of the person who built, planted or sowed on the land of another, but also on the part of the owner of such land, the rights of one and the other shall be the same as though both had acted in good faith.
It is understood that there is bad faith on the part of the landowner whenever the act was done with his knowledge and without opposition on his part. [Emphasis supplied.]
Thus, a landowner is deemed in bad faith when there are circumstances indicating that he had become aware of the encroachment and had chosen not to act on it. In effect, the owner's failure to act gives rise to laches or estoppel, and bars the registered owner from asserting good faith. 35 These circumstances are not present in this case. Records show that as early as August 2006 when Juana became aware of Frederic and Pierre's encroachment, she immediately called their attention. She lost no time in asserting her rights and protecting her interest by having a relocation survey done and thereafter filing the case for quieting of title and recovery of ownership and possession against Frederic and Pierre. Thus, Juana is a landowner in good faith.
FOR THESE REASONS, the petition is DENIED. The July 31, 2018 Decision and December 17, 2018 Resolution of the Court of Appeals in CA-G.R. CV No. 04328-MIN are AFFIRMED.
SO ORDERED."
By authority of the Court:
(SGD.) LIBRADA C. BUENADivision Clerk of Court
By:
MARIA TERESA B. SIBULODeputy Division Clerk of Court
Footnotes
1.Rollo, pp. 7-20.
2.Id. at 24-32; Penned by Associate Justice Tita Marilyn Payoyo-Villordon, with the concurrence of Associate Justices Oscar V. Badelles and Ruben Reynaldo G. Roxas.
3.Id. at 42-43; Rendered by the same Division of the Court of Appeals.
4.Id. at 9-10.
5.Id. at 10-11.
6.Id. at 25.
7.Id. at 26-27. The dispositive portion of the RTC's March 28, 2016 Decision reads:
WHEREFORE, in view of the foregoing, judgment is hereby rendered as follows:
1. Plaintiff Juana Figuron Shermer is adjudged the absolute and real owner of the 1,653 square meters encroached by the defendants in the eastern portion of her property.
2. Defendants Frederic De Backer, Pierre Zappavigna and Zafre, Inc. are declared to be a [sic] builders in good faith of their improvement/building erected in the 1.653 square meters and the provisions of Art. 448, in relation to Article 546 of the New Civil Code applies; and
3. All other claims of plaintiff Juana Figuron Shermer and counterclaim of all the defendants Frederic De Backer, Pierre Zappavigna and Zafre, Inc. are dismissed for lack of factual basis.
SO ORDERED.
8.Id. at 29.
9. Docketed as CA-G.R. CV No. 04328-MIN.
10.Rollo, pp. 24-32.
11.Id. at 31.
12.Id. at 30-31.
13.Id. at 34-41.
14.Id. at 39.
15.Id. at 42-43. Frederic and Pierre's motion for reconsideration was disposed of as follows:
A scrutiny of [Frederic and Pierre's] Motion discloses that their arguments have already been passed upon and fully considered by the Court in the 27 March 2018 Decision. There is, therefore, no reason to warrant the reversal of the 27 March 2018 Decision.
ACCORDINGLY, the Motion for Reconsideration is hereby DENIED.
SO ORDERED.
16.Id. at 14-18.
17.Id. at 59-74.
18.Id. at 63.
19.Id. at 65-66.
20.Id. at 67-71.
21.Id. at 76-79.
22. See Gatan v. Vinarao, 820 Phil. 257 (2017); Heirs of Teresita Villanueva, et al. v. Heirs of Petronila Syquia Mendoza, et al., 810 Phil. 172 (2017); Bacsasar v. Civil Service Commission, 596 Phil. 858 (2009).
23.Sps. Espinoza v. Sps. Mayandoc, 812 Phil. 95, 101 (2017).
24. See Deocariza v. Fleet Management Services Philippines, Inc., et al., 836 Phil. 1087 (2018), citing Manila Shipmanagement and Manning, Inc. v. Aninang, 824 Phil. 916 (2018); Enumerating the following as exceptions: 1) when the findings are grounded entirely on speculations, surmises, or conjectures; 2) when the inference made is manifestly mistaken, absurd, or impossible; 3) when there is grave abuse of discretion; 4) when the judgment is based on misapprehension of facts; 5) when the findings of fact are conflicting; 6) when in making its findings, the Court of Appeals went beyond the issues of the case, or its findings are contrary to the admissions of both the appellant and the appellee; 7) when the findings are contrary to that of the trial court; 8) when the findings are conclusions without citation of specific evidence on which they are based; 9) when the facts set forth in the petition, as well as in the petitioner's main and reply briefs, are disputed by the respondent; 10) when the findings of fact are premised on the supposed absence of evidence and contradicted by the evidence on record; or 11) when the Court of Appeals manifestly overlooked certain relevant facts not disputed by the parties, which, if properly considered, would justify a different conclusion.
25.Supra note 23 at 102.
26.Princess Rachel Development Corp. v. Hillview Marketing Corp., G.R. No. 222482, June 2, 2020.
27.Id.
28.Id.
29. 816 Phil. 554 (2017).
30. G.R. No. 222482, June 2, 2020.
31. CIVIL CODE, Article 451.
32. See Princess Rachel Development Corp. v. Hillview Marketing Corp., G.R. No. 222482, June 2, 2020.
33.Princess Rachel Development Corp. v. Hillview Marketing Corp., supra.
34. See Princess Rachel Development Corp. v. Hillview Marketing Corp., supra.
35.Princess Rachel Development Corp. v. Hillview Marketing Corp., supra.
n Note from the Publisher: Written as "on" in the official document.
n Note from the Publisher: Copied verbatim from the official document.
n Note from the Publisher: Copied verbatim from the official document.
n Note from the Publisher: Copied verbatim from the official document.