Grana v. Court of Appeals
REITERATIONFacts
The Antecedents: Respondents Aurora Bongato and Jardenio Sanchez filed a complaint against petitioners Leonor Grana and Julieta Torralba for the recovery of 87 square meters of residential land. The land in question was part of a lot covered by Original Certificate of Title No. RO-72 (138) issued in 1923 to respondents' predecessors-in-interest. Petitioners claimed the land was part of Lot No. 310, belonging to their predecessor, based on a subsequent resurvey (TS-65 Butuan Cadastre) which allegedly showed a discrepancy in area between the original title and the resurveyed Lot No. 311. Petitioners also claimed to have constructed a portion of their house on the disputed land in good faith. Procedural History: The Court of First Instance of Agusan ruled in favor of the respondents, declaring them owners of the land and ordering petitioners to vacate and pay monthly rentals. The Court of Appeals affirmed this decision with a modification disallowing attorney's fees. The Petition: Petitioners sought review of the Court of Appeals' decision, raising several contentions, including errors in the assessment of evidence, denial of a motion for new trial, and non-joinder of an indispensable party.
Issue(s)
Whether the Court of Appeals erred in affirming the trial court's decision declaring respondents as owners of the disputed land. Whether the Court of Appeals erred in denying petitioners' motion for a new trial based on newly discovered evidence. Whether the complaint should have been dismissed for non-joinder of an indispensable party. Whether petitioners are entitled to damages claimed in their counterclaim. Whether petitioners, as builders in good faith, should be ordered to pay rentals.
Ruling
The appealed decision was modified. Respondents were directed to exercise within 30 days their option to either buy the portion of petitioners' house on their land or sell to petitioners the portion of their land. If petitioners are unwilling or unable to buy, they must vacate and pay reasonable rent of P10.00 monthly from the time respondents made their choice up to the time they vacate. If the value of the land is considerably more than the improvement, petitioners may elect to rent the land, and if they disagree on terms, the court of origin shall fix them. Petitioners shall pay rent until agreement or court fixation.
Ratio Decidendi
On the ownership of the disputed land: The Court held that the petitioners' stand was untenable. No proof was presented to show that the first survey was erroneous or that it included part of the contiguous land of petitioners' predecessor in interest. The difference in area between the land covered by the Torrens title and Lot No. 311 of the resurvey plan was 65 square meters, while the disputed land was 87 square meters. Furthermore, the alleged sketch plan of the resurvey was not presented in evidence. Crucially, the land in question is part of the lot covered by the Torrens title issued in 1923, which has not been contested and has thus become inconvertible evidence of ownership. The rule is well-settled that a Torrens certificate of title becomes conclusive and indefeasible after the lapse of the period within which it may be impugned. On the denial of the motion for new trial: The Court found the contention that the Court of Appeals erred in not granting the motion for new trial on the ground of newly discovered evidence to be unsustainable. The new evidence sought to be introduced was the sketch plan of the second survey, which, with the employment of reasonable diligence, would have been easily discovered and produced at the trial. Even if presented, it would not have altered the result of the case, as a subsequent resurvey plan cannot alter or modify a Torrens title. On the non-joinder of an indispensable party: The Court dismissed this contention, which was not raised in the trial court. Petitioners clearly asserted ownership over the land in dispute as well as over Lot No. 310 in their answer to the complaint, and were therefore estopped from alleging otherwise. On the counterclaim for damages: The Court found that petitioners failed to prove they suffered any damage by reason of the filing of the complaint. In light of the Court's view of the case, they could not have substantiated their claim for damages. On the payment of rentals by a builder in good faith: The Court modified the appellate court's order for petitioners to pay monthly rentals from the date of filing of the complaint. It held that a builder in good faith may not be required to pay rentals and has a right to retain the land until reimbursed for expenses incurred. The Court applied Article 361 of the old Civil Code (now Article 448 of the new Civil Code), which gives the landowner the option to appropriate the building after payment of indemnity or to oblige the builder to pay the price of the land. The Court emphasized that it would be impractical for respondents to buy the portion of the house and suggested that the more workable solution is for respondents to sell the portion of their land to petitioners. If petitioners are unwilling or unable to buy, then they must vacate and pay rent from the time respondents make their choice. If the land's value is considerably more than the improvement, petitioners may elect to rent the land, with the court intervening to fix terms if parties disagree.
Main Doctrine
A Torrens title, once indefeasible, cannot be altered or modified by a subsequent resurvey plan. A builder in good faith is entitled to retain possession of the land until reimbursed for necessary and useful expenses, and cannot be compelled to pay rentals during that period.