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G.R. No. 150666. August 3, 2010.*

LUCIANO BRIONES and NELLY BRIONES, petitioners,

vs. JOSE MACABAGDAL, FE D. MACABAGDAL and
VERGON REALTY INVESTMENTS CORPORATION,
respondents.

Remedial Law; Appeals; Well-settled is the rule that the

jurisdiction of the Court in cases brought to it from the Court of
Appeals via a petition for review on certiorari under Rule 45 is
limited to the review of errors of law.—We note that petitioners
raise factual issues, which are beyond the scope of a petition for
review on certiorari under Rule 45 of the Rules. Well settled is the
rule that the jurisdiction of this Court in cases brought to it from
the Court of Appeals via a petition for review on certiorari under
Rule 45 is limited to the review of errors of law. The Court is not
bound to weigh all over again the evidence adduced by the
parties, particularly where the findings of both the trial court and
the appellate court coincide.  The resolution of factual issues is a
function of the trial court whose findings on these matters are, as
a general rule, binding on this Court, more so where these have
been affirmed by the CA. We note that the CA and RTC did not
overlook or fail to appreciate any material circumstance which,
when properly considered, would have altered the result of the
case.
Civil Law; Property; Builders in Good Faith; When a person
builds in good faith on the land of another, Article 448 of the Civil
Code governs.—The conclusiveness of the factual findings
notwithstanding, we find that the trial court nonetheless erred in
outrightly ordering petitioners to vacate the subject property or to
pay respondent spouses the prevailing price of the land as
compensation. Article 527 of the Civil Code presumes good faith,
and since no proof exists to show that the mistake was done by
petitioners in bad faith, the latter should be presumed to have
built the house in good faith. When a person builds in good faith
on the land of another, Article 448 of the Civil Code governs.
Same; Same; Same; The builder in good faith can compel the
landowner to make a choice between appropriating the building by

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* THIRD DIVISION.

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paying the proper indemnity or obliging the builder to pay the

price of the land.—The above-cited article covers cases in which
the builders, sowers or planters believe themselves to be owners
of the land or, at least, to have a claim of title thereto. The builder
in good faith can compel the landowner to make a choice between
appropriating the building by paying the proper indemnity or
obliging the builder to pay the price of the land.  The choice
belongs to the owner of the land, a rule that accords with the
principle of accession, i.e., that the accessory follows the principal
and not the other way around.  However, even as the option lies
with the landowner, the grant to him, nevertheless, is preclusive.
He must choose one. He cannot, for instance, compel the owner of
the building to remove the building from the land without first
exercising either option. It is only if the owner chooses to sell his
land, and the builder or planter fails to purchase it where its
value is not more than the value of the improvements, that the
owner may remove the improvements from the land. The owner is
entitled to such remotion only when, after having chosen to sell
his land, the other party fails to pay for the same.
Same; Negligence; Damages; Requisites for Recovery of
Damages under Article 2176.—Under this provision, it is the
plaintiff who has to prove by a preponderance of evidence: (1) the
damages suffered by the plaintiff; (2) the fault or negligence of the
defendant or some other person for whose act he must respond;
and (3) the connection of cause and effect between the fault or
negligence and the damages incurred.
Same; Attorney’s Fees; Attorney’s fees are not to be awarded
every time a party wins a suit; court must explicitly state in the
body of the decision, and not only in the dispositive portion thereof,
the legal reason for the award of attorney’s fees.—It must also be
noted that aside from the following, the body of the trial court’s
decision was devoid of any statement regarding attorney’s fees. In
Scott Consultants & Resource Development Corporation, Inc. v.
Court of Appeals, 242 SCRA 393 (1995), we reiterated that
attorney’s fees are not to be awarded every time a party wins a
suit. The power of the court to award attorney’s fees under Article

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2208 of the Civil Code demands factual, legal, and equitable

justification; its basis cannot be left to speculation or conjecture.
Where granted, the court must explicitly state in the body of the
decision, and not only in the dispositive portion thereof, the legal
reason for the award of attorney’s fees.

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Briones vs. Macabagdal

PETITION for review on certiorari of a decision of the

Court of Appeals.
   The facts are stated in the opinion of the Court.
  Jaso, Salgado, Neri Law Office for petitioners.
  Delbert F. Evora for respondents Sps. Jose and Fe
Macabagdal.
  Reynaldo F. Ramos for respondent Vergon Realty
Investment Corp.

VILLARAMA, JR., J.:

On appeal under Rule 45 of the 1997 Rules of Civil
Procedure, as amended, is the Decision1 dated December
11, 2000 of the Court of Appeals (CA) in CA-G.R. CV No.
48109 which affirmed the September 29, 1993 Decision2 of
the Regional Trial Court (RTC) of Makati City, Branch 135,
ordering petitioners Luciano and Nelly Briones to remove
the improvements they have made on the disputed
property or to pay respondent-spouses Jose and Fe
Macabagdal the prevailing price of the land as
compensation.
The undisputed factual antecedents of the case are as
follows:
Respondent-spouses purchased from Vergon Realty
Investments Corporation (Vergon) Lot No. 2-R, a 325-
square-meter land located in Vergonville Subdivision No.
10 at Las Piñas City, Metro Manila and covered by
Transfer Certificate

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1Rollo, pp. 43-51. Penned by Associate Justice Presbitero J. Velasco, Jr.

(now a member of this Court) and concurred in by Associate Justices
Conrado M. Vasquez, Jr. and Juan Q. Enriquez, Jr. The dispositive
portion reads as follows:
WHEREFORE, premises considered, the appealed Decision is hereby
AFFIRMED in toto.
SO ORDERED.

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2 Id., at pp. 81-84. Penned by Judge Omar U. Amin.

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of Title No. 62181 of the Registry of Deeds of Pasay City.

On the other hand, petitioners are the owners of Lot No. 2-
S, which is adjacent to Lot No. 2-R.
Sometime in 1984, after obtaining the necessary
building permit and the approval of Vergon, petitioners
constructed a house on Lot No. 2-R which they thought was
Lot No. 2-S. After being informed of the mix up by Vergon’s
manager, respondent-spouses immediately demanded
petitioners to demolish the house and vacate the property.
Petitioners, however, refused to heed their demand. Thus,
respondent-spouses filed an action to recover ownership
and possession of the said parcel of land with the RTC of
Makati City.3
Petitioners insisted that the lot on which they
constructed their house was the lot which was consistently
pointed to them as theirs by Vergon’s agents over the seven
(7)-year period they were paying for the lot. They
interposed the defense of being buyers in good faith and
impleaded Vergon as third-party defendant claiming that
because of the warranty against eviction, they were
entitled to indemnity from Vergon in case the suit is
decided against them.4
The RTC ruled in favor of respondent-spouses and found
that petitioners’ house was undoubtedly built on Lot No. 2-
R. The dispositive portion of the trial court’s decision reads
as follows:

“PREMISES CONSIDERED, let judgment be rendered

declaring, to wit:
1. That plaintiffs are the owners of Lot No. 2-R of subdivision
plan (LRC) Psd-147392 at Vergonville Subdivision, No. 10, Las
Piñas, Metro Manila covered by TCT No. 62181 of the Registry of
Deeds of Pasay City on which defendants have constructed their
house;

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3 Id., at pp. 6-8.

4 Id., at p. 71, 75-76.

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Briones vs. Macabagdal

2. Defendants, jointly and severally, are ordered to demolish

their  house and vacate the premises and return the possession of
the portion of Lot No. 2-R as above-described to plaintiffs within
thirty (30) days from receipt of this decision, or in the alternative,
plaintiffs should be compensated by defendants, jointly and
severally, by the payment of the prevailing price of the lot
involved as Lot No. 2-R with an area of 325 square meters which
should not be less than P1,500.00 per square meter, in
consideration of the fact that prices of real estate properties in the
area concerned have increased rapidly;
3. Defendants, jointly and severally, pay to plaintiffs for
moral damages with plaintiffs’ plans and dreams of building their
own house on their own lot being severely shattered and
frustrated due to defendants’ incursion as interlopers of Lot No. 2-
R in the sum of P50,000.00;
4. Defendants, jointly and severally, to pay plaintiffs in the
amount of P30,000.00 as attorney’s fees; and,
5. to pay the costs of the proceedings.
Defendants’ counterclaim against plaintiffs is dismissed for
lack of merit and with no cause of action.
Defendants’ third-party complaint against third-party
defendant Vergonville Realty and Investments Corporation is
likewise ordered dismissed for lack of cause of action and
evidently without merit.
On the other hand, defendants, jointly and severally, are liable
for the litigation expenses incurred by Vergonville Realty by way
of counterclaim, which is also proven by the latter with a mere
preponderance of evidence, and are hereby ordered to pay the sum
of P20,000.00 as compensatory damage; and attorney’s fees in the
sum of P10,000.00
SO ORDERED.”5

On appeal, the CA affirmed the RTC’s finding that the

lot upon which petitioners built their house was not the one
(1) which Vergon sold to them. Based on the documentary
evidence, such as the titles of the two (2) lots, the contracts
to

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5 Id., at pp. 83-84.

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sell, and the survey report made by the geodetic engineer,

petitioners’ house was built on the lot of the respondent-
spouses.6 There was no basis to presume that the error was
Vergon’s fault. Also the warranty against eviction under
Article 1548 of the Civil Code was not applicable as there
was no deprivation of property: the lot on which petitioners
built their house was not the lot sold to them by Vergon,
which remained vacant and ready for occupation.7 The CA
further ruled that petitioners cannot use the defense of
allegedly being a purchaser in good faith for wrongful
occupation of land.8
Aggrieved, petitioners filed a motion for reconsideration,
but it was denied by the appellate court.9 Hence, this
petition for review on certiorari.
Petitioners raise the following assignment of errors:

I.
THE COURT OF APPEALS DECIDED A QUESTION OF
SUBSTANCE CONTRARY TO LAW AND APPLICABLE
DECISIONS OF THE SUPREME COURT IN AFFIRMING THE
DECISION OF THE TRIAL COURT ORDERING PETITIONERS
TO DEMOLISH THEIR ONLY HOUSE AND VACATE THE LOT
AND TO PAY MORAL AND COMPENSATORY DAMAGES AS
WELL AS ATTORNEY’S FEE IN THE TOTAL AMOUNT OF
PS[P] 110,000; AND
II.
THE COURT OF APPEALS SANCTIONED THE DEPARTURE
OF THE LOWER COURT FROM THE ACCEPTED AND USUAL
COURSE OF JUDICIAL PROCEEDINGS AS TO CALL FOR AN
EXERCISE OF THE POWER OF SUPERVISION.10

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6  Id., at pp. 46-47.

7  Id., at p. 48.
8  Id., at pp. 48-49.
9  Id., at p. 54.   The Resolution was penned by Associate Justice
Conrado M. Vasquez, Jr., with Associate Justices Mercedes Gozo-Dadole
and Juan Q. Enriquez, Jr., concurring.
10 Id., at pp. 14-15.

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In the main, it is petitioners’ position that they must not

bear the damage alone. Petitioners insist that they relied
with full faith and confidence in the reputation of Vergon’s
agents when they pointed the wrong property to them.
Even the President of Vergon, Felix Gonzales, consented to
the construction of the house when he signed the building
permit.11 Also, petitioners are builders in good faith.12
The petition is partly meritorious.
At the outset, we note that petitioners raise factual
issues, which are beyond the scope of a petition for review
on certiorari under Rule 45 of the Rules. Well settled is the
rule that the jurisdiction of this Court in cases brought to it
from the CA via a petition for review on certiorari under
Rule 45 is limited to the review of errors of law. The Court
is not bound to weigh all over again the evidence adduced
by the parties, particularly where the findings of both the
trial court and the appellate court coincide. The resolution
of factual issues is a function of the trial court whose
findings on these matters are, as a general rule, binding on
this Court, more so where these have been affirmed by the
CA.13 We note that the CA and RTC did not overlook or fail
to appreciate any material circumstance which, when
properly considered, would have altered the result of the
case. Indeed, it is beyond cavil that petitioners mistakenly
constructed their house on Lot No. 2-R which they thought
was Lot No. 2-S.
However, the conclusiveness of the factual findings
notwithstanding, we find that the trial court nonetheless
erred in outrightly ordering petitioners to vacate the
subject property or to pay respondent spouses the
prevailing price of the land

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11 Id., at pp. 16-27.

12 Id., at pp. 27-28.
13  Bernarda Ch. Osmeña v. Nicasio Ch. Osmeña, et al., G.R. No.
171911, January 26, 2010, 611 SCRA 164.

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as compensation. Article 52714 of the Civil Code presumes

good faith, and since no proof exists to show that the
mistake was done by petitioners in bad faith, the latter
should be presumed to have built the house in good faith.
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When a person builds in good faith on the land of

another, Article 448 of the Civil Code governs. Said article
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,
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 lease and in case of
disagreement, the court shall fix the terms thereof.” (Emphasis
ours.)

The above-cited article covers cases in which the

builders, sowers or planters believe themselves to be
owners of the land or, at least, to have a claim of title
thereto.15 The builder in good faith can compel the
landowner to make a choice between appropriating the
building by paying the proper indemnity or obliging the
builder to pay the price of the land.  The choice belongs to
the owner of the land, a rule that accords with the principle
of accession, i.e., that the accessory follows the principal
and not the other way around. However, even as the option
lies with the landowner, the grant to him,

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14  ART. 527. Good faith is always presumed, and upon him who
alleges bad faith on the part of a possessor rests the burden of proof.
15 Vide Philippine National Bank v. De Jesus, 458 Phil. 454, 458; 411
SCRA 557, 561 (2003) and Pada-Kilario v. Court of Appeals, 379 Phil. 515,
529-530; 322 SCRA 481, 492-493 (2000).

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nevertheless, is preclusive. He must choose one.16 He

cannot, for instance, compel the owner of the building to
remove the building from the land without first exercising
either option. It is only if the owner chooses to sell his land,
and the builder or planter fails to purchase it where its

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value is not more than the value of the improvements, that

the owner may remove the improvements from the land.
The owner is entitled to such remotion only when, after
having chosen to sell his land, the other party fails to pay
for the same.17
Moreover, petitioners have the right to be indemnified
for the necessary and useful expenses they may have made
on the subject property. Articles 546 and 548 of the Civil
Code provide,

“ART. 546. Necessary expenses shall be refunded to every

possessor; but only the possessor in good faith may retain the
thing until he has been reimbursed therefor.
Useful expenses shall be refunded only to the possessor in good
faith with the same right of retention, the person who has
defeated him in the possession having the option of refunding the
amount of the expenses or of paying the increase in value which
the thing may have acquired by reason thereof.
ART. 548. Expenses for pure luxury or mere pleasure shall
not be refunded to the possessor in good faith; but he may remove
the ornaments with which he has embellished the principal thing
if it suffers no injury thereby, and if his successor in the
possession does not prefer to refund the amount expended.”

Consequently, the respondent-spouses have the option to

appropriate the house on the subject land after payment to
petitioners of the appropriate indemnity or to oblige
petitioners to pay the price of the land, unless its value is
considera-

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16  Arangote v. Maglunob, G.R. No. 178906, February 18, 2009, 579
SCRA 620, 644.
17  Sarmiento v. Agana, G.R. No. L-57288, April 30, 1984, 129 SCRA
122, 126 and Ignacio v. Hilario, 76 Phil. 605, 608 (1946).

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bly more than the value of the structures, in which case

petitioners shall pay reasonable rent.
In accordance with Depra v. Dumlao,18 this case must be
remanded to the RTC which shall conduct the appropriate
proceedings to assess the respective values of the
improvement and of the land, as well as the amounts of

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reasonable rentals and indemnity, fix the terms of the lease

if the parties so agree, and to determine other matters
necessary for the proper application of Article 448, in
relation to Articles 546 and 548, of the Civil Code.
As to the liability of Vergon, petitioners failed to present
sufficient evidence to show negligence on Vergon’s part.
Petitioners’ claim is obviously one (1) for tort, governed by
Article 2176 of the Civil Code, which provides:

“ART. 2176. Whoever by act or omission causes damage to

another, there being fault or negligence, is obliged to pay for
the damage done. Such fault or negligence, if there is no
preexisting contractual relation between the parties, is called a
quasi-delict and is governed by the provisions of this Chapter.”
(Emphasis ours.)

Under this provision, it is the plaintiff who has to prove

by a preponderance of evidence: (1) the damages suffered
by the plaintiff; (2) the fault or negligence of the defendant
or some other person for whose act he must respond; and
(3) the connection of cause and effect between the fault or
negligence and the damages incurred.19 This the
petitioners failed to do. The President of Vergon signed the
building permit as a precondition for its approval by the
local government, but it did not guarantee that petitioners
were constructing the structure within the metes and
bounds of petitioners’ lot. The sig-

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18  No. L-57348, May 16, 1985, 136 SCRA 475, 483, cited in National
Housing Authority v. Grace Baptist Church, G.R. No. 156437, March 1,
2004, 424 SCRA 147, 154.
19 Child Learning Center, Inc. v. Tagorio, G.R. No. 150920, November
25, 2005, 476 SCRA 236, 242.

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nature of the President of Vergon on the building permit

merely proved that petitioners were authorized to make
constructions within the subdivision project of Vergon. And
while petitioners acted in good faith in building their house
on Lot No. 2-R, petitioners did not show by what authority
the agents or employees of Vergon were acting when they
pointed to the lot where the construction was made nor was

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petitioners’ claim on this matter corroborated by sufficient

evidence.
One (1) last note on the award of damages. Considering
that petitioners acted in good faith in building their house
on the subject property of the respondent-spouses, there is
no basis for the award of moral damages to respondent-
spouses. Likewise, the Court deletes the award to Vergon of
compensatory damages and attorney’s fees for the litigation
expenses Vergon had incurred as such amounts were not
specifically prayed for in its Answer to petitioners’ third-
party complaint. Under Article 220820 of the Civil Code,
attorney’s fees and

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20  Art. 2208. In the absence of stipulation, attorney’s fees and

expenses of litigation, other than judicial costs, cannot be recovered,
except:
(1) When exemplary damages are awarded;
(2) When the defendant’s act or omission has compelled the plaintiff
to litigate with third persons or to incur expenses to protect his interest;
(3) In criminal cases of malicious prosecution against the plaintiff;
(4) In case of a clearly unfounded civil action or proceeding against
the plaintiff;
(5) Where the defendant acted in gross and evident bad faith in
refusing to satisfy the plaintiff’s plainly valid, just and demandable claim;
(6) In actions for legal support;
(7) In actions for the recovery of wages of household helpers, laborers
and skilled workers;
(8) In actions for indemnity under workmen’s compensation and
employer’s liability laws;

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expenses of litigation are recoverable only in the concept of

actual damages,  not as moral damages nor  judicial costs.
Hence, such must be specifically prayed for—as was not
done in this case—and may not be deemed incorporated
within a general prayer for “such other relief and remedy
as this court may deem just and equitable.”21 It must also
be noted that aside from the following, the body of the trial
court’s decision was devoid of any statement regarding
attorney’s fees.  In Scott Consultants & Resource
Development Corporation, Inc. v. Court of Appeals,22 we
reiterated that attorney’s fees are not to be awarded every
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time a party wins a suit. The power of the court to award

attorney’s fees under Article 2208 of the Civil Code
demands factual, legal, and equitable justification; its basis
cannot be left to speculation or conjecture. Where granted,
the court must explicitly state in the body of the decision,
and not only in the dispositive portion thereof, the legal
reason for the award of attorney’s fees.
WHEREFORE, the Decision dated December 11, 2000 of
the Court of Appeals in CA-G.R. CV No. 48109 is
AFFIRMED WITH MODIFICATION. The award of moral
damages in favor of respondent-spouses Jose and Fe
Macabagdal and the award of compensatory damages and
attorney’s fees to respondent Vergon Realty Investments
Corporation are DELETED. The case is REMANDED to
the Regional Trial Court of Makati City, Branch 135, for
further proceedings consistent

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  (9) In a separate civil action to recover civil liability arising from a

crime;
(10) When at least double judicial costs are awarded;
(11) In any other case where the court deems it just and equitable
that attorney’s fees and expenses of litigation should be recovered.
In all cases, the attorney’s fees and expenses of litigation must be
reasonable.
21 Mirasol v. de la Cruz, No. L-32552, 84 SCRA 337, 342-343.
22G.R. No. 112916, March 16, 1995, 242 SCRA 393, 406.

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with the proper application of Articles 448, 546 and 548

of the Civil Code, as follows:
1. The trial court shall determine:
a. the present fair price of the respondent-
spouses’ lot;
b. the amount of the expenses spent by
petitioners for the building of their house;
c. the increase in value (“plus value”) which the
said lot may have acquired by reason thereof;
and
d. whether the value of said land is considerably
more than that of the house built thereon.
2. After said amounts shall have been determined by
competent evidence, the Regional Trial Court shall render
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judgment, as follows:
a. The trial court shall grant the respondent-spouses a
period of fifteen (15) days within which to exercise
their option under Article 448 of the Civil Code,
whether to appropriate the house as their own by
paying to petitioners either the amount of the
expenses spent by petitioners for the building of the
house, or the increase in value (“plus value”) which
the said lot may have acquired by reason thereof, or
to oblige petitioners to pay the price of said land. The
amounts to be respectively paid by the respondent-
spouses and petitioners, in accordance with the option
thus exercised by written notice of the other party
and to the Court, shall be paid by the obligor within
fifteen (15) days from such notice of the option by
tendering the amount to the Court in favor of the
party entitled to receive it;
b. The trial court shall further order that if the
respondent-spouses exercises the option to oblige
petitioners to pay the price of the land but the latter

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rejects such purchase because, as found by the trial

court, the value of the land is considerably more than
that of the house, petitioners shall give written notice
of such rejection to the respondent-spouses and to the
Court within fifteen (15) days from notice of the
respondent-spouses’ option to sell the land. In that
event, the parties shall be given a period of fifteen
(15) days from such notice of rejection within which to
agree upon the terms of the lease, and give the Court
formal written notice of such agreement and its
provisos. If no agreement is reached by the parties,
the trial court, within fifteen (15) days from and after
the termination of the said period fixed for
negotiation, shall then fix the terms of the lease,
payable within the first five (5) days of each calendar
month. The period for the forced lease shall not be
more than two (2) years, counted from the finality of
the judgment, considering the long period of time
since petitioners have occupied the subject area. The
rental thus fixed shall be increased by ten percent
(10%) for the second year of the forced lease.
Petitioners shall not make any further constructions
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or improvements on the house. Upon expiration of the

two (2)-year period, or upon default by petitioners in
the payment of rentals for two (2) consecutive months,
the respondent-spouses shall be entitled to terminate
the forced lease, to recover their land, and to have the
house removed by petitioners or at the latter’s
expense. The rentals herein provided shall be
tendered by petitioners to the Court for payment to
the respondent-spouses, and such tender shall
constitute evidence of whether or not compliance was
made within the period fixed by the Court.
c. In any event, petitioners shall pay the respondent-
spouses reasonable compensation for the occupancy of
the respondent-spouses’ land for the period
314

314 SUPREME COURT REPORTS ANNOTATED

Briones vs. Macabagdal

counted from the year petitioners occupied the subject

area, up to the commencement date of the forced lease
referred to in the preceding paragraph;
d. The periods to be fixed by the trial court in its
Decision shall be inextendible, and upon failure of the
party obliged to tender to the trial court the amount
due to the obligee, the party entitled to such payment
shall be entitled to an order of execution for the
enforcement of payment of the amount due and for
compliance with such other acts as may be required
by the prestation due the obligee.
No costs.
SO ORDERED.

Carpio-Morales (Chairperson), Brion, Bersamin and

Abad,** JJ., concur.

Judgment affirmed with modification.

Note.—There must always be factual basis in the award

of attorney’s fees. (Pepsi Cola Products Philippines, Inc. vs.
Santos, 551 SCRA 245 [2008])
——o0o——

** Designated as additional member per Special Order No. 843 dated

May 17, 2010.

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