Facts:

The case involves the petitioners, the Heirs of the Late Joaquin Limense, namely Concesa Limense (the surviving spouse) and their children Danilo and Joselito Limense, against the respondents Rita Vda. de Ramos and several others, who are the heirs of Francisco Ramos. The dispute centers around a parcel of land identified as Lot No. 12-C, which was originally owned by Dalmacio Lozada, who subdivided his property into five lots and donated them to his daughters through a Deed of Donation dated March 9, 1932. The donation was registered on March 15, 1932, and the lots were subsequently titled. Lot No. 12-C was co-owned by Catalina Lozada, Isabel Lozada, and Salud Lozada, who were married to Sotero Natividad, Isaac Limense, and Francisco Ramos, respectively.

In 1969, Joaquin Limense acquired TCT No. 96886 for Lot No. 12-C, which was adjacent to Lot No. 12-D, occupied by the respondents. In 1981, Limense sought to construct a fence on the boundary line, but discovered that a p...

Facts:

1. Ownership and Donation of the Property

   • Dalmacio Lozada was the registered owner of Lot No. 12, Block No. 1074 in Manila, covered by Original Certificate of Title (OCT) No. 7036.
   • He subdivided the property into five lots (Lot Nos. 12-A to 12-E) and donated them to his daughters (Isabel, Salud, Catalina, and Felicidad Lozada) through a Deed of Donation dated March 9, 1932.
   • Lot No. 12-C was donated to Catalina, Isabel, and Salud Lozada in equal parts.

2. Issuance of Transfer Certificates of Title (TCTs)

   • OCT No. 7036 was canceled, and TCTs were issued to the donees. TCT No. 40043 covered Lot No. 12-C.
   • In 1969, TCT No. 96886 was issued in the name of Joaquin Limense, covering the same Lot No. 12-C.

3. Encroachment and Dispute

   • Respondents (heirs of Francisco Ramos) constructed a residential building on Lot No. 12-D in 1932, which encroached on Lot No. 12-C.
   • Joaquin Limense demanded the removal of the encroachment, but respondents refused, claiming an easement of right of way over Lot No. 12-C.

4. Legal Proceedings

   • Joaquin Limense filed a complaint for removal of obstruction and damages before the Regional Trial Court (RTC).
   • The RTC dismissed the complaint, ruling that an easement of right of way existed in favor of respondents.
   • The Court of Appeals (CA) affirmed the RTC decision.

5. Death of Joaquin Limense and Appeal

   • Joaquin Limense died during the pendency of the appeal. His heirs (petitioners) elevated the case to the Supreme Court.

Issue:

• (Unlock)

Ruling:

• (Unlock)

Ratio:

1. Easement of Right of Way

   • An easement is a real right on another's property, and its existence can be established by long-standing use, even if not annotated on the title.
   • Actual notice or knowledge of the easement is as binding as registration.

2. Good Faith of Builders

   • Respondents acted in good faith when they built on Lot No. 12-C, as they were co-owners of the property at the time of construction.
   • Good faith is presumed, and the burden of proving bad faith lies on the party alleging it.

3. Application of Article 448 of the Civil Code

   • When a builder in good faith encroaches on another's land, the landowner has the option to appropriate the improvement or require the builder to pay for the land.
   • The principle of accession (accessory follows the principal) applies, and the landowner cannot compel the builder to remove the structure.

4. Collateral Attack on Title

   • The validity of TCT No. 96886 cannot be collaterally attacked in this case. A direct proceeding is required to challenge the title's validity.

Conclusion:

The Supreme Court denied the petition, affirming the CA's decision with modifications. The case was remanded to the RTC for further proceedings to determine the indemnity or rent under Articles 448 and 546 of the Civil Code.