Title
Spouses Baes vs. Court of Appeals
Case
G.R. No. 108065
Decision Date
Jul 6, 1993
A landowner exchanged a canal-occupied lot for another, later claiming ownership of a filled creek bed. The Court ruled against double compensation, affirming fair exchange and denying unjust enrichment.

Case Summary (G.R. No. 108065)

Deed of Exchange as Compensation

Because the canal completely occupied Lot 2958-B (3,588 sqm), the Republic and Baes executed a Deed of Exchange dated June 20, 1970. Baes surrendered Lot 2958-B in exchange for Lot 3271-A, of equal area and value, later registered as TCT No. 24300.

Resurvey and Issuance of New Titles

Petitioner filed for resurvey and subdivision in January 1968, alleging survey discrepancies in Lot 2958-C and a portion of 2958-A. The Court of First Instance approved the plan on January 15, 1968, leading to cancellation of old titles and issuance of four new TCTs:
• Lot 1-A, Blk. 4 (672 sqm) – TCT No. 14404
• Lot 1-B (826 sqm) – TCT No. 14405
• Lot 2958-C-1 (452 sqm) – TCT No. 14406
• Lot 2958-C-2 (2,770 sqm) – TCT No. 14407

Further Consolidation and Subdivision of Lot 2958-C

Lots 2958-C-1 and 2958-C-2 were consolidated and subdivided into four parcels:
• Lot 1 (147 sqm) – TCT No. 29592
• Lot 2 (950 sqm) – TCT No. 29593
• Lot 3 (257 sqm) – TCT No. 29594
• Lot 4 (1,868 sqm) – TCT No. 29595

Republic’s Petition for Cancellation of Titles

In 1978 the Republic discovered that Lot 1-B (TCT No. 14405) sat on the filled bed of Tripa de Gallina (Lot 3611 of the Pasay Cadastre) and that Lots 29592–29595 had been unlawfully enlarged. On November 17, 1982, it filed an action to cancel TCT Nos. 14405 and 29592–29595.

Trial Court Ruling and Remaining Dispute

The trial court declared TCTs 14405, 29592, 29594, and 29595 null and void, ordered their cancellation, and directed reissuance of a 452 sqm title in the petitioner’s name (the original Lot 2958-C area). The only unresolved issue was Lot 1-B (826 sqm, TCT 14405), on which petitioners had built an apartment.

Petitioners’ Reliance on Civil Code Article 461

Petitioners invoked Article 461, arguing that the abandoned creek bed belonged to them ipso facto, since the canal diverted the natural watercourse. They cited Dr. Tolentino’s commentary analogizing government‐made diversions to

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