Petitioner bought a lot together with the building and improvements including the wall which encroached that of the defendant. Upon learning of such encroachment, petitioner offered to buy the land but defendant refused.

After 2 years, through an agreement, petitioner agreed to demolish the wall (but the case did not state what happened to this agreement, my assumption is that it did not happen due to conflicts that arose after)

Defendant dug a canal along the wall which caused a portion of it to collapse. Petitioner filed a supplemental complaint re the action and a separate criminal action of malicious mischief (which the wife was convicted of)

RTC decided for the petitioners and the CA reversed. Note that respondent wants to have the wall demolished.


A. Whether or not petitioner is a builder in bad faith because it is 'presumed to know the metes and bounds of his property.'
B. Whether or not amicable settlement was a proper remedy
C. Whether or not respondent can opt to demolish the structure without exercising the option to sell the land to the petitioner and the latter cannot do buy the same

RULING: Petition was granted.

Good faith or Bad Faith – No such doctrinal statement that supports that the knowledge of metes and bounds of a land due to the Torrens system would amount to bad faith if there was encroachment on the land of another.

A. When the petitioner purchased the lot, the wall was already built. Even the respondent did not knew about the encroachment until he has hired a surveyor.

B. Where one derives title to the property from another, the act, declaration, or omission of the latter, while holding the title, in relation to the property, is evidence against the former. And possession in good faith does not lose this character except when the possessor is aware of this impropriety.

C. The encroachment was very narrow which can be considered as a mere error. Remedy – the  petitioner, despite being a purchaser of the original builder, can compel the landowner to either buy the property or sell the piece of land because:

  1. He was really unaware of the encroachment basing on the fact presented by both sides.
  2. When the petitioner bought the land, he has stepped into the rights of the original owner (hence, the right to compel the LO to buy or sell is also transferred)

Estoppel – Petitioner is not considered in estoppel only because it has previously agreed to demolish a part of the wall. Rather, it was to be negotiated by the parties concern. In the meantime, petitioner has to pay the rent for the property occupied by its building only up to the date when respondent serves notice of their option. Case remanded back to the trial court for determination of the value of the land and the number of days to allot for the respondent to choose an option.