DEPRA v. DUMLAO

FACTS:

Dumlao is the owner of a parcel of land in Iloilo, while Depra owns the lot adjoining his. Dumlao built his house on his own land, but the kitchen encroached about 34 sq.m on Depra’s property. Upon finding this, Depra’s mom ordered Dumlao to move back from his encroachment, then subsequently filed an action for unlawful detainer against Dumlao.

The lower court found that Dumlao was a builder in good faith, and ordered him to pay rent (PhP5.00/month) – forced lease between the parties. Depra refused to accept the rentals so Dumlao deposited this with the MTC. Neither party appealed judgment so this became final and executory.

1 year later, though, Depra filed an complaint for Quieting of Title. Dumlao contested this, stating that the suit is barred by res judicata. But Depra averred that the lower court did not have jurisdiction to rule on encumbrances of real property – only the CFI has jurisdiction.

ISSUE:

1. Whether or not res judicata would apply to the case at bar?
2. Whether or not the land owner can be compelled to accept rent payments by the court (with both LO and BPS being in good faith)?

HELD:

In the first issue, res judicata would not apply should the first case be one for ejectment and the other for quieting of title. Article 448 of the Civil Code provides that the land owner has 2 options – to buy the building or to sell/rent his land. This is so because the rights of the owner of the land is older, and by the principle of accession, he also has a right to the accessories.

The Court remanded the case to the RTC to determine the fair price of the land, the expenses incurred by the BPS (Dumlao), the increase in value of the land, and whether the value of the land is considerably more than the value of the kitchen built on it. The RTC shall then give Depra 15 days to exercise such option.