G.R. No. 104828 . January 16, 1997.
SPOUSES RAFAEL BENITEZ AND AVELINA BENITEZ, petitioners, vs. COURT OF APPEALS, SPOUSES RENATO MACAPAGAL and ELIZABETH MACAPAGAL, respondents.

FACTS

Petitioners Rafael and Avelina Benitez owned a lot and house. Respondents Renato and Elizabeth Macapagal purchased an adjacent lot. A survey revealed that a portion of the Benitezes’ house encroached on 46.50 square meters of the Macapagals’ property. The Macapagals made demands to vacate, which were refused. Consequently, the Macapagals filed an ejectment case (Civil Case No. 61004) with the Metropolitan Trial Court (MeTC) of San Juan.
The MeTC ruled in favor of the Macapagals, ordering the Benitezes to vacate the encroached area, pay a monthly amount of P930.00 from July 17, 1989, until they vacate, and pay attorney’s fees. The Regional Trial Court affirmed this decision on appeal. The Court of Appeals subsequently denied the Benitezes’ petition, finding their appeal to be a mere rehash of arguments already presented.

ISSUE

The main issue is whether the MeTC had jurisdiction over the case as an action for ejectment, rather than an accion publiciana, to recover possession of land encroached upon by a part of another’s house.

RULING

The Supreme Court ruled that the MeTC properly had jurisdiction. The Court clarified that an ejectment suit (forcible entry or unlawful detainer) is designed to restore physical possession (possession de facto) and is a summary proceeding. The allegations in the complaint are controlling for jurisdiction. The Macapagals’ complaint alleged that they were deprived of possession of their property by the Benitezes’ encroaching structure and that they made prior demands to vacate. These allegations sufficiently constituted a case for ejectment, as the action was fundamentally to recover physical possession.
The Court further held that the Benitezes were builders in bad faith. Their waiver of the warranty against encumbrances in their own deed of sale implied prior knowledge of a potential flaw, such as the encroachment. As builders in bad faith under Article 449 of the Civil Code, they had no right to retain possession or to demand that the landowner sell the encroached portion to them. The landowner’s option under Article 450 is to demand removal of the structure or to compel the builder to pay the price of the land. The award of reasonable compensation for the use of the encroached land (termed “rent” in the decision) was proper, as it represented the reasonable value for the use and occupation of the Macapagals’ property. The petition was denied for lack of merit.