G.R. No. 11647 ; September 26, 1917

FACTS:
In 1912, the Manila Electric Railroad and Light Company (the Company) was authorized by the Director of Public Works, acting for the Government of the Philippine Islands and the Province of Rizal, to construct an electric railroad track along the side of the provincial highway from Manila to Parañaque. The Company laid its track accordingly. The plaintiff, Rafael C. de Ynchausti, filed an action for recovery of possession and damages, alleging that the Company had encroached upon and occupied a strip of his registered land, which he claimed was not part of the public highway. It was substantially admitted for purposes of the appeal that the plaintiff’s predecessor was the registered owner of the strip of land occupied by the railroad track. The Company entered and occupied the land in good faith, under the mistaken belief it was part of the public highway, and without initiating expropriation proceedings. The plaintiff raised no objection until after the track was completed.

ISSUE:
Whether the plaintiff is entitled to recover possession of the land occupied by the railroad company, given that the company is a corporation clothed with the power of eminent domain and entered the land in good faith without prior expropriation proceedings.

RULING:
No. The Supreme Court reversed the trial court’s judgment awarding the plaintiff the assessed value of the land and dismissed the complaint for recovery of possession and damages.

The Court ruled that where a railroad corporation, authorized by law to condemn land for its use, enters and occupies private land in good faith under a claim of right (here, believing it was part of a public highway) and the landowner acquiesces by not objecting until after completion, the landowner cannot recover possession. The right of election granted to a landowner under Articles 361 and 453 of the Civil Code (to appropriate the improvements upon indemnity or to recover the land upon reimbursing the builder) is effectively negated by the company’s power of eminent domain. It would be a vain and useless formality to order restitution, as the company could immediately re-acquire the land through condemnation proceedings.

The landowner’s remedy is not an action for recovery of possession, but an action to recover the value of the land taken or to compel the institution of appropriate expropriation proceedings to ascertain and pay just compensation. The trial court erred in awarding the assessed value without such relief being prayed for and without evidence of the land’s true market value.

The dismissal of the complaint was without prejudice to the plaintiff’s right to institute appropriate proceedings to recover the value of the land or to compel the Company to commence condemnation proceedings.

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