Princess Rachel Development Corporation v. Hillview Marketing Corporation

Summary

This case involves a property encroachment dispute where Hillview Marketing Corporation built Alargo Residences condominium units on 2,783 square meters of land belonging to Princess Rachel Development Corporation. The Supreme Court reversed the Court of Appeals' finding that Hillview was a builder in good faith, determining instead that Hillview acted in bad faith because it had actual knowledge of the encroachment through its surveyor Engineer Lopez but proceeded with construction anyway, taking advantage of the vacant adjoining property. As a property developer, Hillview was held to a higher standard of diligence. The Court applied Civil Code provisions governing builders in bad faith, granting the landowner the right to appropriate the improvements without indemnity, demand demolition, or compel payment of land value, plus nominal damages of P100,000. The decision clarifies the standards for determining good faith in property encroachment cases and the respective rights of landowners and builders in bad faith situations.