Apparent but not real

An easement is an encumbrance imposed upon a land (servient estate) for the benefit of another land (dominant estate) belonging to a different owner. But if the owner of both properties is the same and it establishes and maintains an apparent sign of easement on one of them and then alienates said property, does an easement already exist? This is illustrated and answered in this case.

This case involved four contiguous lots covered by TCTS along Roxas Boulevard owned by a condominium developer (CDC). Sometime in 1975 CDC executed a real estate mortgage over three of the lots covered by TCT Nos. 120311,120312 and 120313 as security for a loan it obtained from a bank (the bank) to finance the construction of a 21-story condominium on said lots. During the construction, CDC also built a powerhouse (generating set) and two sump pumps on the fourth lot covered by TCT 200760 for the use and benefit of the condominium.

After completion, the condominium project was constituted into a corporation known as LTI pursuant to Republic Act 4726 otherwise known as the Condominium Act. However, since CDC failed to pay its loan, the bank foreclosed the mortgage at a sheriff’s auction sale held on January 30, 1985.

The foreclosure was questioned by CDC before the Regional Trial Court (RTC) when it filed a petition against the bank seeking its nullification. On August 31, 1988 the case was settled through a compromise agreement signed by CDC and the bank and its successor in interest (APT). Under the Compromise Agreement, CDC assigned in favor of APT its rights title and interest in seven contiguous lots at the back of LTI with an aggregate area of 1,504 sq. m. free from all liens and encumbrances. Included among the lots assigned was that covered by TCT No. 200760 on which the sump pumps and generator set used by LTI, were built. On September 9, 1988, the RTC rendered a decision approving the compromise agreement.

But that was not the end of the case because on July 5, 1989, LTI filed a case in the RTC for declaration of the existence of an easement on the lot covered by TCT 200760 adjacent to it. LTI alleged that when CDC constructed the generating set and sump pumps on the lot for the use and benefit of its condominium units and occupants, it was CDC’s intention to have a voluntary easement over the subject property and for it to remain as such even after the property was subsequently transferred to APT. Was LTI correct?

No. Under Article 624 of the Civil Code where there exists an apparent sign of easement between the two estates established or maintained by the owner of both and the owner of the two properties alienates one of them, the entitlement to the easement continues, unless there is a contrary agreement or the apparent sign of easement is removed before the execution of the deed.

In this case CDC was the owner of both the lands where the LTI condominium was erected and the lot covered by TCT 200760 where it constructed the power generating set and the sum pumps which are apparent signs of easement. When the subject property was assigned to APT the apparent sign of easement was not removed. Nevertheless no easement arose or was voluntarily created by the transfer of ownership because CDC committed in the Compromise Agreement that it was transferring, assigning and conveying the subject property free from all liens and encumbrances.

Considering that CDC never intended to transfer said property burdened by the generating set and sump pumps, LTI should remove them from said property. Furthermore since APT has been deprived of its use and benefit for almost two decades, it is but just and proper that LTI should pay reasonable rent for the portion of the property occupied by the generator and sump pumps (Privatization Management Office vs. Legaspi Towers 300 Inc. G.R. 147957, July 22, 2009).

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