Depra v.

Dumlao
136 SCRA 475

Sarmiento v. Agana
129 SCRA 122

DOCTRINE: The owner of land on which improvement was built by another in

good faith is entitled to removal of improvement only after land owner has opted to
sell the land and the builder refused to pay for the same. where the lands value is
considerably more than the improvement, the landowner cannot compel the builder
to buy the land. In such event, a forced lease is created and the court shall fix the
terms thereof in case the parties disagree thereon.

FACTS:
While one Ernesto was still courting his wife, the latter's mother had told him the
couple could build a residential house on a certain lot. They constructed a
residential house.

FACTS:
Francisco Depra, is the owner of a parcel of land registered, situated in the
municipality of Dumangas, Iloilo. Agustin Dumlao, defendant-appellant, owns an
adjoining lot. When Dumlao constructed his house on his lot, the kitchen thereof
had encroached on an area of thirty four (34) square meters of Depras property,
After the encroachment was discovered in a relocation survey of Depras lot made
on November 2, 1972, his mother, Beatriz Depra after writing a demand letter
asking Dumlao to move back from his encroachment, filed an action for Unlawful
Detainer. Said complaint was later amended to include Depra as a party plaintiff.
After trial, the Municipal Court found that Dumlao was a builder in good faith, and
applying Article 448 of the Civil Code. Depra did not accept payment of rentals so
that Dumlao deposited such rentals with the Municipal Court. In this case, the
Municipal Court, acted without jurisdiction, its Decision was null and void and
cannot operate as res judicata to the subject complaint for Quieting of Title. The
court conceded in the MCs decision that Dumlao is a builder in good faith.
ISSUE:
Whether or not the factual situations of Dumlao and Depra conform to the juridical
positions respectively defined by law, for a "builder in good faith" under Article
448, a "possessor in good faith" under Article 526 and a "landowner in good faith'
under Article 448?
HELD:
Owner of the land on which improvement was built by another in good faith is
entitled to removal of improvement only after landowner has opted to sell the land
and the builder refused to pay for the same. Res judicata doesnt apply wherein the
first case was for ejectment and the other was for quieting of title.
ART. 448. The owner of the land on which anything has been built sown or planted
in good faith, shall have the right to appropriate as his own the works, sowing or
planting, after payment of the indemnity provided for in articles 546 and 548, or to
oblige the one who built or planted to pay the price of the land, and the one who
sowed, the proper rent.
However, the builder or planter cannot be obliged to buy the land if its value is
considerably more than that of the building or trees. In such case, he shall pay
reasonable rent, if the owner of the land does not choose to appropriate the building
or trees after proper indemnity. The parties shall agree upon the terms of the lease
and in case of disagreement, the court shall fix the terms thereof.

Subsequently, the land was sold to petitioner Sarmiento, who asked Ernesto and his
wife to vacate. Sarmiento filed an Ejectment suit against them.
In the evidentiary hearing, Sarmiento submitted the deed of sale of the land which
showed the price to be PHP15,000. On the otherhand, Ernesto testified that the
residential house then cost PHP30,000-40,000, which was not questioned.
The MTC found that Ernesto was a builder in good faith and the house had a value
of PHP20,000. When the case was elevated, the CFI of Pasay ordered Sarmiento to
exercise his option, to reimburse Ernesto for the sum of the house or allow them to
purchase the land, within sixty days. Upon expiration of the period, Ernesto was
allowed to deposit the sum of PHP25,000 with the Court as the purchase price for
the land.
ISSUE:
WON private respondents are builders in good faith. -- YES
HELD:
Ernesto and his wife were builders in good faith in view of the peculiar
circumstance under which they had constructed the residential house. As far as they
knew, the land was owned by Ernesto's mother-in-law, and could reasonably be
expected to later on give them the land.
The owner of the building erected in good faith on a land owned by another, is
entitled to retain the possession of the land until he is paid the value of his building.
The owner of the land, has the option either to pay for the building or to sell his
land to the owner of the building. But he cannot, as Sarmiento did, refuse both to
pay for the building and to sell the land and compel the owner of the building to
remove it from the land where it is erected.

Pecson v. CA
244 SCRA 407

Spouses del Campo v. Obesia

160 SCRA

DOCTRINES:
1.
Article 448 of the Civil Code does not apply to a case where the owner of
the land is the builder, sower, or planter who then later loses ownership of the land
by sale or donation.

DOCTRINE: When the co-ownership is terminated by the partition and it appears

that the house of the defendants occupies a portion of 5 square meters of the land
pertaining to plaintiffs which the defendant obviously built in good faith, the
provisions of Article 448 of the new Civil Code should apply.

2.
The provision of Art. 448 on indemnity may be applied by analogy to a
case where one loses the ownership of the land on which he earlier built an
apartment.

FACTS:
An action for partition of a parcel of land was filed by the spouses Del Campo in the
CFI of Cebu. Plaintiffs and defendants are co-owners pro indiviso of this lot in the
proportion of and 1/3 share each, respectively. The trial court appointed a
commissioner in accordance with the agreement of the parties. The commissioner
conducted a survey, prepared a sketch plan and submitted a report to the trial court
on May 29, 1976, recommending that the property be divided into two lots: Lot
1161-A with an area of 30 square meters for the spouses Del Campo and Lot No.
1161-B with an area of 15 square meters for Obesia. Upon surveying, it was shown
that the house of Obesia occupied the portion with an area of 5 square meters of Lot
1161-A of the spouses Del Campo. The parties manifested their conformity to the
report and asked the trial court to finally settle and adjudicate who among the
parties should take possession of the 5 square meters of the land in question.

FACTS:
Pecson was the owner of a commercial lot on which he built a 4-door, 2-storey
apartment. For his failure to pay realty tax on said property, the lot was sold at
public auction by the City Treasurer of Quezon City to Nepomuceno, who in turn
the property to Sps. Nuguid. Pecson questioned the validity of the auction sale. RTC
then, dismissed the complaint and ruled that the apartment building was included
in the sale. It reached the SC, but the same was denied. Thereafter, Sps. Nuguid
filed a Motion for delivery of possession, which was granted by the trial court.
Pecson contested. The Court of Appeals affirmed in part the order of the trial court
citing Article 448 of the Civil Code. CA ordered that Pecson should be indemnified
with the construction cost of the apartment.
ISSUE:
Is Article 448 applicable in a case wherein the owner of the land is also the builder
who then later loses ownership of the land by sale? -- NO
HELD:
By its clear language, Article 448 refers to a land whose ownership is claimed by
two or more parties, one of whom has built some works, or sown or planted
something. The building, sowing or planting may have been made in good faith or
in bad faith. The rule on good faith laid down in Article 526 of the Civil Code shall
be applied in determining whether a builder, sower or planter had acted in good
faith. Article 448 does not apply to a case where the owner of the land is the builder,
sower, or planter who then later loses ownership of the land by sale or donation.
Elsewise stated, where the true owner himself is the builder of works on his own
land, the issue of good faith or bad faith is entirely irrelevant. Thus in strict point of
law, Article 448 is not apposite to the case at bar. Nevertheless, we believe that the
provision therein on indemnity may be applied by analogy considering that the
primary intent of Article 448 is to avoid a state of forced co-ownership and that the
parties, including the two courts below, in the main agree that Articles 448 and 546
of the Civil Code are applicable and indemnity for the improvements may be paid
although they differ as to the basis of the indemnity.

ISSUE:
Whether or Not Article 448 of the Civil Code is applicable to a builder in good faith
when the property involved is owned in common.
HELD:
When the co-ownership is terminated by the partition and it appears that the house
of Obesia occupies a portion of 5 square meters of the land pertaining to spouses
Del Campo which Obesia obviously built in good faith, the provisions of Article 448
of the new Civil Code should apply.
In applying Article 448 of the New Civil Code, the plaintiffs have the right to
appropriate said portion of the house of defendants upon payment of indemnity to
defendants as provided for in Article 546 of the Civil Code. Otherwise, the plaintiffs
may oblige the defendants to pay the price of the land occupied by their house. But
if the price asked for is considerably much more than the value of the portion of the
house of defendants built thereon, then the latter cannot be obliged to buy the land.
The defendants shall then pay the reasonable rent to the plaintiff upon such terms
and conditions that they may agree. In case of disagreement, the trial court shall fix
the terms thereof. The defendants may opt to demolish or remove the said portion
of their house, at their own expense, if they so decide.

Ignao v. IAC, G.R. No. 72876

193 SCRA 17

which is truly abstract, because until division is effected such portion is not
concretely determined.

DOCTRINE: When the co-ownership is terminated by a partition and it appears

that the house of an erstwhile co-owner has encroached upon a portion pertaining
to another co-owner which was however made in good faith, then the provisions of
Article 448 should apply to determine the respective rights of the parties.

Article 448 provides: The owner of the land on which anything has been built, sown
or planted in good faith, shall have the right to appropriate as his own the works,
sowing or planting, after payment of the indemnity provided for in articles 546 and
548, or to oblige the one who built or planted to pay the price of the land, and the
one who sowed, the proper rent. However, the builder or planter cannot be obliged
to buy the land if its value is considerably more than that of the building or trees. In
such case, he shall pay reasonable rent, if the owner of the land does not choose to
appropriate the building or trees after proper indemnity. The parties shall agree
upon the terms of the lease and in case of disagreement, the court shall fix the
terms thereof.

FACTS:
Petitioner Florencio Ignao and his uncles private respondents Juan Ignao and
Isidro Ignao were co-owners of a parcel of land with an area of 534 square meters
situated in Barrio Tabon, Municipality of Kawit, Cavite. Pursuant to an action for
partition filed by petitioner, the then CFI directed the partition of the aforesaid
land, allotting 133.5 square meters or 2/8 thereof to private respondents Juan and
Isidro, and giving the remaining portion with a total area of 266.5 square meters to
petitioner Florencio. However, no actual partition was ever effected.
Petitioner instituted a complaint for recovery of possession of real property against
private respondents Juan and Isidro before the CFI. In his complaint petitioner
alleged that the area occupied by the two (2) houses built by private respondents
exceeded the 133.5 square meters previously allotted to them by the trial court.
It was found that the houses of Juan and Isidro actually encroached upon a portion
of the land belonging to Florencio. Upon agreement of the parties, the trial court
ordered a licensed geodetic engineer to conduct a survey to determine the exact
area occupied by the houses of private respondents. The survey subsequently
disclosed that the house of Juan occupied 42 square meters while that of Isidro
occupied 59 square meters of Florencio's land or a total of 101 square meters.
Trial court ruled that although private respondents occupied a portion of
Florencio's property, they should be considered builders in good faith.
Petitioner appealed to IAC which subsequently affirmed the decision of the trial
court.
Thus, herein petition.
ISSUE:
Whether the provisions of Article 448 should apply to a builder in good faith on a
property held in common. -- YES
HELD:
It should be noted that prior to partition, all the co-owners hold the property in
common dominion but at the same time each is an owner of a share which is
abstract and undetermined until partition is effected. As co-owners, the parties may
have unequal shares in the common property, quantitatively speaking. But in a
qualitative sense, each co-owner has the same right as any one of the other coowners. Every co-owner is therefore the owner of the whole, and over the whole he
exercises the right of dominion, but he is at the same time the owner of a portion

Whether or not the provisions of Article 448 should apply to a builder in good faith
on a property held in common has been resolved in the case of Spouses del Campo
vs. Abesia, wherein the Court ruled that:
The court a quo correctly held that Article 448 of the Civil Code cannot apply where
a co-owner builds, plants or sows on the land owned in common for then he did not
build, plant or sow upon land that exclusively belongs to another but of which he is
a co-owner. The co-owner is not a third person under the circumstances, and the
situation is governed by the rules of co-ownership.
However, when, as in this case, the ownership is terminated by the partition and it
appears that the home of defendants overlaps or occupies a portion of 5 square
meters of the land pertaining to plaintiffs which the defendants obviously built in
good faith, then the provisions of Article 448 of the new Civil Code should apply.
Both the trial court and the Appellate Court erred when they peremptorily adopted
the "workable solution" in the case of Grana vs. CA, and ordered the owner of the
land, petitioner Florencio, to sell to private respondents, Juan and Isidro, the part
of the land they intruded upon, thereby depriving petitioner of his right to choose.
Such ruling contravened the explicit provisions of Article 448 to the effect that
"(t)he owner of the land xxx shall have the right to appropriate xxx or to oblige the
one who built xxx to pay the price of the land xxx." The law is clear and
unambiguous when it confers the right of choice upon the landowner and not upon
the builder and the courts

MWSS v. C.A.
143 SCRA 623
DOCTRINE: The right of a possessor in bad faith to remove improvements applies
only to improvements for pure luxury or mere pleasure, provided the thing does not
suffer any injury and the lawful possessor does not prefer to retain them by paying
their value at the time of his possession.
FACTS:
Dagupan City filed a complaint against MWSS for recovery of ownership and
possession of the Dagupan Waterworks System. MWSS interposed R.A. 1383 as its
defense; it vested to MWSS the ownership, possession, and control of all
waterworks system throughout the Philippines. MWSS also filed a counterclaim for
reimbursement of expenses it incurred for necessary and useful improvements.
Trial court ruled that MWSS is a possessor in bad faith so it is not entitled to claim
reimbursement. MWSS appealed to the Court of Appeals arguing that Dagupan City
should be liable for payment of the balance of the loan secured by MWSS for the
improvement of the Dagupan Waterworks System; however the Court of Appeals
affirmed trial courts judgment.
MWSS appealed to the Supreme Court for the removal of useful improvements.
Dagupan City argues that MWSS is a possessor in bad faith so it has absolutely no
right to the useful improvements.

ISSUE:
Whether or not a possessor in bad faith has the right to remove useful
improvements. -- NO
HELD:
Under Article 499 of the Civil Code, he who builds, plants, or sows in bad faith on
the land of another, loses what is built, planted, or sown without right to
indemnity. Additionally, under Article 546 of the Civil Code, only a possessor in
good faith shall be refunded for useful expenses with the right of retention until
reimbursed. Finally, under Article 547 of the Civil Code, only a possessor in good
faith may remove useful improvements if this can be done without damage to the
principal thing and if the person who recovers the possession does not exercise the
option of reimbursing the useful expenses.
The right of a possessor in bad faith to remove improvements applies only to
improvements for pure luxury or mere pleasure, provided the thing does not suffer
any injury and the lawful possessor does not prefer to retain them by paying their
value at the time of his possession.
In this case, MWSS is a builder in bad faith so it loses whatever useful
improvements it made without right to indemnity.