IGNACIO VS HILARIO

Sometime during the 1940s in Pangasinan, a civil suit arose between Damian Ignacio
and Elias Hilario. Hilario was the owner of a parcel of land. He later discovered that
Ignacio built some buildings therein (a granary and a house). After trial, Judge Antonio
Felix of the Court of First Instance of Pangasinan ruled that both were in good faith
(Hilario was the owner in good faith while Ignacio was the builder in good faith).
Judge Felix then spelled out the rights of the parties to wit:
a.) Ignacio can retain possession over the buildings he erected until after he is paid by
Hilario for the value of the buildings he erected;
b.) Hilario can choose to buy the said buildings or he can choose to sell Ignacio his land
since the value of his land was only P45.00 while the value of the buildings erected was
P2,000.00.
However, Hilario refused to avail of his options. Instead, he filed a motion in court to
have Ignacio be ejected and have them destroy the buildings he erected. Judge Felipe
Natividad (he replaced Judge Felix), granted Hilarios motion.
ISSUE: Whether or not Hilario, the owner in good faith, may eject a builder in good faith
without choosing either to appropriate the building for himself after payment of its value
or to sell his land to the builder in good faith.
HELD: No. The owner in good faith has to make a choice. He cannot dispense the
options under the law and then eject the builder in good faith. This is because both are
in good faith.
But when can the owner in good faith compel the builder in good faith to remove the
building he erected?
This is only available if after the owner in good faith chose to sell his land to the builder
in good faith and the latter fails to pay the value of the land within the agree period. Only
then can the owner in good faith compel the builder in good faith to remove the building
he erected.

Tayag vs Yuseco
FACTS:

Yuseco had been rendering professional services without compensation to Lim.

Lim offered to Yuseco, to build a house within their lot.
Yuseco accepted the offer (believing that the same was a donation or was
compensation for the services rendered)
Yuseco built a house thereon.
Lim sold to her daughter(Tayag) the lots where Yusecos house stood.
Tayag asked Yuseco to remove their house from the lots or pay a monthly rental.
Yuseco refused.
Tayag filed an action of ejection for restitution of the lots.
The case reached the SC and remanded the case to the Trial court to give an
opportunity to Tayag to exercise their choice and option whether they would
appropriate the buildings and pay Yuseco for the value thereof OR compel
Yuseco to pay for the value of the lots.
In a manifestation, Tayag chose to appropriate the buildings.
TC issued a writ of execution to collect from Tayag the sum for the building.
Tayag question said writ, contending that she still retain the right of option and
even if she already had made her choice, she cannot be compelled to pay the
price fixed by the court because of her financial inability.

ISSUE:
HELD:

WONTayag still retain the right of option.

NO. Once a choice is made by the landowner, it is generally irrevocable.

Thus, if the landowner has opted/elected to appropriate the building but he is
unable to pay for the indemnity or amount, the landowner CANNOT afterwards
opt/elect to sell the land. Since Tayags first choice had already been
communicated to the court and she had already been ordered to pay, her duty
has been converted into a monetary obligation which can be enforced by a writ of
execution.
Note: Yuseco is a possessor in good faith, as she believed the land given was a
donation or was compensation for the services rendered.

LEONOR GRANA and JULIETA TORRALBA VS. THE COURT OF APPEALS,

AURORA BONGATO and JARDENIO SANCHEZ
GR L-12486 31 AUG 1960
Facts:
The herein Petitioners were sued by Bongato and Sanchez for the recovery of 87
square meters of residential land which they have inherited as the children of the
spouses Marcos Bongato and Eusebia. The former were ordered by the to vacate and
deliver it to said respondents and to pay a monthly rental of P10.00 from the filing of the
complaint until they actually vacate the same, plus attorney's fees and costs.
The Petitioners alleged that the said property became a subject of a cadastral survey
due to conflicts and overlapping of boundaries. In that survey, Gregorio Bongato's lot,
according to petitioners, was identified as Lot No. 311 and that of Isidaria Trillo, their
predecessor in interest, as Lot No. 310. Citing the fact that Original Certificate of Title
No. RO-72 (138) covers 295 square meters of land, while the sketch plan of the second
cadastral survey of Butuan shows that Lot No. 311 has only 230 square meters,
petitioners maintain that it is the latter area properly belongs to respondents and that the
land in question is part of the adjoining land, Lot No. 310, which belonged to their
predecessor in interest.
Issue:
Whether or not the first survey was erroneous or that it included part of the contiguous
land of petitioners' predecessor in interest?
Held:
Petitioners' stand is untenable. No proof was presented to show that the first survey was
erroneous or that it included part of the contigous land of petitioners' predecessor in
interest as part of the lot now covered by Original Certificate of Title No. RO-72 (138).
Note that the difference in area between the land covered by said title and Lot No. 311
of the resurvey plan is 65 square meters while the area of the land in dispute if 87
square meters. And what is more, the alleged sketch plan of the resurvey was not
presented in evidence.
Upon the other hand, it is not disputed that the land in question is part of the lot covered
by the Torrens title issued way back in 1923 in the name of respondents' predecessor in
interest. Said title has not been contested up to the present, and, therefore, has become
inconvertible evidence of the ownership of the land covered by it. Well settled is the rule
that a Torrens certificate of title becomes conclusive and indefeasible after the lapse of

the period within which it may be impugned (Reyes, et al. vs. Borbon, et al., 50 Phil.,
791; Yumul vs. Rivera, et al., 64 Phil., 13).
Although without any legal and valid claim over the land in question, petitioners,
however, were found by the Court of Appeals to have constructed a portion of their
house thereon in good faith. Under Article 361 of the old Civil Code (Article 448 of the
new), the owner of the land on which anything has been built in good faith shall have
the right to appropriate as his own faith shall have the right to appropriate as his own
the building, after payment to the builder of necessary and useful expenses, and in the
proper case, expenses for pure luxury or mere pleasure, or to oblige the builder to pay
the price of the land. Respondents, as owners of the land, have therefore the choice of
either appropriating the portion of petitioners' house which is on their land upon
payment of the proper indemnity to petitioners, or selling to petitioners that part of their
land on which stands the improvement. It may here be pointed out that it would be
impractical for respondents to choose to exercise the first alternative, i.e., buy that
portion of the house standing on their land, for in that event the whole building might be
rendered useless. The more workable solution, it would seem, is for respondents to sell
to petitioners that part of their land on which was constructed a portion of the latter's
house. If petitioners are unwilling or unable to buy, then they must vacate the land and
must pay rentals until they do so. Of course, respondents cannot oblige petitioners to
buy the land if its value is considerably more than that of the aforementioned portion of
the house. If such be the case, then petitioners must pay reasonable rent. The parties
must come to an agreement as to the conditions of the lease, and should they fail to do
so, then the court shall fix the same. (Article 361, old Civil Code; Article 448 of the new).

DEPRA V. DUMLAO 136 SCRA 475

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
Queting of Title. The court conceded in the MCs decision that Dumlao is a builder in
good faith.
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.

DEL CAMPO V. ABESIA

When land is co-owned by two parties, but the co-ownership is terminated, Article 448
governs in case real property (like a house) encroaches the land of another. This is
provided that good faith exists.

FACTS:
The case involves two friendly parties who are co-owners of a corner lot at Flores and
Cavan Streets in Cebu City. Plaintiff owns 2/3 of the lot and Defendant owns 1/3 of the
same. The total size of the lot is 45 square meters (which is about the size of a typical
Starbux caf)

Later on, the two parties decided to divide the co-owned property into two lots. 30
square meters went to the plaintiffs and 15 square meters went to the defendants. From
the sketch plan, both parties discovered that the house of the defendants occupied a
portion of the plaintiffs adjacent lot, eating 5 sqm of it. The parties then requested the
trial court to adjudicate who should take possession of the encroached 5 sqm.

The trial court ruled that Art 448 does not apply. 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. Since art 448 does not apply, the Plaintiff cannot be obliged to pay for
the portion of defendants house that entered into the 30 sqm lot, AND Defendant
cannot be obliged to pay for the price of the 5 sqm their house occupied. Why? The
RTC believed the rules of co-ownership should govern, and not that of accession.

RTC then assigned the full 30sqm to Plaintiff and ordered Defendants to demolish the
5sqm part of their house encroaching the 30sqm lot of the Plaintiffs. Defendants where
aghast at having to axe the family home, hence they appealed.

CA affirmed the decision. So we have the SC coming to the rescue.

ISSUE:
w/n the rules of accession applies (and not coownership) on property that used to be
co-owned, but was subdivided.

HELD:
The rule of accession applies because co-ownership was terminated upon the
partitioning of the lot. Art 448 therefore governs. The house of Defendant overlapped
that of Plaintiff, but this was built on good faith. Hence, the plaintiffs have the right to
choose one of two options

> Appropriate the 5sqm portion of the house of Defendants after indemnifying the
Defendants; or
> Obliging the Defendants to pay a portion of the land on which their home rested. ( or
they can rent it)

Spouses Del Campo vs Bernarda Abesia

Gr L-49219
April 15, 1988
Facts:
Spouses Del Campo, Estanislao Del Canto, and Barnarda Abesia filed for the
partition of the property co-owned by them. The commissioner who surveyed
the property recommended that the land be divided into two, 30 sq. meters for
Spouses Del Campo and Del Canto and 15 sq. meters for Abesia. However, it
was found that the house built by Abesia encroached upon the part given to
the plaintiffs.
The court ruled that Article 448 of the civil code is inapplicable and the rules
on co-ownership are more relevant over the encroaching strutrure and the
land on which it was built.
Issue:
Whether or not Article 448 should be applied.

Decision:
The court ruled that Article 448 is inapplicable over constructions made by a
co-owner on a land co-owned. However, the co-ownership was terminated by
the partition of the property. Petitioners has the right to exercise the option
provided in Article 448 as the builder in the case at bar is no longer the
landowner.

FILIPINAS COLLEGES INC. vs. MARIA GARCIA TIMBANG, ET AL.

[G.R. No. L-1281, September 29, 1959]
BARRERA, J.:
FACTS:
This is an appeal taken from an order of the Court of First Instance of Manila
dated May 10, 1957 (a) declaring the Sheriff's certificate of sale covering a
school building sold at public auction null and void unless within 15 days
from notice of said order the successful bidders, defendants-appellants
spouses Maria Garcia Timbang and Marcelino Timbang, shall pay to, appellee
Maria Gervacio Blas directly or through the Sheriff of Manila the sum of
P5,750.00 that the spouses Timbang had bid for the building at the Sheriff's
sale; (b) declaring the other appellee Filipinas Colleges, Inc. owner of
24,500/3,285,934 undivided interest in Lot No. 2-a covered by certificate of
tile No 45970, on which the building sold in the auction sale is situated; and
(c) ordering the sale in public auction of the said undivided interest of the
Filipinas Colleges, Inc., in lot No. 2-a aforementioned to satisfy the unpaid
portion of the judgment in favor of appellee Blas and against Filipinas
Colleges, Inc. in the amount of P8,200.00 minus the sum of P5,750.00
mentioned in (a) above. The order appealed from is the result of three
motions filed in the court a quo in the course of the execution of a final

judgment of the Court of Appeals rendered in 2 cases appealed to it in which

the spouses Timbang, the Filipinas Colleges, Inc., and Maria Gervacio Blas
were the parties. The Timbang spouses presented their opposition to each
and all of this motion. In assailing the order of the court a quo directing the
appellants to pay appellee Blas the amount of their bid (P5,750.00) made at
the public auction, appellants' counsel has presented a novel, albeit
ingenious, argument. They contend that since the builder in good faith has
failed to pay the price of the land after the owners thereof exercised their
option under Article 448 of the Civil Code, the builder has lost his right and
the appellants as owners of the land automatically became the owners ipso
facto.
ISSUE/S:
1. Whether or not the contention of the appellants is valid. If not, what
are the remedies left to the owner of the land if the builder fails to pay?
2. Whether or not the appellants, as owner of the land, may seek
recovery of the value of their land by a writ of execution; levy the
house of the builder and sell it in public auction.
HOLDING & RATIO DECIDENDI:
NO, THE APPELLANTS CONTENTION IS SUPERFLUOUS. There is nothing
in the language of these two articles, 448 and 546, which would justify the
conclusion of appellants that, upon the failure of the builder to pay the value
of the land, when such is demanded by the land-owner, the latter becomes
automatically the owner of the improvement under Article 445. Although it is
true, it was declared therein that in the event of the failure of the builder to
pay the land after the owner thereof has chosen this alternative, the builder's
right of retention provided in Article 546 is lost, nevertheless there was
nothing said that as a consequence thereof, the builder loses entirely all
rights over his own building. The remedy left to the parties in such
eventuality where the builder fails to pay the value of the land, though the
Code is silent on this Court, a builder in good faith not be required to pay
rentals. He has right to retain the land on which he has built in good faith
until he is reimbursed the expenses incurred by him. Possibly he might be
made to pay rental only when the owner of the land chooses not to
appropriate the improvement and requires the builder in good faith
to pay for the land but that the builder is unwilling or unable to pay
the land, and then they decide to leave things as they are and
assume the relation of lessor and lessee, and should they disagree
as to the amount of rental then they can go to the court to fix that
amount. This was ruled in the case of Miranda vs. Fadullon, et al., 97 Phil.,
801. A further remedy is indicated in the case of Bernardo vs. Bataclan,
supra, where this Court approved the sale of the land and the improvement
in a public auction applying the proceeds thereof first to the payment of the
value of the land and the excess, if any, to be delivered to the owner of the
house in payment thereof. The second contention was without merit. In
the instant case, the Court of Appeals has already adjudged that appellee
Blas is entitled to the payment of the unpaid balance of the purchase price of

the school building. With respect to the order of the court declaring appellee
Filipinas Colleges, Inc. part owner of the land to the extent of the value of its
personal properties sold at public auction in favor of the Timbang, this Court
likewise finds the same as justified, for such amount represents, in effect, a
partial payment of the value of the land. Failure of the Timbang spouses to
pay to the Sheriff or to Manila Gervacio Blas said sum of P5,750.00 within
fifteen (15) days from notice of the final judgment, an order of execution
shall issue in favor of Maria Gervasio Blas to be levied upon all properties of
the Timbang spouses not exempt from execution for the satisfaction of the
said amount.

Property
Topic art.448
Sarmiento vs. Agana 129 scra 122
Facts:

ERNESTO was still courting his wife, the latter's mother had told him
the couple could build a RESIDENTIAL HOUSE whom Ernesto did construct a
RESIDENTIAL HOUSE on the LAND at a cost of P8,000.00 to P10,000.00 who
probably assumed that the wife's mother was the owner of the LAND and
that, it would be transferred to the spouses. Subsequently turned out that
the LAND had been titled in the name of Mr. & Mrs. Jose C. Santo, Jr. who,
sold the same to petitioner SARMIENTO. SARMIENTO filed an Ejectment suit
against them. In the evidentiary hearings before the Municipal Court,
SARMIENTO submitted the deed of sale of the LAND in her favor, which
showed the price to be P15,000.00. On the other hand, ERNESTO testified
that the then cost of the RESIDENTIAL HOUSE would be from P30,000.00 to
P40,000.00.Sarmiento refuse to pay and give option to buy the property.
Issue: 1.Whether or not Ernesto was in good faith.
2.Whether or not Sarmiento could exercise both refusal to pay the
spouses and give option to purchase.
Held:
1.Yes. We agree that ERNESTO and wife were builders in good faith in
view of the peculiar circumstances under which they had constructed the
RESIDENTIAL HOUSE. As far as they knew, the LAND was owned by
ERNESTO's mother-in-law who, having stated they could build on the
property, could reasonably be expected to later on give them the LAND.
In regards to builders in good faith, Article 448 of the Code provides:t.
hqw
ART. 448. The owner of the land on which anything has been built, sown or
planted in good faith,shall have the rightto 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.

2.No. 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, under article 453 (now Article 546). The owner, of the
land. upon, the other hand, has the option, under article 361 (now Article
448), either to pay for the building or to sell his land to the owner of the
building. But he cannot, as respondents here 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. He is entitled to such remotion only
when, after having chosen to sell his land, the other party fails to pay for the
same.
We hold, therefore, that the order of Judge Natividad compelling
defendants-petitioners to remove their buildings from the land
belonging to plaintiffs-respondents only because the latter chose
neither to pay for such buildings nor to sell the land, is null and
void, for it amends substantially the judgment sought to be
executed and is, furthermore, offensive to articles 361 (now
Article 448) and 453 (now Article 546) of the Civil Code. (Ignacio
vs. Hilario, 76 Phil. 605, 608 [1946]).
Disposition:
WHEREFORE, the Petition for Certiorari is hereby ordered
dismissed, without pronouncement as to costs.
Prepared by: Jener Barrameda