Torbela v Sps Rosario

Torbela siblings owns a land. Sps Rosario borrowed it, used it as security to obtain a loan, used the proceeds thereof
to build a building on said lot, defaulted on their payment of their loan, property got foreclosed. Now the Torbelas
want to get their property back, filed for recovery of ownership.

It was found out that the Torbelas owns the land while the Sps Rosario are builders on said land.

Issue: Who owns the improvements on said lot? May article 448 be applied in view of the Bad Faith on the part of
the builder?

Held: Yes.

When it comes to the improvements said lot, both the Torbela siblings (as landowners) and Dr. Rosario (as builder)
are deemed in bad faith. Why?

The Torbela siblings were aware of the construction of a building by Dr. Rosario on said lot, while Dr. Rosario
proceeded with the said construction despite his knowledge that said lot belonged to the Torbela siblings.

This is the case contemplated under Article 453 of the Civil Code, which reads:

ART. 453. If there was bad faith, not only on the part of the person who built, planted or sowed on the land
of another, but also on the part of the owner of such land, the rights of one and the other shall be the same
as though both had acted in good faith.

It is understood that there is bad faith on the part of the landowner whenever the act was done with his
knowledge and without opposition on his part.

So, article 448 may now be applied.

Until the Torbela siblings have chosen their option under Article 448 of the Civil Code, the Sps Rosario shall retain
said improvements, as well as the rents thereof, until the indemnity for the same has been paid.