Khalils House

Bens Land

Art 448
Rule When On the Land of a Person in Good Faith, Another Builds, Sows, or Plants in Bad Faith

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 x the terms thereof.

Khalils House

Bens Land

Bens Remedies
B is entitled to an option. He is therefore allowed: (a) to appropriate for himself the house upon payment of the proper indemnity;
(b) or to compel the builder B to buy the land upon which the house has been built, unless the value of the land be considerably more than the value of the house. (In the latter case, rent should be paid.)

Inter-Regional Development Corporation v. Court of Appeals L-89677, July 22, 1975

FACTS: On the land of someone, a person planted certain crops. Does the landowner automatically or ipso facto become the owner of said planted crops? HELD: No, the owner of the land does not ipso facto become the owner of what had been planted on his land by another. Firstly, we have to determine whether the planter was in good faith or bad faith. Secondly, assuming that the planter was in good faith, the landowner, should he desire to get the crops, must rst give the proper indemni cation to the planter.

Tan Queto v. CA, et al. GR 35648, Feb. 27, 1987 (Resolution on a Motion for Reconsideration, setting aside the S.C. decision dated May 19, 1983)
The net result of mutual bad faith between the owner and the builder entitles the builder to the rights of a builder in good faith. (Art. 448, Civil Code). Ergo, reimbursement should be given to the builder if the owner decides to appropriate the building for herself. The Chapter on Possession (jus possessionis, not jus possidendi) in the new Civil Code refers to a possessor other than the owner. The difference between a builder (or possessor) in good faith and one in bad faith is that the former is NOT AWARE of the defect or aw in his title or mode of acquisition while the latter is AWARE of such defect or aw. (Art. 526, Civil Code). But in either case, there is a aw or defect. A person who builds in his own property is not merely a possessor or builder in good faith (this phrase presupposes ownership in another) much less is he a builder in bad faith. He is a builder-possessor (jus possidendi) because he is the owner himself.

Fernandez Del Campo v. Abeisa L-49219, Apr. 15, 1988

Plaintiffs and defendant are co-owners pro indiviso of a lot in the proportion of 2/3 and 1/3 each, respectively. An appointed commissioner submitted a partition. The house built by defendants, however, happened to be in the portion given to plaintiffs. Plaintiffs contended and were upheld by lower court that defendant is not entitled to reimbursement of cost of house built because as a coowner he is not a third person in contemplation of Art. 448 de ning builder in good faith. However, when as in this case, the co-ownership is terminated by the partition and it appears that the house of defendants overlaps or occupies a portion of 5 sq.m. of the land pertaining to plaintiffs which defendants obviously built in good faith, then the provisions of Art. 448 of the new Civil Code should apply.

Reason for the Provision

It is true as a rule that whatever is built, planted, or sown on the land of another should, by the principle of accession, belong to him (landowner). However, when the planter, builder, or sower has acted in good faith, a conict of rights arises between the owners, and it becomes necessary to protect the owners of both without causing injustice to either. In view of the impracticability of creating what Manresa calls a state of forced co-ownership (Vol. 3, 4th Ed., p. 213), the law has provided a just and equitable solution. (Bernardo v. Bataclan, 37 O.G. No. 74, p. 1382; see also Co Tao v. Chan Chico, L-49167, Apr. 30, 1949). [NOTE: The builder is considered in good faith if he thought that the land was his: the landowner is in good faith if he did not know that somebody was building on his land, or even if he did know, if he expressed his objection. (See Co Tao v. Chan Chico, Ibid.).].

Spouses Rafael Benitez and Avelina Benitez v. CA 77 SCAD 793, GR 104828, Jan. 16, 1997
The advantage in Art. 448 is accorded the landowner because his right is older, and because, by the principle of accession, he is entitled to the ownership of the accessory thing. There can be no preemptive right to buy even as a compromise, as this prerogative belongs solely to the landowner. No compensation can be legally forced on him, contrary to what petitioners ask from this Court. Such an order would certainly be invalid and illegal.

Why Option Is Given to the Landowner and Not to the Planter or Builder
It is the owner of the land who is allowed to exercise the option because: (a) his right is older; (b) and because, by the principle of accession, he is entitled to the ownership of the accessory thing. (3 Manresa, p. 213, cited in the case of Bernardo v.

Indemnity in Case of Appropriation

In case the owner chooses to appropriate the thing built, or sown, or planted, how much indemnity should be paid by him? ANS.: The indemnity provided for in Arts. 546 and 548 of the new Civil Code. (Mendoza and Enriquez v. De Guzman, 52 Phil. 1641). Please note, however, that ownership over the thing built or sown or planted does not pass to the landowner till after payment therefor has been given. (TS, Jan. 2, 1928). Payment is to be made either on the date xed by agreement or the date xed by the Court. (Bataclan v. CFI, 61 Phil. 428). [NOTE: After the owner of the land has given to the builder or possessor in good faith the proper indemnities, the builder or possessor may be ordered to VACATE the land. (People v. Repato, L-17985, Sep. 29, 1962).].

Fernandez v. Abeisa GR 49219, Apr. 15, 1988

FACTS: In an action for partition of a 45-square meter lot, Concepcion got 2/3 or 30 square meters of the lot while Bernarda got 1/3 or 15 square meters. After the houses of Concepcion and Bernarda were surveyed, it was found that the house of Bernarda occupied the portion of 5 square meters of the lot alloted to Concepcion. Concepcion and Bernarda manifested their conformity to the report of the Commissioners and asked the trial court to settle and adjudicate who between them should take possession of the 5 square meters of the

Fernandez v. Abeisa GR 49219, Apr. 15, 1988

land in question. The trial court held that Art. 448 of the Civil Code does not apply to a case where the builder is a co-owner. Hence, it ordered Bernarda to remove part of the house which encroached on the lot of Concepcion and to deliver the 5-meter portion to the latter. The Supreme Court modi ed the decision of the trial court by ordering Concepcion to indemnify Bernarda for the value of the portion of the latters house in accordance with Art. 549 of the Civil Code, if Concepcion elects to appropriate it. Otherwise, Bernarda shall pay the value of the 5 square meters of land occupied by her house at such price as may be agreed upon with Concepcion. If its value exceeds the portion of the house that Bernarda built, the latter may choose not to buy the land but must pay a reasonable rental for the use of the portion of Concepcions land as may be agreed upon by them. The Court thus

Fernandez v. Abeisa GR 49219, Apr. 15, 1988

HELD: Applying Article 448 of the Civil Code, Concepcion has the right to appropriate said portion of the house of Bernarda upon payment of indemnity to the latter as provided for in Article 546 of the Civil Code. Otherwise, Concepcion may oblige Bernarda to pay the price of the land occupied by her house, but if the price asked for is considerably much more than the value of the portion of Bernardas house built thereon, then the latter cannot be obliged to buy the land. Bernarda shall then pay the reasonable rent to Concepcion upon such terms and conditions that they may agree. If they disagree, the trial court shall x the terms thereof. Of course, Bernarda may demolish or remove the portion of her house, at her own expense if she so decides.

The Indemnities to be Given

(a) Necessary Expenses. (Art. 546, par. 1). (b) Useful Expenses. (Art. 546, par. 2). (c) Luxurious Expenses if he desires to appropriate them for himself. (Art. 548).

Pecson v. CA 61 SCAD 385 (1995)

It is the current market value of the improvements which should be made the basis of reimbursement to the builder in good faith.

Ballatan v. CA 304 SCRA 34 (1999)

The right to choose between appropriating the improvement or selling the land on which the improvement of the builder, planter, or sower stands is GIVEN to the OWNER of the land. In the event that the owner elects to SELL to the builder, planter, or sower the land or which the improvement stands, the price must be FIXED at the prevailing MARKET VALUE at the time of payment.

Rights of Landowner Before He Makes the Choice

Before the landowner exercises the option, it is evident that he is not yet the owner of what ever has been built, planted, or sown, for his only right in the meantime is to exercise the option. (TS, May 21, 1928). Neither builder nor landowner can oust each other, for until indemnity is paid, the builder has the right of retention. (See Martinez v. Baganus, 28 Phil. 500). It has been held by the Spanish Supreme Court that ownership over the accessory passes only after payment of the indemnity.(TS, Jan. 2, 1928).