Digest: Damian Ignacio, et. al. vs Elias Hilario, et. al.

Digest: Damian Ignacio, et. al.  vs Elias Hilario, et. al. , G.R. No. L-175 [76 Phil 605] April 30, 1946

Civil Law – Property – Accession Industrial – Builder in Good Faith; Owner in Good Faith

Facts: This is a civil suit between Elias Hilario and his wife Dionisia Dres, and Damian, Francisco and Luis, surnamed Ignacio concerning the ownership of a parcel of land, partly rice-land and partly residential. Hilario was the owner of a parcel of land. He later discovered that Ignacio built some buildings therein (a granary and a house) at the residential portion of the lot. Hon. Alfonso Felix (Lower courts) presided over and rendered the a judgment holding Hilario as the legal owners of the whole property (owner in good faith) and conceded to Ignacio the ownership of the houses and granaries built by them on the residential portion with the rights of a possessor in good faith (builder in good faith), in accordance with article 361 of the Civil Code.

Ruling of Court of First Instance of Pangasinan

(1) Ignacio are the owners of the whole property (transfer certificate of title No. 12872) issued in their name, and entitled to the possession of the same;

(2) Hilario are entitled to hold the position of the residential lot until after they are paid the actual market value of their houses and granaries erected thereon, unless Ignacio prefer to sell them said residential lot, in which case Hilario shall pay the Ignacio the proportionate value of said residential lot taking as a basis the price paid for the whole land

(3) That upon Hilario’s failure to purchase the residential lot in question, said defendants shall remove their houses and granaries after this decision becomes final and within the period of 60 days from the date that the court is informed in writing of the attitude of the parties in this respect.

No pronouncement is made as to damages and costs.

Parties prayed for order of execution. The current presiding judge is now Hon. Felipe Natividad. Hilario chose neither to pay Ignacio for the buildings nor to sell to them the residential lot, said Ignacio should be ordered to remove the structure at their own expense and to restore plaintiffs in the possession of said lot, which was granted by the Court.

Issue: W/N 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.

Ruling: 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.

 

ART. 361. The owner of land on which anything has been built, sown or planted in good faith, shall have the right to appropriate as his own the work, sowing or planting, after the payment of the indemnity stated in articles 453 and 454, or to oblige the one who built or planted to pay the price of the land, and the one who sowed, the proper rent.

 

ART. 453. Necessary expenses shall be refunded to every possessor; but only the possessor in good faith may retain the thing until such expenses are made good to him.

Useful expenses shall be refunded to the possessor in good faith with the same right of retention, the person who has defeated him in the possession having the option of refunding the amount of the expenses or paying the increase in value which the thing may have acquired in consequence thereof.

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. The owner of the land, upon the other hand, has the option, under article 361, 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.

The writ of execution fails to determine the prices of the buildings and of the residential lot where they are erected, as well as the period of time within which Hilario may exercise their option either to pay for the buildings or to sell their land, and, in the last instance, the period of time within which the Ignacio may pay for the land, these particulars having been left for determination apparently after the judgment has become final. This is erroneous. The writ of execution issued by Judge Natividad is hereby set aside and the lower court ordered to hold a hearing in the principal case to determine the said particulars.