Vda de Roxas v Our Ladys Foundation

OLFIs road development unknowingly encroached upon Roxas land. Roxas got angry and in turn willingly
extended his fence and encroached upon Latosas land. Latosa now files a complaint against Roxas.

Roxas was ordered to return to Latosa the land he encroached upon and to demolish whatever structure he had
constructed

OLFI was ordered to reimburse Roxas the current value of the land (1,800php/sqm) encroached by the former +
legal interest

OLFI then refused to pay Roxas at the current value of the land, dapat kadtong value daw of the land at the time
Roxas first bought it (40php/sqm)

Roxas counters na dapat 1,800php/sqm

Issues:

1. Why was roxas ordered to return the land to latosa + demolish the structure, all at Roxas own expense,
while OLFI was merely ordered to reimburse Roxas?
 2. How should the Roxas property be valued for purposes of reimbursement?

HELD:

1. Because Roxas is a builder in bad faith while OLFI is in good faith.

The SC said:

...this Court resorts to the provisions of the Civil Code governing encroachment on property. Under
Article 448 pertaining to encroachments in good faith, as well as Article 450 referring to
encroachments in bad faith, the owner of the land encroached upon Roxas has the option to
require respondent builder to pay the price of the land.

Article 448 in relation to articles 449, 450, and 451 are applicable:

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. (361a)

Art. 449. 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. (362)

Art. 450. The owner of the land on which anything has been built, planted or sown in bad faith may demand
the demolition of the work, or that the planting or sowing be removed, in order to replace things in their
former condition at the expense of the person who built, planted or sowed; or he may compel the builder or
planter to pay the price of the land, and the sower the proper rent. (363a)

Art. 451. In the cases of the two preceding articles, the landowner is entitled to damages from the builder,
planter or sower. (n)

OLFI did not know that they were already encroaching upon Roxas property. Roxas, on the other hand, knew that
he was overextending his fence onto Latosas property.

Roxas has the 2 options provided in article 448. While Latosa has the options provided under article 450 in relation
to article 449 and 451.

2. The land must be valued at its present or current fair value. It is to be reckoned at the time that the landowner
elected the choice, and not at the time that the property was purchased. The reimbursable amount must reflect
the current value of the property.

Although it might be true that the property was originally purchased at P40.00 per square meter, the
value of the Philippine Peso has greatly devaluated since then P40.00 may be able to purchase a square
meter of land twenty (20) or more years ago but it could only buy two (2) kilos of rice today. It would be
most unfair to the defendants-third party plaintiff if the third party defendant would only be made to
reimburse the purchase price at P40.00 per square meter