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1.

When decision becomes final and executory, judge incumbent to issue necessary writ of
execution
When the decision of the trial court became final and executory, it became incumbent upon the
trial court judge to issue the necessary writ for the execution of the same. There is no basis for
the judge to deny the petitioner's motion to avail of its option to appropriate the improvements
made on its property.

2. When decision becomes final, no addition can be made thereto


In Duenas v. Mandi (151 SCRA 530, 545), it was held that “after a judgment has become final,
no additions can be made thereto, and nothing can be done therewith except its execution,
otherwise there would be no end to legal processes. (Fabular v. Court of Appeals, 119 SCRA
329)" The judge cannot deny the issuance of a writ of execution because the Madlangawa was
adjudged a builder in good faith or on the ground of "peculiar circumstances which supervened
after the institution of this case, like, for instance, the introduction of certain major repairs of and
other substantial improvements" because the option given by law either to retain the premises
and pay for the improvements thereon or to sell the said premises to the builder in good faith
belongs to the owner of the property.

3. Options available to the parties


In Queme v. Olaes (1 SCRA 1159, 1163), it was held that “under Article 448, the right to
appropriate the works or improvements or 'to oblige the one who built or planted to pay the price
of the land' belongs to the owner of the land. The only right given to the builder in good faith is
the right to reimbursement for the improvements; the builder, cannot compel the owner of the
land to sell such land to the former."

4. Builder in good faith


In Paz Mercado, et al. v. Hon. Court of Appeals, et al., (GR L-44001, 10 June 1988), it was held
that "to be deemed a builder in good faith, it is essential that a person assert title to the land on
which he builds; i.e., that he be a possessor in concept of owner, (Art. 525, Civil Code; Lopez,
Inc. v. Phil. Eastern Trading Co., Inc., 98 Phil. 348) and that he be unaware 'that there exists in
his title or mode of acquisition any flaw which invalidates it.' (Art. 526, Civil Code; Granados v.
Monton, 86 Phil. 42; Arriola v. Gomez de la Serna, 14 Phil. 627; See also Manotok Realty, Inc.
v. C.A., 134 SCRA 329, citing Caram v. Laureta, 103 SCRA 7) It is such a builder in good faith
who is given the right to retain the thing, even as against the real owner, until he has been
reimbursed in full not only for the necessary expenses but also for useful expenses. (Art. 546,
Civil Code; Policarpio v. CA., 129 SCRA 51; Sarmiento v. Agana, 129 SCRA 122; cf, Queto v.
C.A. ,122 SCRA 206)"

5. Good faith cease after filing of the complaint


In Mindanao Academy, Inc. v. Yap (13 SCRA 190, 196), it was held that "although the bad faith
of one party neutralizes that of the other and hence as between themselves their rights would be
as if both of them had acted in good faith at the time of the transaction, this legal fiction of
(Yap)'s good faith ceased when the complaint against him was filed, and consequently the court's
declaration of liability for the rents thereafter is correct and proper. A possessor in good faith is
entitled to the fruits only so long as his possession is not legally interrupted, and such
interruption takes place upon service of judicial summons (Arts. 544 and 1123, Civil Code)."
6. Repairs and improvements introduced after the filing of the complaint in bad faith
The repairs and improvements introduced by the builder after the complaint was filed cannot be
considered to have been built in good faith, much less, justify the denial of the landowner's
exercise of option.

7. Improvements gutted by fire, builder’s right to retain extinguished


Since the improvements have been gutted by fire, and therefore, the basis for the builder's right
to retain the premises has already been extinguished without the fault of the landowner, there is
no other recourse for the builder but to vacate the premises and deliver the same to the
landowner.

Lessees cannot be considered builders in good faith


The members of the Bulaong group were admittedly lessees of space in the public
market; they therefore could not, and in truth never did make the claim, that they
were owners of any part of the land occupied by the market so that in respect of
any new structure put up by them thereon, they could be deemed builders in good
faith (in accordance with Article 526 of the Civil Code). To be deemed a builder in
good faith, it is essential that a person assert title to the land on which he builds;
i.e., that he be a possessor in concept of owner, and that he be unaware "that there
exists in his title or mode of acquisition any flaw which invalidates it. It is such a
builder in good faith who is given the right to retain the thing, even as against the
real owner, until he has been reimbursed in full not only for the necessary expenses
but also for useful expenses. On the other hand, unlike the builder in good faith, a
lessee who "makes in good faith useful improvements which are suitable to the use
for which the lease is intended, without altering the form or substance of the
property leased," can only claim payment of "one-half of the value of the
improvements" or, "should the lessor refuse to reimburse said amount, remove the
improvements, even though the principal thing may suffer damage thereby."

Builders in bad faith; Rights of registered owner cannot be defeated by an


unsuccessful opponent through the subterfuge of replacing his old house
with a new one from time to time
The Caridads cannot be regarded as builders in good faith because they are bound
by the 1941 decree of registration that obligated their parents and predecessors-in-
interest. Good faith must rest on a colorable right in the builder, beyond a mere
stubborn belief in one's title despite judicial adjudication. The fact that in 1959 the
Caridads demolished and replaced their old house with new and bigger ones cannot
enervate the rights of the registered owners. Otherwise, the rights of the latter to
enjoy full possession of their registered property could be indefinitely defeated by
an unsuccessful opponent through the simple subterfuge of replacing his old house
with a new one from time to time.
Valentinos in good faith
Ernesto Valentino and his 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.

2. Article 448 of the Civil Code


In regards to builders in good faith, Article 448 of the Code provides that “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."

3. Options available for owner of the land


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. In the present case, the provision for the exercise by Sarmiento of either the option to
indemnify the Valentinos in the amount of P40,000.00, or the option to allow the Valentinos to
purchase the land at P25,000.00, in the Court’s opinion, was a correct decision. The order of the
trial court compelling the Valentinos to remove the building on Sarmiento’s land 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]).

2. Builder in good faith: Right to appropriate works or improvements belong to owner of


the land, builder’s right to reimbursement; Builder cannot compel owner of the land to sell
land
Under Article 448, the right to appropriate the works or improvements or "to oblige the one who
built or planted to pay the price of the land" belongs to the owner of the land. The only right
given to the builder in good faith is the right to reimbursement for the improvements; the builder,
cannot compel the owner of the land to sell such land to the former. This is assuming that the
plaintiffs are builders in good faith.

3. Quemuels not builders in good faith; Builder builds under claim of title
The Quemuels are not builders in good faith. Article 448 of the new Civil Code, (equivalent to
Article 361 of the old Civil Code) is intended to apply only to a case where one builds, or sows,
or plants on land in which he believes himself to have a claim of title and not to lands wherein
one's only interest is that of tenant, under a rental contract, which is the present case (Alburo vs.
Villanueva, 7 Phil., 277). The tenant cannot be said to be a builder in good faith as he has no
pretension to be owner (Rivera vs. Thailand, 48 Phil., 396; see also 3 Manresa 4th Ed. pp. 215-
216).

4. Quemuels are lessees


From the pleadings and the documentary evidence submitted, it is indisputable that the land in
question originally belonged to the government as part of the Friar Lands Estate and the title
thereto was in the name of the government until it was purchased by Agapita Solis who applied,
thru the Bureau of Lands, to purchase the land by installments. The corresponding Sale
Certificate 531, effective 1 July 1909 was executed. In Olaes spouses' complaint, they alleged
that they are the owners of lot 1095 and that the Quemuels have been occupying southeastern
half portion thereof, without any right thereto, except the tolerance of the Olaes spouses. The
Quemuels were not unaware of the flaw in their title, if any, and that their true relation with the
Olaes spouses was that of tenant and landlord, and, that their rights are governed by Article 1573
in relation to article 487 of the old Civil Code. Article 1573 provides that “a lessee shall have
with respect to useful and voluntary improvements, the same right which are granted the
usufructuaries." Article 487 provides that “the usufructuary may make on the property held in
usufruct any improvements, useful or recreative, which he may deem proper, provided he does
not change its form or substance, but he shall have no right to be indemnified therefor. He may,
however, remove such improvements, should it be possible to do so without injury to the
property".

5. Lessee cannot compel lessor to pay for the improvements or to sell the land; Right to
remove improvements if it can be done without damage to the land
From Articles 487 and 1573, it can clearly be inferred that the Quemuels cannot even compel the
Olaes spouses to pay for the improvements the former made in the property or to sell the latter's
land. The Quemuels' only right, is to remove the improvements, if it is possible to do so without
damage to the land.

Improvement of the house made after predecessor-in-interest were summoned; Santos a


builder in bad faith, no right of indemnity
Leonardo Santos' house having been built and reconstructed (after March 1962) into a bigger one
after his predecessors-in-interest, his parents, had been summoned in 1959 in Civil Case 217-R,
he must be deemed a builder in bad faith. As builder in bad faith he lost the improvement made
by him consisting of the reconstructed house to the owners of the land without right to
indemnity, pursuant to Article 449 of the Civil Code (“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.")

3. Options of the landowner in good faith


The owners of the land became owners of the improvement consisting of the house built in bad
faith if they chose to appropriate the accession. (Article 445 and 449, Civil Code.) However, said
owners could choose instead the demolition of the improvement or building at the expense of the
builder, pursuant to Article 450 of the Civil Code, which, in part, provides “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." In the present case, the
Allanigue brothers and sisters chose to have the house or improvement built by Leonardo Santos
demolished pursuant to their motion for demolition.

Possessor in bad faith does not have the right to remove useful improvements
Article 449 of the Civil Code of the Philippines provides that "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."
As a builder in bad faith, NAWASA lost whatever useful improvements it had made without
right to indemnity (Santos vs. Mojica, Jan. 31, 1969, 26 SCRA 703).

4. Only possessor in good faith has right to be refunded for useful expenses with right of
retention until reimbursed; or removal of useful improvements without damage to the
principal thing
Under Article 546 of said code, only a possessor in good faith shall be refunded for useful
expenses with the right of retention until reimbursed; and under Article 547 thereof, only a
possessor in good faith may remove useful improvements if the can be done without damage to
the principal thing and if the person who recovers the possession does not exercise the option of
reimbursing the useful expenses.

5. Possessor in bad faith has right to remove improvements for pure luxury or mere
pleasure, provided such suffers no injury thereby
The right given a possessor in bad faith is to remove improvements applies only to
improvements for pure luxury or mere pleasure, provided the thing suffers no injury thereby and
the lawful possessor does not prefer to retain them by paying the value they have at the time he
enters into possession (Article 549, Id.).

6. Mindanao Academy v. Yap


In Mindanao Academy, Inc. vs. Yap (13 SCRA 190), it was held that "if the defendant
constructed a new building, as he alleges, he cannot recover its value because the construction
was done after the filing of the action for annulment, thus rendering him a builder in bad faith
who is denied by law any right of reimbursement." What this Court allowed appellant Yap to
remove were the equipment, books, furniture and fixtures brought in by him, because they were
outside of the scope of the judgment and may be retained by him.