Paolo F.

Suelto
II – Sanchez Roman

Esguerra vs. De Guzman

G.R. No. L-28721
October 5, 1928
Facts:

The Landowner, Enriquez owns a parcel of land which was subject to a right of retention until full
reimbursement. Here, De Guzman obtained a writ of possession over the said parcel of land.

During the period of retention by De Guzman, he introduced 200 coconut trees.

Enriquez wants to claim ownership over the said parcel.

The trial court ordered Enriquez to pay indemnizacion and applied Art. 453, and 454 of the Spanish Civil
Code.

Issue:
(1) Whether or not De Guzman is in bad faith?
(2) Whether or not Art. 452 of the New Civil Code is applicable?

Ruling:

As to the first issue, The Supreme Court stated that De Guzman is not exactly a possessor in good faith.
Based on the facts, De Guzman is not the Land Owner but only a mere possessor by virtue of the right of
retention upon full reimbursement. Hence, his planting of coconut trees on the subject parcel of land
despite having the knowledge that he does not own the land, and Enriquez owns it, renders him in bad
faith.

As to the second issue, The Supreme Court applied Art. 453 of the Spanish Civil code which provides
that: Necessary expenses shall be paid to every possessor; but only the possessor in good faith may
retain the thing until satisfaction thereof.
In this case, only the necessary expenses incurred by De Guzman shall be paid. Moreover, the Court
discussed the translation of indemnizacion. The court cited the commentaries of Manresa, and construed
indemnizacion as those which are necessary expenditures incurred for the preservation of the thing; as
those that augment the income of the things upon which they are expanded, and According to Scaevola,
as those without which the thing would deteriorate or be lost such as: Cultivation, Upkeep, and
Production.
Applying Art. 452 of the NCC, it provides that the builder, planter or sower in bad faith is entitled to
reimbursement for the necessary expenses of preservation of the land.
In this case, De Guzman is a planter in bad faith. Hence, he shall be entitled to reimbursement for the
necessary expenses incurred or also known as indemnizacion in the Spanish Civil Code. Indemnizacion
should not be construed as indemnity. The reimbursement is only limited to the upkeep, cultivation, and
production of the land, without which the land would deteriorate or be lost. Hence, Art. 449 can not be
applied because the payment of indemnizacion is not indemnity.
Enriquez here chose to take the improvements (coconut trees) planted by De Guzman. Since De
Guzman is a planter in bad faith. De Guzman should only be reimbursed for the necessary expenses in
accordance with Art. 452 of the NCC, not for the value of the trees.