Building with one’s own materials on the land of another (Art.

448)
1. Both acted in GF
a. Concept of GF
To be deemed a builder in good faith, it is essential that a person asserts title to
the land on which he builds, i.e., it is essential 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 fl aw which invalidates it. The concept of builder in good faith or
bad faith presupposes ownership in another.

If a person builds on his own land with his own materials, he is not merely a
builder in good faith — he is a builder-owner.

b. GF of the landowner
The landowner is said to have acted in good faith if he did not know or was not
aware that something was being built, planted or sown on his land; he learned
of it only after the act was done.

c. Legal effects where both parties are in GF

Under Article 448, the landowner, as owner of the principal thing, is given two
alternative rights:
(1) to appropriate as his own the works, sowing or planting after payment to the
builder, planter or sower of the necessary and useful expenses, and in the
proper cases, expenses for pure luxury or mere pleasure, incurred by the latter;
or
(2) to oblige the one who built or planted to pay the price of the land, if the
value of the land is not considerably more than that of the building or trees, and
the one who sowed, the proper rent.

*OPTION is given to the landowner. Landowner cannot refuse to exercise either option.
He must choose one. Hence, the landowner cannot refuse to exercise either
option and compel instead the owner of the building or improvement to remove it
from the land.

The remedy of remotion is available only if and when the owner of the land
chooses to compel the builder to buy the land at a reasonable price but the latter
fails to pay such price.

In a situation where the landowner is refusing to exercise any of the options

granted him under Article 448, the builder in good faith can, under the same
Article, compel the landowner to make a choice between appropriating the
building by paying the proper indemnity or obliging the builder to pay the price of
the land.

d. Option to appropriate
i. If the landowner chooses to acquire the building, he must pay the builder the
indemnities provided for in Articles 546 and 548 of the New Civil Code. In short,
the landowner must pay the necessary and useful expenses, and in the proper
case, expenses for pure luxury or mere pleasure.

ii. Basis of Indemnity:

In Javier v. Concepcion, Jr. - the Supreme Court pegged the value of the useful
improvements consisting of various fruits, bamboos, a house and camarin made of
strong materials based on the market value of the said improvements.

In Sarmiento v. Agana - the value of the house at the time of the trial.

In De Guzman v. Dela Fuente - the landowner was required to pay the “present
value” of the house, a useful improvement

In Pecson v. Court of Appeals - the Supreme Court categorically held that “it is the
current market value of the improvements which should be made the basis of
reimbursement”

iii. Pending Reimbursement, builder has the right of retention

In addition to the right of the builder in good faith to be paid the value of his
improvement, Article 546 of the New Civil Code gives him the corollary right of
retention of the property until he is indemnified by the owner of the land.

The builder in good faith may not, therefore, be required to pay rentals. This is
so because the right to retain the improvements while the corresponding
indemnity is not paid implies the tenancy or possession in fact of the land on
which it is built, planted or sown.

The right of retention is considered as one of the measures devised by the law
for the protection of builders in good faith. Its object is to guarantee full and
prompt reimbursement as it permits the actual possessor to remain in
possession while he has not been reimbursed (by the person who defeated him
in the case for possession of the property) for those necessary expenses and
useful improvements made by him on the things possessed.