29. Lao Chit v Security Bank ART. 448.
ART. 448. The owner of the land on which anything has been built,
ISSUES + RULING:
WoN the lower court erred in rendering judgment against the Bank.
YES.
 Although Lao Chit was not a party to said contract, this stipulation
is binding upon him, he having introduced said improvements
pursuant to his contract with Dikit, from whom he derived,
therefore, his right to enter the building and make the
improvements.
o In short, insofar as the construction thereof, Lao Chit was,
vis-a-vis the lessor, a mere agent or representative of Dikit
and, as such, was privy to the undertakings of Dikit under
his contract of lease with the lessor.
WoN the lessor is liable to Lao Chit for the improvements. NO.
 The lower court held the lessor liable to Lao upon the
ground that he was a builder in good faith, and under the
theory of unjust enrichment.
 Art. 361 (now 448) of the [Old] Civil Code provides:
o The owner of land on which anything has been built,
sown, or planted, in good faith, shall be entitled to
appropriate the thing so built, sown, or planted,
upon paying the compensation mentioned in Articles
453 and 454, or to compel the person who has built
or planted to pay him the value of the land, and the
person who sowed thereon to pay the proper rent
therefor.
 However, this provision refers to one who builds upon a
land which he believes to be his property. Neither Lao nor
Dikit claimed the building as their own.
 The Supreme Court ruled, however, that the provision is
not on point since it refers to "expenses" of production,
gathering and preservation" of fruits received by the
owner of a property, not to improvements, whereas the
claim of Lao Chit is based upon "improvements"
introduced, not "expenses" incurred by him for the
"production, gathering and preservation" of fruits.
30. DEPRA vs. DUMLAO
ISSUE:
1. Whether or not res judicata would apply to the case at bar?
2. Whether or not the land owner can be compelled to accept rent
payments by the court (with both LO and BPS being in good faith)?
HELD:
In the first issue, res judicata would not apply should the first case
be one for ejectment and the other for quieting of title. Article 448
of the Civil Code provides that the land owner has 2 options – to buy
the building or to sell/rent his land. This is so because the rights of
the owner of the land is older, and by the principle of accession, he
also has a right to the accessories.
31. Sarmiento vs. Agana 129 scra 122
Issue: 1.Whether or not Ernesto was in good faith.
2.Whether or not Sarmiento could exercise both refusal
to pay the spouses and give option to purchase.
Held:
1. Yes. We agree that ERNESTO and 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.
In regards to builders in good faith, Article 448 of the Code provides:
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.
2.No. 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.
34. IGNAO vs. IAC
ISSUE:
W/O the respondent Court is correct in considering the private
respondents builders in good faith on the land on question, thus
applying Art. 448 of the Civil Code, although the land in question is
still owned by the parties in co-ownership, hence, the applicable
provision is Art. 486 of the Civil Code, which was not applied.
HELD:
The records of the case reveal that the disputed land with an area of
534 square meters was originally owned by Baltazar Ignao who
married twice. In his first marriage, he had four children, namely
Justo (the father of petitioner Florencio), Leon and private
respondents Juan and Isidro. In his second marriage, Baltazar had
also four children but the latter waived their rights over the
controverted land in favor of Justo. Thus, Justo owned 4/8 of the
land which was waived by his half-brothers and sisters plus his 1/8
share or a total of 5/8. Thereafter, Justo acquired the 1/8share of
Leon for P500.00 which he later sold to his son Florencio for the
same amount. When Justo died, Florencio inherited the 5/8 share of
his father Justo plus his 1/8 share of the land which he bought or a
total of 6/8 (representing 400.5 square meters). Private
respondents, Juan and Isidro, on the other hand, had 1/8 share
(66.75sq) each of the land or a total of 133.5square meters.
The court a quo correctly held that Article 448 of the Civil Code
cannot apply where a co-owner builds, plants or sows on the
land owned in common for then he did not build, plant or sow
upon land that exclusively belongs to another but of which he
is a co-owner. The co-owner is not a third person under the
circumstances, and the situation is governed by the rules of co-
ownership.
In other words, when the co-ownership is terminated by a partition
and it appears that the house of an erstwhile co- owner has
encroached upon a portion pertaining to another co-owner which
was however made in good faith, then the provisions of Article 448
should apply to determine the respective rights of the parties.
1
33. DEL CAMPO V. ABESIA
Issue: Whether or Not Article 448 of the Civil Code is
applicable to a builder in good faith when the property
involved is owned in common.
Held: When the co-ownership is terminated by the partition
and it appears that the house of defendants overlaps or
occupies a portion of 5 square meters of the land pertaining
to plaintiffs which the defendants obviously built in good
faith, then the provisions of Article 448 of the new Civil Code
should apply. Manresa and Navarro Amandi agree that the
said provision of the Civil Code may apply even when there
was co-ownership if good faith has been established.
Applying the aforesaid provision of the Civil Code, the
plaintiffs have the right to appropriate said portion of the
house of defendants upon payment of indemnity to
defendants as provided for in Article 546 of the Civil Code.
Otherwise, the plaintiffs may oblige the defendants to pay
the price of the land occupied by their house. However, if the
price asked for is considerably much more than the value of
the portion of the house of defendants built thereon, then
the latter cannot be obliged to buy the land. The defendants
shall then pay the reasonable rent to the plaintiff upon such
terms and conditions that they may agree.
37. BALUCANAG VS. FRANCISCO
122 SCRA 344
ISSUE:Is the lessee a builder in good faith?
HELD: No, the lessee cannot be considered a builder in good faith.
The provision under Art. 448 of the New Civil Code (Philippine) on a
builder of good faith applies only to the owner of the land who
believes he is the rightful owner thereof, but not to a lessee who's
interest in the land is derived only from a rental contract. Neither
can Stohner be considered a 'possessor in good faith'. A possessor
in good faith is a party who possesses property believing that he is
its rightful owner but discovers later on a flaw in his title that could
indicate that he might not be its legal owner. It cannot apply to a
lessee because he knows right from the start that he is merely a
lessee and not the owner of the premises.
As a mere lessee, he introduces improvements to the
property at his own risk such that he cannot recover from the owner
the reimbursements nor he has any right to retain the premises until
reimbursements.
38. Kilario v. CA
G.R. No. 134329. January 19, 2000

ISSUE: Whether or not the partition was valid

36. Alviola v. CA
The extrajudicial partition of the estate of Jacinto Pada among his
heirs made in 1951 is valid, albeit executed in an unregistered
Private respondents on the other hand offer overwhelming
private document. No law requires partition among heirs to be in
evidence of their ownership and possession of the land and
writing and be registered in order to be valid. The object of
contended that they merely tolerated the petitioner’s occupation of
registration is to serve as constructive notice to others. It follows
the disputed property.
then that the intrinsic validity of partition not executed with the
prescribed formalities is not undermined when no creditors are
ISSUE:
involved. Thus, there is no reason why the heirs should not be
WON the petitioners have ownership over the portions of land
bound by their voluntary acts.
where the copra dryer and store are located.
HELD:
No. The petitioners’ defense that the said parcels of land are public 39. LUMUNGO V. USMAN
lands is rebutted by the Private respondents' tax declarations and 25 SCRA 255
receipts of payment of real estate taxes, as well as other related
documents which prove their ownership of the disputed properties. ISSUE:
Whether or not Angeles is entitled to reimbursement for the
The record further discloses that Victoria S. Tinagan and her son, coconuts tree he planted on the property in litigation.
Agustin Tinagan, took possession of the said properties in 1950,
introduced improvements thereon, and for more than 40 years, HELD:
have been in open, continuous, exclusive and notorious occupation No. It should be noted that said trees are improvements,
thereof in the concept of owners. not "necessary expenses of preservation," which a builder, planter
or sower in bad faith may recover under Arts. 452 and 546, first
paragraph, of the Civil Code. The facts and findings of both the trial
Thus, for purposes of indemnity, Article 448 of the New Civil Code
court and the Court of Appeals leave no room for doubt that Jose
should be applied. 32 However, the copra dryer and the store, as
Angeles was a purchaser and a builder in bad faith. The provision
determined by the trial court and respondent court, are transferable
applicable to this case is, accordingly, Article 449 of the Civil Code,
in nature. Thus, it would not fall within the coverage of Article 448.
which provides that, "he who builds, plants or sows in bad faith on
As the noted civil law authority, Senator Arturo Tolentino, aptly
the land of another, loses what is built, planted or sown without
explains: "To fall within the provision of this Article, the
right to indemnity."
construction must be of permanent character, attached to the soil
with an idea of perpetuity; but if it is of a transitory character or is
transferable, there is no accession, and the builder must remove
the construction. The proper remedy of the landowner is an action
to eject the builder from the land." 33The private respondents'
action for recovery of possession was the suitable solution to eject
petitioners from the premises.

2
ART. 453
40. MUNICIPALITY OF OAS V. ROA
ISSUE:
Whether or not the municipality owns the land.
HELD:
Yes. The defendant was not a purchaser in good faith. The plaintiff,
having permitted the erection by the defendant of a building on the
land without objection, acted in bad faith. The rights of the parties
must, therefore, be determined as if they both had acted in good
faith. To the case are applicable those provisions of the Civil Code
which relate to the construction by one person of a building upon
land belonging to another. Article 364 (now Art.453) of the Civil
Code is as follows: "When there has been bad faith, not only on the
part of the person who built, sowed, or planted on another's land,
but also on the part of the owner of the latter, the rights of both
shall be the same as if they had acted in good faith.” The Supreme
declared that the Municipality is the owner of the land and that it
has the option of buying the building thereon, which is the property
of the defendant, or of selling to him the land on which it stands.
41. MWSS V. CA, CITY OF DAGUPAN,
ISSUE:
Whether or not MWSS has the right to remove all the useful
improvements introduced by NAWASA to the Dagupan
Waterworks System, notwithstanding the fact that NAWASA was
found to be a possessor in bad faith?
HELD: NO.
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. Moreover, 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 this 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. 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).
42. FILIPINAS COLLEGES INC. vs. MARIA GARCIA TIMBANG, ET AL.
ISSUE/S:
1. Whether or not the contention of the appellants is valid.
If not, what are the remedies left to the owner of the land
if the builder fails to pay?
2. Whether or not the appellants, as owner of the land, may
seek recovery of the value of their land by a writ of
execution; levy the house of the builder and sell it in public
auction.
RULING: NO, THE APPELLANTS CONTENTION IS SUPERFLUOUS. There
is nothing in the language of these two articles, 448 and 546, which
would justify the conclusion of appellants that, upon the failure of
the builder to pay the value of the land, when such is demanded by
the land-owner, the latter becomes automatically the owner of the
improvement under Article 445. Although it is true, it was declared
therein that in the event of the failure of the builder to pay the land
after the owner thereof has chosen this alternative, the builder's
right of retention provided in Article 546 is lost, nevertheless there
was nothing said that as a consequence thereof, the builder loses
entirely all rights over his own building. The remedy left to the
parties in such eventuality where the builder fails to pay the value of
the land, though the Code is silent on this Court, a builder in good
faith not be required to pay rentals. He has right to retain the land
on which he has built in good faith until he is reimbursed the
expenses incurred by him. Possibly he might be made to pay rental
only when the owner of the land chooses not to appropriate the
improvement and requires the builder in good faith to pay for the
land but that the builder is unwilling or unable to pay the land, and
then they decide to leave things as they are and assume the relation
of lessor and lessee, and should they disagree as to the amount of
rental then they can go to the court to fix that amount. This was ruled
in the case of Miranda vs. Fadullon, et al., 97 Phil., 801. A further
remedy is indicated in the case of Bernardo vs. Bataclan, supra,
where this Court approved the sale of the land and the improvement
in a public auction applying the proceeds thereof first to the
payment of the value of the land and the excess, if any, to be
delivered to the owner of the house in payment thereof. The second
contention was without merit. In the instant case, the Court of
Appeals has already adjudged that appellee Blas is entitled to the
payment of the unpaid balance of the purchase price of the school
building. With respect to the order of the court declaring appellee
Filipinas Colleges, Inc. part owner of the land to the extent of the
value of its personal properties sold at public auction in favor of the
Timbang, this Court likewise finds the same as justified, for such
amount represents, in effect, a partial payment of the value of the
land.
46. Heirs of Navarro v. IAC
Issue:
Whether or not the petitioners can rightfully claim the land under
the principle of accretion
Held:
The petitioner’s claim is misplaced. The principle of accretion is only
applicable to owners whose estates are adjacent to rivers as stated
in Article 457 of the Civil Code. The disputed land is an accretion not
on a river bank but on a sea bank, or on what used to be the
foreshore of Manila Bay which adjoined petitioners' own tract of
land on the northern side. As such, the applicable law is not Article
457 of to Civil Code but Article 4 of the Spanish Law of Waters of
1866. The disputed property is an accretion on a sea bank, Manila
Bay being an inlet or an arm of the sea; as such, the disputed
property is, under Article 4 of the Spanish Law of Waters of 1866,
part of the public domain.
3
47. MENESES vs. CA et al
ISSUE: WON
1. The lands in question were not accretion lands but lands of the
public domain
2. Conspiracy to commit fraud, deceit and bad faith attended the
issuance of the free patent and titles to Pablito Meneses; and
HELD: WHEREFORE, the petition is DENIED. The Decision CA is
AFFIRMED
While the lots occupied by Villamor and Lanuzo may not be the very
same lots petitioners are claiming here, the two cases refer to the
same accretion lands northwest of the original land owned by the
Quisumbings.
The submersion in water of a portion of the land in question is due
to the rains “falling directly on or flowing into Laguna de Bay from
different sources.” Since the inundation of a portion of the land is
not due to “flux and reflux of tides” it cannot be considered a
foreshore land. The land sought to be registered not being part of
the bed or basin of Laguna de Bay, nor a foreshore land as claimed
by the Director of Lands, it is not a public land and therefore capable
of registration as private property provided that the applicant
proves that he has a registerable title.
As pointed out by the lower court, no act of appropriation is
necessary in order to acquire ownership of the alluvial formation as
the law does not require the same.
2. As found by the CA, petitioners conspired in the approval and
grant of the free patents heirs Quisumbing. Such fraud was
confirmed by this Court in Meneses v. People, which held the
petitioners therein liable for violation of the Anti-Graft and Corrupt
Practices Act in the issuance of the same free patents and titles. In
due course, the Sandiganbayan rendered a decision finding the
defendants guilty as charged. The judgment of conviction was
affirmed.
NOTES:
1. Accretion as a mode of acquiring property under Article 457 of
the Civil Code requires the concurrence of these requisites:
(1) that the deposition of soil or sediment be gradual and
imperceptible;
(2) that it be the result of the action of the waters of the river (or
sea); and
(3) that the land where accretion takes place is adjacent to the banks
of rivers (or the sea coast).
2. The task of fixing the amount of damages is primarily with the trial
court. While it is the appellate court’s duty to review the same, a
reduction of the award of damages must pass the test of
reasonableness. The CA can only modify or change the amount
awarded as damages when they are palpably or scandalously and
reasonably excessive.
3. A public official is by law not immune from damages in his
personal capacity for acts done in bad faith which, being outside the
scope of his authority, are no longer protected by the mantle of
immunity for official actions.
48. Grande v. Court of Appeals
SUMMARY: Owners of a parcel of land filed a suit for quieting of title
and recovery of possession over a portion of property that was added
to the original parcel of land via accretion. The defendants claim
ownership by acquisitive prescription, being in open, continuous and
undisturbed possession of the property for over 30 years prior to the
filing of this case.
DOCTRINE: Alluvial deposits become part of the property to which it
becomes attached, and ownership of the alluvial portion belongs to
the owner of the attached property. However, this land is not
automatically covered by the Torrens title of the land owned prior to
the accretion, and is considered unregistered land, making it
susceptible to acquisitive prescription.
The RTC ruled in favor of the Grandes, but the Court of Appeals
reversed the decision below and upheld the Calalungs’ argument on
acquisitive prescription.
ISSUES/HELD: WON the contested property can be acquired by
prescription
RATIO: The Supreme Court ruled in favor of the Calalungs and
upheld the decision of the Court of Appeals.
The Supreme Court acknowledged that by Article 457 of the New
Civil Code and Article 366 of the Old Civil Code, the Grandes are the
owners of the alluvial property. However, this does not operate to
automatically include the alluvial property under OCT No. 2892.
While ownership is governed by the Civil Code, imprescriptibility of
registered land is provided in the registration law. As the Grandes
never sought to have the alluvial property titled, it is considered
unregistered land.
The Supreme Court upheld the findings of the Court of Appeals on
the possession of the Calalungs of the property since 1933-1934,
openly, continuously and adversely, under a claim of ownership up to
the filing of the action in 1958. The Court pointed out that it is the
provisions of Act No. 190, particularly Sec. 41, that governs this case,
since the provisions of the Old Civil Code were not yet in effect. Sec.
41 provides an acquisitive prescriptive period of only ten years,
meaning the Calalung acquired ownership as early as 1943-1944.
49. JAGUALING V. CA 
Issue:
Who between the one who has actual possession of an island that
forms in a non-navigable and non-floatable river and the owner of
the land along the margin nearest the island, has the better right
thereto?
 
Held:
The parcel of land is part of an island that formed in a non-
navigable and non-floatable river; from a small mass of eroded or
segregated outcrop of land, it increased to its present size due to
the gradual and successive accumulation of alluvial deposits. The
CA did not err in applying Article 465 of the Civil Code. Under this
provision, the island belongs to the owner of the land along the
nearer margin as sole owner thereof; or more accurately, because
the island is longer than the property of Eduave, they are deemed
ipso jure to be the owners of that portion which corresponds to
the length of their property along the margin of the river.
4
Lands formed by accretion belong to the riparian owner. This
preferential right is, under Article 465, also granted the owners of
the land located in the margin nearest the formed island for the
reason that they are in the best position to cultivate and attend to
the exploitation of the same. In fact, no specific act of possession
over the accretion is required. If, however, the riparian owner fails
to assert his claim thereof, the same may yield to the adverse
possession of third parties, as indeed even accretion to land titled
under the Torrens system must itself still be registered.

There is no need to make a final determination regarding the

origins of the island, i.e., whether the island was initially formed by
the branching off or division of the river and covered by Article 463
of the Civil Code, in which case there is strictly no accession
because the original owner retains ownership, or whether it was
due to the action of the river under Article 465, or whether it was
caused by the abrupt segregation and washing away of the
stockpile of the river control, which makes it a case of avulsion
under Article 459, as the case is not between parties as opposing
riparian owners contesting ownership over an accession but rather
between a riparian owner and the one in possession of the island.