Builder in bad faith not entitled to reimbursement

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Persida Acosta

Dear PAO,
My father allowed Pete and his family to stay on our land located in the province subject to the condition that Pete will leave the premises when the property will be needed. Pete built a semi-concrete house on the land when he occupied it. My father died in 2003 and, from that year, Pete introduced more developments by constructing a building on the property. He claimed that he owned the property, because he allegedly bought it from my father. We filed a complaint before barangay (village) authorities exercising jurisdiction over the property in order to recover it. During a barangay confrontation, Pete could not substantiate his claim that he bought the property. Hence, he demanded reimbursement for all the expenses he incurred in developing the land. Pete alleged that he is a builder in good faith. Is he really a builder in good faith under the circumstances? If he is a builder in good faith, is he entitled to reimbursement of the expenses he incurred in the construction of a building on our land?
Alex

Dear Alex,
Article 449 of the New Civil Code of the Philippines provides:

“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.”

Relative to the above provision of law are Articles 450 and 451 of the same code that state:
“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.


“In the cases of the two preceding articles, the landowner is entitled to damages from the builder, planter or sower.”

The above-mentioned provisions of law are rights of the owner in case the builder is in bad faith. In the case at hand, Pete is not a builder in good faith because he knew from the very beginning that his possession was by mere tolerance.

Please be guided by the decision of the court in the case of Spouses Esmaquel and Sordevilla vs. Coprada (G.R. No. 152423, December 15, 2010), where the Supreme Court, through Associate Justice Diosdado Peralta said:

“Respondent’s argument does not hold water. Since respondent’s occupation of the subject property was by mere tolerance, she has no right to retain its possession under Article 448 of the Civil Code. She is aware that her tolerated possession may be terminated any time and she cannot be considered as builder in good faith. It is well settled that both Article 448 and Article 546 of the New Civil Code, which allow full reimbursement of useful improvements and retention of the premises until reimbursement is made, apply only to a possessor in good faith, i.e., one who builds on land with the belief that he is the owner thereof. Verily, persons whose occupation of a realty is by sheer tolerance of its owners are not possessors in good faith. At the time respondent built the improvements on the premises in 1945, she knew that her possession was by mere permission and tolerance of the petitioners; hence, she cannot be said to be a person who builds on land with the belief that she is the owner thereof.”

Applying the decision in your case, it can be said that Pete is a builder in bad faith. Thus, his demand for reimbursement of his expenses in the construction of a building on the land of your father has no legal basis.
We hope that we were able to answer your queries. Please be reminded that this advice is based solely on the facts you have narrated and our appreciation of the same. Our opinion may vary when other facts are changed or elaborated.

Editor’s note: Dear PAO is a daily column of the Public Attorney’s Office. Questions for Chief Acosta may be sent to dearpao@manilatimes.net

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