VICENTE M.

COLEONGCO
vs.
PEDRO F. REGALADO and LEONOR MONTILLA

G.R. No. L-4529 December 29, 1952

FACTS:

Regalado was the owner of lot situated at Bacolod, of which lot No. 157 of the subdivision plan
was a portion. There was erected a building which in 1944, was occupied by the Japanese
Army. Regalado sold lot No. 157 to Coleongco, covered by transfer certificate with the total area
of 1,000 square meters, and the land occupied by the house was 245 square meters.

From the records that Coleongco contended that the house erected on lot 157 was included in
the sale. When Bacolod was liberated by the Americans, they occupied said house for about
two months. After the Americans vacated the house, Regalado occupied the same, so
Coleongco instituted a civil case of Ejectment.

The Court of First Instance ruled that the improvement of lot No. 157, consisting of a residential
house, was the property of. Regalado. From that decision Coleongco appealed to the Court of
Appeals, the tribunal declared the appeal abandoned.

On 1947, Regalado, in consideration of the sum of P3,500, sold said the house to Leonor
Montilla who was knowledgable of the present case that was pending against the vendor,
assumed whatever rights and obligations might arise with respect to such civil case, and freed
and liberated Regalado from the result of the case.

Coleongco prayed that: To order the defendants to remove or clear the house from the plaintiff's
premises; and pay rents as he was then paying rents for the lease of his residence at a rate
higher than the amount he is entitled to receive as rents from the portion of the land occupied by
the building of the defendants.

CA said that the house was formerly the property of Regalado, and that this was constructed in
Good Faith, and consequently, that the enjoyment and possession thereof must be considered
to have always been in Good Faith, as provided in Arts. 358, 361, 453, 454 of the Old Civil
Code.

ISSUE: WON Art. 361 of the Civil Code (Now Art. 448) applies in this case (because Coleongco
is a builder in good faith)

HELD:

NO.

"ART. 361. 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 456, or to compel the person who has built or
planned to pay him the value of the land, and the person who sowed thereon to pay the proper
rent therefor. “
Article 361 of the old Civil Code is not applicable in this case, for Regalado constructed the
house on his own land before he sold said land to Coleongco. Article 361 applies only in the
cases where a person constructs a building on the land of another in good or in bad faith, as the
case may be. It does not apply to a case where a person constructs a building on his own land,
for then there can be no question as to good or bad faith on the part of the builder.

In view of the foregoing, the decision of the Court of Appeals is modified by ordering Regalado
and his successor Leonor Montilla to remove the above-mentioned house from the lot of
Coleongco, without any obligation on the part of the latter to pay any compensation to Regalado
or his successor Montilla. In all other respects, the decision of the Court of Appeals is affirmed
with costs against respondents Regalado and Montilla.

SHORT VERSION:

Facts: Regalado is an owner of a lot of which Lot 157 was a portion of. Erected in this lot was a
house being occupied by the Japanese Army. Regalado then sold Lot 157 to Coleongco who
thus became the owner of that particular lot. Coleongco is contending that the sale of Lot 157
included the house, such that when the city was liberated, he collected rentals from the
American forces for the occupation of the house. It so happened however that after the
American forces vacated the house, Regalado occupied it. Coleongco then filed a civil
complaint against Regalado. TC ordered Regalado to pay rentals to Coleongco and to remove
the house from the said portion of the lot. CA said that the house was formerly the property of
Regalado, and that this was constructed in GF, and consequently, that the enjoyment and
possession thereof must be considered to have always been in GF, as provided in Arts. 358,
361, 453, 454 of the Old CC (now: Arts. 445, 448, 546,548, respectively). In view of these
provisions, the right of the owner of the lot to have the lot cleared of improvements from a
builder in GF should be subordinated to the rights of the builder in GF.

Issue: Is Art. 361 applicable in this case?

Held: The said rule (now found in Art 448 of the NCC) is not applicable in this case. Regalado
constructed the said house on his own land even before he sold the land to Coleongco. Art 448
applies only in cases where a person constructs a building on the land of another in good or bad
faith, as the case may be. It does not apply to a case where a person constructs a building on
his own land (like in this case), for then there can be no question as to good or bad faith of the
builder.