IGNACIO

vs
HILARIO
GR No. L-175, Apr. 30, 1946

Facts:
Hilario was the owner of a parcel of land. He later discovered that Ignacio
built some buildings therein (a granary and a house). After trial, Judge Antonio
Felix of the Court of First Instance of Pangasinan ruled that both were in good
faith (Hilario was the owner in good faith while Ignacio was the builder in good
faith).
Judge Felix then spelled out the rights of the parties to wit:

a.) Ignacio can retain possession over the buildings he erected until after he is
paid by Hilario for the value of the buildings he erected;

b.) Hilario can choose to buy the said buildings or he can choose to sell
Ignacio his land since the value of his land was only P45.00 while the value of
the buildings erected was P2,000.00.

However, Hilario refused to avail of his options. Instead, he filed a motion

in court to have Ignacio be ejected and have them destroy the buildings he
erected. Judge Felipe Natividad (he replaced Judge Felix), granted Hilario’s
motion.

Issue:
Whether or not Hilario, the owner in good faith, may eject a builder in good
faith without choosing either to appropriate the building for himself after
payment of its value or to sell his land to the builder in good faith.

Ruling:
No. The owner in good faith has to make a choice. He cannot dispense the
options under the law and then eject the builder in good faith. This is because
both are in good faith. But when can the owner in good faith compel the
builder in good faith to remove the building he erected?

This is only available if after the owner in good faith chose to sell his land to
the builder in good faith and the latter fails to pay the value of the land within
the agreed period. Only then can the owner in good faith compel the builder in
good faith to remove the building he erected.

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 of the Civil Code.
 "ART. 453. Necessary expenses shall be refunded to every possessor;
but only the possessor in good faith may retain the thing until such expenses
are made good to him.
"Useful expenses shall be refunded to the possessor in good faith with the
same right of retention, the person who has defeated him in the possession
having the option of refunding the amount of the expenses or paying the
increase in value which the thing may have acquired in consequence thereof."

The owner of the land, upon the other hand, has the option, under article 361,
either to pay for the building or to sell his land to the owner of the building.
"ART. 361. The owner of land on which anything has been built, sown or
planted in good faith, shall have the right to appropriate as his own the work,
sowing or planting, after the payment of the indemnity stated in articles 453
and 454, or to oblige the one who built or planted to pay the price of the land,
and the one who sowed, the proper rent.

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.