Bar Q and A #17

1.) Anselmo is the registered owner of a land and a house that his friend Boboy occupied for a nominal rental and on the condition that Boboy would vacate the property on demand. With Anselmo's knowledge, Boboy introduced renovations consisting of an additional bedroom, a covered veranda, and a concrete block fence, at his own expense. Subsequently, Anselmo needed the property as his residence and thus asked Boboy to vacate and turn it over to him. Boboy, despite an extension, failed to vacate the property, forcing Anselmo to send him a written demand to vacate. In his own written reply, Boboy signified that he was ready to leave but Anselmo must first reimburse him the value of the improvements he introduced on the property as he is a builder in good faith. Anselmo refused, insisting that Boboy cannot ask for reimbursement as he is a mere lessee. Boboy responded by removing the improvements and leaving the building in its original state. 1. Resolve Boboy's claim that as a builder in good faith, he should be reimbursed the value of the improvements he introduced. 2. Can Boboy be held liable for damages for removing the improvements over Anselmo's objection?

Boboy’s claim that he is a builder in good faith has no legal A builder in good faith is someone who occupies the property in the concept of an owner. The provisions on builder-planter-sower under the Civil Code cover cases in which the builder, planter and sower believe themselves to be owners of the land, or at least, to have a claim of title thereto. As Boboy is a lessee of the property, even if he was paying nominal rental, Article 1678 Civil Code, is applicable. Under this provision, if the lessee makes, in good faith, useful improvements which are suitable to the use for which the lease is intended without altering the form or substance of the property leased, the lessor upon the termination of the lease shall pay the lessee one-half of the value of the improvements at that time. Should the lessor refuse to reimburse said amount, the lessee may remove the improvements even though the principal thing may suffer damage thereby.
No. Boboy cannot be held liable for The lessor, Anselmo, refused to reimburse one-half of the value of the improvements, so the lessee, Boboy, may remove the same, even though the principal thing may suffer damage thereby. If in removing the useful improvements Boboy caused more impairment on the property leased than what is necessary, he will be liable for damages. (Art. 1678)

2.) Tim came into possession of an old map showing where a purported cache of gold bullion was hidden. Without any authority from the government Tim conducted a relentless search and finally found the treasure buried in a new riverbed formerly part of a parcel of land owned by spouses Tirso and Tessie. The old river which used to cut through the land of Spouses Ursula and Urbito changed its course through natural causes. To whom shall the treasure belong? Explain.

The treasure was found in a property of public dominion, the new riverbed. Since Tim did not have authority from the government and, therefore, was a trespasser, he is not entitled to the one-half share allotted to a finder of hidden treasure. All of it will go to the State. In addition, under Art. 438 of the NCC in order that the finder be entitled to the 1/2 share, the treasure must be found by chance, that is by sheer luck. In this case, since Tim found the treasure not by chance but because he relentlessly searched for it, he is not entitled to any share in the hidden treasure.

3.) Marcelino, a treasure hunter as just a hobby, has found a map which appears to indicate the location of hidden treasure. He has an idea of the land where the treasure might possibly be found. Upon inquiry, Marcelino learns that the owner of the land, Leopoldo, is a permanent resident of Canada. Nobody, however, could give him Leopoldo's exact address. Ultimately, anyway, he enters the land and conducts a search. He succeeds. Leopoldo learning of Marcelino's "find", seeks to recover the treasure from Marcelino but the latter is not willing to part with it. Failing to reach an agreement, Leopoldo sues Marcelino for the recovery of the property. Marcelino contests the action. How would you decide the case?

I would decide in favor of Marcelino since he is considered a finder by chance of the hidden treasure, hence, he is entitled to one-half (1/2) of the hidden treasure. While Marcelino may have had the intention to look for the hidden treasure, still he is a finder by chance since it is enough that he tried to look for it. By chance in the law does not mean sheer luck such that the finder should have no intention at all to look for the treasure. By chance means good luck, implying that one who intentionally looks for the treasure is embraced in the provision. The reason is that it is extremely difficult to find hidden treasure without looking for it deliberately.

Marcelino is not a trespasser since there is no prohibition for him to enter the premises, hence, he is entitled to half of the treasure.

4.) Adam, a building contractor, was engaged by Blas to construct a house on a lot which he (Blas) owns. While digging on the lot in order to lay down the foundation of the house, Adam hit a very hard object. It turned out to be the vault of the old Banco de las Islas Filipinas. Using a detonation device, Adam was able to open the vault containing old notes and coins which were in circulation during the Spanish era. While the notes and coins are no longer legal tender, they were valued at P100 million because of their historical value and the coins silver nickel content. The following filed legal claims over the notes and coins: i. Adam, as finder; ii. Blas, as owner of the property where they were found; iii. Bank of the Philippine Islands, as successor-in-interest of the owner of the vault; and iv. The Philippine Government because of their historical value. Who owns the notes and coins?

Hidden treasure is a money jewelry or other precious objects the ownership of which does not appear. (Art. 439, CC) The vault of the Banco de las Islas Filipinas has been buried for about a century and the Bank of the Philippine Islands cannot succeed by inheritance to the property of Banco de las Islas Filipinas. The ownership of the vault, together with the notes and coins can now legally be considered as hidden treasure because its ownership is no longer apparent. The contractor, Adam, is not a trespasser and therefore entitled to one-half of the hidden treasure and Blas as owner of the property, is entitled to the other half. (Art. 438, CC) Since the notes and coins have historical value, the government may acquire them at their just price which in turn will be divided equally between Adam and Blas. (Art. 438, par. 3, CC)

5.) O, owner of Lot A, learning that Japanese soldiers may have buried gold and other treasures at the adjoining vacant Lot B belonging to spouses X & Y, excavated in Lot B where she succeeded in unearthing gold and precious stones. How will the treasures found by O be divided? 1. 100% to O as finder; 2. 50% to O and 50% to the spouses X and Y; 3. 50% to O and 50% to the state; 4. None of the above

None of the above. The general rule us that the treasure shall belong to the spouses X and Y, the owners of Lot B. Under Article 438 (NCC), the exception is that when the discovery of a hidden treasure is made on the property of another and by chance, one-half thereof shall belong to the owner of the land and the other one-half is allowed to the finer. In the problem, the finding of the treasure was not by chance because O knew that the treasure was in Lot B. While a trespasser is also not entitled to any share, and there is no indication in the problem whether or not O was a trespasser, O is not entitled to a share because the finding was not “by chance.”

6.) Pedro bought a parcel of land described as Cadastral Lot No. 123 and the title was issued to his name. Juan also bought a lot in the same place, which is described as Cadastral Lot No. 124. Pedro hired a geodetic engineer to determine the actual location of Lot No. 123 but for some reason, the engineer pointed to Lot No. 124 by mistake. Pedro hired a contractor to construct his house and the latter put up a sign stating the name of the owner of the project and the construction permit number. It took more than a year before the house was constructed. When Pedro was already residing in his house, Juan told him to remove his house because it was built on his (Juan's) lot. Juan filed a Complaint for Recovery of Possession and prayed that the house be removed because Pedro is a builder in bad faith. Pedro filed his Answer with Counterclaim that he is entitled to the payment of the value of the house plus damages because he is a builder in good faith and that Juan is guilty of estoppel and laches. 1. If Pedro is a builder in good faith, what are the rights given to Juan under the law? Explain. 2. If Pedro is a builder in bad faith, what are the rights given to Juan under the law? Explain.

If Pedro is a builder in good faith and Juan is an owner in good faith, Juan has the right to appropriate as his own the house after payment of indemnity provided for in Articles 546 and 548 of the Civil Code, which are the necessary and useful As to useful expenses, Juan has the option to either refund the amount of the expenses, or pay the increase in value which the land may have acquired by reason thereof. Alternatively, under Article 448 of the Civil Code, Juan has the right to oblige Pedro to pay the price of the land. However, Pedro cannot be obliged to buy the land if its value is considerably more than that of the house. In such case, he shall pay reasonable rend, if Juan does not choose to appropriate the house after proper indemnity. It is the owner of the land who is authorized to exercise the options under Article 448 because his right is older and by principle of accession, he is entitled to the ownership of the accessory thing.

If Pedro is a builder in good faith and Juan is an owner in bad faith because Juan knew that Pedro was building on his lot and did not oppose it (Art. 453 par. 2), and Art. 454 in relation to Art. 447 of the Civil Code applies. Juan shall pay the value of the house and is also liable for reparation of damage; however, Pedro also has the right to remove or demolish the house and ask for damages.

If Pedro is a builder in bad faith and Juan is an owner in good faith, Juan has three He may appropriate the improvements without indemnity under Art. 449 of the Civil Code or demand the demolition of the house in order to replace things to their former condition at Pedro’s expense under Art. 450 or compel Pedro to pay the price of the land. In addition to these options, Juan is also entitled to damages from Pedro.

If Pedro is a builder in bad faith and Juan is an owner in bad faith, it shall be as if both of them were in good faith. (Art. 453, New Civil Code)

7.) Benjamin is the owner of a titled lot which is bounded on the north by the Maragondon River. An alluvial deposit of two (2) hectares was added to the registered area. Daniel took possession of the portion formed by accretion and claims that he has been in open, continuous and undisturbed possession of said portion since 1923 as shown by a tax declaration. In 1958, Benjamin filed a Complaint for Quieting of Title and contends that the alluvium belongs to him as the riparian owner and that since the alluvium is, by law, part and parcel of the registered property, the same may be considered as registered property. Decide the case and explain.

I will decide in favor of Daniel and dismiss the action to quite title filed by Benjamin. Under Art. 457 of the Civil Code, the owner of lands adjoining the banks of rivers belong the accretion which they gradually receive from the effects of the current of the waters. The accretion, however, does not automatically become registered land. It must be brought under the Torrens system of registration by Benjamin, the riparian owner. Since he did not, then the increment, not being registered land, was open to acquisition through prescription by third persons, like Daniel. (Grande v. Court of Appeals, 5 SCRA 524 [1962]; Cureg v. Intermediate Appellate Court, 177 SCRA 313 [1989])

8.) Ciriaco Realty Corporation (CRC) sold to the spouses Del a Cruz a 500-square meter land (Lot A) in Paranaque. The land now has a fair market value of P1, 200,000. CRC likewise sold to the spouses Rodriguez, a 700-square meter land (Lot B) which is adjacent to Lot A. Lot B has a present fair market value of P1,500,000. The spouses Dela Cruz constructed a house on Lot B, relying on there presentation of the CRC sales agent that it is the property they purchased. Only upon the completion of their house did the spouses Dela Cruz discover that they had built on Lot B owned by the spouses Rodriguez, not on Lot A that they purchased. They spent P , 000,000 for the house. As their lawyer, advise the spouses Dela Cruz on their rights and obligations under the given circumstances, and the recourses and options open to them to protect their interests.

Based on the facts as stated, the spouses Dela Cruz as builders and the spouses Rodriguez as landowners, are both in good faith. The spouses Dela Cruz are builders in good faith because before constructing the house they exercised due diligence by asking the agent of CRC the location of Lot A. and they relied on the information given by the agent who is presumed to know the identity of the lot purchased by the Dela Cruz spouses. (Pleasantville v. CA, G.R. No. 79688, February 1, 1996) On the other hand, there is no showing that the landowners, spouses Rodriguez, acted in bad faith. The facts do not show that the building was done with their knowledge and without opposition on their part (Art. 453). Good faith is always presumed (Art. 527). The owner of the land on which anything has been built, sown or planted in good faith shall have the right:

to appropriate as his own the works after payment of the indemnity provided for in Articles 546 and 548,or

to oblige the one who built to pay the price of the

However, the builder cannot be obliged to buy the land if its value is considerably more than that of the building. 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. (Art.448, CC)

The house constructed by the spouses Dela Cruz is considered as a useful expense, since it increased the value of the lot. As such, should the spouses Rodriguez decide to appropriate the house, the spouses Dela Cruz are entitled to the right of retention pending reimbursement of the expenses they incurred or the increase in value which the thing may have acquired by reason of the improvement (Art. 546). Thus, the spouses Dela Cruz may demand P1,000,000 as payment of the expenses in building the house or increase in value of the land because of the house as a useful improvement, as may be determined by the court front the evidence presented during the trial. (Depra Dumlao, G.R. No. L 57348, May 16, 1985; Technogas Phils. v. CA,G.R. No. 108894, February 10, 1997)

9.) A delayed accession is: (2014 BAR) A. Formation of an island B. Avulsion C. Alluvium D. Change in the course of the riverbed A: B (Art. 459, CC) Q: Mr. and Mrs. X migrated to the US with all their children. As they had no intention of coming back, they offered their house and lot for sale to their neighbors, Mr. and Mrs. A (the buyers) who agreed to buy the property for 128 Million. Because Mr. and Mrs. A needed to obtain a loan from a bank first, and since the sellers were in a hurry to migrate, the latter told the buyers that they could already occupy the house, renovate it as it was already in a state of disrepair, and pay only when their loan is approved and released. While waiting for the loan approval, the buyers spent P1 Million in repairing the house. A month later, a person carrying an authenticated special power of attorney from the sellers demanded that the buyers either immediately pay for the property in full now or vacate it and pay damages for having made improvements on the property without a sale having been perfected. What are the buyers' options or legal rights with respect to the expenses they incurred in improving the property under circumstances?

The buyers here may be deemed possessors or builders in good faith because they were made to believe that they were allowed to make repairs or renovation by the sellers themselves. As builders in good faith, they have the right to seek reimbursement for the value of the improvements in case the owner decides to appropriate them. They cannot be asked to remove the improvements because that is not one of the options given by law to the landowner in case the builder is in good faith.

10.) A owns a parcel of residential land worth P500,000.00. Unknown to A, a residential house costing P100,000.00 is built on the entire parcel by B who claims ownership of the land. Answer all the following questions based on the premise that B is a builder in good faith and A is a landowner in good faith. a) May A acquire the house built by B? If so, how? b) If the land increased in value to P500,000.00 by reason of the building of the house thereon, what amount should be paid by A in order to acquire the house from B? c) Assuming that the cost of the house was P900,000.00 and not P100,000.00, may A require B to buy the land? d) If B voluntarily buys the land as desired by A, under what circumstances may A nevertheless be entitled to have the house removed? e) In what situation may a “forced lease” arise between A and B, and what terms and conditions would govern the lease? Give reasons for your answers.

a) Yes, A may acquire the house built by B by paying indemnity to B. Article 448 of the Civil Code provides that the owner of the land on which anything has been built, sown or planted in good faith, shall have the right to appropriate as his own works, sowing or planting, after payment of the indemnity provided for in Article 546 of the Civil Code.

b) A should pay B the sum of P50,000.00. Article 548 of the Civil Code provides that useful expenses shall be refunded to the possessor in good faith with the right of retention, the person who has defeated him in the possession having the option of refunding the amount of the expenses or of paying the increase in value which the thing may have acquired by reason thereof. The increase in value amounts to P50,000.00.

c) Yes, A may require B to buy the land. Article
448 of the Civil Code provides that the owner of the land on which anything has been built in good faith shall have the right to oblige the one who built to pay the price of the land if its value is not considerably more than that of the building.

d) If B agrees to buy land but fails to pay, A can have the house removed. (Depra v. Dumlao, 136 SCRA 475)

e) Art. 448 of the Civil Code provides that the builder cannot be obliged to buy the land if its value is considerably more than that of the building. In such case, he shall pay reasonable rent, if the owner of the land does not choose to appropriate the building after proper indemnity. The parties shall agree upon the terms of the lease and in case of disagreement, the court fix the terms thereof.

Marcelino is not a trespasser since there is no prohibition for him to enter the premises, hence, he is entitled to half of the treasure.

If Pedro is a builder in bad faith and Juan is an owner in bad faith, it shall be as if both of them were in good faith. (Art. 453, New Civil Code)

to appropriate as his own the works after payment of the indemnity provided for in Articles 546 and 548,or

to oblige the one who built to pay the price of the

However, the builder cannot be obliged to buy the land if its value is considerably more than that of the building. 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. (Art.448, CC)

c) Yes, A may require B to buy the land. Article 448 of the Civil Code provides that the owner of the land on which anything has been built in good faith shall have the right to oblige the one who built to pay the price of the land if its value is not considerably more than that of the building.

d) If B agrees to buy land but fails to pay, A can have the house removed. (Depra v. Dumlao, 136 SCRA 475)

c) Yes, A may require B to buy the land. Article
448 of the Civil Code provides that the owner of the land on which anything has been built in good faith shall have the right to oblige the one who built to pay the price of the land if its value is not considerably more than that of the building.