Del Campo vs. Abesia

Article 448 of the Civil Code does not apply to a co-owner who builds on land owned in common while the co-ownership subsists, but it does apply after partition terminates the co-ownership, if the builder acted in good faith and the structure encroaches upon the portion allotted to another co-owner. In such case, the owner of the allotted land may either appropriate the encroaching portion upon payment of indemnity under Article 546, or compel the builder to pay the price of the land, provided that if the land’s value is considerably more than the structure, the builder cannot be forced to buy and shall instead pay reasonable rent, or may choose to demolish the structure at the builder’s own expense.

Plaintiffs and defendant owned a 45-square-meter parcel of land in Cebu City in common, the plaintiffs holding a 2/3 share and the defendant a 1/3 share. Both parties had their respective houses standing on the lot. Plaintiffs instituted an action for partition to segregate their shares.

• The Property and Co-ownership: The dispute centered on Lot No. 1161 of the Cadastral Survey of Cebu, a 45-square-meter parcel situated at the corner of F. Flores and Cavan Streets, Cebu City, covered by TCT No. 61850. Plaintiffs and defendant were co-owners pro indiviso in the proportion of 2/3 and 1/3 shares, respectively. Both parties had constructed their houses on the lot.
• Partition and Survey: Plaintiffs filed an action for partition. The trial court appointed a geodetic engineer as commissioner, who surveyed the property and submitted a sketch plan and report on May 29, 1976. The report recommended dividing the lot into Lot 1161-A with 30 square meters for plaintiffs, and Lot 1161-B with 15 square meters for the defendant. The sketch disclosed that the defendant’s house occupied a portion of 5 square meters of Lot 1161-A.
• Stipulations and Lower Court Ruling: The parties manifested their conformity to the commissioner’s report but requested the trial court to settle which party should take possession of the 5-square-meter encroachment area. The CFI held that Article 448 does not apply between co-owners, ordered the defendant to remove and demolish the encroaching part at her expense within 60 days, and directed delivery of possession to plaintiffs.

• Applicability of Article 448: Whether Article 448 of the Civil Code on the rights of a builder in good faith applies to a co-owner who built a house on common property, after partition reveals that a portion of the house encroaches on the land allotted to another co-owner.
• Propriety of Demolition Order: Whether the trial court properly ordered the defendant to demolish the encroaching portion of her house at her own expense.

• Applicability of Article 448: Article 448 does not apply during the subsistence of the co-ownership. A co-owner who builds, plants, or sows on land owned in common does so on land that is also his own; he is not a third person building on another’s land, and the relationship is governed exclusively by the rules of co-ownership. Once the co-ownership is terminated by partition, however, the character of the occupation changes. If a co-owner’s house, built earlier in good faith, overlaps a portion allotted to another co-owner, the former co-owner becomes, for that portion, a builder on the land of another. Because the defendant’s good faith in constructing her house was undisputed, Article 448 became operative. Plaintiffs, as owners of Lot 1161-A, acquired the right to appropriate the encroaching portion of defendant’s house after payment of the indemnity prescribed in Article 546, or to compel the defendant to purchase the 5-square-meter land. Should the value of the land be considerably more than the value of the built portion, the defendant could not be forced to buy the land but must instead pay reasonable rent; alternatively, the defendant could elect to demolish the encroaching part at her own expense.
• Propriety of Demolition Order: The absolute order for demolition was inconsistent with the hierarchy of options under Article 448. Demolition is not a peremptory obligation imposed on the builder; it is merely an option the builder may choose to exercise. The decision was accordingly modified to reflect the alternative rights and obligations set out in Article 448.

• Inapplicability of Article 448 to Co-owners During Co-ownership — Article 448 of the Civil Code cannot be invoked by one co-owner against another who builds, plants, or sows on the land owned in common while the co-ownership exists. The builder does not act on land belonging exclusively to another; rather, the matter is governed by the rules on co-ownership. (Citing Viuda de Arias v. Aguilar, Manresa, Sanchez Roman, Planiol and Ripert, and Tolentino.)
• Application of Article 448 After Partition — Upon termination of the co-ownership through partition, if a co-owner’s earlier good-faith construction encroaches on the portion allotted to another, Article 448 becomes operative. The landowner may either appropriate the encroaching works upon indemnity under Article 546, or compel the builder to purchase the land, subject to the limitation that if the land value considerably exceeds the value of the building, the builder cannot be forced to buy and must instead pay reasonable rent. The builder retains the option to demolish at his own expense.

• “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.”
• “However, when, as in this case, 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.”

• Viuda de Arias v. Aguilar, Court of Appeals, O.G. Supp., Aug. 30, 1941, p. 126 — Cited as authority that Article 448 cannot be invoked by a co-owner against another who builds upon the common land. The Supreme Court affirmed this doctrine for the period of co-ownership but distinguished it upon termination of the co-ownership through partition, where Article 448 comes into play.

• Article 448, Civil Code — Defines the reciprocal rights and obligations between a landowner and a builder, sower, or planter in good faith. Applied after partition to give plaintiffs the option to appropriate the encroaching structure upon indemnity or to require defendant to purchase the land, subject to the conditions on comparative value, rent, and demolition.
• Article 546, Civil Code — Provides the measure of indemnity for useful improvements made in good faith; referenced in Article 448 as the basis for indemnity if the landowner appropriates the building.

Teehankee, C.J., Narvasa, Cruz, and Griño-Aquino, JJ., concurred.