Damian Ignacio vs Elias Hilario

G.R. No. L-175 – 76 Phil. 605 – Civil Law – Law on Property – Accession Industrial – Builder in Good Faith; Owner in Good Faith

Sometime during the 1940s in Pangasinan, a civil suit arose between Damian Ignacio and Elias Hilario. 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 while the value of the buildings erected was P2,.

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.

HELD: 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.

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