FILOMENA R. BENEDICTO, Petitioner, vs. ANTONIO VILLAFLORES, Respondent.

G.R. No. 185020               October 6, 2010 SECOND DIVISION

FILOMENA R. BENEDICTO, Petitioner, vs. ANTONIO VILLAFLORES, Respondent.

Facts

In 1980, Maria Villaflores (Maria) sold a portion of Lot 2-A to her nephew, respondent Antonio Villaflores (Antonio). Antonio then took possession of the portion sold to him and constructed a house thereon. Twelve (12) years later, or on August 15, 1992, Maria executed in favor of Antonio a Kasulatan ng Bilihang Tuluyan covering the entire Lot 2-A. However, Antonio did not register the sale or pay the real property taxes for the subject land.

On August 31, 1994, Maria sold the same Lot 2-A to Filomena, evidenced by a Kasulatan ng Bilihang Tuluyan. Filomena registered the sale on September 6, 1994. Since then Filomena paid the real property taxes for the subject parcel of land.

After trial, the RTC sustained Filomena’s ownership who was the one who registered the sale in good faith. It rejected Antonio’s allegation of bad faith on the part of Filomena because no sufficient evidence was adduced to prove it. This finding was affirmed by the CA.

Issue

Whether Antonio is a possessor in good faith.

Ruling

The Court sustained the finding that Antonio is a builder in good faith.

Under Article 448, a landowner is given the option to either appropriate the improvement as his own upon payment of the proper amount of indemnity, or sell the land to the possessor in good faith. Anent to this, Article 546 provides that a builder in good faith is entitled to full reimbursement for all the necessary and useful expenses incurred; it also gives him right of retention until full reimbursement is made. The objective of Article 546 of the Civil Code is to administer justice between the parties involved. Guided by this precept, it is therefore the current market value of the improvements which should be made the basis of reimbursement.

However, in spite of its finding of good faith on the part of Antonio by the RTC it did not order the reimbursement of the necessary and useful expenses he incurred. Hence, the CA correctly ordered the remand of the case for further proceedings.