Boyer-Roxas v. Court of Appeals

b. Right of Accession — Builder in good faith (Art. 448): good faith

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Case DigestChapter II — Ownership

Boyer-Roxas v. Court of Appeals

G.R. No. 100866 · July 14, 1992 · Supreme Court

b. Right of Accession — Builder in good faith (Art. 448): good faith

Gist

The controversy involves two family members/stockholders of a corporation who were ordered to vacate corporate properties they occupied by mere tolerance, including a staff house, a recreation hall, and an unfinished building constructed with personal funds. While the Supreme Court upheld the separate juridical personality of the corporation and its right to evict the occupants, it modified the lower courts' orders regarding the unfinished building constructed by petitioner Rebecca Boyer-Roxas.

Core Doctrine

The central doctrine is that under Article 453 of the Civil Code, where a building is constructed on the land of another with the knowledge of the owner and without opposition on its part, the rights of the parties shall be the same as though both had acted in good faith; consequently, the relationship is governed by Article 448, which grants the landowner the preclusive option to either appropriate the improvement upon payment of indemnity or to oblige the builder to pay the price of the land..

Facts

Respondent Heirs of Eugenia V. Roxas, Inc. is a bona fide corporation and the registered owner of the land where the Hidden Valley Springs Resort is located in Calamba, Laguna. 1.
Petitioners Rebecca Boyer-Roxas and Guillermo Roxas, who are stockholders of the corporation, occupied certain corporate-owned buildings on the land—a staff house and a recreation hall converted for residential use. 4, 1.
While Rebecca’s husband, Eriberto Roxas, was still alive and serving as the General Manager of the corporation, the couple began constructing an additional "unfinished building" on the property using their personal funds. 2.
The Board of Directors of the respondent corporation was aware of this construction but did not object, allowing it to continue despite its location on corporate land. 2.
Following an internal conflict, the corporation filed two complaints for recovery of possession (Civil Case Nos. 802-84-C and 803-84-C) against the petitioners, alleging their stay was by mere tolerance. 5, 4.
The Regional Trial Court (RTC) ruled in favor of the corporation, ordering the petitioners to vacate and specifically ordering Rebecca to remove the unfinished building. 5, 6.
The Court of Appeals (CA) affirmed the RTC decision in its entirety, finding that the petitioners had no right to remain on corporate property. 5.
Petitioners elevated the matter to the Supreme Court, arguing that Rebecca should be treated as a builder in good faith regarding the unfinished structure. 6, 2.
The Supreme Court issued its final decision on July 14, 1992. 5.

Issue

Whether petitioner Rebecca Boyer-Roxas is a builder in good faith under Article 448 of the Civil Code regarding the unfinished building constructed on corporate land with the knowledge and non-opposition of the Board. 2.

Secondary issues. Whether the separate juridical personality of a corporation may be ignored by stockholders to justify their continued possession of corporate real property. 1.

Ruling

Main issue. YES — she is treated as a builder in good faith, so Article 448 governs the unfinished building and it may not simply be demolished. The Board of Directors "did not object to the construction" and "allowed the construction to continue despite the fact that it was within the property of the corporation," which puts the landowner in bad faith; the builder, knowing the land was not hers, was in bad faith too. Article 453 then applies: where both are in bad faith, "the rights of one and the other shall be the same as though both had acted in good faith" — the two bad faiths neutralize each other. The corporation must therefore elect under Article 448 either to appropriate the building upon paying the indemnity under Articles 546 and 548, or to oblige her to buy the land; the lower courts erred in ordering summary removal.

Secondary issues. NO — the corporate veil is not pierced for the stockholders' convenience. A corporation has a personality separate from its members, and its realty is its own; shareholding confers no right to occupy corporate property, so the staff house and recreation hall must be surrendered to the corporation.

"WHEREFORE, the present petition is partly GRANTED. The questioned decision of the Court of Appeals affirming the decision of the Regional Trial Court of Laguna, Branch 37, in RTC Civil Case No. 802-84-C is MODIFIED in that subparagraphs (c) and (d) of Paragraph 1 of the dispositive portion of the decision are deleted. In their stead, the petitioner Rebecca Boyer-Roxas and the respondent corporation are ordered to follow the provisions of Article 448 of the Civil Code as regards the questioned unfinished building in RTC Civil Case No. 802-84-C. The questioned decision is affirmed in all other respects. SO ORDERED.".

Ratio

The Court’s reasoning is anchored on the distinction between the buildings owned by the corporation and the specific "unfinished building" constructed by the petitioner.
While the corporation had a clear right to recover the staff house and recreation hall, the unfinished building was subject to the Rules of Accession.
The Court ruled that Rebecca qualified as a builder in good faith by operation of Article 453.
The established facts showed that the Board of Directors "did not object to the construction" and "allowed the construction to continue despite the fact that it was within the property of the corporation.".
Under the law, when a landowner knows of the construction and does not oppose it, he is considered in bad faith.
Because the builder is also technically in bad faith (building on land she knows she does not own), the bad faith of both parties neutralizes each other, and they are treated as if they both acted in good faith. 8, 9, 3.
Consequently, the Court held that the relationship regarding the unfinished building must be governed by Article 448.
The lower courts erred in ordering the summary removal of the building.
Instead, the corporation (as landowner) must exercise its legal options: either appropriate the building upon payment of indemnity or sell the land to the petitioner. 3.

Doctrine

Neutralization of Bad Faith (Art. 453): "If there was bad faith, not only on the part of the person who built, planted or sown on the land of another but also on the part of the owner of such land, the rights of one and the other shall be the same as though both had acted in good faith.".
Options of the Landowner (Art. 448): The owner of the land on which anything has been built in good faith has the right to: (a) appropriate the works as his own after payment of indemnity under Articles 546 and 548; or (b) oblige the builder to pay the price of the land. 3.
Indemnity for Useful Expenses (Art. 546): A builder in good faith (including one deemed as such under Art. 453) is entitled to full reimbursement for useful expenses before he can be compelled to vacate. 10, 11.
Separate Juridical Personality: A corporation has a personality separate from its stockholders; hence, a stockholder’s occupancy of corporate property is merely by tolerance and does not vest any possessory right. 1.

The Court emphasized that Article 448 applies only to the unfinished building constructed with the Board's non-opposition. It does not apply to the existing corporate structures (staff house/recreation hall) as those were not built by the petitioners. 1.

Full Digest — Recitation Format

I. Gist and Central Doctrine

Relationship to requested topic: DIRECT. The controversy involves two family members/stockholders of a corporation who were ordered to vacate corporate properties they occupied by mere tolerance, including a staff house, a recreation hall, and an unfinished building constructed with personal funds. While the Supreme Court upheld the separate juridical personality of the corporation and its right to evict the occupants, it modified the lower courts' orders regarding the unfinished building constructed by petitioner Rebecca Boyer-Roxas. The central doctrine is that under Article 453 of the Civil Code, where a building is constructed on the land of another with the knowledge of the owner and without opposition on its part, the rights of the parties shall be the same as though both had acted in good faith; consequently, the relationship is governed by Article 448, which grants the landowner the preclusive option to either appropriate the improvement upon payment of indemnity or to oblige the builder to pay the price of the land..

II. Chronological Narration of Material Facts

Respondent Heirs of Eugenia V. Roxas, Inc. is a bona fide corporation and the registered owner of the land where the Hidden Valley Springs Resort is located in Calamba, Laguna. 1.
Petitioners Rebecca Boyer-Roxas and Guillermo Roxas, who are stockholders of the corporation, occupied certain corporate-owned buildings on the land—a staff house and a recreation hall converted for residential use. 4, 1.
While Rebecca’s husband, Eriberto Roxas, was still alive and serving as the General Manager of the corporation, the couple began constructing an additional "unfinished building" on the property using their personal funds. 2.
The Board of Directors of the respondent corporation was aware of this construction but did not object, allowing it to continue despite its location on corporate land. 2.
Following an internal conflict, the corporation filed two complaints for recovery of possession (Civil Case Nos. 802-84-C and 803-84-C) against the petitioners, alleging their stay was by mere tolerance. 5, 4.
The Regional Trial Court (RTC) ruled in favor of the corporation, ordering the petitioners to vacate and specifically ordering Rebecca to remove the unfinished building. 5, 6.
The Court of Appeals (CA) affirmed the RTC decision in its entirety, finding that the petitioners had no right to remain on corporate property. 5.
Petitioners elevated the matter to the Supreme Court, arguing that Rebecca should be treated as a builder in good faith regarding the unfinished structure. 6, 2.
The Supreme Court issued its final decision on July 14, 1992. 5.

III. Arguments of the Parties

A. Petitioner

Petitioners argued that their status as stockholders justified their possession and that the corporate veil should be ignored in a family corporation. 1. Specifically regarding the unfinished building, Rebecca argued she was a builder in good faith under Article 448 because the construction was financed by her own funds with the full knowledge and consent of the corporation’s management and Board. 2.

B. Respondent

The corporation maintained that it possessed a juridical personality separate and distinct from its stockholders and that the properties occupied were corporate assets. 1. They contended that the occupancy was by mere tolerance, and once that tolerance was withdrawn, the petitioners were obligated to vacate and remove any unauthorized structures. 4.

IV. Issues

A. MAIN ISSUE

B. SECONDARY ISSUES

Whether the separate juridical personality of a corporation may be ignored by stockholders to justify their continued possession of corporate real property. 1.

V. Ruling / Disposition

A. MAIN ISSUE

YES — she is treated as a builder in good faith, so Article 448 governs the unfinished building and it may not simply be demolished. The Board of Directors "did not object to the construction" and "allowed the construction to continue despite the fact that it was within the property of the corporation," which puts the landowner in bad faith; the builder, knowing the land was not hers, was in bad faith too. Article 453 then applies: where both are in bad faith, "the rights of one and the other shall be the same as though both had acted in good faith" — the two bad faiths neutralize each other. The corporation must therefore elect under Article 448 either to appropriate the building upon paying the indemnity under Articles 546 and 548, or to oblige her to buy the land; the lower courts erred in ordering summary removal.

B. SECONDARY ISSUES

NO — the corporate veil is not pierced for the stockholders' convenience. A corporation has a personality separate from its members, and its realty is its own; shareholding confers no right to occupy corporate property, so the staff house and recreation hall must be surrendered to the corporation.

"WHEREFORE, the present petition is partly GRANTED. The questioned decision of the Court of Appeals affirming the decision of the Regional Trial Court of Laguna, Branch 37, in RTC Civil Case No. 802-84-C is MODIFIED in that subparagraphs (c) and (d) of Paragraph 1 of the dispositive portion of the decision are deleted. In their stead, the petitioner Rebecca Boyer-Roxas and the respondent corporation are ordered to follow the provisions of Article 448 of the Civil Code as regards the questioned unfinished building in RTC Civil Case No. 802-84-C. The questioned decision is affirmed in all other respects. SO ORDERED.".

VI. Ratio Decidendi and Doctrines

A. Ratio Decidendi

The Court’s reasoning is anchored on the distinction between the buildings owned by the corporation and the specific "unfinished building" constructed by the petitioner.
While the corporation had a clear right to recover the staff house and recreation hall, the unfinished building was subject to the Rules of Accession.
The Court ruled that Rebecca qualified as a builder in good faith by operation of Article 453.
The established facts showed that the Board of Directors "did not object to the construction" and "allowed the construction to continue despite the fact that it was within the property of the corporation.".
Under the law, when a landowner knows of the construction and does not oppose it, he is considered in bad faith.
Because the builder is also technically in bad faith (building on land she knows she does not own), the bad faith of both parties neutralizes each other, and they are treated as if they both acted in good faith. 8, 9, 3.
Consequently, the Court held that the relationship regarding the unfinished building must be governed by Article 448.
The lower courts erred in ordering the summary removal of the building.
Instead, the corporation (as landowner) must exercise its legal options: either appropriate the building upon payment of indemnity or sell the land to the petitioner. 3.

B. Doctrines/Rules

Neutralization of Bad Faith (Art. 453): "If there was bad faith, not only on the part of the person who built, planted or sown on the land of another but also on the part of the owner of such land, the rights of one and the other shall be the same as though both had acted in good faith.".
Options of the Landowner (Art. 448): The owner of the land on which anything has been built in good faith has the right to: (a) appropriate the works as his own after payment of indemnity under Articles 546 and 548; or (b) oblige the builder to pay the price of the land. 3.
Indemnity for Useful Expenses (Art. 546): A builder in good faith (including one deemed as such under Art. 453) is entitled to full reimbursement for useful expenses before he can be compelled to vacate. 10, 11.
Separate Juridical Personality: A corporation has a personality separate from its stockholders; hence, a stockholder’s occupancy of corporate property is merely by tolerance and does not vest any possessory right. 1.

C. Limitations/Exceptions

The Court emphasized that Article 448 applies only to the unfinished building constructed with the Board's non-opposition.
It does not apply to the existing corporate structures (staff house/recreation hall) as those were not built by the petitioners. 1.

D. Topic Integration

The relationship is DIRECT.
This case is a mandatory authority for the subtopic of "Good Faith" under Article 448.
It illustrates that "Good Faith" in industrial accession is not limited to a subjective belief of ownership but can be a legal fiction created by Article 453.
It teaches that the Action to Recover Real Property (Art. 428) is modified by the Right of Accession whenever a landowner permits a third party to build on its land without protest, thereby requiring the owner to pay for the improvements before ousting the occupant. 12, 9, 2.

VII. Separate Opinions

NOT IN RECORD (Unanimous decision). 7.

Cited Laws & Provisions

Every statute, rule, and issuance the decision turns on — the text as written, and the work it does in this case.

Civil Code

Article 453, Civil Code

Civil Code of the Philippines (R.A. No. 386), Book II (Property, Ownership, and Its Modifications), Title II (Ownership), Chapter 2 (Right of Accession), Section 2 (Right of Accession With Respect to Immovable Property)

If there was bad faith, not only on the part of the person who built, planted or sowed on the land of another, but also on the part of the owner of such land, the rights of one and the other shall be the same as though both had acted in good faith.

It is understood that there is bad faith on the part of the landowner whenever the act was done with his knowledge and without opposition on his part. (364a)

Why it is cited here

The article the case is decided on, and it produces a result that looks paradoxical until you read the second paragraph.

"If there was bad faith, not only on the part of the person who built, planted or sowed on the land of another, but also on the part of the owner of such land, the rights of one and the other shall be the same as though both had acted in good faith."

Two wrongs do not cancel morally, but they do legally: where each party is at fault, the law declines to prefer either and applies the good-faith regime of Article 448.

The second paragraph supplies the test for the landowner's bad faith, and it is a low bar: "It is understood that there is bad faith on the part of the landowner whenever the act was done with his knowledge and without opposition on his part."

Knowledge plus silence. No encouragement is needed, no representation, no consent — an owner who watches a building go up on his land and says nothing is in bad faith for this purpose. That is why a landowner faced with an encroachment must object, and object early; standing by is itself a legal act with consequences.

Civil Code

Article 448, Civil Code

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, sowing or planting, after payment of the indemnity provided for in articles 546 and 548, or to oblige the one who built or planted to pay the price of the land, and the one who sowed, the proper rent. However, the builder or planter cannot be obliged to buy the land if its value is considerably more than that of the building or trees. 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. The parties shall agree upon the terms of the lease and in case of disagreement, the court shall fix the terms thereof. (361a)

Why it is cited here

The regime Article 453 routes the parties into, so its terms govern although neither party was innocent.

The landowner therefore keeps the option — appropriate the works on paying the indemnity under Articles 546 and 548, or oblige the builder to buy the land — and the builder keeps the protections, including the limit that he cannot be compelled to buy where the land is worth considerably more than the building.

Worth noticing what this means practically: an owner who might have had the improvements for nothing by objecting in time must instead pay for them because he did not.

Civil Code

Article 546, Civil Code

Civil Code of the Philippines (R.A. No. 386), Book II (Property, Ownership, and Its Modifications), Title V (Possession), Chapter 3 (Effects of Possession)

Necessary expenses shall be refunded to every possessor; but only the possessor in good faith may retain the thing until he has been reimbursed therefor.

Useful expenses shall be refunded only 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 of paying the increase in value which the thing may have acquired by reason thereof. (453a)

Why it is cited here

The indemnity that follows, and the reason the owner's silence proves expensive.

Necessary expenses are refunded to every possessor, with the right of retention for the good-faith one; useful expenses are refunded only to the possessor in good faith, the owner choosing between the cost and the increase in value.

Because Article 453 places the builder in the good-faith position, he acquires the right of retention — he may hold the property until paid. The landowner cannot recover possession first and argue about money later.

Cited laws & provisions

Article 453, Civil Code

Civil Code

It is understood that there is bad faith on the part of the landowner whenever the act was done with his knowledge and without opposition on his part. (364a)

Why it is cited here

The article the case is decided on, and it produces a result that looks paradoxical until you read the second paragraph.

Two wrongs do not cancel morally, but they do legally: where each party is at fault, the law declines to prefer either and applies the good-faith regime of Article 448.

Full entry below ↓

Article 448, Civil Code

Civil Code

Why it is cited here

The regime Article 453 routes the parties into, so its terms govern although neither party was innocent.

Worth noticing what this means practically: an owner who might have had the improvements for nothing by objecting in time must instead pay for them because he did not.

Full entry below ↓

Article 546, Civil Code

Civil Code

Civil Code of the Philippines (R.A. No. 386), Book II (Property, Ownership, and Its Modifications), Title V (Possession), Chapter 3 (Effects of Possession)

Necessary expenses shall be refunded to every possessor; but only the possessor in good faith may retain the thing until he has been reimbursed therefor.

Why it is cited here

The indemnity that follows, and the reason the owner's silence proves expensive.

Full entry below ↓

Facts

Respondent Heirs of Eugenia V. Roxas, Inc. is a bona fide corporation and the registered owner of the land where the Hidden Valley Springs Resort is located in Calamba, Laguna. 1.
Petitioners Rebecca Boyer-Roxas and Guillermo Roxas, who are stockholders of the corporation, occupied certain corporate-owned buildings on the land—a staff house and a recreation hall converted for residential use. 4, 1.
While Rebecca’s husband, Eriberto Roxas, was still alive and serving as the General Manager of the corporation, the couple began constructing an additional "unfinished building" on the property using their personal funds. 2.
The Board of Directors of the respondent corporation was aware of this construction but did not object, allowing it to continue despite its location on corporate land. 2.
Following an internal conflict, the corporation filed two complaints for recovery of possession (Civil Case Nos. 802-84-C and 803-84-C) against the petitioners, alleging their stay was by mere tolerance. 5, 4.
The Regional Trial Court (RTC) ruled in favor of the corporation, ordering the petitioners to vacate and specifically ordering Rebecca to remove the unfinished building. 5, 6.
The Court of Appeals (CA) affirmed the RTC decision in its entirety, finding that the petitioners had no right to remain on corporate property. 5.
Petitioners elevated the matter to the Supreme Court, arguing that Rebecca should be treated as a builder in good faith regarding the unfinished structure. 6, 2.
The Supreme Court issued its final decision on July 14, 1992. 5.

Issue

Secondary issues. Whether the separate juridical personality of a corporation may be ignored by stockholders to justify their continued possession of corporate real property. 1.

Ruling

"WHEREFORE, the present petition is partly GRANTED. The questioned decision of the Court of Appeals affirming the decision of the Regional Trial Court of Laguna, Branch 37, in RTC Civil Case No. 802-84-C is MODIFIED in that subparagraphs (c) and (d) of Paragraph 1 of the dispositive portion of the decision are deleted. In their stead, the petitioner Rebecca Boyer-Roxas and the respondent corporation are ordered to follow the provisions of Article 448 of the Civil Code as regards the questioned unfinished building in RTC Civil Case No. 802-84-C. The questioned decision is affirmed in all other respects. SO ORDERED.".

Ratio

The Court’s reasoning is anchored on the distinction between the buildings owned by the corporation and the specific "unfinished building" constructed by the petitioner.
While the corporation had a clear right to recover the staff house and recreation hall, the unfinished building was subject to the Rules of Accession.
The Court ruled that Rebecca qualified as a builder in good faith by operation of Article 453.
The established facts showed that the Board of Directors "did not object to the construction" and "allowed the construction to continue despite the fact that it was within the property of the corporation.".
Under the law, when a landowner knows of the construction and does not oppose it, he is considered in bad faith.
Because the builder is also technically in bad faith (building on land she knows she does not own), the bad faith of both parties neutralizes each other, and they are treated as if they both acted in good faith. 8, 9, 3.
Consequently, the Court held that the relationship regarding the unfinished building must be governed by Article 448.
The lower courts erred in ordering the summary removal of the building.
Instead, the corporation (as landowner) must exercise its legal options: either appropriate the building upon payment of indemnity or sell the land to the petitioner. 3.

Doctrine

Neutralization of Bad Faith (Art. 453): "If there was bad faith, not only on the part of the person who built, planted or sown on the land of another but also on the part of the owner of such land, the rights of one and the other shall be the same as though both had acted in good faith.".
Options of the Landowner (Art. 448): The owner of the land on which anything has been built in good faith has the right to: (a) appropriate the works as his own after payment of indemnity under Articles 546 and 548; or (b) oblige the builder to pay the price of the land. 3.
Indemnity for Useful Expenses (Art. 546): A builder in good faith (including one deemed as such under Art. 453) is entitled to full reimbursement for useful expenses before he can be compelled to vacate. 10, 11.
Separate Juridical Personality: A corporation has a personality separate from its stockholders; hence, a stockholder’s occupancy of corporate property is merely by tolerance and does not vest any possessory right. 1.

Full Digest — Recitation Format

I. Gist and Central Doctrine

II. Chronological Narration of Material Facts

Respondent Heirs of Eugenia V. Roxas, Inc. is a bona fide corporation and the registered owner of the land where the Hidden Valley Springs Resort is located in Calamba, Laguna. 1.
Petitioners Rebecca Boyer-Roxas and Guillermo Roxas, who are stockholders of the corporation, occupied certain corporate-owned buildings on the land—a staff house and a recreation hall converted for residential use. 4, 1.
While Rebecca’s husband, Eriberto Roxas, was still alive and serving as the General Manager of the corporation, the couple began constructing an additional "unfinished building" on the property using their personal funds. 2.
The Board of Directors of the respondent corporation was aware of this construction but did not object, allowing it to continue despite its location on corporate land. 2.
Following an internal conflict, the corporation filed two complaints for recovery of possession (Civil Case Nos. 802-84-C and 803-84-C) against the petitioners, alleging their stay was by mere tolerance. 5, 4.
The Regional Trial Court (RTC) ruled in favor of the corporation, ordering the petitioners to vacate and specifically ordering Rebecca to remove the unfinished building. 5, 6.
The Court of Appeals (CA) affirmed the RTC decision in its entirety, finding that the petitioners had no right to remain on corporate property. 5.
Petitioners elevated the matter to the Supreme Court, arguing that Rebecca should be treated as a builder in good faith regarding the unfinished structure. 6, 2.
The Supreme Court issued its final decision on July 14, 1992. 5.

III. Arguments of the Parties

A. Petitioner

B. Respondent

IV. Issues

A. MAIN ISSUE

B. SECONDARY ISSUES

Whether the separate juridical personality of a corporation may be ignored by stockholders to justify their continued possession of corporate real property. 1.

V. Ruling / Disposition

A. MAIN ISSUE

B. SECONDARY ISSUES

VI. Ratio Decidendi and Doctrines

A. Ratio Decidendi

The Court’s reasoning is anchored on the distinction between the buildings owned by the corporation and the specific "unfinished building" constructed by the petitioner.
While the corporation had a clear right to recover the staff house and recreation hall, the unfinished building was subject to the Rules of Accession.
The Court ruled that Rebecca qualified as a builder in good faith by operation of Article 453.
The established facts showed that the Board of Directors "did not object to the construction" and "allowed the construction to continue despite the fact that it was within the property of the corporation.".
Under the law, when a landowner knows of the construction and does not oppose it, he is considered in bad faith.
Because the builder is also technically in bad faith (building on land she knows she does not own), the bad faith of both parties neutralizes each other, and they are treated as if they both acted in good faith. 8, 9, 3.
Consequently, the Court held that the relationship regarding the unfinished building must be governed by Article 448.
The lower courts erred in ordering the summary removal of the building.
Instead, the corporation (as landowner) must exercise its legal options: either appropriate the building upon payment of indemnity or sell the land to the petitioner. 3.

B. Doctrines/Rules

Neutralization of Bad Faith (Art. 453): "If there was bad faith, not only on the part of the person who built, planted or sown on the land of another but also on the part of the owner of such land, the rights of one and the other shall be the same as though both had acted in good faith.".
Options of the Landowner (Art. 448): The owner of the land on which anything has been built in good faith has the right to: (a) appropriate the works as his own after payment of indemnity under Articles 546 and 548; or (b) oblige the builder to pay the price of the land. 3.
Indemnity for Useful Expenses (Art. 546): A builder in good faith (including one deemed as such under Art. 453) is entitled to full reimbursement for useful expenses before he can be compelled to vacate. 10, 11.
Separate Juridical Personality: A corporation has a personality separate from its stockholders; hence, a stockholder’s occupancy of corporate property is merely by tolerance and does not vest any possessory right. 1.

C. Limitations/Exceptions

The Court emphasized that Article 448 applies only to the unfinished building constructed with the Board's non-opposition.
It does not apply to the existing corporate structures (staff house/recreation hall) as those were not built by the petitioners. 1.

D. Topic Integration

The relationship is DIRECT.
This case is a mandatory authority for the subtopic of "Good Faith" under Article 448.
It illustrates that "Good Faith" in industrial accession is not limited to a subjective belief of ownership but can be a legal fiction created by Article 453.
It teaches that the Action to Recover Real Property (Art. 428) is modified by the Right of Accession whenever a landowner permits a third party to build on its land without protest, thereby requiring the owner to pay for the improvements before ousting the occupant. 12, 9, 2.

VII. Separate Opinions

NOT IN RECORD (Unanimous decision). 7.