G.R. No. L-2238

FACTS:
Yu-Chingco died in China in October 1901. After his death, Yu-Chiocco leased land in Tondo, Manila, in his own name and constructed buildings thereon using his own licenses. The administratrix of Yu-Chingco’s estate, Leoncia Liuanag, filed an action against Yu-Chiocco’s executor, claiming ownership of the buildings, alleging that the construction materials belonged to Yu-Chingco’s estate. The trial court found that while Yu-Chiocco performed the labor, the materials used belonged to the estate of Yu-Chingco, and consequently awarded ownership of one-half of the buildings to the plaintiff administratrix.

ISSUE:
Does the owner of materials used by another in constructing a building on leased land become a co-owner of the building?

RULING:
No. The Supreme Court reversed the trial court’s decision. Applying Article 360 of the Civil Code, the Court held that the owner of materials used by another in construction (the builder) does not acquire ownership of the building. The law only grants the material owner a right to be paid the value of the materials used. If the builder acted in bad faith, the material owner is further entitled to indemnity for damages. The right to remove the materials is limited to cases where such removal can be done without injury to the structure. Consequently, the plaintiff administratrix merely has a personal claim for the value of the estate’s materials used in the construction, not an ownership interest in the building itself. The case was remanded for the entry of judgment in favor of the defendant, without prejudice to the plaintiff’s right to pursue her claim for the value of the materials.