Short answer. Yes. For useful expenses, Article 546 gives the owner who recovers the property the choice: refund the amount the good-faith possessor actually spent, or pay the increase in value the improvement gave the property. The possessor may retain the property until reimbursed, but the choice of measure belongs to the owner.
What the law says
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.
Civil Code, Article 546 — Necessary and Useful Expenses. Read the full provision →
Two kinds of expense, treated differently
Article 546 sorts a possessor's outlays into necessary and useful expenses, and the rules diverge. Necessary expenses — those needed to preserve the property — are refunded to every possessor. Useful expenses are different: they are improvements that increased the property's value, and the article refunds them only to the possessor in good faith. So the question of choosing between cost and value arises squarely for useful improvements made by someone who possessed honestly, and it is the owner recovering the property who is handed that choice.
The owner's option: expenses or increase in value
The heart of the provision is the alternative it gives the owner. On useful expenses, the person who has defeated him in the possession has 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. The two figures can differ widely — a possessor may spend heavily for little added value, or add value well beyond what he spent. The choice is the owner's, not the possessor's, so the owner can settle on whichever measure is lower, and the possessor cannot insist on the more generous one.
The right of retention
The good-faith possessor is not left to chase payment after handing everything back. The article gives him the same right of retention for useful expenses that it gives for necessary ones: he may hold the property until he has been reimbursed. Retention is a practical lever — it keeps the property in the possessor's hands as security until the owner pays whichever amount he has elected. The owner who wants the property back must therefore make good the reimbursement first, which is what gives the possessor's entitlement real force rather than leaving it a paper claim.
Why the choice matters, and to whom
The option is the owner's to exploit, so the practical contest is over the two numbers. The possessor will document what he actually spent; the owner will look to what the improvement really added, and may commission his own valuation, because he pays the increase in value only if he chooses that route. Neither figure is assumed — each has to be shown. A good-faith possessor who made useful improvements should keep the receipts and records that fix his expenditure, while an owner should assess the added value before electing, since the article lets him pick the cheaper path.
Cases citing this provision
These Supreme Court decisions cite the provision above. We list them so you can read them yourself; the summaries of what each decided are not ours to give.
- Onesimo Agapito vs. Marilyn F. Agapito, G.R. No. 255157, July 4, 2022 — read the decision on LawPhil →
- Henry L. Sia vs. Court of Appeals, et al, G.R. No. 108222, May 5, 1997 — read the decision on LawPhil →
- Sulo sa Nayon, Inc. and/or Philippine Village Hotel, Inc. et al. vs. Nayong Filipino Foundation, G.R. No. 170923, January 20, 2009 — read the decision on LawPhil →
- Republic of the Philippines vs. Heirs of Eriberto Ontiveros, G.R. No. 241507, December 7,2022 — read the decision on LawPhil →