Short answer. Only a possessor in good faith can. He may hold on to the property until he is paid for both necessary and useful expenses. A possessor in bad faith is refunded necessary expenses alone, and has no right to keep the property while waiting for the money.
What the law says
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.
Civil Code, Article 546 — Necessary and Useful Expenses. Read the full provision →
Two kinds of spending, treated differently
The article sorts money into two classes and gives them different consequences. Necessary expenses are what had to be spent to keep the thing in existence or in serviceable condition — repairing a roof before the house rots, shoring up a wall, the taxes that would otherwise have cost the owner the property. Useful expenses are what made the thing more valuable or more productive without being needed to save it, such as an added room or a paved access road. Everything else, the spending that merely suits the possessor's taste, falls outside the article altogether and is recovered from nobody.
The right of retention is the real leverage
The sentence that decides most disputes is the one saying only the possessor in good faith may retain the thing until he has been reimbursed therefor. Reimbursement without retention is a claim you have to chase; reimbursement with retention means you keep the property until the money arrives. This is why good faith is fought over so hard. A bad-faith possessor may be owed his necessary expenses and still have to vacate first, then collect afterwards from an owner who is in no hurry — a materially worse position built on the same peso figure.
For useful expenses, the owner chooses the measure
Useful expenses are refunded to the good-faith possessor with the same right of retention, but the amount is not his to set. The article gives the person who has defeated him in the possession 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 owner picks whichever is lower, and the difference can be large. A costly improvement that added little market value is paid at the value it added; a cheap intervention that transformed the property is paid at cost. Neither figure is presumed — both have to be proved.
What settles it in practice
Two things carry a claim under this article, and a possessor who has neither will struggle whatever the law says. The first is proof of what was spent and when: receipts, contractor billings, permits, photographs of the property before and after. The second is proof of what the spending did to the property's value, which usually means an appraisal addressed specifically to the improvement rather than to the property as a whole. Fix the date good faith ended as well, because expenses incurred after that date are governed by the harsher rule, not this one.
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 →