AGUIRRE V.

PHENG
G.R. L-20851
SEPTEMBER 3, 1966
John Patrick L. Paumig
11582456
Facts
June 23, 1954, Vicente Aldaba and Teresa Aldaba sold to Jesus Aguirre a circular
bolted steel tank for nine-hundred Pesos (P 900)
However, it appeared that Vicente and Teresa sold the same tank to Zosimo Gabriel
on December 2, 1954 for nine-hundred Pesos (P 900).
Gabriel then sold it to Leonora & Company on December 5, 1954 for two thousand
five hundred Pesos (P 2,500)
Leonora & Company improved the tank with some alterations on it. It was then sold
to National Shipyard & Steel Corporation (Nassco) for fourteen thousand five
hundred Pesos (P 14,500)
Lower courts rendered in favor of Aguirre. However, Nassco is only required to pay
Aguirre the sum of P 900, which is the amount he spent on the tank, and Leonora &
Co. the sum of P 11,299 which represents the improvements made by them.
Aguirre contested the decision stating that he is entitled for the full P14,500.
Issue

Whether or not Jesus Aguirre is entitled for the

full price of P14,500 being declared the
absolute owner of the steel tank in question.
Arguments
Jesus Aguirre
Contends that under Art. 440 of the
Civil Code, his ownership of the
property entitles him to everything
produced thereby, or is incorporated
or attached thereto, either naturally or
artificially.
Article 440. The ownership of property gives the
right by accession to everything which is
produced thereby, or which is incorporated or
attached thereto, either naturally or artificially.
In other words, since he has full
ownership of the tank, the
improvements made by Leonora and
Co shall be deemed to have been
owned by him therefore entitling him
for the full price of the tank.
Leonora and Co., and
NASSCO
To pay Aguirre nine-hundred Pesos
(P 900) is sufficient because this
was all the amount that he (Aguirre)
parted with when he purchased the
tank.
In the event that the improved tank
is delivered to Aguirre, he would be
tasked to reimburse Leonora and
Co. the sum of P11,299. Therefore,
paying him the full sum of P14,500
is counter-intuitive.
Ruling

Court held that as a general rule the absolute owner is entitled to all accession thereto.
However, the case is different where there is absence of bad faith or there is good faith
on the one who made the improvements or the accessions on the property.
Article 466. Whenever two movable things belonging to different owners are, without bad faith, united
in such a way that they form a single object, the owner of the principal thing acquires the accessory,
indemnifying the former owner thereof for its value.
To uphold Aguirres contention would unjustly enrich himself at the expense of another
which is contrary to law.
Therefore NASSCO cannot be compelled to pay more than P14,500 for the tank as well
as pay Aguirre to pay the full price.
Petition DENIED