RIGHTS OF POSSESSOR IN GOOD FAITH (BONA FIDE) AND BAD FAITH (MALA FIDE)

Arts. 544-552, New Civil Code

FRUITS

POSSESSOR IN GOOD FAITH

• (art. 544) entitled to all fruits received BEFORE legal interruption (through service of judicial summons)

1. NATURAL or INDUSTRIAL - gathered or severed BEFORE such interruption
2. CIVIL - accrue daily; amount is proportionate to the time of possession

• (art. 545) WHEN GOOD FAITH CEASES: entitled to part of the expenses of cultivation and part of the net harvest, amount proportionate to the time of possession
• CHARGES: divided between the two (owner and possessor) on the same basis
• OWNER'S OPTION: let the possessor in good faith to finish the cultivation as an indemnity for his part of the cultivation and net harvest; if the latter refuses for whatever reason, he loses right to be indemnified

POSSESSOR IN BAD FAITH

• (art. 549) reimburse the fruits received and those which the legitimate possessor could have received

NECESSARY EXPENSES

• (art. 546) refunded whether possessor in bad faith or good faith
• ADDITIONAL RIGHTS OF POSSESSOR IN GOOD FAITH: right of rentention until reimbursement

USEFUL EXPENSES

• refunded only to possessor in good faith with right of retention until reimbursement
• SUBJECT TO OWNER'S OPTION: retain the improvement but must refund the amount of expenses or pay the increase in value which the thing may have acquired
• possessor in bad faith is not entitled to any right regarding useful expenses

USEFUL IMPROVEMENTS

• (art. 547) POSSESSOR IN GOOD FAITH: right of removal if done without damage to the principal
• SUBJECT TO OWNER'S OPTION: retain the improvement but must refund the amount of expenses or pay the increase in value which the thing may have acquired

LUXURIOUS/ORNAMENTAL EXPENSES

POSSESSOR IN GOOD FAITH

• (art. 548)

1. no right of reimbursement
2. but right of removal if done without damage to the principal

• SUBJECT TO OWNER'S OPTION: allow the possessor to remove or owner retains the improvement but must refund the amount spent

POSSESSOR IN BAD FAITH

• (art. 549)

1. no right of reimbursement
2. but right of removal if done without damage to the principal

• SUBJECT TO OWNER'S OPTION: allow the possessor to remove or owner retains the improvement but must pay the value of improvement at the time he enters into possession