Pedro P. Pecson v. Court of Appeals

Summary

This case involves property rights when a landowner who built improvements loses the land through tax delinquency. Pedro Pecson built an apartment building on his lot but lost the land through public auction for unpaid taxes. The buyers, spouses Nuguid, sought possession of both land and building. The Supreme Court clarified that under Articles 448 and 546 of the Civil Code, a builder in good faith is entitled to indemnity based on current market value, not original construction cost, and may retain the improvements until paid. The Court emphasized preventing unjust enrichment and ensuring fair compensation reflecting present economic realities. The case was remanded to determine the apartment building's current market value for proper indemnification.