37 ORTIZ V.

KAYANAN

Facts:
 The subject lot belonged to Martin Dolorico II, Bartolome Ortiz's ward who died. After his
death, it was Ortiz who continued in the possession of the property.
 In the Homestead Application for the lot, Martin Dolorico II named his uncle, Martin
Dolorico I as his heir and successor in interest.
 Martin Dolorico I executed an affidavit relinquishing his rights over the property in favor of
Quirino Comintan and Eleuterio Zamora, and requested the Director of Lands to cancel
the homestead application.
 Because of the affidavit, the Homestead Application was cancelled and Comintan and
Zamora filed their sales applications
 Oritz filed his protest on alleging that he should be given preference to purchase the lot
inasmuch as he is the actual occupant and has been in continuous possession of the
same since the death of Martin Dolorico I.
 In spite of Ortiz’s opposition, half of the property was sold at public auction wherein
Comintan was the only bidder
 Eventually, the Regional Land Officer dismissed Ortiz’s claim and gave due course to
Comintan's and Zamora’s sales applications.
 The Director of Lands denied Ortiz’s MR, and the Secretary of Agriculture and Natural
Resources affirmed.
 CFI: Confirmed the award of the lot to Comintan, and gave due course to Zamora’s sales
application of the other half. The lot to was to be auctioned at a public bidding, where
Ortiz would have the right to participate. Should Ortiz not be the winner of the bidding,
Comintan and Zamora would have to reimburse Ortiz P13,632 for the improvements he
has introduced on the property and expenses in the maintenance thereof, with Ortiz
having the right of retention over the property until after he has been fully paid therefor

ISSUE: Can Ortiz still retain all the fruits of the property for his own exclusive benefit? NO

Ortiz’s argument: So long as the P13,632 remains unpaid, he can appropriate all the fruits for his
exclusive benefit

SC:
 A possessor in good faith is entitled to the fruits. But possession in good faith ceases or
is legally interrupted from the moment that defects in the title are made known to the
possessor, either by extraneous evidence or by the filing of an action in court by the true
owner.
 However, even after good faith ceases, the possessor can still retain the property (Art.
546, CC) until he has been fully reimbursed for all the necessary and useful expenses.
o This right of retention is for the protection of the possessor in good faith. Its
object is to guarantee the reimbursement of the improvements and expenses.
o The principal characteristic of the right of retention is its accessory character.
o For the right to be useful, we must concede to the possessor-creditor the right to
secure reimbursement from the fruits of the property by utilizing its proceeds for
the payment of the interest and the principal of the debt.
o It is not a coercive measure, but a means of obtaining compensation for the debt.
o It is analogous to the contract of antichresis/ pledge, as the right to retain the
thing lasts only for the period necessary to enable the creditor to be reimbursed
from the fruits for the necessary and useful expenses. (Manresa)
 In the case at bar: Ortiz cannot appropriate the fruits. It was his duty to apply the fruits to
the payment of the interest and the principal of the debt, after deducting the necessary
expenses for his administration.