Spouses Fuentes vs Roca

FACTS: On, Oct 11, 1982, Tarciano Roca bought a 358-square meter lot in Zambales from his
mother. Six years later in 1988, Tarciano offered to sell the lot to the petitioners Fuentes
spouses through the help of Atty. Plagata who would prepare the documents
and requirements to complete the sale. In the agreement between Tarciano and Fuentes
spouses there will be a Php 60,000 down payment and Php 140,000 will be paid upon the
removal of Tarciano of certain structures on the land and after the consent of the estranged wife
of Tarciano, Rosario, would be attained. Atty. Plagata thus went about to complete such tasks
and claimed that he went to Manila to get the signature of Rosario but notarized the document
at Zamboanga . The deed of sale was executed January 11, 1989. As time passed, Tarciano
and Rosario died while the Fuentes spouses and possession and control over the lot. Eight
years later in 1997, the children of Tarciano and Rosario filed a case to annul the sale and
reconvey the property on the ground that the sale was void since the consent of Rosario was
not attained and that Rosarios signature was a mere forgery. The Fuentes spouses claim that
the action has prescribed since an action to annul a sale on the ground of fraud is 4 years from
discovery.

The RTC ruled in favor of the Fuentes spouses ruling that there was no forgery, that the
testimony of Atty. Plagata who witnessed the signing of Rosario must be given weight, and that
the action has already prescribed.

On the other hand, the CA reversed the ruling of the CA stating that the action has not
prescribed since the applicable law is the 1950 Civil Code which provided that the sale of
Conjugal Property without the consent of the other spouse is voidable and the action must be
brought within 10 years. Given that the transaction was in 1989 and the action was brought in
1997 hence it was well within the prescriptive period.

ISSUES: 1. Whether or not Rosarios signature on the document of consent to her husband
Tarcianos sale of their conjugal land to the Fuentes spouses was forged;

2. Whether or not the Rocas action for the declaration of nullity of that sale to the spouses
already prescribed; and

3. Whether or not only Rosario, the wife whose consent was not had, could bring the action to
annul that sale.

RULING: 1. The SC ruled that there was forgery due to the difference in the signatures of
Rosario in the document giving consent and another document executed at the same time
period. The SC noted that the CA was correct in ruling that the heavy handwriting in the
document which stated consent was completely different from the sample signature. There was
no evidence provided to explain why there was such difference in the handwriting.

2. Although Tarciano and Rosario was married during the 1950 civil code, the sale was done in
1989, after the effectivity of the Family Code. The Family Code applies to Conjugal Partnerships
already established at the enactment of the Family Code. The sale of conjugal property done by
Tarciano without the consent of Rosario is completely void under Art 124 of the family code.
With that, it is a given fact that assailing a void contract never prescribes. On the argument that
the action has already prescribed based on the discovery of the fraud, that prescriptive period
applied to the Fuentes spouses since it was them who should have assailed such contract due
to the fraud but they failed to do so. On the other hand, the action to assail a sale based on no
consent given by the other spouse does not prescribe since it is a void contract.

3. It is argued by the Spouses Fuentes that it is only the spouse, Rosario, who can file such a
case to assail the validity of the sale but given that Rosario was already dead no one could
bring the action anymore. The SC ruled that such position is wrong since as stated above, that
sale was void from the beginning. Consequently, the land remained the property of Tarciano
and Rosario despite that sale. When the two died, they passed on the ownership of the property
to their heirs, namely, the Rocas. As lawful owners, the Rocas had the right, under Article 429 of
the Civil Code, to exclude any person from its enjoyment and disposal.
COMMUNITIES CAGAYAN, INC.,
vs.
SPOUSES ARSENIO (Deceased) and ANGELES NANOL AND ANYBODY CLAIMING
RIGHTS UNDER THEM
Facts:
Sometime in 1994, respondent-spouses Arsenio and Angeles Nanol entered into a
Contract to Sell with petitioner Communities Cagayan, Inc., (CCI) whereby the latter agreed
to sell to respondent-spouses a house and Lots 17 and 19 located at Block 16, Camella Homes
Subdivision, Cagayan de Oro City, for the price of P368,000.00 (P368T). They obtained a loan
from Capitol Development Bank (CDB), using the property as collateral. To facilitate the loan,
a simulated sale over the property was executed by petitioner in favor of respondent-
spouses. Accordingly, titles (TCT Nos. 105202 and 105203) were transferred in the names of
respondent-spouses and submitted to CDB for loan processing. The bank collapsed and
closed before it could release the loan.
On November 30, 1997, respondent-spouses entered into another Contract to Sell with
petitioner over the same property for the same price. This time, they availed of petitioners
in-house financing thus, undertaking to pay the loan over four years, from 1997 to 2001.
Respondent Arsenio demolished the original house and constructed a three-
story house allegedly valued at P3.5 million, more or less. (Respondent Arsenio died,
leaving his wife, herein respondent Angeles, to pay for the monthly amortizations.)
On September 10, 2003, petitioner sent respondent-spouses a notarized
Notice of Delinquency and Cancellation of Contract to Sell due to the latters failure
to pay the monthly amortizations. Petitioner filed before the Municipal Trial Court in
Cities, an action for unlawful detainer against respondent-spouses.
In her Answer, respondent Angeles averred that the Deed of Absolute Sale is
valid.
Issues
1) Whether petitioner is obliged to refund to respondent-spouses all the
monthly installments paid; and
2) Whether petitioner is obliged to reimburse respondent-spouses the value of
the new house minus the cost of the original house.
Ruling
The petition is partly meritorious.
Respondent-spouses are entitled to the cash surrender value of the
payments
on the property equivalent to 50% of the total payments made under the Maceda
Law.
Respondent-spouses are entitled to reimbursement of the improvements
made on the property.
In view of the special circumstances obtaining in this case, we are constrained
to rely on the presumption of good faith on the part of the respondent-spouses which
the petitioner failed to rebut. Thus, respondent-spouses being presumed builders in
good faith, we now rule on the applicability of Article 448 of the Civil Code. Article
448 on builders in good faith does not apply where there is a contractual relation
between the parties, such as in the instant case. We went over the records of this
case and we note that the parties failed to attach a copy of the Contract to Sell. As
such, we are constrained to apply Article 448 of the Civil Code, which provides viz:
ART. 448. The owner of the land on which anything has been built, sown or
planted in good faith, shall have the right to appropriate as his own the
works, sowing or planting, after payment of the indemnity provided for in
Articles 546 and 548, or to oblige the one who built or planted to pay the
price of the land, and the one who sowed, the proper rent. However, the
builder or planter cannot be obliged to buy the land if its value is
considerably more than that of the building or trees. In such case, he shall
pay reasonable rent, if the owner of the land does not choose to appropriate
the building or trees after proper indemnity. The parties shall agree upon
the terms of the lease and in case of disagreement, the court shall fix the
terms thereof.
The rule that the choice under Article 448 of the Civil Code belongs to the
owner of the land is in accord with the principle of accession, i.e., that the accessory
follows the principal and not the other way around. Even as the option lies with the
landowner, the grant to him, nevertheless, is preclusive. The landowner cannot refuse
to exercise either option and compel instead the owner of the building to remove it
from the land. The raison detre for this provision has been enunciated thus: Where
the builder, planter or sower has acted in good faith, a conflict of rights arises
between the owners, and it becomes necessary to protect the owner of the
improvements without causing injustice to the owner of the land. In view of the
impracticability of creating a state of forced co-ownership, the law has provided a
just solution by giving the owner of the land the option to acquire the improvements
after payment of the proper indemnity, or to oblige the builder or planter to pay for
the land and the sower the proper rent. He cannot refuse to exercise either option.
It is the owner of the land who is authorized to exercise the option, because his right
is older, and because, by the principle of accession, he is entitled to the ownership of
the accessory thing.
In conformity with the foregoing pronouncement, we hold that petitioner, as
landowner, has two options. It may appropriate the new house by reimbursing respondent
Angeles the current market value thereof minus the cost of the old house. Under this option,
respondent Angeles would have "a right of retention which negates the obligation to pay
rent." In the alternative, petitioner may sell the lots to respondent Angeles at a price
equivalent to the current fair value thereof. However, if the value of the lots is considerably
more than the value of the improvement, respondent Angeles cannot be compelled to
purchase the lots. She can only be obliged to pay petitioner reasonable rent.
Angeles v. Pascual 658 SCRA 23 G.R. No. 157150

Under appeal is the decision promulgated on January 31, involved a dispute about the true location of
the respective lots of the parties, with the respondents (Pascual) claiming that the petitioner (Angeles)
had encroached on their lot but the latter denying the encroachment.

Facts:

Neighbors Regidor Pascual and Pedro Angeles were registered owners of adjacent parcels of land
located in Cabanatuan City. Each of them built a house on his respective lot, believing all the while that
his respective lot was properly delineated. It was not until Metropolitan Bank and Trust Company
(Metrobank), as the highest bidder in the foreclosure sale of an adjacent, caused the relocation survey
of foreclosed lot that the geodetic engineer discovered that Pascuals house had encroached on said
foreclosed lot. As a consequence, Metrobank successfully ejected Pascual. In turn, Pascual caused the
relocation survey of his own Lot 4 and discovered that Angeles house in turn encroached on his lot. Of i
the 318 square meters comprising Lot 4, Angeles occupied 252 square meters, leaving Pascual with only
about 66 square meters. Pascual demanded rentals for the use of the encroached area from Angeles, or
the removal of Angeles house. Angeles refused the demand. Accordingly, Pascual sued Angeles for
recovery of possession and damages in the Regional Trial Court (RTC) in Cabanatuan City.

In the course of the trial, Pascual presented Clarito Fajardo, the geodetic engineer who had conducted
the relocation survey and had made the relocation plan of Pascuals lot, Fajardo testified that Angeles
house was erected on said lot. On the other hand, Angeles presented Juan Fernandez, the geodetic
engineer who had prepared the sketch plan relied upon by Angeles to support his claim that there had
been no encroachment. However, Fernandez explained that he had performed only a table work, that
is, he did not actually go to the site but based the sketch plan on the descriptions and bearings
appearing on the TCTs of the lots in question and recommended the conduct of a relocation survey. The
RTC ruled that the ownership of the lots is not the issue, rather what was disputed between them was
the location of their respective lots; that Pascual proved Angeles encroachment on his lot by
preponderant evidence; and that Pascual was entitled to relief. Thus the RTC ordered the Angeles or
persons claiming right through him to cause the removal of his house insofar as the same occupies

the portion of Pascuals lot, of an area of 252 square meters . Angeles then appealed the case to the CA.
On January 31, 2002, the CA affirmed the RTC, and held that as between the findings of the

ii geodetic engineer (Fajardo) who had actually gone to the site and those of the other (Fernandez) who
had based his findings on the TCTs of the owners of the three lots; those of the former should prevail.
However, the modified the ruling of the RTC stating that Angels is a builder in good faith as provided for
in Article 448 of the Civil Code. Thus the CA ordered Angeles to vacate, appropriate, or pay rent for the
occupied portion of Pascuals property. Moreover, Angeles may opt to sell his property instead. Angeles
sought for reconsideration but CA denied the motion. Hence this case of certiorari for certiorari under
rule 45.

Issues: 1. Whether or not the CA was correct in agreeing with the RTC with respect to the testimony of
Fajardo over the testimony of Fernandez. 2. Whether or not the decision of the CA with respect to the
options given was contrary to its finding of good faith.iii
Held: With regards the first issue, the Supreme Court that the credence given by the RTC to the
testimony and relocation plan of Fajardo was conclusive upon this Court especially by virtue of the
affirmance by the CA of the RTC. Resultantly, the fact of Angeles iv encroachment on Pascuals Lot was
proved by preponderant evidence . Thus it is unassailable that Angeles house straddled the lot of
Pascual. On the second issue, the Supreme Court affirmed the findings of the RTC and the CA that Angels
is a builder in good faith which can easily be drawn from the fact that Angeles insisted that he built his
house entirely on his own lot. Good faith consists in the belief of the builder that the land he is building
on is his and in his ignorance of a defect or flaw in his title. Furthermore, the Court affirmed the
application of the CA of the provisions of Article 448 of the Civil Code which spells out the rights and
obligations of the owner of the land as well as of the builder. Consequently, the land being the principal
and the building the accessory, preference is given to Pascual as the owner of the land to make the
choice as between appropriating the building or obliging Angeles as the builder to pay the value of the
land. Contrary to the insistence of Angeles, therefore, no inconsistency exists between the finding of
good faith in his favor and the grant of the reliefs set forth in Article 448 of the Civil Code. The Petition is
Dismissed. Information on this sentence is trivial but can be cited in recitation for descriptive purposes.
Ibid. iii Simply put, Whether or not Angeles is a builder in good faith. iv Fajardo went on site to survey
the property while Fernandez simply looked at the TCT and sketch work of the property.

G.R. NO. 170923 JANUARY 20, 2009SULO SA NAYON, INC. VS

NAYONG PILIPINOFOUNDATION

FACTS:In 1975, respondent leased a portion of the

N a y o n g P i l i p i n o C o m p l e x , t o p e t i t i o n e r S u l o s a Nayon, Inc. for the
construction and operation of a hotel building, to be known as the Philippine Village
Hotel. The lease was for an initial period of 21 years,or until May 1996. It is renewable for
a period of 25years under the same terms and conditions upon due
n o t i c e i n w r i t i n g t o r e s p o n d e n t o f t h e i n t e n t i o n t o renew.In 1995, petitioners sent
respondent a letter n o t i f y i n g t h e l a t t e r o f t h e i r i n t e n t i o n t o r e n e w t h e contract
for another. July of the same year, parties agreed to the renewal of the contract for
another 25y e a r s , o r u n t i l 2 0 2 1 . U n d e r t h e n e w a g r e e m e n t , petitioner PVHI was
bound to pay the monthly
rentalsB e g i n n i n g J a n u a r y 2 0 0 1 , p e t i t i o n e r s d e f a u l t e d i n t h e p a y m e n
t o f t h e i r m o n t h l y r e n t a l . Respondent repeatedly demanded petitioners to paythe arrears
and vacate the premises. M e T C r e n d e r e d i t s d e c i s i o n i n f a v o r o f respondent
RTC which modified the ruling of the MeTC.C A w h i c h h e l d t h a t t h e R T C e r r o n e o u s l y
applied the rules on accession, as found in Articles448 and 546 of the Civil Code
ISSUE:WON Sulo sa Nayon as builders have actedin good faith in order for Art. 448 in
relation to Art.546 of the Civil Code may apply with respect to their rights over improvements.
HELD:Article 448 is manifestly intended to applyonly to a case where one builds,
plants, or sows onland in which he believes himself to have a claim of title, and not
to lands where the only interest of thebuilder, planter or sower is that of a holder, such as
atenant.I n t h e c a s e a t b a r , p e t i t i o n e r s h a v e n o adverse claim or title to the
land. In fact, as lessees,they recognize that the respondent is the owner of the land.
What petitioners insist is that because of theimprovements, which are
of substantial value, that they have introduced on the leased premises with thepermission of
respondent, they should be considered b u i l d e r s i n g o o d f a i t h w h o h a v e t h e r i g h t t o
r e t a i n possession of the property until reimbursement
byrespondent.W e a f f i r m t h e r u l i n g o f t h e C A t h a t introduction of
valuable improvements on the leasedpremises does not give the petitioners the right
of retention and reimbursement which rightfully belongsto a builder in good faith. Otherwise,
such a situationwould allow the lessee to easily "improve" the lessor out of its property. We
reiterate the doctrine that alessee is neither a builder in good faith nor in bad faith
that would call for the application of Articles 448and 546 of the Civil Code. His rights are
governed byArticle 1678 of the Civil Code.