G.R. No.
L-11084 April 29, 1961 On September 17, 1954, the trial court dismissed the complaint,
ALEJANDRO QUEMUEL and RUPERTA SOLIS, plaintiffs-
appellants,
vs.
ANGEL S. OLAES and JULIANA PRUDENTE, defendants-
appellees.
Baldomero S. Luque for plaintiffs-appellants.
Jose P. Santillan for defendants-appellees.
PAREDES, J.:
Angel S. Olaes and his wife, Juliana Prudente, defendants-appellees
herein, were plaintiffs in another case (No 5442 of the CFI of Cavite),
wherein Alejandro Quemuel and his wife Ruperta Solis, plaintiffs-
appellants herein were defendants. In that case No. 5442, the Olaes
spouses registered owners of lot 1095 of the San Francisco de
Malabon Estate, located in Rosario, Cavite, sought the recover of the
possession of the said lot and rentals therefor, from the Quemuel
spouses, who in their verified answer admitted plaintiffs' ownership,
but contended that their occupation was gratuitous. On March 16,
1954, the trial court ordered Quemuel and his wife to return the
possession of lot 1095 to the Olaes spouses and to pay the latter
P20.00 a month from January, 1954, until they shall have vacated
the premises. Quemuel and his wife did not appeal from said
decision which became final on April 22, 1954. Thereafter, the Olaes
spouses sought the execution of the decision and to forestall
ejectment, the Quemuel spouses, filed on July 1, 1954, the present
complaint, docketed as Civil Case No. 5518, CFI of Cavite.
In the present complaint, the Quemuel spouses seek to reduce the
monthly rental of P20.00 fixed in Civil Case No. 5442, and to compel
the Olaes spouses to sell to them (Quemuels) the portion of the lot
1095 where their house is erected. Respondents, the Olaes
spouses, filed a motion to dismiss dated July 9, 1954, alleging lack of
cause of action, res adjudicata; prescription, and the cause of action,
if any, is barred by plaintiffs' failure to set it up as a counter-claim in
civil case No. 5442.
without pronouncement as to costs.
An appeal was taken by plaintiffs to the Court of Appeals (Case No.
CA-G.R. No. 14837-R) which, by the agreement of the parties
certified the case to this Court. The ex parte petition filed by the
plaintiffs-appellants in this Court on August 9, 1956, asking that a
writ of prohibition and injunction be issued to the Provincial Sheriff of
Cavite and the defendants-appellees, enjoining them from
demolishing the house of plaintiffs-appellants until there is a final
decision in said case No. 14837, by the Supreme Court, was denied
on August 14, 1956 by the latter court.
The lone assignment alleges that the trial court erred in dismissing
the complaint without trial on the merits and in not granting the reliefs
prayed for by the plaintiffs-appellants. Appellants stated in their brief
that if there will be trial on the merits, they would be entitled to a
decision in their favor, because they will establish by competent
evidence the allegations in their complaint. And on the claim that
they were builders in good faith, they based the right to buy the lot on
which their house is built, upon the decision of Belen Uy Tayao v.
Rosario Yuseco, et al., G.R. No. T,8139, Oct. 24, 1955. It should be
recalled at the outstart, that the trial court ordered the dismissal of
the complaint, which must have been granted in all or any of the
grounds therein alleged, to wit:
I. The Complaint states no cause of action. —
The first cause of action on the present complaint al alleges that in
Civil Case No. 5442, the trial court rendered the decision of March
16, 1954, ordering the latter to vacate lot No. 1095 belonging to
Olaes and his wife and to pay them a monthly rental of P20.00 from
January, 1954 until they shall have vacated the premises; that
plaintiff believe that the portion they are occupying belonged to them;
that they occupy only about one-half of the lot; that considering the
purchase price of the land, its assessed value and the interest the
price would have earned, the rental should not be more than 7-½%
or P5.60 monthly. Plaintiffs prayed that the rental be reduced to
P5.60 a month.
Assuming the truth of the above allegations, the same do not
constitute a cause of action. A cause of action presupposes a right of
the plaintiff and a violation of such right by the defendant. According
to the complaint itself, the rental of P20.00 monthly and the order to
vacate, were provided in a prior judgment (Civil Case No. 5442),
which is final and its validity is not assailed. There being no law that
fixes the rental of the same land at 7½ of the allowed market value,
the plaintiffs have no right thereto or aright which could be violated.
The defendants are not compelling the plaintiffs to rent the property
but wanted them to vacate the premises (Civil Case No. 5442). If the
rental determined by the trial court were excessive, the plaintiffs are
free to vacate the property. For plaintiffs to insist on possessing the
property and fixing the rentals themselves, would have no legal
sanction at all.
In the second cause of action of the present complaint, the plaintiffs
allege: That they actually occupy about 384 square meters or one-
half of lot 1095; of the said area they thought they own 256 square
meters by inheritance from Romualdo Solis, father of plaintiff,
Ruperta Solis, who became the owner thereof pursuant to a verbal
extrajudicial partition made in 1924; Agapita Solis who sold the entire
lot 1095 to defendants, is a sister of Romualdo Solis, and there was
an error in the inclusion of the 256 square meters in the Torrens Title
and the sale; they acquired from Valentin Solis, brother of both
Romualdo and Agapita, a part of the portion occupied by plaintiff's
house and warehouse; their house has been there for almost 34
years and is worth P4,000; the defendants are rich, have a house
and a lot of their own, and will not suffer any material or sentimental
damage if they sell to the plaintiffs one-half of lot No. 1095; plaintiff
offered to pay P960 for the portion they are occupying or P1,920.00
for the whole lot.
On the assumption that the allegations of the second cause of action
are true, what would be the rights of the parties? The plaintiffs claim
that their second cause of action is based on Article 448 in
connection with Art. 546, of the new Civil Code. A cursory reading of
these provisions, however, will show that they are not applicable to
plaintiffs' case. Under Article 448, the right to appropriate the works
or improvements or "to oblige the one who built or planted to pay the
price of the land belongs to the owner of the land. The only right
given to the builder in good faith is the right to reimbursement for the
improvements; the builder, cannot compel the owner of the land to
sell such land to the former. This is assuming that the plaintiffs are
builders in good faith. But the plaintiffs are not builders in good faith.
From the pleadings and the documentary evidence submitted, it is
indisputable that the land in question originally belonged to the
government as part of the Friar Lands Estate and the title thereto
was in the name of the government, until it was purchased by
Agapita Solis who applied, thru the Bureau of Lands, to purchase the
land by installments. The corresponding Sale Certificate No. 531,
effective July 1, 1909 Exhibit 2) was executed. In defendants'
complaint (as plaintiffs in Civil Case No. 5442), they alleged that they
are the owners of lot 109'a and that defendants (plaintiffs herein),
"have been occupying southeastern half portion thereof, without any
right thereto, except the tolerance of plaintiffs" (defendants herein),
which were admitted expressly and under oath, in the answer of
plaintiffs herein. It would, therefore, appear that plaintiffs herein were
not Unaware of the flaw in their title, if any, and that their true relation
with the herein defendants was that of tenant and landlord, and that
their rights are governed by Article 1573 in relation to article 487 of
the old Civil Code, which reads as follows: —
Art. 1573. A lessee shall have with respect to useful a
voluntary improvements, the same right which are granted
the usufructuaries.
Art. 487. The usufructuary may make on the property in
usufruct any improvements, useful or recreative, which may
deem proper, provided he does not change its form or
substance, but he shall have no right to be indemnified
thereof. He may, however, remove such improvements,
should it possible to do so without injury to the property.
From the above provisions, it can clearly be inferred that plaintiffs
can not compel the defendants to pay for the improvements the
former made on the property or to sell the latter's land. Plaintiffs' only
right, is to remove improvements, if it is possible to do so, without
damage to the land.
It should be noted that article 448 of the new Civil Code, (equivalent
to Art. 361 of the old Civil Code), relied upon by plaintiffs, is intended
to apply only to a case where one builds, or sows, or plants on land
in which believes himself to have a claim of title and not to land
wherein one's interest is that of tenant, under a rental co tract, which
is the present case (Alburo v. Villanueva, Phil. 277). The tenant
cannot be said to be a builder in good faith as he has no pretension
to be owner (Rivera v. Trinidad, 48 Phil. 396; see also 3 Manresa 4th
Ed. pp. 215-216).
The trial court, therefore, did not commit any error in dismissing the
two causes of action.
II. The first cause of action, if any, is barred by prior judgment.
As plaintiffs in Civil Case No. 5442, the defendants al alleged in their
complaint that the reasonable rental value of the premises in
question was P20.00 a month (par. 5). In said case No. 5442, the
matter of the rental was in issue and the same was considered and
decided by the trial court, which ordered the defendants therein "to
pay reasonable compensation of P20.00 a month beginning with
January, 1954, until they shall have left the premises". In the instant
case, the parties are the identical parties in Civil Case No. 5442; the
same lot 1095 is the subject matter of both cases; the same issue,
namely, the amount of the rental is involved. Even assuming that
appellants have a cause of action, the doctrine of res
judicata already operates against them.
III. The second cause of action, if any, is barred by the statute of
limitations.
As shown by the documentary evidence submitted with the
defendant's motion to dismiss, lot No. 1095 was purchased by
Agapita Solis from the Government on July 1, 1909. After full
payment of the purchase price, T.C.T. No. 10771 covering said lot
was issued to said Agapita Solis on June 8, 1933,(Exhibits 1 and 2).
Assuming that plaintiffs or their alleged predecessor-in-interest, had
a cause of action for claiming the ownership of potion of said lot,
such cause of action accrued at the latest, on June 8, 1933. The
plaintiffs or their predecessors had ten (10) years from said date,
within which to file the corresponding action. They, however, filed the
instant complaint only on July 1, 1954, or more than 21 years, after
the accrual of the cause of action.
IV. The cause of action, if any, is barred by plaintiffs' failure to set it
up as a counterclaim in Civil Case No. 5442.
Whether the cause of action is for recovery of ownership or for an
alleged right to purchase the property, or for reimbursement for some
improvements, the herein plaintiffs as defendants in Civil Case No.
5442, should have set it up as a counterclaim in said case, because
same was necessarily connected with, or arose out of the
transactions involved in said case No. 5442(Sec. 6, Rule 10, Rules
of Court).
It is alleged that plaintiffs-appellants' complaint should not have been
dismissed without trial on the merits, because in the case of De
Jesus, et al. v. Belarmino, et al. G.R. No. L-6665, June 30, 1954; Off.
Gaz. July 1954, p. 3064, it was held that "where the complaint was
dismissed not because of any evidence presented by the parties, or
merits, but merely on a motion as a result of a trial on the to dismiss
filed by the defendants, the sufficiency of the motion should be
tested on the strength of the allegation of facts contained in the
complaint and no other", which has been interpreted to apply to
cases where the motion to dismiss is based solely on the ground of
lack of cause of action. Considering the fact that (1) In the case a
bar, documentary evidence and the records of the Civil Case No.
5442 were presented and considered by the trial court; and (2) in the
De Jesus case, the only ground for dismissal was the lack of cause
of action, while in the present case, aside from said ground, plaintiffs
allegation other grounds, the said ruling finds no application.
IN VIEW HEREOF, we hereby affirm the order appealed from, with
costs against the plaintiffs-appellants
G.R. No. L-43456 May 6, 1935
CATALINO BATACLAN, petitioner,
vs.
THE COURT OF FIRST INSTANCE OF CAVITE and VICENTE
SANTO DOMINGO BERNARDO, respondents.
Nicolas Santiago for petitioner.
Pedro de Leon for respondent Santo Domingo Bernardo.
No appearance for the other respondent.
VICKERS, J.:
This is a petition for a writ of certiorari to annul an order of the Court
of First Instance of Cavite issued on April 24, 1934 for the sale at
public auction of the land which was the subject of civil case No.
2428 of said court between the respondent, Vicente Santo Domingo
Bernardo, as plaintiff, and the petitioner herein, Catalino Bataclan, as
defendant.
The dispositive part of the decision in that case is as follows:
Por las consideraciones expuestas, se declara al
demandante Vicente Santo Domingo Bernardo dueño y con
derecho a la posesion del terreno que se describe en la
demanda, y al demandado Catalino Bataclan con derecho a
que el demandante le pague la suma de P1,642 por gastos
utiles hechos de buena fe en el terreno, y por el cerco y
ponos de coco y abca existentes en el mismo, y con
derecho, ademas, a retener la posesion del terreno hasta
que se le pague dicha cantidad. El demandante puede
optar, en el plazo de treinta dias, a partir de la fecha en que
fuere notificado de la presente, por pagar esa suma la
demandado, haciendo asi suyos el cerco y todas las
plantaciones existentes en el terreno, u obligar al
demandado a pagarle el precio del terreno, a eazon de
trescientos pesos la hectarea. En el caso de que el
demandante optara (por) que el demandado le pagara el
precio del terreno, el demandado efectuara el pago en el
plazo convenido por las partes o que sera fijado por el
Juzgado. Sin costas.
On appeal to this court the value of the land containing 90 hectares
was reduced from P300 to P200 a hectare, and the value of the
improvements made by the defendant thereon was increased from
P1,642 to P2,212. The decision of the lower court was affrimed in all
other respects. (G.R. No. 37319.)1
The plaintiff in that case, Vicente Santo Domingo Bernardo, elected
to compel the defendant, Catalino Bataclan, to pay him the value of
the land, P18,000. Petitioner alleges that he filed a motion on
January 12, 1934 praying that he be granted a period of fifteen years
in which to pay said sum of P18,000; that said motion was never
granted or denied, but on April 24, 1934 the court issued an order
directing that the land be sold at public auction and that out of the
proceeds of the sale the sum of P18,000 be paid to the plaintiff in
addition to the legal expenses of the sale, and that the remainder to
the amount of P2,212 be paid to the defendant.
It appears, however, from the order of Judge Leopoldo Rovira of
January 24, 1934 that the plaintiff informed the court that he elected
to compel the defendant to pay him the value of the land, and that
the defendant appeared in court and stated that he did not have any
money; that the court then granted the plaintiff thirty days in which to
pay the defendant the sum of P2,212, and ordered that if said
payment was not made the land should be sold at public auction of
the payment of said sum to the defendant, the balance after
deducting the expenses of the sale to be delivered to the plaintiff.
On March 16, 1934 Judge Rovira modified his order of January 24th,
and ordered that from the proceeds of the sale the plaintiff should be
paid for the land at the rate of P200 a hectare, and that the balance,
if any, should be delivered to the defendant.
On April 24, 1934 Judge Sixto de la Costa issued an order for the
sale of the land at public auction in order that the plaintiff might be
paid from the proceeds the sum of P18,000 and the legal expenses
of the sale, and that from the balance, if any, P2,212 should be paid
to the defendant. This is the order complained of.
The decision of the lower court was based on article 361 of the Civil
Code, which reads as follows:
Any owner of land on which anything has been built, sown,
or planted, in good faith, shall be entitled to appropriate the
thing so built, sown, or planted, upon paying the
compensation mentioned in articles 453 and 454, or to
compel the person who has built or planted to pay him the
value of the land or, to require the person who sowed
thereon to pay the proper rent therefore.
The contention of the petitioner is that in issuing the order of April 24,
1934 the court exceeded its jurisdiction because it constituted an
amendment to a final judgment of said court, which had been
affirmed by this court.
It is true that in the decision in question it was provided that in case
the plaintiff elected to compel the defendant to pay him the value of
the land, the payment should be made within the period agreed upon
by the parties or that it would be fixed by the court; but, according to
the petitioner, he asked for a period of fifteen years in which to pay
the owner of the land the value thereof; and when he appeared in
court he informed the court that he had no money with which to pay
for the land. Under those circumstances, it would have been futile for
the court to grant the defendant a reasonable period of thirty or sixty
days in which to pay the plaintiff the sum of P18,000, and if there
was any irregularity in the court's ordering the sale of the property at
public auction under the conditions stated in the orders of March 16,
1934 and April 24, 1934, it was not prejudicial but favorable to the
petitioner, because his only right was to purchase the land for the
sum of P18,000.
Furthermore the petitioner could have appealed from the order in
question, and his right to appeal was an adequate remedy.
For the foregoing reasons, the petition is denied, with the costs
against the petitioner.
G.R. No. L-8139 October 24, 1955
BELEN UY TAYAG and JESUS B. TAYAG, petitioners,
vs.
ROSARIO YUSECO, JOAQUIN C. YUSECO and THE COURT OF
APPEALS, respondents.
Pelaez and Jalandoni for petitioners.
Yuseco, Abdon, Yuseco and Narvasa for respondents.
MONTEMAYOR, J.:
This is an appeal by certiorari by petitioners Belen Uy Tayag and her
husband Jesus B. Tayag from the decision of the Court of Appeals of
April 23, 1954, affirming the decision of the Court of First Instance of
Manila. The facts in this case as may be gathered from the records
and as found by the Court of Appeals may be briefly stated as
follows. In and prior to the year 1930 Atty. Joaquin C. Yuseco had
been rendering professional services to Maria Lim, owner of lots 11-
A and 11-B, block 2251 of the Government Subdivision known as
Hacienda de San Lazaro covered by transfer certificates of title Nos.
36400 and 36401 of the Register of Deeds of Manila. To show her
appreciation of the service rendered to her Maria offered the two lots
to Atty. Yuseco and his wife Rosario Yuseco for them to build on,
and accepting the offer, the Yusecos built a house and an annex for
servants quarters on the two lots which improvements at present
may be reasonably valued at P50,000. Although Atty. Yuseco claims
that the two lots were donated to him, he could exhibit no evidence
of said donation and the certificates of title already mentioned
remained in the name of Maria. There is reason to believe that at
least during her lifetime and while she remained owner of the two
lots, it was her desire to have the Yusecos occupy the land free. But
to go through the formalities and to legalize the possession of the
two lots, after the house and the annex were built, there was
executed a lease contract to the effect that the lease was to run for a
period of five years, with a rental of P120 a year; that the owner of
the lots was to pay all land taxes, and that failure to pay the rent
when due would be sufficient cause for the recission of the contract.
This agreement was noted on the certificates of title.
On November 29, 1945, a few days before her death, Maria sold the
two lots to her daughter Belen Uy married to Jesus B. Tayag for and
in consideration of the sum of P4,000. The new owners in 1946
asked the Yusecos to remove their houses from the land because
Belen and her husband planned to build their own house on the two
lots, or else pay a monthly rent of P120. Because of the failure of the
Yusecos to comply with the demand, Belen assisted by her husband
filed an action of ejectment in the Municipal Court of Manila which
later rendered judgment for the plaintiffs and against the defendants
"for the restitution of the premises described in the complaint and for
the recovery of a monthly rental of P100 from November 30, 1945,
up to the date of restitution, and for cost." On appeal by the
defendants to the Court of First Instance of Manila, the latter
rendered judgment, the dispositive part of which reads as follows:
Wherefore judgment is hereby rendered declaring the
plaintiff, Belen Uy Tayag, to be entitled to the possession of
the two parcels of land described in the complaint upon
payment by her to the defendants of the sum of P50,000,
which is the value of the two houses they had built thereon;
but in the event said plaintiff shall not be in a position to pay
said amount within 90 days from the date this decision shall
become final, the defendants are hereby declared to be
entitled to purchase the two parcels of land in question for
the sum P10,000, within 90 days from the date the
defendants shall have failed to buy the house. In the
meantime, the two parcels of land without any obligation
thereof. No pronouncement is hereby made as to costs.
On appeal by the plaintiffs to the Court of Appeals said court found
that the Yusecos were builders in good faith under article 448 of the
new Civil Code; and that as such builders in good faith, they cannot
be required to remove their house and the annex unless they were
paid the value thereof. The Court of Appeals further approved
P50,000 and P10,000 as the reasonable values of the house and the
two lots, respectively, as found by the Court of First Instance and
that the Yusecos as builders in good faith will begin to pay rent only
when the plaintiffs as owners of the land are unable or choose not to
exercise their right to purchase the land, but in the present case,
neither partly has expressed his willingness or inability to exercise
the right corresponding to him under article 448 of the new Civil
Code, hence the payment of rent is not in order. The Court of
Appeals affirmed the decision of the Court of First Instance.
Appellants Belen and her husband Jesus Tayag filed the present
petition for review of the decision of the Court of Appeals, and in their
brief assign the following errors:
I
The Court of Appeals committed a grave error of law when it
decided an issue foreign to that raised in an ejectment case,
for in so doing it acted without jurisdiction over the subject
matter.
II
Granting, arguendo, that there was jurisdiction to determine
an issue other than that raised in an ejectment case, the
Court of Appeals committed a grave error of law in holding
that the rights of Belen Uy Tayag and Jesus B. Tayag,
owners of the land, and those of Rosario Yuseco and
Joaquin C. Yuseco, owner of the building, should be
resolved in accordance with the provisions of Article 448
(formerly Article 361) of the Civil Code of the Philippines.
III
 Granting, further, for the sake of argument only, that Article
448 of the Civil Code of the Philippines should govern the
rights of the parties herein, the Court of Appeals gravely
abused its discretion and committed a serious error of law
when it affirmed the judgment of the trial court which, in
effect, compels the owner of the land to sell it to the owner of
the building.
IV
The Court of Appeals gravely erred in holding that the
petitioners Belen Uy Tayag and Jesus B. Tayag shall be
entitled to the possession of the land described in the
complaint upon payment of the sum of P50,000 but in the
event that they are not in a position to pay said amount
within 90 days from the date the decision shall have become
final, the respondents Rosario Yuseco and Joaquin C.
Yuseco shall be entitled to purchase the land in question for
the sum of P10,000.
Petitioners claim that the Court of First Instance and the Court of
Appeals lacked jurisdiction to decide the case as they did for the
reason that the only issue involved in an ejectment case is actual
possession and that under Rule 72, section 6, the only judgment that
may be rendered in such a case is for the defendant to recover costs
in the event that the court find that the complaint is not true, or if it
finds the complaint to be true to render judgment for the plaintiff for
the restitution of the premises, for the sum justly due as arrears of
rent or as reasonable compensation for the use and occupation of
the premises, and for costs. But according to petitioners, in spite of
this legal provision both courts went further and applied the provision
of article 448 of the new Civil Code.
In theory, and speaking of ordinary ejectment cases, petitioners may
be right; that is to say, if the lessee or occupant has not built
anything on the premises, payment of rent would be a valid and
satisfactory solution of the problem; but where the occupant has built
on the land, especially where said building is substantial and
valuable, the courts even in ejectment cases are bound to take
cognizance of said fact and when they find that the construction or
planting had been effected in good faith, instead of dismissing the
complaint and suggesting to the parties to observe and follow the
provisions of article 361 or article 448 of the old and the new Civil
Code of the Philippines, respectively, and if they cannot agree, to file
a new action, not only to enforce or defend the respective rights of
the parties but to assess the value of the land and of the
improvement as well, the courts in order to avoid multiplicity of
actions and to administer practical and speedy justice may, as was
done in this case, apply the provisions of the Civil Code relative to
builders specially since there is no question as to the ownership of
the land as shown by the certificates of title, and the ownership of the
buildings.
Petitioners insist that the relation between them and the respondents
is that of lessor and lessee and in support of their contention they
point to the contract of lease between Maria Lim and the Yusecos
executed in 1930. As already stated, the Court of Appeals found
respondents to be builders in good faith and that finding is
conclusive. In connection with said finding, we are of the opinion that
the Yusecos in the mistaken belief that the two lots were being given
to them free constructed the improvements in question, and that as
already stated, the execution and registration of the contract of lease
was a mere formality to legalize the occupation of the lots. Despite
the belief of the Yusecos about the lots being donated to them, there
is every reason to believe that what Maria Lim intended was to keep
the title to the land but allow the Yusecos to occupy the same free, at
least as long as she kept said title. This arrangement would appear
to have been known to Belen, Maria's daughter, when the two lots
were transferred to her a few days before Maria died, because as
observed by the Court of Appeals although the Yusecos had paid no
rent since the year 1930 when they constructed the two buildings,
Belen in 1946, one year after the land was transferred to her,
demanded rents not for the period of 15 or 16 years but only from
1946. This action of hers neither supports nor strengthens her theory
that the Yusecos since 1930 were mere lessees and continued to be
such after Belen acquired the lots in question.
It will be remembered that the construction in good faith was effected
in 1930 and that good faith of the builders may be considered as
ended in 1946 when the demand for rent was made. It is, therefore,
clear that Art. 361 of the old Civil Code instead of article 448 of the
new Civil Code is applicable for the reason that the new Civil Code
did not go into effect until 1950. Article 361 of the old Civil Code
reads as follows:
Art. 361. The owner of land on which anything has been
built, sown, or planted in good faith, shall be entitled to
appropriate the things so built, sown or planted, upon paying
the compensation mentioned in Article 453 and 454, or to
compel the person who has built or planted to pay him the
value of the land, and the person who sowed thereon to pay
the proper rent therefor.
The above-quoted legal provision is clear and it is now up to the
parties, particularly the petitioners to act and make their choice.
Since the Court of Appeals has found that neither party has
expressed its desire or willingness to do the thing or things which by
law they are authorized or compelled to perform, the courts cannot
disturb their present status and naturally, payment of rent by
respondent for the present, is not in order.
Petitioners question the correctness of the amount of P50,000 fixed
by the trial court and approved by the Court of Appeals, as the value
of the improvements, claiming that under article 546 of the new Civil
Code (taken from article 453 of the old Civil Code) they (petitioners)
as owners of the land have the option of either refunding the amount
spent for the construction of the two buildings, said to be only
P18,000 or "paying him the increase in value which the thing has
acquired by reason thereof." The contention of petitioners is well
taken.
Affirming the decision of the Court of Appeals in so far as it finds and
declares respondents to be possessors in good faith, let this case be
remanded to the trial court for further proceedings, particularly to
give an opportunity to plaintiffs-petitioners to exercise their choice
and option; and for purposes of said choice and option the trial court
will admit evidence and make a finding as to the amount of the useful
expenditures or "the increase in value which the thing has acquired
by reason thereof", under article 453 of the old Civil Code, to be
refunded or paid by the petitioners should they choose to appropriate
the buildings; "the value of the land" under article 361 of the same
Code, to be paid by the defendants-respondents in case plaintiffs-
petitioner elect to compel them to buy the land. No costs.
G.R. No. L-12812 September 29, 1959
FILIPINAS COLLEGES, INC., plaintiff-appellee,
vs.
MARIA GARCIA TIMBANG, ET AL., defendants.
------------------------------
G.R. No. L-12813 September 29, 1959
MARIA GARCIA TIMBANG, ET AL., plaintiffs.
MARIA GARICA TIMBANG, plaintiff-appellant,
vs.
MARIA GERVACIO BLAS, defendant-appellee.
De Guzman and Fernandez for appellee Filipinas Colleges, Inc.
San Huan, Africa and Benedicto for appellant Maria Garcia Timbang.
Nicanor S. Sison for appellee Maria Gervacio Blas.
BARRERA, J.:
This is an appeal taken from an order of the Court of First Instance of
Manila dated May 10, 1957 (a) declaring the Sheriff's certificate of
sale covering a school building sold at public auction null and void
unless within 15 days from notice of said order the successful
bidders, defendants-appellants spouses Maria Garcia Timbang and
Marcelino Timbang, shall pay to, appellee Maria Gervacio Blas
directly or through the Sheriff of Manila the sum of P5,750.00 that the
spouses Timbang had bid for the building at the Sheriff's sale; (b)
declaring the other appellee Filipinas Colleges, Inc. owner of
24,500/3,285,934 undivided interest in Lot No. 2-a covered by
certificate of tile No 45970, on which the building sold in the auction
sale is situated; and (c) ordering the sale in public auction of the said
undivided interest of the Filipinas Colleges, Inc., in lot No. 2-a
aforementioned to satisfy the unpaid portion of the judgment in favor
of appellee Blas and against Filipinas Colleges, Inc. in the amount of
P8,200.00 minus the sum of P5,750.00 mentioned in (a) above.
The order appealed from is the result of three motions filed in the
court a quo in the course of the execution of a final judgment of the
Court of Appeals rendered in 2 cases appealed to it in which the
spouses Timbang, the Filipinas Colleges, Inc., and Maria Gervacio
Blas were the parties. IN that judgment of the Court of Appeals, the
respective rights of the litigants have been adjudicated as follows: 1âwphïl.nêt
(1) Filipinas Colleges, Inc. was declared to have acquired
the rights of the spouses Timbang in and to lot No. 2-a
mentioned above and in consideration thereof, Filipinas
Colleges, Inc., was ordered to pay the spouses Timbang the
amount of P15,807.90 plus such other amounts which said
spouses might have paid or had to pay after February, 1953,
to Hoskins and Co. Inc., agent of the Urban Estates, Inc.,
original vendor of the lot. Filipinas Colleges, Inc. original
vendor of the total amount with the court within 90 days after
the decision shall have become final.
(2) Maria Gervacio Blas was declared to be a builder in good
faith of the school building constructed on the lot in question
and entitled to be paid the amount of P19,000.00 for the
same. Filipinas Colleges, Inc., purchaser of the said building
was ordered to deliver to Blas stock certificate (Exh. C) for
108 shares of Filipinas Colleges, Inc. with a par value of
P10,800.00 and to pay Blas the sum of P8,200.00 of the
house.
(3) In case Filipinas Colleges, Inc. failed to deposit the value
of the land, which after liquidation was fixed at P32,859.34,
within the 90-day period set by the court, Filipinas Colleges
would lose all its rights to the land and the spouses Timbang
would then become the owners thereof. In that eventuality,
the Timbangs would make known to the court their option
under Art. 448 of the Civil Code whether they would
appropriate the building in question, in which even they
would have to pay Filipinas Colleges, Inc. the sum of
P19,000.00, or would compel the latter to acquire the land
and pay the price thereof.
Filipinas Colleges, Inc. having failed to pay or deposit the sum of
P32,859.34 within the time prescribed, the spouses Timbang, in
compliance with the judgment of the Court of Appeals, on September
28, 1956, made known to the court their decision that they had
chosen not of appropriate the building but to compel Filipinas
Colleges, Inc., for the payment of the sum of P32,859,34. The motion
having been granted, a writ of execution was issued on January 8,
1957.
On January 16, 1957, appellee Blas in turn filed a motion for
execution of her judgment of P8,200.00 representing the unpaid
portion of the price of the house sold to Filipinas Colleges, Inc. Over
the object of the Timbangs, the court grated the motion and the
corresponding writ of execution was issued on January 30, 1957,
date of the granting of the motion for execution, Blas through
counsel, sent a letter to the Sheriff of Manila advising him of her
preferential claim or lien on the house to satisfy the unpaid balance
of the purchase price thereof under Article 2242 of the Civil Code,
and to withhold from the proceed of the auction sale the sum of
P8,200.00. Levy having been made on the house in virtue of the
writs of execution, the Sheriff of Manila on March 5, 1957, sold the
building in public auction in favor of the spouses Timbang, as the
highest bidders, in the amount of P5,750.00. Personal properties of
Filipinas Colleges, Inc. were also auctioned for P245.00 in favor of
the spouses Timbang.
As a result of these actuation, three motion were subsequently filed
before the lower court:
 (1) By appellee Blas, praying that the Sheriff of Manila
and/or the Timbang spouses be ordered to pay and deliver
to her the sum of P5,750.00 representing the proceeds of
the auction sale of the building of Filipinas Colleges, Inc.
over which she has a lien of P8,200.00 for the unpaid
balance of the purchase price thereof;.
(2) Also by the appellee Bals, praying that there being still
two unsatisfied executions, one for the sum of P32,859.34 in
favor the land involved, Lot No. 2-a, be sold at public
auction; and (3) By Filipinas Colleges, Inc. praying that
because its properties, the house and some personal
properties, have been auctioned for P5,750.00 and P245.00
respectively in favor of the Timbang spouses who applied
the proceeds to the partial payment of the sum of
P32,859.34 value of the land, Lot No. 2-a, it (Filipinas
Colleges, Inc.) be declared part owner of said lot to the
extent of the total amount realized from the execution sale of
its properties.
1âwphïl.nêt
The Timbang spouses presented their opposition to each and all of
these motion. After due hearing the lower court rendered its
resolution in the manner indicated at the beginning of this decision,
from which the Timbangs alone have appealed.
In assailing the order of the court a quo directing the appellants to
pay appellee Blas the amount of their bid (P5,750.00) made at the
public auction, appellants' counsel has presented a novel, albeit
ingenious, argument. It is contended that because the builder in
good faith has failed to pay the price of the land after the owners
thereof exercised their option under Article 448 of the Civil Code, the
builder lost his right of retention provided in Article 546 and by
operation of Article 445, the appellants as owners of the land
automatically became the owners ipso facto, the execution sale of
the house in their favor was superfluous. Consequently, they are not
bound to make good their bid of P5,750.00 as that would be to make
goods to pay for their own property. By the same token, Blas claim
for preference on account of the unpaid balance of the purchase
price of the house does not apply because preference applies only
with respect to the property of the debtor, and the Timbangs, owners
of the house, are not the debtors of Blas.
This Court cannot accept this oversimplification of appellants'
position. Article 448 and 546 of the Civil Code defining the right of
the parties in case a person in good faith builds, sows or plants on
the land of another, respectively provides:
ART. 448. The owner of the land on which anything has
been built, sown or plated in good faith shall have the right to
appropriate as his own the works, sowing or planting, after
payment of the indemnify provided for in article 546 and 548,
or to obligate 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.
ART. 546. Necessary expenses shall be refunded to every
possessor; but only the possessor in good faith may retain
the thing until he has reimbursed therefor.
Useful expenses shall be refunded only to the possessor in
good faith with the same right of retention the person who
has defeated him in the possession having to option of
refunding the amount of expenses or of paying the case in
value which thing may have acquired by reason thereof.
Under the terms of these article, it is true that the owner of the land
has the right to choose between appropriating the building by
reimbursing the builder of the value thereof or compelling the builder
in good faith to pay for his land. Even this second right cannot be
exercised if the value of the land is considerably more than that of
the building. In addition to the right of the builder to be paid the value
of his improvement, Article 546 gives him the corollary right of
retention of the property until he is indemnified by the owner of the
land. There is nothing in the language of these two article, 448 and
546, which would justify the conclusion of appellants that, upon the
failure of the builder to pay the value of the land, when such is
demanded by the land-owner, the latter becomes automatically the
owner of the improvement under Article 445. The case of
Bernardo vs. Bataclan, 66 Phil., 590 cited by appellants is no
authority for this conclusion. Although it is true it was declared
therein that in the event of the failure of the builder to pay the land
after the owner thereof has chosen this alternative, the builder's right
of retention provided in Article 546 is lost, nevertheless there was
nothing said that as a consequence thereof, the builder loses entirely
all rights over his own building. The question is; what is the recourse
or remedy left to the parties in such eventuality where the builder
fails to pay the value of the land? While the Code is silent on this
Court in the cases of Miranda vs. Fadullon, et al., 97 Phil., 801; 51
Off. Gaz., [12] 6226; Ignacio vs. Hilario, 76 Phil., 605 and the cited
case of Bernardo vs. Bataclan, supra.
In the first case, this Court has said:
A builder in good faith not be required to pay rentals. he has
right to retain the land on which he has built in good faith
until he is reimbursed the expenses incurred by
him. Possibly he might be made to pay rental only when the
owner of the land chooses not to appropriate the
improvement and requires the builder in good faith to pay for
the land but that the builder is unwilling or unable to pay the
land, and then they decide to leave things as they are and
assume the relation of lessor and lessee, and should they
disagree as to the amount of rental then they can go to the
court to fix that amount. (Emphasis supplied)
Should the parties not agree to leave things as they are and to
assume the relation of lessor and lessee, another remedy is
suggested in the case of Ignacio vs. Hilario, supra, wherein the court
has ruled that the owner of the land in entitled to have the
improvement removed when after having chosen to sell his land to
the other party, i.e., the builder in good faith fails to pay for the same.
A further remedy is indicated in the case of Bernardo vs. Bataclan,
supra, where this Court approved the sale of the land and the
improvement in a public auction applying the proceeds thereof first to
the payment of the value of the land and the excess, if any, to be
delivered to the owner of the house in payment thereof.
The appellants herein, owners o the land, instead of electing any of
the alternative above indicated chose to seek recovery of the value
of their land by asking for a writ of execution; levying on the house of
the builder; and selling the same in public auction. Sand because
they are the highest bidder in their own auction sale, they now claim
they acquired title to the building without necessity of paying in cash
on account of their bid. In other words, they in effect pretend to retain
their land and acquire the house without paying a cent therefor.
This contention is without merit. This Court has already held
in Matias vs. The Provincial Sheriff of Nueva Ecija (74 Phil., 326) that
while it is the inveriable practice, dictated by common sense, that
where the successful bidder is the execution creditor himself, he
need not pay down the amount of the bid if it does not exceed the
amount of his judgement, nevertheless, when their is a claim by a
third-party, to the proceeds of the sale superior to his judgment
credit, the execution creditor, as successful bidder, must pay in cash
the amount of his bid as a condition precedent to the issuance to him
of the certificate of sale. In the instant case, the Court of Appeals has
already adjudged that appellee Blas is entitled to the payment of the
unpaid balance of the purchase price of the school building. Blas is
actually a lien on the school building are concerned. The order of the
lower court directing the Timbang spouses, as successful bidders, to
pay in cash the amount of their bid in the sum of P5,750.00 is
therefore correct.
With respect to the order of the court declaring appellee Filipinas
Colleges, Inc. part owner of the land to the extent of the value of its
personal properties sold at public auction in favor of the Timbang,
this Court Likewise finds the same as justified, for such amount
represents, in effect, a partial payment of the value of the land. If this
resulted in the continuation of the so-called involuntary partnership
questioned by the difference between P8,200.00 — the unpaid
balance of the purchase price of the building and the sum of
P5,750.00 — amount to be paid by the Timbangs, the order of the
court directing the sale of such undivided interest of the Filipinas
Colleges, Inc. is likewise justified to satisfy the claim of the appellee
Blas.
Considering that the appellant spouses Marcelino Timbang and
Maria Garcia Timbang may not voluntarily pay the sum of P5,750.00
as ordered, thereby further delaying the final termination of this case,
the first part of the dispositive portion of the order appealed from is
modified in the sense that upon failure of the Timbang spouses to
pay to the Sheriff or to Manila Gervacio Blas said sum of P5,750.00
within fifteen (15) days from notice of the final judgment, an order of
execution shall issue in favor of Maria Gervasio Blas to be levied
upon all properties of the Timbang spouses not exempt from
execution for the satisfaction of the said amount.
In all other respects, the appealed order of the court a quo is hereby
affirmed, with costs against the appellants.
It is so ordered.
G.R. No. L-8220 October 29, 1955
SALVACION MIRANDA, plaintiff-appellants,
vs.
ESTEBAN FADULLON and spouses DIONISIO SEGARRA and
CLEMENCIA N. DE SEGARRA, defendants-appellees.
Lopez, Duterte, Guillamac, Rubillos, Montecillo and Bernardo for
appellees.
Gaudencio R. Juezan for appellant.
MONTEMAYOR, J.:
The present appeal was first taken to the Court of Appeals. Later by
resolution of the said court it was certified to us under section 17,
paragraph 6 of the Judiciary Act of 1948, as amended, the said
Tribunal being of the opinion that the case involved only questions of
law. The facts as may be gathered from the pleadings filed by the
parties may be briefly stated as follows. In the year 1939 one Lucio
Tio was the owner of a parcel of land, lot 1589-J of the Banilad
Estate, Cebu, under Transfer Certificate of Title No. 10548. On
December 29, 1939, a power of attorney in favor of one Esteban
Fadullon executed by Lucio Tio was registered in the land records of
Cebu City and annotated on the same certificate of title. In the year
1946, on the strength of the said power of attorney Fadullon to make
the repurchase within this period, the Segarras about ten days after
the expiration of the period filed a sword petition for the consolidation
of their ownership and registered said petition in the office of the
Register of Deeds on May 15, 1946. Apprised of the sale of his
property, Lucio Tio on June 4, 1946, filed a complaint in the Court of
First Instance of Cebu, Civil Case No. 181 to annul the sale. Service
of summons was made upon the Segarras on June 10, 1946. After
hearing the trial court rendered judgment annulling the sale. The
Segarras appealed to the Court of Appeals under CA—G. R.
No.6550-R and the said Tribunal affirmed the appealed decision and
further required the Segarras to pay plaintiff the reasonable rentals
on the property from the filing of the action until said property shall
have been returned to plaintiff. Upon the decision becoming final the
corresponding writ of execution was issued directing the Sheriff to
put plaintiff Tio in possession of the lot. It turned out however that
during the possession of the property by the Segarras they had
introduced improvements thereon consisting of a building of three
rooms and a storage room, and one artesian well, with tower and
water tank and a cement flooring covering about one-third of the lot
which according to the Segarras cost them P5,300. They then filed a
motion with the trial court claiming that they were possessors in good
faith of the lot in question, and that they had introduced the
improvements aforementioned in good faith and asked the court to
order the plaintiff to pay for the said improvements valued at P5,300
or to allow them to buy the land should the plaintiff decide not to pay
for the improvements. On August 28, 1952, the trial court issued the
following order:
The attorney for the plaintiff has been accordingly served
with copy of defendant's motion of July 31, 1952, filed
through counsel.
As prayed for, without opposition, the plaintiff is hereby
ordered to either pay the defendant spouses, Dionisio
Segarra and Clemencia N. Segarra (possessors in good
faith) the sum of P5,300, value of the building erected on the
land in question, or otherwise allow said defendants to
purchase the aforementioned lot.
The plaintiff filed a motion for reconsideration claiming that the
Segarras were possessors and builders in bad faith and so were not
entitled to reimbursement for the value of the improvements; that the
reason he (plaintiff) did not file an opposition to the motion of the
defendants asking for reimbursement was that he thought that the
trial court was sufficiently informed and impressed with the bad faith
with which defendants bought the land and introduced improvements
thereon and that it would consequently deny their motion; and in
support of his motion for reconsideration plaintiff quoted portions of
the decision of the trial court and the Court of Appeals. Upon the
denial of his motion for reconsideration, he took the present appeal.
After a careful review of the record we agree with the plaintiff-
appellant. The trial court in its decision declaring the sale of the land
to the defendants null and void and commenting on the alleged good
faith of defendants in buying the property said the following:
There are two circumstances which seem to stubbornly belie
the professed good faith on the part of the Segarras in
buying this property; namely. the circumstances of the
power-of-attorney appearing on the back of the title as of five
or six years previous and the other circumstances of the
comparatively limited period of one month granted vendor
Fadullon to redeem the property. Above all these, is the
further circumstance that the said property had already been
mortgaged in favor of the Cebu Mutual Building and Loan
Association by virtue of that power-of-attorney.
While the evidence did not disclose a collusion or conspiracy
between Fadullon and the Segarras, yet, considering the
short period of one month within which to redeem and the
surrounding circumstances, the possibility of such collusion
lingers.
Obviously there was in this transaction a prevailing intention
of railroading the property into a new ownership as may be
proven by the fact that said purchasers filed a sworn petition
for consolidating their ownership barely ten days after the
expiration of thirty days, that is, on April 13, 1946, and
registered with the office of Register of Deeds for Cebu
twelve days thereafter, or on May 15, 1946.
The Court of Appeals in its decision affirming that of the trial court
said:
The Segarra spouses maintain that they are purchasers in
good faith. We will now examine the record on this point.
The alleged power of attorney executed by the late Lucio Tio
in favor of appellant Fadullon was registered in the land
record of the Register of Deeds of Cebu Citly and annotated
at the back of Transfer Certificate of Title No. 10548 on
December 29, 1939. On the same date, the deed of
mortgage in favor of the Cebu Mutual Building and Loan
Association was annotated in the said Torrens title (Exhibits
1 and 1-B). This encumbrance alone should have been
sufficient to put the Segarra spouses upon an inquiry as to
the authority of Fadullon to sell to them the same property
six years later. For instance, the Segarras could have asked
themselves this question: Did not the mortgage of P400
serve the purpose for which the power of attorney was
executed?
The Segarras did not require Fadullon to produce his power
of attorney. While it is true that said power of attorney is
 annotated at the back of the Torrens title of Tio, it was still
incumbent upon the Segarras to ascertain the scope and
authority of Fadullon under said power of attorney. Fadullon
executed the sale with the right to repurchase within the
extraordinary short period of 30 days. This circumstance,
again, should have placed the Segarras on their guards,
knowing, as they did, that they were dealing with an agent
under a power of attorney executed before the war. These
unusual circumstances would seem to engender in our
minds the possibility of collusion between the appellants, to
hasten the registration of the title of the Segarras to the land
in dispute . . .
. . . the transfer of dominion on the property in question to
the Segarras was null and void and of no effect. The new
Certificate of Torrens Title No. 392 on the property now in
the name of the Segarras is hereby ordered cancelled and
that a new one issued in the name of Lucio Tio and his wife
Salvacion Miranda; ordering the Segarras to return the
possession of said property to plaintiff;
The defendants Segarras are furthermore required to pay
plaintiff the reasonable rentals on the property from the filing
of this action until such time as the said property shall have
been returned to plaintiff . . ."
Although neither the trial court nor the Court of Appeals did expressly
say and in so many words that the defendants-appellees were
possessors in bad faith, from a reading of their decisions particularly
those we have just quoted, one can logically infer that that was the
conclusion of the two courts, or to say it more mildly, that the
defendants were not possessors in good faith. Moreover, the very
fact that the Court of Appeals sentenced the defendants to pay
rentals is an indication, even proof that defendants were considered
possessors and builders in bad faith, or at least that they were not
possessors and builders in good faith. A builder in good faith may not
be required to pay rentals. He has a right to retain the land on which
he has built in good faith until he is reimbursed the expenses
incurred by him. Possibly he might be required to pay rental only
when the owner of the land chooses not to appropriate the
improvement and requires the builder in good faith to pay for the
land, but that the builder is unwilling or unable to buy the land, and
then they decide to leave things as they are and assume the relation
of lessor and lessee, and should they disagree as to the amount of
the rental then they can go to the court to fix that amount.
Furthermore, plaintiff-appellant in her brief (page 7) says without
denial or refutation on the part of defendants-appellees that they
(defendants) applied for a building permit to construct the
improvements in question on December 4, 1946, and the permit was
granted on January 11, 1947, all this about seven months after they
received the summons on June 10, 1946, meaning to say that the
improvements were introduced long after their alleged good faith as
possessors had ended.
In view of the foregoing, the appealed order of August 28, 1952 and
the order of October 15, 1952, denying plaintiff's motion for
reconsideration are set aside. With costs against appellees.
G.R. No. L-175 April 30, 1946
DAMIAN IGNACIO, FRANCISCO IGNACIO and LUIS
IGNACIO, petitioners,
vs.
ELIAS HILARIO and his wife DIONISIA DRES, and FELIPE
NATIVIDAD, Judge of First Instance of Pangasinan, respondents.
Leoncio R. Esliza for petitioners.
Mauricio M. Monta for respondents.
MORAN, C.J.:
This is a petition for certiorari arising from a case in the Court of First
Instance of Pangasinan between the herein respondents Elias Hilario
and his wife Dionisia Dres as plaintiffs, and the herein petitioners
Damian, Francisco and Luis, surnamed Ignacio, as defendants,
concerning the ownership of a parcel of land, partly rice-land and
partly residential. After the trial of the case, the lower court, presided
over by Hon. Alfonso Felix, rendered judgment holding plaintiffs as
the legal owners of the whole property but conceding to defendants
the ownership of the houses and granaries built by them on the
residential portion with the rights of a possessor in good faith, in
accordance with article 361 of the Civil Code. The dispositive part of
the decision, hub of this controversy, follows:
Wherefore, judgment is hereby rendered declaring:
(1) That the plaintiffs are the owners of the whole property
described in transfer certificate of title No. 12872 (Exhibit A)
issued in their name, and entitled to the possession of the
same;
(2) That the defendants are entitled to hold the position of
the residential lot until after they are paid the actual market
value of their houses and granaries erected thereon, unless
the plaintiffs prefer to sell them said residential lot, in which
case defendants shall pay the plaintiffs the proportionate
value of said residential lot taking as a basis the price paid
for the whole land according to Exhibit B; and
(3) That upon defendant's failure to purchase the residential
lot in question, said defendants shall remove their houses
and granaries after this decision becomes final and within
the period of sixty (60) days from the date that the court is
informed in writing of the attitude of the parties in this
respect.
No pronouncement is made as to damages and costs.
Once this decision becomes final, the plaintiffs and
defendants may appear again before this court for the
purpose of determining their respective rights under article
361 of the Civil Code, if they cannot come to an extra-judicial
settlement with regard to said rights.
Subsequently, in a motion filed in the same Court of First Instance
but now presided over by the herein respondent Judge Hon. Felipe
Natividad, the plaintiffs prayed for an order of execution alleging that
since they chose neither to pay defendants for the buildings nor to
sell to them the residential lot, said defendants should be ordered to
remove the structure at their own expense and to restore plaintiffs in
the possession of said lot. Defendants objected to this motion which,
after hearing, was granted by Judge Natividad. Hence, this petition
by defendants praying for (a) a restraint and annulment of the order
of execution issued by Judge Natividad; (b) an order to compel
plaintiffs to pay them the sum of P2,000 for the buildings, or sell to
them the residential lot for P45; or (c), a rehearing of the case for a
determination of the rights of the parties upon failure of extra-judicial
settlement.
The judgment rendered by Judge Felix is founded on articles 361
and 453 of the Civil Code which are as follows:
ART. 361. The owner of land on which anything has been
built, sown or planted in good faith, shall have the right to
appropriate as his own the work, sowing or planting, after the
payment of the indemnity stated in articles 453 and 454, or
to oblige the one who built or planted to pay the price of the
land, and the one who sowed, the proper rent.
ART. 453. Necessary expenses shall be refunded to every
possessor; but only the possessor in good faith may retain
the thing until such expenses are made good to him.
Useful expenses shall be refunded to the possessor in good
faith with the same right of retention, the person who has
defeated him in the possession having the option of
refunding the amount of the expenses or paying the increase
in value which the thing may have acquired in consequence
thereof.
The owner of the building erected in good faith on a land owned by the principal case wherein it must determine the prices of the
another, is entitled to retain the possession of the land until he is buildings and of the residential lot where they are erected, as well as
paid the value of his building, under article 453. The owner of the the period of time within which the plaintiffs-respondents may
land, upon the other hand, has the option, under article 361, either to exercise their option either to pay for the buildings or to sell their
pay for the building or to sell his land to the owner of the building. But land, and, in the last instance, the period of time within which the
he cannot, as respondents here did, refuse both to pay for the defendants-petitioners may pay for the land, all these periods to be
building and to sell the land and compel the owner of the building to counted from the date the judgment becomes executory or
remove it from the land where it is erected. He is entitled to such unappealable. After such hearing, the court shall render a final
remotion only when, after having chosen to sell his land, the other judgment according to the evidence presented by the parties.
party fails to pay for the same. But this is not the case before us.
The costs shall be paid by plaintiffs-respondents
We hold, therefore, that the order of Judge Natividad compelling
defendants-petitioners to remove their buildings from the land
belonging to plaintiffs-respondents only because the latter chose
neither to pay for such buildings not to sell the land, is null and void,
for it amends substantially the judgment sought to be executed and GR No. 44606, Nov 28, 1938 ]
is, furthermore, offensive to articles 361 and 453 of the Civil Code.
VICENTE STO. DOMINGO BERNARDO v. CATALINO BATACLAN
There is, however, in the decision of Judge Felix a question of
procedure which calls for the clarification, to avoid uncertainty and
delay in the disposition of cases. In that decision, the rights of both
parties are well defined under articles 361 and 453 of the Civil Code, 66 Phil. 598
but it fails to determine the value of the buildings and of the lot where
they are erected as well as the periods of time within which the
option may be exercised and payment should be made, these
particulars having been left for determination apparently after the LAUREL, J.:
judgment has become final. This procedure is erroneous, for after
the judgment has become final, no additions can be made thereto
and nothing can be done therewith except its execution. And
execution cannot be had, the sheriff being ignorant as to how, for This is an appeal taken by both the plaintiff and the defendant from
how much, and within what time may the option be exercised, and the order of September 26, 1935, hereinbelow referred to, of the
certainly no authority is vested in him to settle these matters which
Court of First Instance of Cavite in Civil Case No. 2423.
involve exercise of judicial discretion. Thus the judgment rendered by
Judge Felix has never become final, it having left matters to be
settled for its completion in a subsequent proceeding, matters which There is no controversy as to the facts. By a contract of sale
remained unsettled up to the time the petition is filed in the instant executed on July 17, 1920, the plaintiff herein acquired from Pastor
case. Samonte and others ownership of a parcel of land of about 90
hectares situated in sitio Balayunan, Silang, Cavite. To secure
For all the foregoing, the writ of execution issued by Judge Natividad possession of the land from the vendors the said plaintiff, on July 20,
is hereby set aside and the lower court ordered to hold a hearing in
1929, instituted Civil Case No, 1935 in the Court of First Instance of
Cavite. The trial court found for the plaintiff in a decision which was
affirmed by this Supreme Court on appeal (G. R. No. 33017).[1]
When plaintiff entered upon the premises, however, he found the
defendant herein, Catalino Bataclan, who appears to have been
authorized by former owners, as far back as 1922, to clear the land
and make improvements thereon. As Bataclan was not a party in
Case No. 1935, plaintiff, on June 11, 1931, instituted against him, in
the Court of First Instance of Cavite, Civil Case No. 2428. In this
case, plaintiff was declared owner but the defendant was held to be
a possessor in good faith, entitled to reimbursement in the total sum
of P1,642, for work done and improvements made. The dispositive
part of the decision reads:
"Por las consideraciones expuestas, se declara al demandante
Vicente Santo Domingo Bernardo dueno con derecho a la posesion
del terreno que se describe en la demanda, y al demandado
Catalino Bataclan con derecho a que el demandante le pague la
suma de P1,642 por gastos utiles hechos de buena fe en el terreno,
y por el cerco y ponos de coco y abaca existentes en el mismo, y
con derecho, ademas a retener la posesion del terreno hasta que se
le pague dicha cantidad. Al demandante puede optar, en el plazo de
treinta dias, a partir de la fecha en que fuere notificado de la
presente, por pagar esa suma al demandado, haciendo asi suyos el
cerco y todas las plantaciones existentes en el terreno, u obligar al
demandado a pagarle el precio del terreno, a razon de trescientos
pesos la hectarea. En el caso de que el demandante optara por que
el demandado le pagara el precio del terreno, el demandado
efectuara el pago en el plazo conveniente por las partes o que sera
fijado por el Juzgado. Sin costas."
Both parties appealed to this court (G. R. No. 87319).[1] The
decision appealed from was modified by allowing the defendant to
recover compensation amounting to P2,212 and by reducing the
price at which the plaintiff could require the defendant to purchase
the land in question from P300 to P200 per hectare. Plaintiff was
given by this court 30 days from the date when the decision became
final within which to exercise his option, either to sell the land to the
defendant or to buy the improvements from him. On January 9,
1934, the plaintiff manifested to the lower court his desire "to require
the defendant to pay him the value of the land at the rate of P200 per
hectare or a total price of P18,000 for the whole tract of land." The
defendant informed the lower court that he was unable to pay for the
land and, on January 24, 1934, an order was issued giving the
plaintiff 30 days within which to pay the defendant the sum of P2,212
stating that, in the event of failure to make such payment, the land
would be ordered sold at public auction "Para hacer pago al
demandante de la suma de P2,212 y el remanente despues de
deducidos los gastos legales de la venta en publica subasta sera
entregado al demandante." On February 21, 1934, plaintiff moved to
reconsider the foregoing order so that he would have preference
over the defendant in the order of payment. The motion was denied
on March 1, 1934 but on March 16 following the court below, motu
proprio, modified its order of January 24, "en el sentido de que el
demandante tiene derecho preference al importe del terreno no se
vendiere en publica subasta, a razon de P200 por hectarea y el
remanente, si acaso lo hubiere se entregara at demandado en pago
de la cantidad de P2,212 por la limpieza del terreno y las mejoras
introducidas en el mismo por el citado demandado." On April 24,
1934, the court below, at the instance of the plaintiff and without
objection on the part of the defendant, ordered the sale of the land in
question at public auction. The land was sold on April 5, 1935 to
Toribio Teodoro, the highest bidder, for P8,000. In the certificate of
sale issued to said purchaser on the very day of sale, it was stated
that the period of redemption of the land sold was to expire on April
5, 1936. Upon petition of Toribio Teodoro the court below ordered
the provincial sheriff to issue another certificate not qualified by any
equity of redemption. This was complied with by the sheriff on July
30, 1935. On September 18, 1935, Teodoro moved that ha be
placed in possession of the land purchased by him. The motion was
granted by order of September 26, 1935, the dispositive part of
which is as follows:
"Por tanto, se ordena al Sheriff Provincial de Cavite ponga a Toribio
Teodoro en posesion del terreno comprado por el en subasta publica
y por el cual se le expidio certificado de venta definitiva, reservando
al demandado su derecho de ejercitar una accion ordinaria para
reclamar del demandante la cantidad de P2,212 a que tiene derecho
por la limpieza y mejoras del terreno y cuya suma, en justicia y
equidad, debe ser descontada y deducida de la suma de P8,000 que
ya ha recibido el demandante."
The Civil Code confirms certain time-honored principles of the law of
property. One of these is the principle of accession whereby the
owner of property acquires not only that which it produces but that
which is united to it either naturally or artificially. (Art. 353.) Whatever
is built, planted or sown on the land of another, and the
improvements or repairs made thereon, belong to the owner of the
land (art. 358). Where, however, the planter, builder, of 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 what Manresa calls a state of "forced
coownership" (vol. 3, 4th ed., p. 213), the law has provided a just and
equitable 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 to
pay the proper rent (art 361). It is the owner of the land who is
allowed 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 (3 Manresa, 4th ed., p. 213). In the
case before us, the plaintiff, as owner of the land, chose to require
the defendant, as owner of the improvements, to pay for the land.
The defendant dates that he is a possessor in good faith and that the
amount of P2,212 to which he is entitled has not yet been paid to
him. Therefore, he says, he has a right to retain the land in
accordance with the provisions of article 453 of the Civil Code. We
do not doubt the validity of the premises stated. "Considera la ley tan
sagrada y legitima la deuda, que, hasta que sea pagada, no
consiente que la cosa se restituya al vencedor." (4 Manresa. 4th ed.,
p., 304.) We find, however, that the defendant has lost his right of
retention. In obedience to the decision of this court in G. R. No.
37319, the plaintiff expressed his desire to require the defendant to
pay for the value of the lard. The said defendant could have become
owner of both land and improvements and continued in possession
thereof. But he said he could not pay and the land was sold at public
auction to Toribio Teodoro. The law, as we have already said,
requires no more than that the owner of the land should choose
between indemnifying the owner of the improvements or requiring
the latter to pay for the land. When he failed to pay for the land, the
defendant herein lost his right of retention.
The sale at public auction having been asked by the plaintiff himself
(p. 22, bill of exceptions) and the purchase price of P8,000 received
by him from Toribio Teodoro, we find no reason to justify a rupture of
the situation thus created between them, the defendant-appellant not
being entitled, after all, to recover from the plaintiff the sum of
P2,212.
The judgment of the lower court is accordingly modified by
eliminating therefrom the reservation made in favor of the defendant-
appellant to recover from the plaintiff the sum of P2,212. In all other
respects, the same is affirmed, without pronouncement regarding
costs. So ordered.
G.R. No. L-43345 July 29, 1976
JOSEFINA S. DE LAUREANO, petitioner,
vs.
HON. MIDPANTAO L. ADIL, in his capacity as Presiding Judge,
Court of First Instance of Iloilo, Branch II, and ONG
CU, respondents.
Celso Ed. T. Unson for petitioner.
Rolando Magbanua Antiquiera for private respondent.
AQUINO, J.:
Josefina S. de Laureano in this special civil action
of certiorari assails the interlocutory orders of the Court of First
Instance of Iloilo, denying her motions for execution and for a
preliminary mandatory injunction in an ejectment suit which was
decided in her favor by the city court of Iloilo City and which was
appealed by the lessee, Ong Cu (Civil Case No. 10370).
Mrs. Laureano is the registered owner of Lots 996 and 1004-B with a
total area of 3,107 square meters located at the- corner of Iznart and
Solis Streets, Iloilo City. The lots were leased to Ong Cu for fifteen
year period which allegedly expired on August 31, 1974.
In view of Ong Cu's failure to vacate the lots and remove his
improvements thereon. Mrs. Laureano filed against him an ejectment
suit in October, 1974 in the city court of Iloilo City.
After trial, the city court on September 23, 1975 rendered a judgment
ordering Ong Cu to vacate the lots, to restore their possession to
Mrs. Laureano, to remove his buildings and other improvements
thereon and to pay P12,428 monthly as compensation for the use
and occupation of the lots from September 1, 1974 up to the time he
vacates them, with interest at twelve percent per annum from the
date of accrual plus P10,000 as moral and exemplary damages and
attorney's fees.
Ong Cu appealed to the Court of Fist Instance of Iloilo. Instead of
filing a supersedeas bond based on the findings of the city court in its
decision, Ong Cu asked the city court ex parte to approve his
supersedeas bond in the sum of P22,000 and to fix the rental value
of the two lots at P1,200 a month. The city court granted that ex
parte motion in its order of October 8, 1975. Thereafter, the record
was elevated to the Court of First Instance. The case was assigned
to the sala of respondent Judge.
On November 4 Mrs. Laureano received a notice from the clerk of
court that Ong Cu's appeal had been docketed. On November 13
she filed a motion in the lower court praying for a preliminary
mandatory injunction to restore her to the possession of the said lots.
Invoking article 1674 of the Civil Code and section 9, Rule 70 of the
Rules of Court, she alleged that Ong Cu's appeal was frivolous and
dilatory.
She also asked for immediate execution of the city court's judgment
on the ground that Ong Cu's supersedeas bond was inadequate and
that he had failed to deposit the sum of P12,428 monthly as
reasonable value of the use and occupation of the lots adjudged by
the city court.
Ong Cu opposed the two motions. The lower court in its order of
December 9, 1975 upheld the city court's order fixing the
supersedeas bond and the amount to be deposited by Ong Cu.
After the lower court's attention was called to its failure to resolve
Mrs. Laureano's other motion for a mandatory injunction, it ruled in
its order of February 12, 1976 that the writ could not be granted
because it had already sanctioned Ong Cu's supersedeas bond, the
purpose of which was to stay execution pending appeal. The lower
court reasoned out that it would be absurd to stay execution and at
the same time restore possession to the plaintiff by granting the
mandatory injunction. It regarded Ong Cu as a possessor in good
faith entitled to reimbursement of his necessary and useful
expenses.
The instant certiorari action was filed on March 25, 1976. The issue
is whether the lower court acted. with grave abuse of discretion in
denying Mrs. Laureano's motions for execution and a mandatory
injunction.
The motion for execution. — Rule 70 of the Rules of Court provides:
SEC. 8. Immediate execution of judgment. Haw to
stay same. If judgment is rendered against the
defendant, execution shall issue immediately, unless
an appeal has been perfected and the defendant to
stay execution files a sufficient bond, approved by
the municipal or city court and executed to the
plaintiff to enter the action in the Court of First
Instance and to pay the rents, damages, and costs
accruing down to the time of the judgment appealed
from, and unless, during the pendency of the appeal,
he deposits with the appellate court the amount of
rent due from time to time under the contract, if any,
as found by the judgment of the municipal or city
court to exist. In the absence of a contract, he shall
deposit with the court the reasonable value of the
use and occupation of the premises for the
preceding month or period at the rate determined by
the judgment, on or before the tenth day of each
succeeding month or period. The supersedeas bond
shall be transmitted by the municipal or city court,
with the other papers, to the clerk of the Court of
First Instance to which the action is appealed.
All moneys so paid to the appellate court shall be
deposited in the provincial or city treasury, and shall
be held there until the final disposition of the appeal,
unless the court, by agreement of the interested
parties, or in the absence of reasonable grounds of
opposition to a motion to withdraw, or for justifiable
reasons, shall decree otherwise. Should the
defendant fail to make the payments above
prescribed from time to time during the pendency of
the appeal, the appellate court, upon motion of the
plaintiff, of which the defendant shall have notice,
and upon proof of such failure, shall order the
execution of the judgment appealed from with
respect to the restoration of possession, but such
execution shall not be a bar to the appeal taking its
course until the final disposition thereof on its merits.
xxx xxx xxx
As explicitly provided in section 8, the judgment of tile inferior court in
plaintiff's favor in an ejectment case is immediately executory. Thus,
where the city court on the day it rendered the judgment ordered the
execution thereof and the defendant did not perfect his appeal and
did not post a supersedeas bond, it was held that certiorari would not
lie to set aside the execution. Section 8 of Rule 70 is an exception to
the general rule as to the execution of the judgment of an inferior
court which is found in section 18, Rule 5 of the Rules of Court
(Pascua vs. Nable, 71 Phil. 186).
The inferior court's judgment is immediately executory in order to
prevent further damages to the plaintiff should the defendant
continue to deprive him of the possession of the premises in litigation
(Yu Tiong Tay vs. Barrios, 79 Phil. '597, 601).
The defendant may stay execution by (a) perfecting an appeal and
filing a supersedeas bond and (b) paying from time to time either to
the plaintiff or to the Court of First Instance during the pendency of
the appeal the rentals or the reasonable value Of the use and
occupation of the property as fixed by the inferior in its
judgment (Sison vs. Hon. Bayona, 109 Phil. 567, 561; Vda. de
Palanca vs. Chua Keng Kian, L-26430, March 11, 1969, 27 SCRA
356).
The reasonable value of the use and occupation of the premises is
that fixed by the inferior court in its judgmentbecause the rental
stipulated in the lease contract that had expired might no longer be
the reasonable value for the use and occupation of the premises by
the reason of the change or rise in value (Aylon vs. Jugo, 78 Phil.
816).
The purpose of the supersedeas bond is to secure payment of the
rents and damages adjudged in the appealed judgment. Hence, the
bond is not n if the defendant deposits in court the amount of back
rentals as fixed in the judgment. In other words, the supersedeas
bond answers only for rentals was in the judgment and not for those
that may accrue during the pendency of the appeal which are
guaranteed by the periodical deposits to be made by the defendant.
(Sison vs. Hon. Bayona, supra). The appeal bond answers for the
costs (Sanchez vs. Zosa, L-27043, November 28, 1975, 68 SCRA
171, 174; Contreras vs. Dinglasan 79 Phil. 42).
The damages contemplated in section 8 of Rule 70 refer to the
reasonable compensation for the use and occupation of the property
which is generally measured by its fair rental value. It cannot refer to
other damages which are foreign to the enjoyment or material
possession of the property. Consequently attorney's fees cannot be
considered as damages (Castueras vs. Bayona, 106 Phil. 340).
In the instant case, the city court found that Ong Cu's lease expired
on August 31, 1974 and that the reasonable value of the use and
occupation of the two lots is four pesos a square meter or P12,428
monthly. To stay execution, Ong Cu should have filed, and the city
court should have required, a supersedeas bond in the total amount
of the reasonable value of the use and occupation of the two lots for
the period from September 1, 1974 to September, 1975, or for
thirteen months, at the rate fixed in the city court's judgment which is
P12,428.
The supersedeas bond should be in the total sum of P161,564.00.
And the amount to be deposited monthly beginning October, 1975 is
that same amount of P12,428. The deposit should be made on or
before the tenth day of the succeeding month.
The city court erred in issuing ex parte an order granting Ong Cu's
motion fixing the supersedeas bond at P22,000 and the monthly
deposit at P1,200 which was the rental stipulated in the lease
contract that had already expired. The city court should not have
allowed Ong Cu to dictate the amount of the supersedeas bond and
the amount of the monthly payments to be deposited in court.
The reasonable value of the use and occupation of the two lots was
already fixed in its judgment. That value is the value to be deposited
in court. Ong Cu's motion that it be fixed at P1,200 was uncalled for
and was in contravention of the mandatory provisions of section 8 of
Rule 70.
Also contrary to the peremptory provisions of section 8 was Ong Cu's
act of fixing his supersedas bond at P22,000 instead of at the
amount equivalent to the total compensation or rentals Is that had
accumulated up to the rendition of the city court's judgment. That is
the amount of the supersedeas bond unalterably fixed in section 8.
The lower court theorized that the city court's order of October 8,
1975 approving Ong Cu's supersedeas bond in the sum of P22,000
and provisionally fixing the monthly rental deposited at P1,200 was a
valid amendment of the city court's decision of September 23. That
theory is untenable. It distorts the meaning of an amendment. Ong
Cu did not move. that the decision be amended. The order according
to its letter and tenor can in no sense be interpreted as amendment
of the city court's decision. It makes no reference to the decision.
At the time the order was issued, Ong Cu had already riled his notice
of appeal. He did not rile a new notice of appeal by indicating therein
that he was appealing from the city court's ,decision as supposedly
amended by its order of October 8. He could not have done so
because the October 8 order in its face does not purport to amend
the decision.
It results that Ong Cu's supersedeas bond was inadequate and that
he did not deposit the compensation for the use and occupation of
the two lots which wits fixed in the city court judgment. His
supersedeas bond and his deposits were not sufficient to stay
execution.
If this were a case where the defendant did not file any supersedeas
bond or did not make any monthly deposit, then Mrs. Laureano
would be entitled as a matter of right to the immediate execution of
the city court's judgment both as to the restoration of possession and
the payment of the accrued rentals or compensation for the use and
occupation of the premises (De Pages and Vda. de Rodriguez vs.
Hon. Canonoy, 116 Phil. 898, 901; Paulino, Sr. vs. Hon. Surtida, 109
Phil. 621, 626).
In such a case ' the execution is mandatory. The only exceptions are
the existence of fraud, accident, mistake or execusable negligence
which prevented the defendant from posting the supersedeas bond
or making the monthly deposit, or the occurrence of supervening
events which brought about a material change in the situation of the
parties and which would make the execution inequitable (Cunanan
vs. Rodas, 78 Phil. 800; Laurel vs. Abalos, L-26098, October 31,
1969, 30 SCRA 281).
This is a case where there was a supersedeas bond and where
monthly de sits were made but the bond and the deposit were
inadequate or were not in conformity with the city court's judgment.
Ong Cu committed a mistake because he followed the erroneous
order of the city court which fixed the supersedeas bond and the
monthly deposit in contravention of its own decision and,
consequently, in violation of section 8 of Rule 70. Because of that
mistake, immediate execution under Rule 70 would not be warranted
(See Yu Phil. Khim vs. Amparo, 86 Phil. 441, 445, Bantug vs.
Montinola, 73 Phil. 13, 20; Kraut vs. Encarnacion, 96 Phil. 986;
Tagulimot vs. Makalintal, 85 Phil. 40; De la Cruz vs. Burgos, L-
28095, July 30, 1969, 28 SCRA 977). The Court of First Instance has
discretion to order the execution of a new supersedeas bond to
replace a defective one (Zamora vs. Dinglasan and Hilario, 77 Phil.
46, 53).
Ong Cu should be given a thirty-day period from notice within which
to file a new supersedeas bond in the sum of P161,564 and to
deposit the value of the use and occupation of the two lots at the rate
of P12,428 beginning October, 1975 less the amounts already
deposited by him. Execution should issue if he fails to file a new
supersedeas bond and to make up for the deficiency in his monthly
deposits.
Motion for mandatory injunction. — The Civil Code provides:
ART. 1674. In ejectment cases where an appeal is
taken the remedy granted in article 539, second
paragraph, shall also apply, if the higher court is
satisfied that the lessee's appeal is frivolous or
dilatory, or that the lessor's appeal is prima
facie meritorious. The period of ten days referred to
in said article shall be counted from the time the
appeal is perfected. (n)
Article 1674 is reproduced in section 9 of Rule 70. Article 539 of the
Civil Code in its second paragraph grants to the possessor, who was
deprived of the possession of his real property through forcible entry,
the right to secure from an inferior court in the action for forcible
entry a writ of preliminary mandatory injunction to restore him in his
possession.
Article 1674 gives to the plaintiff in an unlawful detainer case
originating in the inferior court and appealed to the Court of First
Instance the remedy which article 539 gives to the plaintiff in a
forcible entry case. It is designed to eliminate the injustice of the old
rule which allowed the lessee to continue in possession during an
appeal even if the owner or plaintiff has an immediate right to the
premises in litigation (pp. 98,143, Report of Code Commission).
Article 1674 is in consonance with the summary character of an
ejectment suit which is an expeditious means for recovering
possession of real property (Deveza vs. Montecillo, L-23942, March
28, 1969, 27 SCRA 822; Mara, Inc. vs. Estrella, L40511, July 25,
1975, 65 SCRA 471) but the effectiveness of which was often
frustrated by defendant's dilatory tactics which were tolerated by
inferior courts (Vda. de Palanca vs. Chua Keng Kian L-26430, March
11, 1969, 27 SCRA 3.56, 365-6).
The decisive issue is whether the pleadings, the city court's decision
and Ong Cu's contentions show that his appeal is manifestly
frivolous and dilatory.
There is no question that Mrs. Laureano is the registered owner of
the two lots and that they were leased to Ong Cu for a fifteen year
period counted from September 1, 1959 and expiring on August 31,
1974. Ong Cu in his answer to the ejectment complaint unmistakably
admitted that the lease expired on that date. He alleged that there
were negotiations for his purchase of the two lots.
His defenses were that the ejectment action was premature because
he was still considering Mrs. Laureano's proposal to sell the lots; that
the removal of his buildings and iniprovements allegedly worth
P1,800,000 would prejudice him and entail considerable expenses;
that there is difficulty in looking for another site during the short
period granted to him by Mrs. Laureano; that he is willing to buy the
lots at a reasonable price, and that the price fixed by Mrs. Laureano
is excessive.
Those defenses cannot defeat the ejectment suit. The expiration of
lease and Mrs. Laureano's refusal to renew it made Ong Cu a
deforciant or an unlawful with holder of the possession of the lots. He
has become a possessor in bad faith. The Civil Code provides:
ART. 1669. If the lease was made for a determinate
time, it ceases upon the day fixed, without the need
of a demand. (1565)
ART. 1671. If the lessee continues enjoying the
thing after the expiration of the contract over the
lessor's objection, the former shall be subject to the
responsibilities of a possessor in bad faith. (n)
ART. 1673. The lessor may judicially eject the
lessee for any of the following causes:
(1) When the period agreed upon, ... has expired.
xxx xxx xxx
(1569a)
The rule is that if after the termination of the lease contract the
lessee prolongs his occupation of the premises, there is unlawful
detainer and article 1674 applies. For the purpose of that article, it is
enough that the plaintiff is the owner of the land and that the
defendant is in temporary occupation thereof whether under a lease
contract or on mere tolerance or under a temporary permit. (De la
Cruz vs. Bocar, 99 Phil. 491).
The lower court assumed that Ong Cu in constructing his building on
the leased lots is a possessor in good faith entitled to reimbursement
of the necessary and useful expenses incurred by him and with a
right of retention, as contemplated in articles 546 and 547 of the Civil
Code.
That assumption is erroneous. As a lessee, who constructed a
building on the leased land, Ong Cu cannot be characterized as a
builder in good faith. Under article 448 of the Civil Code the owner of
the land on which anything has been built in good faith may
appropriate the building after payment of the indemnity provided in
articles 546 and 548 of the Civil Code.
Article 448 applies to a case where one builds on land of which he
honestly claims to be the owner and not to lands wherein one's only
interest is that of a lessee under a rental contract. A contrary rule
would place it within the power of the lessee "to improve his landlord
out of his property" (Alburo vs. Villanueva, 7 Phil. 277, 280; Cortes
vs. Ramos, 46 Phil. 184; Fojas vs. Velasco, 51 Phil. 520; Bantug vs.
Montinola, 73 Phil. 13).
In other words, article 448 refers to a possessor who occupied the
land in the belief that he was the owner thereof. It does not apply to
the lessee because the lessee knows at the outset that he is not the
owner of the land (Lopez, Inc. vs. Philippine & Eastern Traiding Co.,
Inc., 98 Phil. 348). The tenant has no pretension to being the owner
of the land (Rivera vs. Trinidad, 48 Phil. 396, 401).
As noted by the city court, Ong Cu's rights with respect to the
improvements made by him on the leased land are governed by the
following provisions of the Civil Code:
ART 1678. If the lessee makes, in good faith, —
useful improvements which are suitable to the use
for which the lease is intended, without altering the
form or substance of the property leased, the lessor
upon the termination of the lease shall pay the
lessee one-half of the value of the improvements at
that time. Should the lessor refuse to reimburse said
amount, the lessee may remove the improvements,
even though the principal thing may suffer damage
thereby, He shall not, however, cause any more
impairment upon the property leased than is
necessary.
With regard to ornamental expenses, the lessee
shall not be entitled to any reimbursement, but he
may remove the ornamental objects, provided no
damage is caused to the principal thing, and the
lessor does not choose to retain them by paying
their value at the time the lease is extinguished. (n)
Under article 1678 it is the lessor who has the option to pay for one-
half of the value of the improvements which the lessee has made in
good faith, which are suitable for the use for which the lease is
intended and which have not altered the form and substance of the
land (Philippine National Bank vs. Pineda, L-29748, August 29,
1969, 29 SCRA 262; Lapeña and Pineda vs. Morfe, 101 Phil. 997;
Sto. Domingo vs. Chua Man, 105 Phil. 220; Bacaling vs. Laguda, 70
O. G. 2694, 54 SCRA 243).
Contrary to the lower courts impression, the lessee has no right of
retention because article 546 of the Civil Code does not apply to the
improvements made by him. Only the possessor in good faith has a
right of retention under article 546. As already noted, article 1671
regards an overstaying lessee as a possessor in bad faith.
The lower court discerned an absurdity or incongruency in allowing a
defendant in an ejectment case to stay execution of the inferior
court's decision, by filing a supersedeas bond and making monthly
deposits, and at the same time granting a mandatory injunction to
restore possession on the theory that the defendant's appeal is
frivolous and mandatory.
The absurdity is more apparent than real. The execution in an
ejectment case has two espects: (a) possession and (b) the rentals
or reasonable value of the use of the premises, The mandatory
injunction refers to the possession of the premises in litigation.
On the other hand, the supersedeas bond and the monthly deposits
are primarily designed to insure that the plaintiff would be paid the
back rentals or the compensation for the use and occupation of the
premises should the inferior court's decision in his favor be affirmed
on appeal. Hence, if no bond was filed or no monthly deposit was
made, the plaintiff is entitled to the possession of the premises. To
allow the defendant to continue his possession without any security
for the rentals would be prejudicial to the plaintiff. He might not be
able to recover the back rentals when the judgment in his favor
becomes final and executory. In that event, his claim for rentals
would be illusory or ineffectual.
If the mandatory injunction is granted, defendant's possession would
cease but the supersedeas bond and the deposits already made
would subsist as security for the accrued pecuniary liability of the
defendant to the plaintiff. The execution as to the rentals or
compensation for the use of the premises would be stayed.
It results that the lower court gravely abused its discretion in not
granting the writ of mandatory injunction. Its questioned orders were
predicated on erroneous assumptions.
Generally, certiorari does not lie to question the propriety of an
interlocutory order of the trial court. Interlocutory orders ordinarily
should be reviewed when an appeal is taken from the trial court's
judgment. Not every procedural error or erroneous legal or factual
conclusion amounts to a grave abuse of discretion. An error of
judgment is not necessarily a jurisdictional error.
But when a grave abuse of discretion was patently committed, such
as when the lower court acted capriciously and whimsically, or
petitioner's contention appears to be clearly tenable, or the broader
interests of justice or public policy require the setting aside of the
interlocutory order, then it devolves upon this Court in a certiorari
proceeding to exercise its supervisory authority and to correct the
error committed which in such a case is equivalent to lack of
jurisdiction (Sanchez vs. Zosa, L-27043, November 28, 1975, 68
SCRA 171, 175; Pacheco vs. Tumangday and Fernando, 108 Phil.
238; Manila Electric Co. and Sheriff of Quezon City vs. Hon.
Enriquez, etc. and Espinosa, 110 Phil. 499).
The immediate possession to be granted to Mrs. Laureano under the
writ of mandatory injunction would embrace the portions of the two
lots not occupied by Ong Cu's improvements.
As to the portions of the lots occupied by Ong Cu's improvements,
their demolition would be necessary in order to deliver the
possession thereof to Mrs. Laureano. In such a case, the provisions
of section 14, Rule 39 of the Rules of Court should be observed. A
special order of demolition should be issued only after r notice and
hearing a. c g and after giving Ong Cu a reasonable time effect the
removal.
The disposition of the appeal in the lower court should proceed in
accordance. with section 45 of the Judiciary Law as amended. The
grant of the mandatory injunction constitutes a prejudgment of the
appeal with respect to the possession of the two lots. The main point
to be resolved in the lower court's disposition of the appeal is the
correctness of the city court's finding on the reasonable value of the
use and occupation of the two lots after the lease expired on August
31, 1974.
In filing the ejectment suit Mrs. Laureano opted not to reimburse Ong
Cu for his improvements. Consequently, there is no issue as to the
reimbursement to be made under article 1678. What period should
be given to Ong Cu for the removal of his improvements is a matter
that should be judiciously resolved by the lower court in the light of
the evidence introduced in the city court and the evidence that will be
presented during the hearing on the petition for a special order of
demolition. Ong Cu's rights under the law should be respected.
Nothing oppressive or arbitrary should be perpetrated in connection
with the removal of his improvements.
WHEREFORE, the lower court's orders of December 9, 1975 and
February 12, 1976 are set aside.
(1) The lower court is directed to require Ong Cu (a)
to file within thirty (30) days from notice a new
supersedeas bond in the amount of P161,564
representing the reasonable compensation for the
use and occupation of the two lots, at the rate found
by the city court, from September 1, 1974 to
September, 1975, when the city court rendered its
judgment, and (b) to deposit in court within the same
period the compensation for the use and occupation
of the lots for the period from October 1, 1975 to
June, 1976 at the rate of P12,428 a month, the
amount fixed in the inferior court's judgment, less the
amounts already deposited by Ong Cu at the rate of
P1,200 a month.
(2) If after June, 1976 he has not restored to Mrs.
Laureano the portions of the two lots not occupied
by his buildings, then h should deposit in court on or
before the tenth day of each month, as prescribed in
section 8, Rule 70 of the Rules of Court, the same
sum of P12,428 until he has complied with the
mandatory injunction decreed herein.
(3) The lower court is further directed to issue a writ
of preliminary mandatory injunction requiring Ong
 Cu to vacate the two lots in question, to deliver the
possession thereof to Mrs. Laureano and to remove
his buildings and improvements after the court has
passed upon the corresponding petition for
demolition.
(4) After Ong Cu has complied with the mandatory
injunction with respect to the portions of the lots not
occupied by his buildings and improvements, he
should deposit in court the value of the use and
occupation of the portions of the two lots occupied
by his buildings at the rate of four pesos a square
meter. Costs against respondent Ong Cu.
SO ORDERED.
G.R. No. L-25462 February 21, 1980
MARIANO FLOREZA, petitioner,
vs.
MARIA D. de EVANGELISTA and SERGIO
EVANGELISTA, respondents.
R.D. Hipolito & B. P. Fabir for petitioner.
E.G. Tanjuatco & Associates for respondents.
MELENCIO-HERRERA, J:
This is a Petition for Review on certiorari of the Decision of the Court
of Appeals (CA-G.R. No. 23516-R) promulgated on November 4,
1965, entitled "Maria de Evangelista and Sergio Evangelists, (now
the respondents) vs. Mariano Floreza (petitioner herein)," reversing
the judgment of the Court of First Instance of Rizal rendered on July
17, 1957, and instead ordering petitioner to vacate respondents'
residential lot, to remove his house at his own expenses and to pay
rental from May 5, 1956.
Plaintiffs Maria de Evangelista and Sergio Evangelista, who are
mother and son, (the EVANGELISTAS, for short) are the owners of a
residential lot located at Sumilang St., Tanay, Rizal, with an area of
204.08 sq. ms., assessed at P410.00. In May 1945, the
EVANGELISTAS borrowed from FLOREZA the amount of P100.00.
On or about November 1945, with the consent of the
EVANGELISTAS, FLOREZA occupied the above residential lot and
built thereon a house of light materials (barong- barong) without any
agreement as to payment for the use of said residential lot owing to
the fact that the EVANGELISTAS has then a standing loan of
P100.00 in favor of FLOREZA. 1
On the following dates, the EVANGELISTAS again borrowed the
indicated amounts: September 16, 1946 — P100.00; 2 August 17,
1947 — P200,00; 3 January 30, 1949 — P200.00; 4 April 1, 1949 —
P140.00, 5 or a total of P740.00 including the first loan. The last three
items are evidenced by private documents stating that the residential
lot stands as security therefor and that the amounts covered
thereunder are payable within six years from date, without mention of
interest. The document executed on September 16, 1946 stated
specifically that the loan was without interest "walang anumang
patubo."
On January 10, 1949, FLOREZA demolished this house of light
materials and in its place constructed one of strong materials
assessed in his name at P1,410.00 under Tax Declaration No. 4448.
FLOREZA paid no rental as before. 6
On August 1, 1949, the EVANGELISTAS, for and in consideration of
P1,000.00 representing the total outstanding loan of P740.00 plus
P260.00 in cash, sold their residential lot to FLOREZA, with a right to
repurchase within a period of 6 years from date, or up to August 1,
1955, as evidenced by a notarial document, Exh. B, registered under
Act 3344 on December 6, 1949, as Inscription No. 2147. 7
On January 2, 1955, or seven months before the expiry of the
repurchase period, the EVANGELISTAS paid in full the repurchase
price of P1,000.00.
On April 25, 1956, the EVANGELISTAS, through their counsel, wrote
FLOREZA a letter 8 asking him to vacate the premises as they
wanted to make use of their residential lot besides the fact that
FLOREZA had already been given by them more than one year
within which to move his house to another site. On May 4, 1956, the
EVANGELISTAS made a formal written demand to vacate, within
five days from notice, explaining that they had already fully paid the
consideration for the repurchase of the lot. 9 FLOREZA refused to
vacate unless he was first reimbursed the value of his house. Hence,
the filing of this Complaint on May 18, 1956 by the EVANGELISTAS.
The EVANGELISTAS prayed that: 1) they be declared the owners of
the house of strong materials built by FLOREZA on their residential
lot, without payment of indemnity; or, in the alternative to order
FLOREZA to remove said house; 2) that FLOREZA pay them the
sum of P10.00 per month as the reasonable value for the use and
occupation of the same from January 2, 1955 (the date the
repurchase price was paid) until FLOREZA removes the house and
delivers the lot to them; and 3) to declare the transaction between
them and FLOREZA as one of mortgage and not of pacto de retro.
In his Answer, FLOREZA admitted the repurchase but controverted
by stating that he would execute a deed of repurchase and leave the
premises upon payment to him of the reasonable value of the house
worth P7,000.00.
In a Decision dated July 17, 1957, the Court of First Instance of Rizal
opined that the question of whether the transaction between the
parties is one of mortgage or pacto de retro is no longer material as
the indebtedness of P1,000.00 of the EVANGELISTAS to FLOREZA
had already been fully paid. And, applying Article 448 of the Civil
Code, 10 it rendered a decision dispositively decreeing:
FOR ALL THE FOREGOING CONSIDERATIONS,
the Court hereby renders judgment granting the
plaintiffs the right to elect, as owners of the land, to
purchase the house built, on the said lot in question
by the defendant for P2,500 or to sell their said land
to e defendant for P1,500. In the event that the
plaintiffs shall decide not to purchase the house in
question the defendant should be allowed to remain
in plaintiffs' premises by, paying a monthly rental of
P10.00 which is the reasonable value for the use of
the same per month as alleged by plaintiffs in their
complaint. The Court also orders the defendant to
pay a monthly rental of P10.00 for the use of the
land in question from May 18, 1956, the date of the
commencement of this action. The counterclaim of
the defendant is hereby ordered dismissed. Without
pronouncement as to costs.
SO ORDERED. 11
Both parties appealed to the Court of Appeals.
On November 4, 1965, the Court of Appeals concluded that Article
448 of the Civil Code, supra, was inapplicable; that FLOREZA was
not entitled to reimbursement for his house but that he could remove
the same at his expense; and accordingly rendered judgment thus:
WHEREFORE, judgment is hereby rendered: (1)
adjudging the defendant-appellant Mariano Floreza
to vacate plaintiffs' residential lot described in the
complaint and to pay rental of P10.00 a month from
May 5, 1956, until he (defendant) shall have vacated
the premises; (2) ordering defendant to remove his
house from the land in question within 30 days from
the time this decision becomes final and executory;
(3) ordering the Register of Deeds of Rizal to cancel
inscription No. 2147, Page 210, Vol. 36, in the
Registration Book under Act 3344 upon payment of
his lawful fees; and (4) taxing the costs in both
 instances against defendant-appellant Mariano
Floreza. 12
Hence, this Petition for Review on certiorari by FLOREZA, seeking a
reversal of the aforestated judgment and ascribing the following
errors:
1) That the Court of Appeals erred in holding that
petitioner Floreza was a builder in bad faith without
likewise holding that respondents as owners of the
land in dispute, were likewise in bad faith and
therefore both parties should in accordance with Art.
453 of the New Civil Code be considered as having
acted in good faith.
2) That the Court of Appeals erred in completely
ignoring the issue raised on appeal as to whether or
not respondents as owners of the questioned lot,
were in bad faith in the sense that they had
knowledge of and acquiseced to the construction of
the house of petitioner on their lot.
3) That the Court of Appeals erred in not applying
Art. 448 of the New Civil Code in the adjudication of
the rights of petitioner and respondent.
4) That the Court of Appeals erred in declaring that
petitioner is not entitled to reimbursement for the
value of his house and that he should instead
remove the same at his expense.
5) That the Court of Appeals erred in adjudging
petitioner to vacate respondents' lot in question and
to pay rentals commencing from May 5, 1956, until
he shall have vacated the premises, notwithstanding
that petitioner is entitled under Arts. 448 and 546 of
the New Civil Code, to retention without payment of
rental while the corresponding indemnity of his
house had not been paid.
6) That the Court of Appeals erred in taxing costs
against petitioner.
7) That the Court of Appeals erred in not awarding
petitioner's counterclaim.
During the pendency of this appeal, petitioner Maria D. de
Evangelista died and was ordered substituted by her son, petitioner
Sergio, as her legal representative, in a Resolution dated May 14,
1976.
On October 20, 1978. the EVANGELISTAS filed a Motion to Dismiss
stating that FLOREZA had since died and that his heirs had
voluntarily vacated the residential lot in question. The date
FLOREZA passed away and the date his heirs had voluntarily
vacated the property has not been stated. Required to comment,
"petitioner (represented by his heirs)", through counsel, confirmed
his death and the removal of the house and manifested that thereby
the question of reimbursement had moot and academic. He objected
to the dismissal of the case, however, on the ground that the issue of
rentals still pends. On January 21, 1980, complying with a Resolution
of 'his Court, the EVANGELISTAS clarified that the dismissal they
were praying for was not of the entire case but only of this Petition
for Review on Certiorari.
We are not in agreement that the question of reimbursement of the
value of the improvement erected on the subject property has
become moot. Petitioner's right of retention of subject property until
he is reimbursed for the value of his house, as he had demanded, is
inextricably linked with the question of rentals. For if petitioner has
the right to indemnity, he has the right of retention and no rentals
need be paid. Conversely, if no right of retention exists, damages in
the form of rentals for the continued use and occupation of the
property should be allowed.
We uphold the Court of Appeals in its conclusion that Article 448 of
the Civil Code is inapplicable to the factual milieu herein. Said codal
provision applies only when the builder, planter, or sower believes he
had the right so to build, plant or sow because he thinks he owns the
land or believes himself to have a claim of title. 13 In this case,
petitioner makes no pretensions of ownership whatsoever.
Petitioner concedes that he was a builder in bad faith but maintains
that' the EVANGELISTAS should also be held in bad faith, so that
both of them being in bad faith, Article 453 of the Civil Code 14 should
apply. By the same token, however, that Article 448 of the same
Code is not applicable, neither is Article 453 under the ambiance of
this case.
Would petitioner, as vendee a retro, then be entitled to the rights
granted iii Article 1616 of the Civil Code (Art. 1518 of the old Code)?
To quote:
Art. 1616. The vendor cannot avail himself of the
right of repurchase without returning to the vendee
the price of the sale, and in addition:
(1) The expenses of the contract, and any other
legitimate payments made by reason of the sale;
(2) The necessary and useful expenses made on the
thing sold.
The question again calls for a negative answer. It should be noted
that petitioner did not construct his house as a vendee a retro. The
house had already been constructed as far back as 1949 (1945 for
the house of light materials) even before the pacto de retro sale in
1949. Petitioner incurred no useful expense, therefore, after that
sale. The house was already there at the tolerance of the
EVANGELISTAS in consideration of the several loans extended to
them. Since petitioner cannot be classified as a builder in good faith
within the purview of Article 448 of the Civil Code, nor as a vendee a
retro, who made useful improvements during the lifetime of the pacto
de retro, petitioner has no right to reimbursement of the value of the
house which he had erected on the residential lot of the
EVANGELISTAS, much less to retention of the premises until he is
reimbursed.The rights of petitioner are more akin to those of a
usufructuary who, under Article 579 of the Civil (Art. 487 of the old
Code), may make on the property useful improvements but with no
right to be indemnified therefor. He may, however, remove such
improvements should it be possible to do so without damage to the
property: For if the improvements made by the usufructuary were
subject to indemnity, we would have a dangerous and unjust
situation in which the usufructuary could dispose of the owner's
funds by compelling him to pay for improvements which perhaps he
would not have made. 15
We come now to the issue of rentals. It is clear that from the date
that the redemption price had been paid by the EVANGELISTAS on
January 2, 1955, petitioner's right to the use of the residential lot
without charge had ceased. Having retained the property although a
redemption had been made, he should be held liable for damages in
the form of rentals for the continued use of the subject residential
lot16 at the rate of P10.00 monthly from January 3, 1955, and not
merely from the date of demand on May 4, 1956, as held by the
Court of Appeals, until the house was removed and the property
vacated by petitioner or his heirs.
WHEREFORE, the judgment appealed from is hereby affirmed, with
the modification that payment of rentals by the heir, of Mariano
Floreza, who are hereby ordered substituted for him, shall
commence on January 3, 1955 until the date that the residential lot in
question was vacated.
Costs against petitioner.
SO ORDERED.
G.R. No. L-39677 July 22, 1975
INTER-REGIONAL DEVELOPMENT CORPORATION, petitioner,
vs.
COURT OF APPEALS and RICARDO CABALLERO, respondents.
Raquiza, Esparraqo, Amante, Pacificador, Ozamis and Adaza for
petitioner.
German M. Lopez for private respondent.
CASTRO, J.:
This is a petition for review on certiorari of the decision of the Court
of Appeals in CA-GR 02794-SP. Upon consideration of the
allegations contained, the issues raised and the arguments adduced
in the petition, as well as the respondent's comment thereon, the
Court resolved to treat this case as a special civil action.1 The
challenged decision declares null and void an order dated January
16, 1974 of Judge Sancho Y. Inserto of the Court of First Instance of
Iloilo (Branch 1) which enjoined the defendant in its civil case 9562,
entitled "Inter-Regional Development Corporation vs. Ricardo
Caballero," from cutting and milling the sugar cane crop which the
therein plaintiff company (herein petitioner) asserts to have planted
in good faith.
On December 13, 1974 we issued a temporary restraining order
which reads as follows:
You (respondent Court of Appeals) are hereby
RESTRAINED from enforcing and/or implementing
your decision in CA-GR No. 02794-SP entitled
"Ricardo Caballero versus Hon. Sancho Inserto,
etc., et al." and you (respondent Caballero), your
agents, representatives, assigns, successors-in-
interest and/or any person or persons acting upon
your orders or in your place or stead, are likewise
RESTRAINED from collecting and/or negotiating the
quedans representing the milled sugar canes
homestead from Lots No. I and 6, Psu-118496 in
Batad, Iloilo for the crop year 1973-74.
In civil case 8195 of the Court of First Instance of Iloilo, entitled
"Inter-Regional Development Corporation vs. Isidro Estrada, et al.,"
for annulment of sales and damages and involving land ownership,
the court, thru Judge Castrence Veloso of Branch III, rendered
judgment dismissing the complaint and, among others, ordering the
spouses Jose Bañez and Isabel Bañez (president and treasurer,
respectively, of the inter-Regional Development Corporation) or their
privies —
to immediately vacate and surrender the possession
of Lots 1 and 6, Plan Psu-118496 to the third-party
plaintiff (Isidro A. Estrada) and not to molest, disturb
or in any manner interfere with his possession
thereof ....
The corporation appealed; nonetheless, Judge Veloso issued, on
May 7, 1973, a partial writ of execution pending appeal, and
possession of the two lots was delivered to Estrada, following which
the latter, on May 25, 1973, leased the lots to now respondent
Ricardo Caballero for a term of ten years, starting with the crop year
1973-74.
On July 6, 1973 the corporation filed a special civil action for
certiorari with the Court of Appeals, praying that Judge Veloso be
enjoined from enforcing the partial writ of execution. Holding that the
said Judge did not abuse his discretion in ordering partial execution,
the Court of Appeals, on October 16, 1973, dismissed the petition.
This decision became final.
However, five days before entry of judgment, or on November 15,
1973, the corporation filed civil case 9562, for injunction and
damages, against the lessee Caballero to settle the question of
ownership of the sugar crop for 1973-74 which the corporation
alleged to have planted in good faith on the lands litigated in civil
case 8195. Judge Sancho Inserto, to whom the case was assigned,
issued a writ of preliminary injunction enjoining Caballero "from
cutting, milling the growing sugar cane ...."
Caballero moved for reconsideration, but before the court could act
on his motion, he filed a petition for certiorari with the Court of
Appeals. On September 30, 1974 the appellate court promulgated its
decision setting aside Judge Inserto's preliminary injunction. 1äw phï1.ñët
Hence, the present recourse by the corporation.
On the issue of whether the preliminary injunction issued in case
9562 by Judge Inserto enjoining Caballero from cutting and milling
the sugar cane constitutes an interference with the partial writ of
execution pending appeal issued in case 8195 by Judge Veloso
ordering the Bañez spouses to vacate and surrender possession of
the parcels of land and not to molest or disturb Estrada's (Caballero's
lessor) possession thereof, we find that neither order interferes with
the other; as a matter of fact the order of Judge Inserto complements
that of Judge Veloso. The latter refers to the land itself, the
ownership of which was the only issue adjudged in the decision
pending appeal, while the former refers to the sugar cane crop
standing thereon. True it is that under article 440 of the Civil Code
the ownership of property includes the right of accession to
everything attached thereto either naturally or artificially, and that
under article 415, trees, plants and growing fruits, while they are
attached to the land, are immovable property; it is equally true that
when a person plants in good faith on land belonging to another, the
landowner does not ipso facto acquire ownership of what has been
planted; he must first indemnify the planter before he can appropriate
the same. And so provides article 448:
The owner of the land in 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 ....
Absent any incompatibility between the orders issued by Judges
Inserto and Veloso, the doctrine that no court has the power to
interfere by injunction with the judgment or decrees of another court
of concurrent or coordinate jurisdiction, having equal power to grant
the relief,3 does not apply.
In holding that the gathering of the crops existing on the land is part
of Estrada's right of ownership and possession, the Court of Appeals
in effect prematurely held that the petitioner is a planter in bad faith;
this is error since the issues as to who planted and whether the
planter planted in good faith are the very issues posed in case 9562,
which is yet pending.
The Court of Appeals, however, did not err in entertaining the petition
for certiorari even if a motion for reconsideration had not yet been
resolved by the Court of First Instance, in view of the urgency of
securing a definitive ruling on the sugar cane crop, which is
perishable.4
ACCORDINGLY, the judgment of the Court of Appeals in CA-G.R.
02794-SP is set aside, and the restraining order heretofore issued is
made permanent, without prejudice, however, to the final outcome in
case 9562 of the Court of First Instance of Iloilo. No costs.
Makasiar, Esguerra, Muñoz Palma and Martin, JJ., concur.
Teehankee, J., is on leave.

The aforequoted article, not those relied upon by the respondent,

applies in the present case, because the petitioner has alleged good
faith in planting the sugar cane, thus giving rise to a conflict of rights
which poses the issue of the protection of the alleged planter in good
faith without causing injustice to the landowner.2
G.R. No. L-15398 December 29, 1962
J. M. TUAZON & CO., INC., represented by its Managing Partner,
Gregorio Araneta, Inc., plaintiff-appellee,
vs.
TEODOSIO MACALINDONG, defendant-appellant.
Araneta and Araneta for plaintiff-appellee.
Leandro Sevilla and Ramon S. Aquino for defendant- appellant.
PAREDES, J.:
On September 9, 1958, plaintiff instituted Civil Case No. Q-3303 in
the Court of First Instance of Rizal, against Teodosio Macalindong,
alleging therein that it is the registered owner of a parcel of land,
commonly known as the Sta. Mesa Heights Subdivision, located at
Quezon City and Covered by Transfer Certificate of Title No. 1267
(37686-Rizal) of the Registry of Deeds of Quezon City; that on or
about December 5, 1955, the defendant, thru force, strategy and
stealth, unlawfully entered into the possession of some 200 square
meters, within said parcel of land, situated at Bo. North Tatalon,
Quezon City, and constructed his house thereon; and that because
of this act it suffered and will continue to suffer damages at the rate
of P60.00 monthly, representing the fair rental value of the portion
occupied. Defendant answering, stated among others, that —
. . . prior to 1955 and since time immemorial, he and his
predecessors-in-interest have been in open, adverse, public,
continuous and actual possession of the lot in question in the
concept of owner and, by reason of such possession, he had
made improvement thereon valued at P9,000.00.
As a counterclaim, he asked an award of P25,000.00 for moral and
exemplary damages and P600.00 as attorney's fees.
Defendant presented documents tending to show that the portion in
question was acquired by him on June 28, 1954, thru purchase from
Graciano M. Flores (Exh. 1), who in turn acquired the same from
Lucia T. Teotico on April 27, 1954 (Exh. 2). The latter bought the
same from Agustin de Torres on April 1, 1950 (Exh. 3), who allegedly
derived his title from Telesforo Deudor, a party in the Compromise
Agreement, which formed the basis of the joint decisions in Civil
Cases Nos. Q-135, 139, 174, 177 and 186, of same court.
The court a quo rendered judgment, the pertinent portions of which
read —
. . . In the first place, the Court takes judicial notice of the
fact that this property has been registered under the Torrens
System, in the name of plaintiff since 1914, hence, the claim
of possession of defendant cannot defeat the efficacy of the
title of the plaintiff; in the second place, as testified to by the
defendant himself when he was trying to declare the
property in question in the Office of the City Assessor he
could not . . . so because he was told that there was a
question to that. In fine, the documents presented by the
defendant cannot be considered by the Court as to vest in
him any rights over the property in question as against the
title of the plaintiff which has been issued since 1914. . . .
WHEREFORE, the Court renders judgment in favor of the
plaintiff and against the defendant by declaring the
defendant to have no valid right of possession and title
whatever in plaintiff's premises; ordering him and all persons
claiming under him to vacate the premises in question and to
remove his house and other construction therefrom; ordering
him to pay the plaintiff the sum of P30.00 a month from the
date of usurpation in 1955 until the plaintiff is restored to the
possession of the same; and for him to pay the costs.
Defendant presented a Motion to Reconsider and/or to Set Aside
Decision, alleging that the said decision is contrary to the evidence
and law. It was contended that while the plaintiff secured title over
the land, the portion in question, however, had been in the adverse,
open, public and continuous possession of the defendant's
predecessor-in-interest, since 1893. Defendant reproduced portions
of the Compromise Agreement used in the Civil Cases earlier
enumerated, to show the possession of his predecessors-in-interest,
to wit: —l awphil.net
SECOND. — That within the perimeter of said land is an
area measuring fifty (50) quiñones over which the
DEUDORS have claimed possessory rights by virtue of what
purports to be an abstract of an "informacion posesoria"
covering the latter property, which recites that at the time of
issuance thereof in 1893, the Records of the Registry of
Deeds of Manila (South District) showed that said property
was registered in the name of the old Telesforo Deudor,
predecessor-in-interest of the present Deudors who are
parties hereto. . . .
THIRD. — That said DEUDORS have been in possession of
the land in question and claim to be the owners thereof and
during the period of possession have sold their possessory
rights to various third persons;
FOURTH. — That in the middle of 1950, DEUDORS, under
a mistaken impression of the nature of their rights in said
property, began the following suits against the OWNERS in
the Court of First Instance of Quezon City: . . . .
The motion for reconsideration having been denied February 21,
1959, defendant appealed directly to this Court, claiming that the
court a quo erred —
(1) In not holding that plaintiff-appellee's Torrens Certificate
of Title is Null and Void insofar as the property controversy is
concerned;
(2) In not holding the plaintiff-appellee's action has ready
prescribed or is already barred by laches;
(3) In not holding that defendant-appellant is a possess in
good faith and is entitled to retention until reimbursed the
value of his improvements;
(4) In ordering defendant-appellant to pay rentals in the sum
of P30 per month from 1955 until plaintiff-appellee is
restored to the possession of the land in controversy; and
(5) In not dismissing the complaint.
The appellee's cause of action is based on its ownership of the
subject land, evidenced by TCT No. 1267 of the Register of Deeds of
Quezon City (Exhibit A), which was issued in appellee's name on
May 29, 1939 (Decree No. 17431 G.L.R.O. No. 7681), and was
traceable O.C.T. No. 735 (Rizal, issued on July 8, 1914). Appellant's
defense is that he is the owner of the subject premises. His only
counter-claim is for attorney's fees a moral and exemplary damages,
for appellee's supposedly malicious and frivolous presentation of the
complain Nullity of appellee's title and reconveyance were never set
up, either as defenses or as counter-claims. Neither prescription of
appellee's claim or bar of the action recovery due to laches was
averred in appellant's defenses. Appellant cannot raise them now for
the first time on appeal. Verily the failure to raise the issue of
prescription and laches, amounts to a waiver of such defense (Sec.
10, Rule 9; Maxilim v. Tabotabo, 9 Phil. 39 Domingo v. Osorio, 7
Phil. 405). Moreover, the right of the appellee to file an action to
recover possession based on its Torrens Title is imprescriptible and
not barred under doctrine of laches (Art. 348, Civil Code; Francisco
et al. v. Cruz, et al., 43 O.G. 5105). On the contra the laws on
prescription of actions and on estoppel an laches presently operate
against appellant. After many years of inaction - forty-four years,
from July 8, 1914 (issuance of O.C.T. No. 735, Rizal), or nineteen
(19) years from May 29, 1939 (issuance of T.C.T. No. 1267),
appellant should be completely barred from assailing the decree of
registration of the subject property (Tiburcio v. PHHC, G.R. NO. L-
13429, Oct. 31, 1959; See also J.M. Tuason & Co., Inc. v. Bolanos,
L-4935, May 28, 1954, and J.M. Tuason & Co., Inc. v. Santiago, G.R.
No. L-5079, July 31, 1956, involving the same Decree).
We are in accord with appellant's contention that Act No. 496 is not
intended to shield fraud and that registration thereunder merely
confirms title but does not vest any, when there is none, because
registration under the Torrens system is not a mode of acquiring
ownership. We are not, however, justified to apply these principle to
the facts of the case and partially annul appellee's Torrens Title,
which, as stated above, is traceable to an original certificate of title
issued way back in 1914, or over 44 years ago, and which is now
incontrovertible and conclusive against the whole world (sec. 38, Act
496) To sustain an action for annulment of a Torrens Title, for being
void ab initio, it must be shown that the land Court which had issued
the pertinent decree of registration, did not acquire jurisdiction over
the case; and to succeed is an action for reconveyance after the
lapse of one year from the decree of registration, actual fraud in
securing the title must be proved (Bernardo v. Siojo, 58 Phil. 89 102).
The pleadings filed by appellant before the trial court, alleged no
such lack of jurisdiction and no evidence whatsoever was adduced
or attempted to be adduced on the question of jurisdiction of the said
land court and the record also fails to show fraudulent acts or and
knowledge of others' adverse rights by the original Tuason
registrants in G.L.R.O. Rec. No. 7681, or that the latter knew of
Telesforo Deudor's or Agustin de Torres' sup posed right of
ownership.
Appellant mentions an informacion posesoria, subject of
Compromise Agreement dated March 16, 1953, between Deudor
and Tuason & Co., Inc., allegedly issued in 1893 to Telesforo
Deudor, who sold a portion of his land to Agustin de Torres, who
possessed it until it passed to Lucia T. Teotico, to show that he had a
previous title to the land, before the appellee had obtained a Torrens
title in 1914. In the first place, the compromise agreement had
already been rescinded (Deudor et al. v. J.M. Tuason & Co., Inc., L-
13768, May 30, 1961). In the second place, the records do not
indicate that either Telesforo Deudor or Agustin de Torres was in
possession of the subjected lot, at the time appellee's predecessor-
interest had obtained a Torrens Title thereto in 1914, or at any time
before World War II. And there is no finding of the trial court to this
effect. On the contrary, it is a fact that in December 1955, appellant
entered a portion of 200 square meters of appellee's land, without
the consent and knowledge of appellee, and on September 9, 1958,
appellee commenced the present action for recovery of possession.
To this finding of fact, the parties are bound, because the appeal,
according to appellant, would only raise questions of law. Moreover,
if We were to give due weight to the compromise agreement which
by the way, was not presented in evidence in the case at bar, the
appellant will have to concede that "The Deudors had a wrong
impression of the nature of their rights" in the subject property, and
perforce admit that Telesforo Deudor and Agustin de Torres had no
dominical title to the property in question.
Appellant claims that he should have been declared a builder in good
faith, that he should have been ordered to pay rentals; and that the
complaint should have been dismissed. Again this question is being
raised for the first time on appeal. It was not alleged as a defense or
counter-claim and the trial court did not make any finding on this
factual issue. From the documents submitted, however, it appears
that appellant was not a builder in good faith. From the initial
certificate of title of appellee's predecessors-in-interest issued on
July 8, 1914, there is a presumptive knowledge by appellant of
appellees Torrens Title (which is a notice to the whole world) over
the subject premises and consequently appellant can not, in good
conscience, say now that he believed his vendor (Flores), his
vendor's vendor (Teotico) and the latter's seller (De Torres) had
rights of ownership over said lot (Francisco, et al. v. Cruz, supra).
Appellant, had likewise, a sufficient warning from the fact that the lot,
subject of his purchase, is described in his Exhibits 1, 2 and 3, to be
a portion of an unnumbered and, therefore, unapproved subdivision
plan. Had he investigated before buying and before building his
house on the questioned lot, he would have been informed that the
land is registered under the Torrens system in the name of J.M.
Tuason & Co., Inc. If he failed to make the necessary inquiry,
appellant is now bound conclusively to appellee's Torrens Title (Sec.
51, Act 496; Emas v. Zuzuarregui, 35 Phil. 144). Moreover, when
appellant was trying to declare the property, the Office of the City
Assessor told him he could not do so, because there was "a question
to that". Lastly, appellant's remedy in this regard, should have been
directed against his predecessors-in-interest.
The decision appealed from, is therefore, affirmed, with costs against
the defendant-appellant.
G.R. No. L-45038 April 30, 1987
MANOTOK REALTY, INC., petitioner,
vs.
THE HON. COURT OF APPEALS and FELIPE
MADLANGAWA, respondents.
Romeo J. Calejo for petitioner.
Mantanggot C. Gunigundo for private respondent.
GUTIERREZ, JR., J.:
This is a petition for certiorari by way of appeal seeking to set aside
the decision of the Court of Appeals which upheld the dismissal of
the petitioner's complaint for reinvidicatory action with damages
against the private respondent and ordered the petitioner to accept
the payment of the balance of P2,551.85 from said respondent, and
thereafter, to execute the corresponding deed of sale of Lot 227,
Block I in favor of the latter.
The private respondent Felipe Madlangawa claims that he has been
occupying a parcel of land in the Clara de Tambunting de Legarda
Subdivision since 1949 upon permission being obtained from Andres
Ladores, then an overseer of the subdivision, with the understanding
that the respondent would eventually buy the lot.
On April 2, 1950, the owner of the lot, Clara Tambunting, died and
her entire estate, including her paraphernal properties which covered
the lot occupied by the private respondent were placed
under custodia legis.
On April 22, 1950, the private respondent made a deposit for the
said lot in the sum of P1,500.00 which was received by Vicente
Legarda, husband of the late owner. As evidenced by the receipt
issued by Vicente Legarda, the lot consisted of an area of 240
square meters and was sold at P30.00 per square meter. There,
thus, remained an unpaid balance of P5,700.00 but the private
respondent did not pay or was unable to pay this balance because
after the death of the testatrix, Clara Tambunting de Legarda, her
heirs could not settle their differences. Apart from the initial deposit,
no further payments were made from 1950.
On April 28, 1950, Don Vicente Legarda was appointed as a special
administrator of the estate. Meanwhile the private respondent
remained in possession of the lot in question.
Subsequently, the petitioner became the successful bidder and
vendee of the Tambunting de Legarda Subdivision consisting of 44
parcels of land spread out in the districts of Tondo and Sta. Cruz,
Manila, pursuant to the deeds of sale executed in its favor by the
Philippine Trust Company on March 13 and 20, 1959, as
administrator of the Testate Estate of Clara Tambunting de Legarda,
in Special Proceeding No. 10809 of the Manila probate court. The lot
in dispute was one of those covered by the sale. The Deed of Sale,
among others, provided for the following terms and conditions:
1. — The VENDEE assumes the risk and expenses
of ejecting the tenants or squatters on the said
parcels of land if it decides to eject them. Any rentals
or damages that may be due or collectible from the
said tenants or squatters for the period subsequent
to the date of this deed of sale shall belong to the
VENDEE but rentals due from the said tenants or
squatters prior to the execution of this deed of sale
shall belong to the VENDOR.
xxx xxx xxxx x x
3. — The VENDEE renounces the right to warranty
in case of eviction with the knowledge of the risks of
eviction and assumes its consequences with respect
not only to the lots subject-of the above mentioned
cases and claims but also with respect to any other
lots subject of contracts of sale or promises to sell
 that may have been executed by the deceased,
Clara Tambunting de Legarda and/or Vicente L.
Legarda, and it hereby relieves the estate of Clara
Tambunting de Legarda and the Philippine Trust
Company, in its capacity as Administrator thereof, of
any and all liability with respect thereto in case of
eviction. All sums of money that have been paid to
the deceased Clara Tambunting de Legarda and/or
Vicente L. Legarda and/or the administrator of Clara
Tambunting de Legarda on account of the purchase
price of said lots shall belong to the estate, but any
sums of money that are or may be due as the
balance of the purchase price of said lots shall
belong to the VENDEE. (pp. 27-28, Rollo).
xxx xxx xxx
In its effort to clear the Tambunting Subdivision of its squatters and
occupants, the petitioner caused the publication of several notices in
the Manila Times issues of January 1, 1966 and the Taliba issues of
January 2, and March 16, 1966, advising the occupants to vacate
their respective premises, otherwise, court action with damages
would follow. In addition to these notices by publication, the
petitioner sent circulars to the occupants to vacate.
The private respondent was one of the many occupants who refused
to vacate the lots they were occupying, so that on April 26, 1968, the
petitioner filed the action below to recover the said lot.
The trial court dismissed the petitioner's action after finding that the
Identity of the parcel of land described in the complaint had not been
sufficiently established as the very same piece of land in the material
and physical possession of the private respondent.
On appeal, the respondent Court of Appeals found the Identity of the
lot sought to be recovered by the petitioner to be the same as that in
the physical possession of the private respondent and ruled that the
only right remaining to the petitioner is to enforce the collection of the
balance because accordingly, it stepped into the shoes of its
predecessor; and that since the area now in possession of the
petitioner which is that involved in the present case is only 115
square meters, the balance after deducting the deposit of P1,500.00
is P2,551.85, and as per order of the Court of First Instance of
Manila, the said balance should be paid in 18 equal monthly
installments.
In this petition, the petitioner maintains that the Court of Appeals
committed a reversible error in holding that the sale by Don Vicente
Legarda in favor of the private respondent is valid, binding, and
enforceable against the petitioner.
The petitioner contends that since there is no dispute that the
property in question was the paraphernal property of Clara
Tambunting, who died on April 2, 1950, Vicente Legarda had no
authority whatsoever to sell the said property to the private
respondent on May 12, 1950 since the former was appointed as
administrator of the estate of Clara Tambunting only on August 28,
1950. Therefore, the questioned sale could not have bound Clara
Tambunting's estate because the vendor Vicente Legarda neither
acted as the owner nor the administrator of the subject property
when the alleged sale took place. As regards the provision in the
deed of sale which it executed with the Philippine Trust Company
wherein it bound itself to respect the contracts of sale or promises to
sell that may have been executed by Vicente Legarda and
renounced the right to warranty in case of eviction, the petitioner
argues that this re-required respect only for those valid sales
executed by the deceased Clara Tambunting and by persons vested
with authority to act on behalf of the estate.
On the other hand, the private respondent contends that the
aforequoted provisions of the deed of sale are a declaration or
admission against the interest of the petitioner, and shows that the
acts of Vicente Legarda had been ratified by the Philippine Trust
Company and approved by the probate court. The petitioner,
therefore, is allegedly estopped from questioning the authority of
Vicente Legarda in selling the property in dispute.
It is an undisputed fact that the lot in dispute is the paraphernal
property of Dona Clara Tambunting and that at the time of the sale
thereof, the owner was already dead. Thus, the only question to be
resolved in this petition is: in what capacity did the husband of the
deceased, Don Vicente Legarda, dispose of the lot?
Articles 136 and 137 of the Civil Code of the Philippines provide:
Art. 136. The wife retains the ownership of the
paraphernal property.
Art. 137. The wife shall have the administration of
the paraphernal property, unless she delivers the
same to the husband by means of a public
instrument empowering him to administer it.
In this case, the public instrument shall be recorded
in the Registry of Property. As for the movables, the
husband shall give adequate security.
There is nothing in the records that wig show that Don Vicente
Legarda was the administrator of the paraphernal properties of Dona
Clara Tambunting during the lifetime of the latter. Thus, it cannot be
said that the sale which was entered into by the private respondent
and Don Vicente Legarda had its inception before the death of Dona
Clara Tambunting and was entered into by the former for and on
behalf of the latter, but was only consummated after her death. Don
Vicente Legarda, therefore, could not have validly disposed of the lot
in dispute as a continuing administrator of the paraphernal properties
of Dona Clara Tambunting.
It is also undisputed that the probate court appointed Don Vicente
Legarda as administrator of the estate only on August 28, 1950,
more than three months after the questioned sale had taken place.
We are, therefore, led to the inevitable conclusion that the sale
between Don Vicente Legarda and the private respondent is void ab
initio, the former being neither an owner nor administrator of the
subject property. Such being the case, the sale cannot be the subject
of the ratification by the Philippine Trust Company or the probate
court. As was held in the case of Arsenal v. Intermediate Appellate
Court (143 SCRA 40, 49):
Under the provisions of the Civil Code, a void
contract is inexistent from the beginning. It cannot
be ratified neither can the right to set up the defense
of its illegality be waived. (Art. 1409, Civil Code .
To further distinguish this contract from the other
kinds of contract, a commentator has stated that.
The right to set up the nullity of a
void or non-existent contract is not
limited to the parties as in the case
of annuable or voidable contracts, it
is extended to third persons who are
directly affected by the contract.
(Tolentino, Civil Code of the
Philippines, Vol. IV, p. 604, [1973]).
Any person may invoke the
inexistence of the contract
whenever juridical affects founded
thereon are asserted against him.
(Id. P. 595).
Section 1, Rule 89 of the Revised Rules of Court provides for the
procedure on how a property in custodia legis can be disposed of by
sale:
Order of sale of personalty. — Upon the application
of the executor or administrator, and on written
notice to the heirs and other persons interested, the
court may order the whole or a part of the personal
estate to be sold, if it appears necessary for the
purpose of paying debts, expenses of
administration, or legacies, or for the preservation of
the property.
After the appointment of Don Vicente Legarda as administrator of the
estate of Dona Clara Tambunting, he should have applied before the
probate court for authority to sell the disputed property in favor of the
private respondent. If the probate court approved the request, then
Don Vicente Legarda would have been able to execute a valid deed
of sale in favor of the respondent. Unfortunately, there was no effort
on the part of the administrator to comply with the above-quoted rule
of procedure nor on that of the respondent to protect his interests or
to pay the balance of the installments to the court appointed
administrator.
As was held in Kline v. Shoup (226 Pacific Reporter 729, 731), which
we find applicable in the case at bar:
There are, however, certain steps to be taken in the
administration of an estate which the law deems of
sufficient importance to have placed without the
power of the probate court to effect under the
jurisdiction acquired over the general subject matter
by law and over the estate and those interested
therein, by the filing and due service of the petition
for the appointment of an administrator and the
order of appointment and issuance of letters, and at
least one of such steps is the sale of the real
property of an estate for the payment of the debts of
the deceased. C.S. 7603, provides that —
No sale of any property of an estate of a decedent is
valid unless made under order of the probate court.
...
From the foregoing, it cannot be denied that the law
recognizes the issuance of an order of sale as an
indispensable requisite in effecting a valid sale of the
property of a decedent's estate. ...
Considering the location of the disputed lot, we find a monthly rental
of Twenty Centavos (P0.20) per square meter to be more than fair to
the private respondent for his use of the premises. The petitioner,
however, should return the P 1,500.00 received by Mr. Legarda, with
legal interest, to the respondent.
WHEREFORE, IN VIEW OF THE FOREGOING, the decision
appealed from is hereby REVERSED and SET ASIDE. The private
respondent is ordered to SURRENDER the material and physical
possession of Lot No. 277, Block I to the petitioner and to pay the
latter the rentals as stated above from May, 1950 until he surrenders
the said lot. The petitioner shall reimburse the private respondent the
amount of P1,500.00 with legal interest from May, 1950 or offset said
amount from the rentals due to it. Costs against the private
respondent.
SO ORDERED.
G.R. No. L-35648 February 27, 1987
PERSHING TAN QUETO, petitioner,
vs.
COURT OF APPEALS, JUAN POMBUENA and RESTITUTA
TACALINAR GUANGCO DE POMBUENA, respondents.
RESOLUTION
PARAS, J.:
This is a Motion for Reconsideration of the decision dated May
16,1983 of this Court * in the above-entitled case, asking for the reversal of said
decision on the following grounds:
1. Decison erred in disregarding the fact that Lot
No. 304-B was registered in the name of the
husband, Juan Pombuena, as per OCT. No. 0-
1160 issued pursuant to the November 22, 1938
Decision (Exhibit 3) of the Cadastral Court in
Cadastral Case No. 12, G.L.R.O. Cad. Rec. No.
1638, and that petitioner had the right to rely on
said OCT;
2. The Decision erred in misinterpreting the
admission in the Answer of petitioner to the
complaint in the unlawful detainer Case No. 448
(City Court of Ozamiz City) as his admission that
Lot 304-B is the paraphernal property of the wife,
Restituta Tacalinar;
3. The Decision erred in reforming the Contract of
Sale (Exh. B) of Lot 304-B from Basilides
Tacalinar (mother) to the respondent, Restituta
Tacalinar Guangco de Pombuena, from a sale to
a conveyance of the share of the wife Restituta
Tacalinar (daughter) in the future hereditary
estate of her parents;
4. The Decision erred in over-looking that the
barter agreement is an onerous contract of
exchange, whereby private respondents-spouses
received valuable consideration, concessions and
other benefits therefor and in concluding that 'the
barter agreement has no effect;
5. The Decision erred in disregarding the fact that
petitioner constructed his concrete building on Lot
No. 304-B in good faith relying OCT No. 0-
1160, after the dismissal of the ejectment case
and only after the execution of said barter
agreement;
6. The Decision erred in confusing the conclusion
of law that petitioner is a builder in bad faith with
a finding of fact. The rule is that questions of law
are reviewable on appeal or by certiorari.
Moreover, the rule on finding of fact is subject to
well-settled exceptions. (pp. 257-258, Rollo)
It wig be recalled that the undisputed relevant facts indicate:
(1) that Restituta Tacalinar Guanaco de
Pombuena (RESTITUTA, for short) received the
questioned lot (no. 304-B), of the Cadastre
Survey of the Municipality of Centro, Mizamis
Occidental, either as a purported donation or by
way of purchase on (February 11, 1927) (with
P50.00) as the alleged consideration thereof;
(2) that the transaction took place during her
mother's lifetime, her father having predeceased
the mother;
(3) that the donation or sale was consummated
while RESTITUTA was already married to her
husband Juan Pombuena (JUAN, for short);
(4) that on January 22, 1935, JUAN filed for
himself and his supposed co-owner RESTITUTA
an application for a Torrens Title over the land;
(5) that under date of November 22, 1938 a
decision was promulgated in GLRC No. 1638
(Cadastral Case No. 12) pronouncing JUAN
('married to RESTITUTA') as the owner of the
land;
(6) that on September 22, 1949 a contract of
lease over the lot was entered into between
Pershing Tan Queto (TAN QUETO, for short, the
herein petitioner) and RESTITUTA (with the
consent of her husband JUAN) for a period of ten
(10) years;
(7) that on December 27, 1960 RESTITUTA sued
TAN QUETO for unlawful detainer (the lease
contract having expired) before the Municipal
Court of Ozamis City;
(8) that as a consequence of the cadastral case,
an Original Certificate of Title (Exh. 10) was
issued in JUAN's name ("married to
RESTITUTA") on April 22, 1962;
(9) that the unlawful detainer case was won by the
spouses in the Municipal Court; but on appeal in
the Court of First Instance, the entire case was
DISMISSED because of an understanding (barter)
whereby TAN QUETO became the owner of the
disputed lot, and the spouses RESTITUTA and
JUAN in turn became the owners of a parcel of
land (with the house constructed thereon)
previously owned (that is, before the barter) by
TAN QUETO;
(10) that after the barter agreement dated October
10, 1962 between JUAN and TAN QUETO, the
latter constructed (See p. 257, Rollo, Vol. II) on
the disputed land a concrete building, without any
objection on the part of RESTITUTA;
(11) that later, RESTITUTA sued both JUAN and
TAN QUETO for reconveyance of the title over
the registered but disputed lot, for annulment of
the barter, and for recovery of the land with
damages.
The two principal issues are clearly the following:
(1) Is the questioned lot paraphernal or conjugal?
(2) In having constructed the building on the lot, should TAN
QUETO be regarded as a builder in good faith (and hence
entitled to reimbursement) or a builder in bad faith (with no right
to reimbursement)?
The finding by both the Court of First Instance and the Court of
Appeals that the disputed lot is paraphernal and that TAN
QUETO is a builder in bad faith were regarded by Us in Our
assailed decision as findings of facts and thus ordinarily
conclusive on Us. Assuming they are factual findings, still if they
are erroneous inferences from certain facts, they cannot bind this
Court.
A second hard look at the circumstances of the case has
constrained Us to rule as follows:
(1) The land is conjugal, not paraphernal. How was ownership
transferred, if at all, from her mother to RESTITUTA?
The oral donation of the lot cannot be a valid
donation interviews because it was not executed in a public
instrument (Art. 749, Civil Code), nor as a valid donation mortis
causa for the formalities of a will were not complied with. The
allegation that the transfer was a conveyance to RESTITUTA of
her hereditary share in the estate of her mother (or parents)
cannot be sustained for the contractual transmission
of future inheritance is generally prohibited.
The fact is ownership was acquired by both JUAN and
RESTITUTA by tradition (delivery) as a consequence of the
contract of sale (See Art. 712, Civil Code) with P50.00 (then a
considerable amount) as the cause or consideration of the
transaction. The lot is therefore conjugal, having been acquired
by the spouses thru onerous title (the money used being
presumably conjugal there being no proof that RESTITUTA had
paraphernal funds of her own). The contention that the sale was
fictitious or simulated (and therefore void) is bankrupt. Firstly,
there was a valid consideration therefor. Secondly, assuming that
there had indeed been a simulation, the parties thereto cannot
use said simulation to prejudice a stranger to said stratagem (like
petitioner herein).
One nagging question has been posed. But did not TAN QUETO
admit in his Answer that RESTITUTA was the owner of the lot.
This is not so. He admitted RESTITUTA was an owner"
(not the owner) of the lot, and this is true, for she was a co-owner
(with JUAN, and therefore "an owner. " Surely, there is no
admission of RESTITUTA's exclusive ownership. And yet this is
the basis of the trial court's conclusion that the lot was indeed
paraphernal.
(2) Was Tan Queto a possessor and builder in good faith or in
bad faith?
Even assuming that despite registration of the lot as conjugal,
Tan Queto nursed the belief that the lot was actually
RESTITUTA's (making him in bad faith), still RESTITUTA's failure
to prohibit him from building despite her knowledge that
construction was actually being done, makes her also in bad faith.
The net resultant of mutual bad faith would entitle TAN QUETO to
the rights of a builder in good faith (Art. 448, Civil Code), ergo,
reimbursement should be given him if RESTITUTA decides to
appropriate the building for herself (Art. 448, Civil Code).
However, as already previously intimated, TAN QUETO having
bartered his own lot and small house with the questioned lot with
JUAN (who has been adverted to by a court decision and by the
OCT a conjugal owner) may be said to be the OWNER-
POSSESSOR of the lot. Certainly he is not merely a possessor
or builder in good faith (this phrase presupposes ownership
in another); much less is he a builder in bad faith. He is a builder-
possessor jus possidendi because he is the OWNER himself.
Please note that the Chapter on Possession (jus possesionis, not
jus possidendi) in the Civil Code refers to a possessor other than
the owner. Please note further that the difference between a
builder (or possessor) in good faith and one in bad faith is that the
former is NOT AWARE of the defect or flaw in his title or mode of
acquisition while the latter is AWARE of such defect or flaw (Art.
526, Civil Code). But in either case there is a flaw or defect. In the
case of TAN QUETO there is no such flaw or defect because it is
he himself (not somebody else) who is the owner of the property.
WHEREFORE, Our decision promulgated on May 16,1983 is
hereby SET ASIDE, and a new one is hereby rendered declaring
the questioned lot together with the building thereone, as TAN
QUETO's exclusive property. No costs..
SO ORDERED.
G.R. No. 180076 November 21, 2012
DIONISIO MANANQUIL, LAUDENCIA MANANQUIL-VILLAMOR,
ESTANISLAO MANANQUIL, and DIANITA MANANQUIL-RABINO,
represented by OTILLO RABINO, Petitioners,
vs.
ROBERTO MOICO, Respondent.**
DECISION
DEL CASTILLO, J.:
In order that an action for quieting of title may proper, it is essential
that the plaintiff must have legal or equitable title to, or interest in, the
property which is the subject-matter of the action. Legal title denotes
registered ownership, while equitable title means beneficial
ownership. In the absence of such legal or equitable title, or interest,
there is no cloud to be prevented or removed.
This Petition for Review on Certiorari1 assails the March 13, 2007
Decision2 of the Court of Appeals (CA) in CA-G.R. CV No. 81229,
which reversed and set aside the January 2, 2001 Decision3 of the
Malabon Regional Trial Court, Branch 74 in Civil Case No. 2741-MN,
thus dismissing the said civil case for quieting of title.
Factual Antecedents
Lots 18 and 19 in Dagat-Dagatan, Navotas form part of the land
previously expropriated by the National Housing Authority (NHA) and
placed under its Tondo Dagat-Dagatan Foreshore Development
Project – where occupants, applicants or beneficiaries may purchase
lots on installment basis. In October 1984, Lot 18 was awarded to
spouses Iluminardo and Prescilla Mananquil under a Conditional
Contract to Sell. Lot 19, on the other hand, was sold to Prescilla in
February 1980 by its occupant.
In 1991, Iluminardo and Prescilla died without issue, but it turned out
that Prescilla had a child by a previous marriage – namely Eulogio
Francisco Maypa (Eulogio). After the spouses’ death, Iluminardo’s
supposed heirs (Mananquil heirs) – his brothers and sisters and
herein petitioners Dionisio and Estanislao Mananquil (Estanislao),
Laudencia Mananquil-Villamor (Laudencia), and Dianita Mananquil-
Rabino (Dianita) – executed an Extrajudicial Settlement Among Heirs
and adjudicated ownership over Lots 18 and 19 in favor of Dianita.
They took possession of Lots 18 and 19 and leased them out to third
parties.
Sometime later, the Mananquil heirs discovered that in 1997, Eulogio
and two others, Eulogio Baltazar Maypa and Brenda Luminugue, on
the claim that they are surviving heirs of Iluminardo and Prescilla,
had executed an Extrajudicial Settlement of Estate with Waiver of
Rights and Sale, and a Deed of Absolute Sale in favor of Roberto
Moico (Moico).
In May 1997, Moico began evicting the Mananquils’ tenants and
demolishing the structures they built on Lots 18 and 19. In June, the
Mananquils instituted Civil Case No. 2741-MN for quieting of title and
injunctive relief.
Ruling of the Regional Trial Court
The trial court issued a temporary restraining order, thus suspending
eviction and demolition. After trial on the merits, a Decision was
rendered in favor of the Mananquils. The dispositive portion thereof
reads:
WHEREFORE, premises considered, judgment is hereby rendered:
1. Ordering that a permanent injunction be issued enjoining
defendant Roberto Moico to refrain from threatening the
tenants and destroying the improvements standing on the
subject properties and from filing the ejectment suits against
the tenants;
2. Ordering the Extrajudicial Settlement of Estate with
Waiver of Rights and Sale and the Deed of Absolute Sale
dated January 9, 1997 cancelled for having no force and
effect;
3. Declaring plaintiffs to be rightfully entitled to the subject
properties and the Extrajudicial Settlement of Heirs of the
plaintiffs to be valid and enforceable;
4. Ordering defendants to pay jointly and severally the
plaintiffs the following, to wit:
a. P50,000.00 as moral damages;
b. P50,000.00 as exemplary damages;
c. P50,000.00 for and as attorney’s fees; and
 d. Costs of suit.
SO ORDERED.4
Ruling of the Court of Appeals
Moico appealed to the CA, which reversed the trial court. It held that
the petitioners have failed to show that Iluminardo and Prescilla have
–
x x x perfected their grant/award from the NHA so as to secure a
firm, perfect and confirmed title over the subject lots. It must be
stressed that the Conditional Contract to Sell that covers Lot No. 18
stipulates several terms and conditions before a grantee of the NHA
may legally acquire perfect title over the land, and there should be no
mistake that the same stipulations hold true with respect to Lot No.
19. Inter alia, the more vital contractual conditions, are: (a) payment
in installment of the price for a specified period, (b) personal use of
and benefit to the land by the grantee, and (c) explicit prohibition
from selling, assigning, encumbering, mortgaging, leasing, or sub-
leasing the property awarded x x x.5
The CA noted that Lots 18 and 19 must still belong to the NHA, in
the absence of proof that Iluminardo and Prescilla have completed
installment payments thereon, or were awarded titles to the lots. And
if the couple disposed of these lots even before title could be issued
in their name, then they may have been guilty of violating conditions
of the government grant, thus disqualifying them from the NHA
program. Consequently, there is no right in respect to these
properties that the Mananquils may succeed to. If this is the case,
then no suit for quieting of title could prosper, for lack of legal or
equitable title to or interest in Lots 18 and 19.
Issues
The present recourse thus raises the following issues for the Court’s
resolution:
I
THE COURT OF APPEALS GRAVELY ERRED IN
PASSING UPON AN ISSUE NOT BEING ASSIGNED AS
ERROR IN THE APPELLANTS’ BRIEF OF PRIVATE
RESPONDENTS AND NOT TOUCHED UPON DURING
THE TRIAL IN THE COURT A QUO PARTICULARLY THE
ALLEGED VIOLATION OF THE SPOUSES ILUMINARDO
AND PRESCILLA MANANQUIL OF THE CONDITIONAL
CONTRACT TO SELL PURPORTEDLY COVERING THE
PROPERTIES IN QUESTION, TO SUIT ITS
RATIONALIZATION IN ITS QUESTIONED DECISION
JUSTIFYING THE REVERSAL OF THE DECISION OF THE
COURT A QUO.
II
THE COURT OF APPEALS ALSO COMMITTED A
GRIEVOUS ERROR IN CONSTRUING THE PROVISIONS
OF ARTICLES 476 AND 477 OF THE CIVIL CODE
AGAINST PETITIONERS NOTWITHSTANDING THE
POSITIVE CIRCUMSTANCES OBTAINING IN THIS CASE
POINTING TO THE PROPRIETY OF THE CAUSE OF
ACTION FOR QUIETING OF TITLE.6
Petitioners’ Arguments
Petitioners argue that the CA cannot touch upon matters not raised
as issues in the trial court, stressing that the NHA did not even
intervene during the proceedings below to ventilate issues relating to
the rights of the parties to Lots 18 and 19 under the Tondo Dagat-
Dagatan Foreshore Development Project. Petitioners claim that
since the issue of violation of the terms of the grant may be resolved
in a separate forum between the Mananquils and the NHA, it was
improper for the CA to have pre-empted the issue.
On quieting of title, petitioners advance the view that since they are
the legal heirs of Iluminardo Mananquil, then they possess the
requisite legal or equitable title or interest in Lots 18 and 19, which
thus permits them to pursue Civil Case No. 2741-MN; whatever
rights Iluminardo had over the lots were transmitted to them from the
moment of his death, per Article 777 of the Civil Code. And among
these rights are the rights to continue with the amortizations covering
Lots 18 and 19, as well as to use and occupy the same; their interest
as successors-in-interest, though imperfect, is enough to warrant the
filing of a case for quieting of title to protect these rights.
Respondent Moico’s Arguments
Moico, on the other hand, argues that because the issue relating to
Iluminardo and Prescilla’s possible violation of the terms and
conditions of the NHA grant is closely related to the issue of
ownership and possession over Lots 18 and 19, then the CA
possessed jurisdiction to pass upon it.
Moico supports the CA view that petitioners failed to prove their title
or interest in the subject properties, just as he has proved below that
it was his predecessor, Eulogio, who paid all obligations relative to
Lots 18 and 19 due and owing to the NHA, for which reason the NHA
released and cleared the lots and thus paved the way for their proper
transfer to him.
Our Ruling
The petition lacks merit.
An action for quieting of title is essentially a common law remedy
grounded on equity. The competent court is tasked to determine the
1âw phi 1
respective rights of the complainant and other claimants, not only to
place things in their proper place, to make the one who has no rights
to said immovable respect and not disturb the other, but also for the
benefit of both, so that he who has the right would see every cloud of
doubt over the property dissipated, and he could afterwards without
fear introduce the improvements he may desire, to use, and even to
abuse the property as he deems best. But "for an action to quiet title
to prosper, two indispensable requisites must concur, namely: (1) the
plaintiff or complainant has a legal or an equitable title to or interest
in the real property subject of the action; and (2) the deed, claim,
encumbrance, or proceeding claimed to be casting cloud on his title
must be shown to be in fact invalid or inoperative despite its prima
facie appearance of validity or legal efficacy."7
Contrary to petitioners’ stand, the issue relating to the grant of rights,
title or award by the NHA determines whether the case for quieting of
title may be maintained. If the petitioners are legitimate successors
to or beneficiaries of Iluminardo upon his death – under the
certificate of title, award, or grant, or under the special law or specific
terms of the NHA program/project – then they possess the requisite
interest to maintain suit; if not, then Civil Case No. 2741-MN must
necessarily be dismissed.
From the evidence adduced below, it appears that the petitioners
have failed to show their qualifications or right to succeed Iluminardo
in his rights under the NHA program/project. They failed to present
any title, award, grant, document or certification from the NHA or
proper government agency which would show that Iluminardo and
Prescilla have become the registered owners/beneficiaries/
awardees of Lots 18 and 19, or that petitioners are qualified
successors or beneficiaries under the Dagat-Dagatan
program/project, taking over Iluminardo’s rights after his death. They
did not call to the witness stand competent witnesses from the NHA
who can attest to their rights as successors to or beneficiaries of Lots
18 and 19. They failed to present proof, at the very least, of the
specific law, provisions, or terms that govern the Tondo Dagat-
Dagatan Foreshore Development Project which would indicate a
modicum of interest on their part. For this reason, their rights or
interest in the property could not be established.
It was erroneous, however, for the CA to assume that Iluminardo and
Prescilla may have violated the conditions of the NHA grant under
the Tondo Dagat-Dagatan Foreshore Development Project by
transferring their rights prior to the issuance of a title or certificate
awarding Lots 18 and 19 to them. In the absence of proof, a ruling to
this effect is speculative. Instead, in resolving the case, the trial court
– and the CA on appeal – should have required proof that petitioners
had, either: 1) a certificate of title, award, or grant from the proper
agency (NHA or otherwise) in the name of their predecessor
Iluminardo, or, in the absence thereof, 2) a right to succeed to
Iluminardo’s rights to Lots 18 and 19, not only as his heirs, but also
as qualified legitimate successors/beneficiaries under the Tondo
Dagat-Dagatan Foreshore Development Project terms and
conditions as taken over by the NHA.8 Petitioners should have
shown, to the satisfaction of the courts that under the NHA program
project governing the grant of Lots 18 and 19, they are entitled and
qualified to succeed or substitute for Iluminardo in his rights upon his
death. As earlier stated, this takes the form of evidence apart from
proof of heirship, of course – of the specific law, regulation or terms
covering the program/project which allows for a substitution or
succession of rights in case of death; the certificate of title, award or
grant itself; or the testimony of competent witnesses from the NHA.
Proof of heirship alone does not suffice; the Mananquils must prove
to the satisfaction of the courts that they have a right to succeed
Iluminardo under the law or terms of the NHA project, and are not
disqualified by non-payment, prohibition, lack of qualifications, or
otherwise.
WHEREFORE, premises considered, the Petition is DENIED for lack
of merit. The March 13, 2007 Decision of the Court of Appeals in CA-
G.R. CV No. 81229 is AFFIRMED.
SO ORDERED.
Heirs of Valientes vs. Hon. Ramas
G.R. No. 157852: December 15, 2010
HEIRS OF DOMINGO VALIENTES, Petitioners, v. Hon. ReInerio
(Abraham) B. Ramas, Acting Presiding Judge, RTC, Branch 29, 9th
Judicial Region, San Miguel, Zamboanga del Sur and Vilma V.
Minor, Respondents.
LEONARDO-DE CASTRO, J.:
FACTS:
Petitioners claim that they are the heirs of Valientes who, before his
death, was the owner of a parcel of land in Zamboanga delSur. In
1939, Valientes mortgaged the subject property to secure his loan to
the spouses Belen. In the 1950s, the Valientes family purportedly
attempted, but failed, to retrieve the subject property from the
spouses Belen. Through an allegedly forged document captioned
VENTA DEFINITIVA purporting to be a deed of sale of the subject
property between Valientes and the spouses Belen, the latter
obtained title over the land. On February 28, 1970, the legitimate
children of the late Valientes, had their Affidavit of Adverse Claim.
Upon the death of the spouses Belen, their surviving heirs executed
an extra-judicial settlement with partition and sale in favor of private
respondent Minor, the present possessor of the subject property. On
June 20, 1979, Minor filed with the then CFI a "PETITION FOR
CANCELLATION OF MEMORANDUM OF ENCUMBRANCE
APPEARING IN THE TITLE IN HER POSSESSION" which the RTC
granted. On the other hand, petitioners filed a complaint for the
cancellation of the title in Minors possession and its reconveyanceto
them. On this complaint, Minor filed an Omnibus Motion to Dismiss
on the ground of forum shopping and litis pendentia, which the RTC
dismissed. Undeterred, Minor filed a Motion for Reconsideration
which was granted. Petitioners filed a Motion for Reconsideration
based on this decision which was denied. They appealed it to the
CA, which although found that there was no forum shopping nor litis general rules of the above mentioned articles of the Civil Code).
pendentia, dismissed the case on the ground of prescription and Under the Torrens System as enshrined in P.D. No. 1529, the
laches. decree of registration and the certificate of title issued become
incontrovertible upon the expiration of one year from the date of
entry of the decree of registration, without prejudice to an action for
damages against the applicant or any person responsible for the
ISSUE:
fraud.

Whether or not prescription or laches has already set in to bar the

It took petitioners 28 before filing this case. This period is
filing of the case at hand.
unreasonably long for a party seeking to enforce its right to file the
appropriate case. Thus, petitioners claim that they had not slept on
their rights is patently unconvincing.
HELD: Petition for Certiorari is DISMISSED

The Decision of the CA and the Resolution are AFFIRMED.

CIVIL CODE; PRESCRIPTION

When the plaintiff is in possession of the subject property, the action,

being in effect that of quieting of title to the property, does not
prescribe. In the case at bar, petitioners are not in possession of the
subject property. In this case, if it were to be considered as that of
enforcing an implied trust, should have therefore been filed within ten
years from the issuance of TCT to spouses Belen.But, the case was
instituted beyond the prescriptive period.

As to the alternative defense of petitioners, applying Arts. 1141, 1134

and 1137 of the Civil Code, thus entitling them to a 30 year period to
assail the title, the Court ruled that the applicable law in this instant
case is Presidential Decree No. 1529, otherwise known as the
Property Registration Decree (since it is more specific that the