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Bad faith as liability for damages – Art. 447- 456
Depra vs. Dumlao – 136 SCRA 475
RIGHT OF ACCESSION
FACTS: Dumlao is the owner of a parcel of land in Iloilo, while Depra owns the lot adjoining his. Dumlao built his house on his own land, but the kitchen encroached about 34 sq.m on Depra’s property. Upon finding this, Depra’s mom ordered Dumlao to move back from his encroachment, then subsequently filed an action for unlawful detainer against Dumlao. The lower court found that Dumlao was a builder in good faith, and ordered him to pay rent (PhP5.00/month) – forced lease between the parties. Depra refused to accept the rentals so Dumlao deposited this with the MTC. Neither party appealed judgment so this became final and executory. 1 year later, though, Depra filed an complaint for Quieting of Title. Dumlao contested this, stating that the suit is barred by res judicata. But Depra averred that the lower court did not have jurisdiction to rule on encumbrances of real property – only the CFI has jurisdiction. ISSUE: 1. Whether or not res judicata would apply to the case at bar? 2. Whether or not the land owner can be compelled to accept rent payments by the court (with both LO and BPS being in good faith)?
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. Since art 448 does not apply, the Plaintiff cannot be obliged to pay for the portion of defendant’s house that entered into the 30 sqm lot, AND Defendant cannot be obliged to pay for the price of the 5 sqm their house occupied. Why? The RTC believed the rules of co-ownership should govern, and not that of accession. RTC then assigned the full 30sqm to Plaintiff and ordered Defendants to demolish the 5sqm part of their house encroaching the 30sqm lot of the Plaintiffs. Defendants where aghast at having to axe the family home, hence they appealed. CA affirmed the decision. So we have the SC coming to the rescue. ISSUE: w/n the rules of accession applies (and not coownership) on property that used to be co-owned, but was subdivided. HELD: The rule of accession applies because co-ownership was terminated upon the partitioning of the lot. Art 448 therefore governs. The house of Defendant overlapped that of Plaintiff, but this was built on good faith. Hence, the plaintiffs have the right to choose one of two options: > Appropriate the 5sqm portion of the house of Defendants after indemnifying the Defendants; or > Obliging the Defendants to pay a portion of the land on which their home rested. ( or they can rent it) Mercado vs. CA – June 10, 1988 FACTS: Lolita C. Bulaong, FlorentinoAgulto, SeverinoSalaysay, Susana Bernardino (the Bulaong Group), from 1956 to 1972, have been individual lessees of stalls in the public market of Baliuag, Bulacan. The market was destroyed by fire on 17 February 1956; the members of the Bulaong Group constructed new stalls therein at their expense; and they thereafter paid rentals thereon to the Municipality of Baliuag. In 1972, the members of the group sub-leased their individual stalls to other persons: Paz Mercado, Carolina S. Chico,nLuciana Cabrera, Joaquin Ignacio, Elmer Flores, and Avelina C. Nucom (the Mercado Group). After the Mercado Group had been in possession of the market stalls for some months, the municipal officials of Baliuag cancelled the long standing leases of the Bulaong Group and declared the persons comprising the Mercado Group as the rightful lessees of the stalls in question, in substitution of the former. The municipal authorities justified the cancellation of the leases of the Bulaong Group by invoking the provisions of Municipal Ordinance 14, dated 14 December 1964, which prohibited the sub-leasing stalls by the lessees thereof, as well as a 29 May 1973 directive of the Office of the President requiring enforcement of said Ordinance 14. Recognition of the Mercado Group’s rights over the stalls was subsequently manifested in Municipal Ordinance 49, approved on 5 July 1973. The members of the Bulaong Group sued. They filed several individual complaints with the CFI seeking recovery of their stalls from the Mercado Group as well as damages. Their theory was anchored on their claimed ownership of the stalls constructed by them at their own expense, and their resulting right, as such owners, to sub-lease the stalls, and necessary, to recover them from any person withholding possessionthereof from them. The Mercado Group thereafter filed motions for summary judgment, asserting that in light of the admissions made at the pre-trial and in the pleadings, no issue remained under genuine controversion, to which the Bulaong Group objected. Assuming the indifference of the Court and the other
HELD: In the first issue, res judicata would not apply should the first case be one for ejectment and the other for quieting of title. Article 448 of the Civil Code provides that the land owner has 2 options – to buy the building or to sell/rent his land. This is so because the rights of the owner of the land is older, and by the principle of accession, he also has a right to the accessories. The Court remanded the case to the RTC to determine the fair price of the land, the expenses incurred by the BPS (Dumlao), the increase in value of the land, and whether the value of the land is considerably more than the value of the kitchen built on it. The RTC shall then give Depra 15 days to exercise such option. Del Campo vs. Abesia – 160 SCRA 379 When land is co-owned by two parties, but the co-ownership is terminated, Article 448 governs in case real property (like a house) encroaches the land of another. This is provided that good faith exists. FACTS: The case involves two friendly parties who are co-owners of a corner lot at Flores and Cavan Streets in Cebu City. Plaintiff owns 2/3 of the lot and Defendant owns 1/3 of the same. The total size of the lot is 45 square meters (which is about the size of a typical Starbux café) Later on, the two parties decided to divide the co-owned property into two lots. 30 square meters went to the plaintiffs and 15 square meters went to the defendants. From the sketch plan, both parties discovered that the house of the defendants occupied a portion of the plaintiff’s adjacent lot, eating 5 sqm of it. The parties then requested the trial court to adjudicate who should take possession of the encroached 5 sqm. The trial court ruled that Art 448 does not apply. The owner of the land on which anything has been built, sown or planted in good faith, shall have the right to appropriate as his own the works, sowing or planting, after payment of the indemnity provided for in Articles 546 and 548, or to oblige the one who built or planted to pay the price of the land, and the one who sowed, the proper rent. However, the builder or planter cannot
PROPERTY Case Digests PART III – Right of Accession
They represent profits. is income and.‖ can only claim payment of ―one-half of the value of the improvements‖ or.. This reverted back to the father. it is essential that a person assert title to the land on which he builds. Bachrach. industrial. Sophie Seifert FACTS: The deceased E. wasn’t able to purchase part of the land. without altering the form or substance of the property leased. notice of which had been served on them on 3 November 1975. due to lack of funds. legal heirs of the deceased. To be deemed a builder in good faith.‖ b. HELD: The reserved right of vendor on a parcel of land doesn’t include rentals from the buildings subsequently constructed on the vacant lots. HELD: The usufructuary shall be entitled to receive all the natural. M. for if it were declared out of the capital it would be a serious violation of the law.000 shares of stock dividend are civil fruits of the original investment. who left no forced heir except his widow Mary McDonald Bachrach. These were denied. until he has been reimbursed in full not only for the necessary expenses but also for useful expenses. instituting in that court a special civil action of certiorari and prohibition ―to annul that portion of the summary judgment awarding damages to the Bulaong Group and to restrain the Judge and the Provincial Sheriff of Bulacan from enforcing the same.‖ The appellate Court rendered judgment on 14 May 1976 affirming the judgment of the lower court.. An appeal by way of certiorari was filed before the Supreme Court.000 shares. Thereafter.e. whether in the form of cash or stock. secured by a mortgage. i. just as the offspring of a domestic animal may be sold independently of its mother. taking into consideration that a stock dividend as well as a cash dividend can be declared only out of profits of the corporation. with authority of the father. the former presented affidavits and depositions to prove the value of the improvements. they contend that a stock dividend is not. The 108. Said shares may be sold independently of the original shares. But by Order dated 9 January 1976. received from the latter 54. Bachrach. and in truth never did make the claim. Judge Benigno Puno rendered a summary judgment in all the cases. ISSUE: Whether or not a dividend is an income and whether it should go to the usufructuary. although paid out in the form of stock. as owner of 108. even as against the real owner. Once again. and the delivery of the certificate of stock covering said dividend is equivalent to the payment of said profits. The Mercado Group and the Municipality filed on 14 November 1975. but merely represents an addition to the invested capital. Lessees cannot be considered builders in good faith The members of the Bulaong group were admittedly lessees of space in the public market. If the dividend be in fact a profit. The Supreme Court dismissed the petition and affirmed the appealed judgment. He co-owned the land with his children then. Accesion Discreta – Art. On 7 January 1976. holding that the judgment had become final and certiorari or prohibition could not be availed of as a substitute for the group’s lost appeal.000 shares of stock dividend by indorsing and delivering to her the corresponding certificate of stock. wherein rentals was given to the father. unlike the builder in good faith. is fruit or income and therefore belonged to her as usufructuary or life tenant. for which they were seeking reimbursement. as usufructuary or life tenant of the estate.000 shares of stock are part of the property in usufruct. declaring the members of the Bulaong Group to be builders in good faith. opposed said petition on the ground that the stock dividend in question was not income but formed part of the capital and therefore belonged not to the usufructuary but to the remainderman. and once again wererebuffed. it should be held to be income.group to its opposition. the father reserved for himself the usufruct of the property. ―should the lessor refuse to reimburse said amount. the Mercado Group moved for reconsideration of an adverse judgment. The estate of E. petitioned the lower court to authorize the Peoples Bank and Trust Company. adjudging that its decision had become final because the appeal documents had ―not been seasonably filed. On 24 October 1975. Bachrach. with costs against the Mercado Group. although declared in stock. claiming that said dividend. It is such a builder in good faith who is given the right to retain the thing. the Mercado Group filed a notice of appeal. 1948. the Trial Court directed inter alia the execution of the judgment. they were thus inpari delicto.‖ The writ was issued. Industrial Gaboya vs. that he be a possessor in concept of owner. While appellants admit that a cash dividend is an income. to transfer to her the said 54. even though the principal thing may suffer damage thereby. Inc.The Group went to the Court of Appeals. and notice of the order of denial was received by them on 18 December 1975. as administrator of the estate of E. Civil Mary McDonald Bachrach v. and hence had no cause of action one against the other and no right to recover whatever had been given or demand performance of anything undertaken. entitled to retain possession of the stalls respectively put up by them until and unless indemnified for the value thereof The decision also declared that the Bulaong and Mercado Groups had executed the sub-letting agreements with full awareness that they were thereby violating Ordinance 14. motions for reconsideration of the summary judgment. to construct a commercial building. A. in his last will and testament made various legacies in cash and willed the remainder of his estate. A dividend. 440 a. Sophie Siefert and Elisa Elianoff. they therefore could not. It rejected the claim of the Municipality of Baliuag that it had automatically acquired ownership of the new stalls constructed after the old stalls had been razed by fire. As part of the sale. The father alleges that since he has usufruct over the land. to which the Mercado Group did not respond.. The 54. they could be deemed builders in good faith (in accordance with Article 526 of the Civil Code). an appeal bond and a motion for extension of time to file their record on appeal. should go to the usufructuary. but that it did entitle the usufructuary to a reasonable rental for the portion of the land being occupied by the building. that they were owners of any part of the land occupied by the market so that in respect of any new structure put up by them thereon. and civil fruits of the property in usufruct. One of his children. A building was then constructed in a portion of the land. remove the improvements. M.000 shares of stock of the Atok-Big Wedge Mining Co. Cui -28 SCRA 85 FACTS: Don Mariano sold his three lots prodiviso to his three children. Mary McDonald Bachrach. On the other hand. and that he be unaware ―that there exists in his title or mode of acquisition any flaw which invalidates it. a lessee who ―makes in good faith useful improvements which aresuitable to the use for which the lease is intended. the two children who were co-owners obtained a loan. Kinds of accession: 1. and the Mercado Group’s motion to quash the same and to re-open the case was denied. On June 10. he has usufruct or share in the rentals earned through the constructed building.000 shares representing 50 per cent stock dividend on the said 108. Natural PROPERTY Case Digests PART III – Right of Accession Page 2 . b. M. consequently.
1953. This advantage in Article 448 is accorded the landowner because "his right is older. Artificial or industrial – building. Talisaygranted him a bonus whose value was computed as a percentage of the balance of the loan. Inc. On September 18. and (c) ordering the sale in public auction of the said undivided interest of the Filipinas Colleges. a case was filed against petitioners for the recovery of possession of an encroached portion of the lot they purchased. In this case. Ledesma. to Hoskins and Co. what the law provides is that the builders in bad faith can be ordered to dismantle said structure at their own expense. neighbor's property. Accession Continua a. It is clearly meant to becompensation for the risk assumed by the owner. by the principle of accession. all earnings of a corporation. private respondents discovered that some 46.Under the Massachusetts rule. planting. Bachrach vs. The SC found it unwarranted to review the lower courts’ factual finding of bad faith.934 undivided interest in Lot No. contrary to what petitioners asks from the Court. CA 77 SCAD 793 FACTS: Petitioners Rafael and Avelina Benitez purchased a 303-squaremeter parcel of land with improvement from the Cavite Development Bank. Despite verbal and written demands. Inc. a stock dividend is considered part of the capital and belongs to the remainderman. they claim the pre-emptive right to purchase the litigated portion as a matter of course.807. Since petitioners are not builders in good faith. covered by Transfer Certificate of Title No. private respondents filed an ejectment case against petitioners. Benitez vs. CA upheld the decision of the lower courts. On appeal. Talisay – Silay – 56 PHIL 117 FACTS: Talisay obtained a loan from PNB with a REM provided by one of its planters. 448 Filipinas College Inc. Inc.. as a creditor of Ledesma. he is entitled to the ownership of the accessory thing.285. laid a claim to the bonus received by the latter. 40155. In the interim period that petitioners' structure remains. as this prerogative belongs solely to the landowner.. 41961 (now. 1989. belong to the latter. the mortgage extends to the civil fruits of the property. The Pennsylvania rule is more in accord with our statutory laws than the Massachusetts rule.750. leases of lands. A last notice to vacate was sent to petitioners on October 26. Bps in good faith – Art. they cannot demand that respondents sell the disputed portion. Inc. was declared to have acquired the rights of the spouses Timbang in and to lot No. appellee Maria Gervacio Blas the sum of P5. owner of 24. defendants-appellants spouses Maria Garcia Timbang and Marcelino Timbang. in the amount of P8. private respondents purchased still another property. Bachrach. while under the Pennsylvania rule. plants or sows on. have the preemptive right to purchase the litigated portion of the property? RULING: Option To Sell Belongs To Owner Article 448 of the Civil Code is unequivocal that the option to sell the land on which another in good faith builds.00 minus the sum of P5. the lower courts were correct in rejecting the petitioners' offer to buy the encroached land. Inc. Civil fruits are the rents of the buildings. not to buy. 1989. The MeTC of San Juan decided in favor of the petitioners.00 that the spouses Timbang had bid for the building at the Sheriff's sale. PNB claims that it owns the fruits.000 per square meter. and because. Subsequently. Thus. private respondents Renato and Elizabeth Macapagal bought a 361-square-meter lot covered by TCT No. No compulsion can be legally forced on him. HELD: The bonus is not a civil fruit. Owner is bps with material of another In good faith Sps. on which the building sold in the auction sale is situated. ISSUE: Whether the bonus is a civil fruit. (b) declaring the other appellee Filipinas Colleges. 2-a covered by certificate of tile No 45970. as builders in good faith. In this petition for review on certiorari. On July 17. 1990. The option is to sell. 448 a. they should pay reasonable rent until they remove the structure. made during the lifetime of the usufructuary. because under Article 2127. thereby giving PNB a preferential right over it. Petitioners were fully aware that part of their house encroached on their PROPERTY Case Digests PART III – Right of Accession In bad faith ( Art. ISSUE: W/N the petitioners.750. On the other hand. in lot No. In the judgment of the Court of Appeals. inter alia.500/3. Not even a declaration of the builder. petitioners refused to vacate. TCT No. agent of the Page 3 . planter.5 square meters of their property was occupied by petitioners' house. or other similar sources of income. or sower's bad faith shifts this option to him per Article 450 of the Civil Code. The common denominator. the bonus is not based on the value of the land but rather on the amount of the outstanding obligation of Talisay.. and it is the landowner's choice. Ledesma. adjacent to that of petitioners. After a relocation survey was conducted. Inc. Petitioners cannot claim good faith as against the respondents.00 mentioned in (a) above. is derivation of the income from the land itself. Filipinas Colleges.200. while respondents became aware of it only after purchasing said property. Due to their alleged good faith. 2-a mentioned above and in consideration thereof. The assailed resolution was AFFIRMED. To compensateLedesma for the accommodation. 1986. Over Immovables 1. 2. 2-a aforementioned to satisfy the unpaid portion of the judgment in favor of appellee Blas and against Filipinas Colleges. petitioners pray. was ordered to pay the spouses Timbang the amount of P15. sowing (bps) – Art. vs Garcia Timbang 106 PHIL 247 This is an appeal taken from an order of the CFI of Manila (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. which is absent in the bonus. On January 18. for a review of the factual finding of bad faith.90 plus such other amounts which said spouses might have paid or had to pay after February. when declared as dividends in whatever form. Such an order would certainly be invalid and illegal. The parties were able to reach a compromise in which private respondents sold the encroached portion to petitioners at the acquisition cost of P1. shall pay to. belongs to the landowner. Though it is possible to consider the bonus as income. 55864). the RTC affirmed the decision of the MeTC. it is not similar income to the items in the preceding enumeration. 447) 3." There can be no pre-emptive right to buy even as a compromise. the respective rights of the litigants have been adjudicated as follows: (1) Filipinas Colleges. and income from life annuities.
No. what is the effect upon the rights of the parties? When there is a claim by a third-party. In this case. To secure possession of the land from the vendors the said plaintiff. the execution creditor.642. No.00 — the unpaid balance of the purchase price of the building and the sum of P5.000. with a par value of P10. 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. the latter becomes automatically the owner of the improvement under Article 445. By the same token. (c) The land and the improvement may be sold at public auction applying the proceeds thereof first to the payment of the PROPERTY Case Digests PART III – Right of Accession value of the land and the excess.. plaintiff was declared owner but the defendant was held to be a possessor in good faith. The order of the lower court directing the Timbang spouses. and selling the same in public auction with the owner as highest bidder. Inc. the appealed order of the court a quo is hereby affirmed. 448 and 546.Urban Estates. on July 20.212 to which he is entitled has not yet been paid to him. The trial court found for the plaintiff in a decision which was affirmed by this Supreme Court on appeal (G. Inc. on June 11. In the instant case. In that eventuality. upon the failure of the builder zo pay the value of the land. Filipinas Colleges.00 and to pay Blas the sum of P8. plaintiff.. Blas is actually a lien on the school building are concerned. the execution sale of the house in their favor was superfluous. this Court Likewise finds the same as justified.34. which would justify the conclusion of appellants that. is likewise justified to satisfy the claim of the appellee Blas.R.200. for work done and improvements made. original vendor of the total amount with the court within 90 days after the decision shall have become final. in effect. as successful bidders.00. Even this second right cannot be exercised if the value of the land is considerably more than that of the building. he says. 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. when such is demanded by the land-owner. There is nothing in the language of these two article. the Timbangs would make known to the court their option under Art. (2) What then is the remedy left to the owner of the land if the builder fails to pay? Where the builder in good faith fails to pay the value of the land when such is demanded by the landowner.R. to be delivered to the owner of the house in payment thereof. within the 90day period set by the court. the sum of P19.750. The said defendant could have become owner of both land and improvements and Page 4 . In addition to the right of the builder to be paid the value of his improvement. November 28. 37319. instituted a civil case. he has a right to retain the land in accordance with the provisions of article 453 of the Civil Code. must pay in cash the amount of his bid as a condition precedent to the issuance to him of the certificate of sale.00 — amount to be paid by the Timbangs. Consequently. for such amount represents. 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. Inc. 1929. 1938 FACTS: By a contract of sale executed from Pastor Samonte and others ownership of a parcel of land of about 90 hectares. the parties may resort to: (a) Parties may decide to leave things as they are and assume the relation of lessor and lessee. As Bataclanwas not a party in the civil case. The defendant states that he is a possessor in good faith and that the amount of P2. part owner of the land to the extent of the value of its personal properties sold at public auction in favor of the Timbang. and should they disagree as to the amount of rental then they can go to the court to fix that amount. Inc.750. 1931.but such builder fails to pay.00 within fifteen (15) days from notice of the final judgment. No. If this resulted in the continuation of the so-called involuntary partnership questioned by the difference between P8. (b) Should the parties not agree to leave things as they are and to assume the relation of lessor and lessee. Inc. to pay in cash the amount of their bid in the sum of P5. however. who appears to have been authorized by former owners. does he become automatically the owner of the building? Under Arts 448 and 546. to clear the land and make improvements thereon. instituted against him a civil case. to the proceeds of the sale superior to his judgment credit. (3) In case Filipinas Colleges. he found the defendant herein. i. the order of the court directing the sale of such undivided interest of the Filipinas Colleges. 456 Bernardo vs. the owner of the land in entitled to have the improvement removed when after having chosen to sell his land to the other party.859. Article 546 gives him the corollary right of retention of the property until he is indemnified by the owner of the land. Inc. the builder lost his right of retention provided in Article 546 and by operation of Article 445.200. 448 of the Civil Code whether they would appropriate the building in question. Therefore.e. C) for 108 shares of Filipinas Colleges. Filipinas Colleges. Good faith does not include negligence – Art. (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. with costs against the appellants. Inc. in which even they would have to pay Filipinas Colleges. if any. In obedience to the decision of this court in G. Inc. the builder in good faith fails to pay for the same.R. levying on the house of the builder. owners of the house. which after liquidation was fixed at P32.800. the appellants as owners of the land automatically became the owners ipso facto.compelling the builder in good faith to pay the value of the land. purchaser of the said building was ordered to deliver to Blas stock certificate (Exh. the plaintiff expressed his desire to require the defendant to pay for the value of the land.00 as that would be to make goods to pay for their own property. are not the debtors of Blas. or would compel the latter to acquire the land and pay the price thereof. as far back as 1922. (3) The appellants .000. and the Timbangs. Filipinas Colleges would lose all its rights to the land and the spouses Timbang would then become the owners thereof. Appellant 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. original vendor of the lot. 4. owners o the land. they are not bound to make good their bid of P5.00 is therefore correct.00 of the house. ISSUES/RULING: (1) Suppose that the owner of the land should avail himself of the 2nd remedy provided for in Art 448. CatalinoBataclan. 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.. Bataclan – 66 PHIL 598 G. as successful bidder. 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. 33017). entitled for reimbursement in the total sum of P1.00 for the same. a partial payment of the value of the land. failed to deposit the value of the land. L-44606.750. When plaintiff entered upon the premises. 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 amoun In all other respects. With respect to the order of the court declaring appellee Filipinas Colleges.750.
though.000-10. PROPERTY Case Digests PART III – Right of Accession Page 5 . the former shall be subject to the responsibilities of a possessor in bad faith. Agana – 129 SCRA 122 FACTS: Before Ernesto Valentino and Rebecca Lorenzo wed. to recover from the plaintiff the sum of P2. to remove his buildings and other improvements thereon and to pay P12. The lower court erred in assuming 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. in turn. In view of Ong Cu's failure to vacate the lots after the expiration of the lease and to remove his improvements thereon. 448.. In 1967.000 received by him from ToribioTeodoro. In line with this. So ordered The sale at public auction having been asked by the plaintiff himself (p.continued in possession thereof. without pronouncement regarding costs. that the lot was owned by the Spouses Santos who . Respondent judge upheld the city court's order fixing the supersedeas bond and the amount to be deposited by Ong Cu. then eventually filed and Ejection Suit against them. Laureano vs. based on the value decided by the courts.428 monthly as reasonable value of the use and occupation of the lots adjudged by the city court. It regarded Ong Cu as a possessor in good faith with right of retention and right to reimbursement of his necessary and useful expenses. after all. The lessor may judicially eject the lessee for any of the following causes: (1) When the period agreed upon.212. 1974 up to the time he vacates them. If the lessee continues enjoying the thing after the expiration of the contract over the lessor's objection.000 as moral and exemplary damages and attorney's fees. bill of exceptions) and the purchase price of P8. the Court ordered Sarmiento to exercise the option in 60 days to pay Ernesto 40. But the case was then elevated to the CFI of Pasay (w/ Agana as Judge). they finally built their home which cost about PhP8. Sarmiento ordered the Valentinos to vacate their lot.448 of the CC (March 1979).200 a month. If the lease was made for a determinate time. 1974. there is unlawful detainer. the lot would be transferred to them in their name. Laureano filed against him an ejectment suit where the court rendered a judgment ordering Ong Cu to vacate the lots. It turns out. Since Sarmiento failed to exercise the option within the allotted period. thinking that someday. HELD: 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. Laureano. 22. to restore their possession to Mrs.000 as the value of the house. Sarmiento was not able to exercise this option. Laureano in this special civil action of certiorari assailed the interlocutory orders denying her motions for execution and for a preliminary mandatory injunction. 1671. The Civil Code provides: ART. the purpose of which was to stay execution pending appeal. Sarmiento (LO) was required to exercise only 2 options: To purchase the house or to sell the land to them. xxx xxx xxx (1569a) The rule is that if after the termination of the lease contract the lessee prolongs his occupation of the premises. (n) ART. ISSUE: Whether or not there is good faith.. Mrs. The expiration of lease and Mrs.000 as the value of the house or to let them purchase the land for 25. 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 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.000. The lots were leased to Ong Cu for a fifteen year period which allegedly expired on August 31. the defendant-appellant not being entitled. has expired. sold the same to Leonila Sarmiento in 1974. as contemplated in articles 546 and 547 of the Civil Code. the court granted Ong Cu’s ex parte motion for the approval of his supersedeas bond in the sum of P22. with interest at twelve percent per annum from the date of accrual plus P10.212.000. The lower court ruled in Sarmiento’s favor and ordered her to pay 20.000 purchase price with the Court. Adil – 72 SCRA 148 FACTS: Mrs. we find no reason to justify a rapture of the situation thus created between them. Laureano's motion for a mandatory injunction was denied because it had already sanctioned Ong Cu's supersedeas bond. He has become a possessor in bad faith. A year later. Rebecca’s mother offered a lot in Paranaque that they could build their house on. 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. But he said he could not pay and the land was sold at public auction to ToribioTeodoro.000 and to fix the rental value of the two lots at P1. ISSUE: Whether or not the land owner is compelled to exercise either option: to buy the building or to sell the land? HELD: Ernesto and his wife (BPS) were clearly in good faith as they believed that Rebecca’s mother has the capacity to eventually transfer the title of the land to them. in this case. In all the respects.107 square meters in Iloilo City. . 1673. and based on Art. the same is affirmed. without the need of a demand. it ceases upon the day fixed. Sarmiento vs. ISSUE: W/N Ong Cu is a possessor in good faith? RULING: NO. Laureano filed a motion for a preliminary mandatory injunction to restore her to the possession of the said lots. and the CFI allowed Ernesto to deposit the 25. the defendant herein lost his right of retention.428 monthly as compensation for the use and occupation of the lots from September 1. On appeal. Laureano is the registered owner of Lots 996 and 1004-B with a total area of 3. Laureano's refusal to renew it made Ong Cu an unlawful withholder of the possession of the lots. the LO is compelled by law to exercise either option. 1669. (1565) ART. When he failed to pay for the land. and pursuant to Art. Not choosing either is a violation of the law.
not juspossidendi) in the Civil Code refers to a possessor other than the owner. In the present case. No. without costs. Misamis Occidental) either as a purported donation or by way of purchase on 11 February 1927 for P50. It cannot apply to a lessee because he knows right from the start that he is merely a lessee and not the owner of the premises. February 27. The transaction took place during her mother’s lifetime (her father having PROPERTY Case Digests PART III – Right of Accession Manotok Realty v. As a mere lessee. an OCT was issued in Juan’s name. and the spouses in turn became the owners of a parcel of land with the house constructed thereon previously owned (that is. On 22 April 1962. On 22 September 1949 a contract of lease over the lot was entered into between Pershing Tan Queto and Restituta (with the consent of her husband) for a period of 10 years. 1678 (NCC) which provides that. Meanwhile. It further provided that should the lessee fail to remove the same structures or improvements withing two months after the expiration of the lease. Manotok Realty vs. a decision waspromulgated (GLRC 1638. the lessor may remove them or cause them to be removed at the expense of the lessee. useful improvements which are suitable to the use for which the lease is intended. 1987 FACTS: Restituta Tagalinar Guangco de Pombuena received the questioned lot (Lot 304-B of the Cadastre Survey of the Municipality of Centro. The provision under Art. The CFI and the Court of Appeals found the disputed lot as paraphernal and that Tan Queto was a builder in bad faith. On 10 October 1962. Thereafter. the petitioner. 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. " if the lessee. Restituta sued both Juan and Tan Queto for reconveyance of the title over the registered but disputed lot.Under Article 448 of the Civil Code. but not to a lessee who's interest in the land is derived only from a rental contract. and for recovery of the land with damages. The Supreme Court set aside its decision promulgated on 16 May 1983. the entire case was dismissed because of an understanding (barter) entered into by Juan and Tan Queto. The lessee knows at the outset that he is not the owner of the land. On 27 December 1960 Restituta sued Tan Queto for unlawful detainer (the lease contract having expired) before the Municipal Court of Ozamis City. however. not the owner. A contrary rule would place it within the power of the lessee "to improve his landlord out of his property". as Tan Queto’s exclusive property. Important Ruling: Tan Queto recognized Restituta as an owner. CA – 122 SCRA 206 G. Francisco – 122 SCRA 265 FACTS: The petitioner bought a lot owned by Mrs. But in either case there is a flaw or defect. The Municipal court ruled in favor of the spouses in the unlawful detainer case. makes. the lessor upon the termination of the lease shall pay the lessee 1/2 of the value of the improvements at the time.00 as the alleged consideration thereof. A possessor in good faith is a party who possesses property believing that he is its rightful owner but discovers later on a flaw in his title that could indicate that he might not be its legal owner. where 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. The lessee contended that he is a 'builder in good faith. the petitioner filed the present petition for mandamus alleging that the respondent judge committed grave abuse of discretion in denying his motion to exercise option and for execution of judgment on the grounds that under Articles 448 and 546 of Page 6 . 526. Cadastral Case 12) pronouncing Juan (married toRestituto) as the owner of the land. cause any more impairment upon the property leased than is necessary. as a consequence of the cadastral case. the lessee cannot be considered a builder in good faith. On 22 January 1935. Civil Code). before the barter) by Tan Queto." predeceased the mother) and consummated while Restitutawas already married to her husband Juan Pombuena. through counsel. Tecson 164 SCRA 587 FACTS: After a denial of its motion for reconsideration. The Chapter on Possession (jus possessionis. Tan Queto filed for amotion for reconsideration of the Supreme Court decision dated 16 May 1983. The said lease contract provided that the lessee may erect structures and improvements which shall remain as lessee's property and he may remove them at any time.L-35648. without altering the form or substance of the property leased. He shall not. the lessee may remove the improvements even though the principal thing may suffer damage thereby. sent Stohner a demand letter ordering him to vacate the lot. On 22 November 1938. Tan Queto and Juan entered into a barter agreement whereby Tan Queto became the owner of the disputed lot. Balucanag vs. Should the lessor refuse to reimburse said amount. Tan Queto constructed on the disputed land a concrete building. there is no such flaw or defect because it is Tan Queto himself (not somebody else) who is the owner of the property. but on appeal in the CFI. What applies in this case is Art. 448 of the New Civil Code (Philippine) on a builder of good faith applies only to the owner of the land who believes he is the rightful owner thereof. in good faith. CA – 134 SCRA 325(?) Tan Queto vs.' ISSUE: Is the lessee a builder in good faith? RULING: No. The interlocutory orders of the lower court were set aside. Juan filed an application of Torrens title over the land for himself and his supposed co-owner Restituta. Neither can Stohner be considered a 'possessor in good faith'. Stohner made fillings on the land and constructed a house. only 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. When he failed to pay the rent. and rendered a new one declaring the questioned lot together with the building thereon. for annulment of the barter.R.Charvet which was then previously leased by the latter to one Richard Stohner. he introduces improvements to the property at his own risk such that he cannot recover from the owner the reimbursements nor he has any right to retain the premises until reimbursements. These findings were regarded by the Supreme Court as findings of facts and thus ordinarily conclusive upon the Court. without any objection on the part of Restituta.
the basis for private respondent’s right to retain the premises has already been extinguished without the fault of the petitioner. so that the willingness and readiness of the petitioner to exercise the alleged option can no longer be exercised since the subject-matter thereof has been extinguished by the fire. the private respondent filed his comment on the petition alleging that the same has already become moot and academic for two reasons: first. since the house of the private respondent was gutted by fire. justify the denial of the petitioner’s fai-rn of option. as a result of the said fire. the President of the Philippines has already issued a Presidential Decree for the expropriation of certain estates in Metro Manila including the Tambunting Estate. thereby allowing the victims of the fire to put up new structures on the premises. the then First Lady and Metro Manila Governor Imelda R. to its execution which is only a ministerial act on the part of the respondent judge. Furthermore. it is entitled to the execution of the same and that moreover. much less. 1978. and that upon finality of judgment. the beneficient and humanitarian purpose of the Zonal Improvement Project and the expropriation proceeding would be defeated if petitioner is allowed to exercise an option which would result in the ejectment of the private respondent. the prevailing party is entitled. Thus. the execution of the decision would now involve the delivery of possession of the disputed area by the private respondent to the petitioner. As stated earlier. ISSUE: Whether or not the respondent has the right of retention? HELD: The respondent judge is hereby ordered to immediately issue a writ of execution ordering the private respondent to vacate the disputed premises and deliver possession of the same to the petitioner. there is no other recourse for the private respondent but to vacate the premises and deliver the same to herein petitioner. the petitioner argues that since the judgment of the trial court has already become final. and second. Therefore. who is the petitioner herein. and therefore.the Civil Code. Marcos has placed the disputed area under her Zonal Improvement Project. Since the improvements have been gutted by fire. On April 15. the repairs and improvements introduced by the said respondents after the complaint was filed cannot be considered to have been built in good faith. fire gutted not only the house of the private respondent but the majority of the houses in Tambunting Estate. as a matter of right. the exercise of option belongs to the owner of the property. PROPERTY Case Digests PART III – Right of Accession Page 7 .
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