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Republic of the Philippines was the owner of the LAND and that,

SUPREME COURT eventually, it would somehow be transferred


Manila to the spouses.

FIRST DIVISION It subsequently turned out that the LAND


had been titled in the name of Mr. & Mrs.
G.R. No. L-57288 April 30, 1984 Jose C. Santo, Jr. who, on September
7 , 1974, sold the same to petitioner
LEONILA SARMINETO, petitioner, SARMIENTO. The following January 6,
vs. 1975, SARMIENTO asked ERNESTO and
HON. ENRIQUE A. AGANA, District wife to vacate and, on April 21, 1975, filed
Judge, Court of First Instance of Rizal, an Ejectment suit against them. In the
Seventh Judicial District, Branch XXVIII, evidentiary hearings before the Municipal
Pasay City, and SPOUSES ERNESTO Court, SARMIENTO submitted the deed of
VALENTINO and REBECCA LORENZO- sale of the LAND in her favor, which
VALENTINO, respondents. showed the price to be P15,000.00. On the
other hand, ERNESTO testified that the
Mercedes M. Respicio for petitioner. then cost of the RESIDENTIAL HOUSE
would be from P30,000.00 to P40,000.00.
Romulo R. Bobadilla for private The figures were not questioned by
respondents. SARMIENTO.

The Municipal Court found that private


respondents had built the RESIDENTIAL
HOUSE in good faith, and, disregarding the
MELENCIO-HERRERA, J.:
testimony of ERNESTO, that it had a value
ñé+.£ªwph! 1

of P20,000.00. It then ordered ERNESTO


This Petition for certiorari questions a March and wife to vacate the LAND after
29, 1979 Decision rendered by the then SARMIENTO has paid them the mentioned
Court of First Instance of Pasay City. The sum of P20,000.00.
Decision was one made on memoranda,
pursuant to the provisions of RA 6031, and
The Ejectment suit was elevated to the
it modified, on October 17, 1977, a
Court of First Instance of Pasay where, after
judgment of the then Municipal Court of
the submission of memoranda, said Court
Paranaque, Rizal, in an Ejectment suit
rendered a modifying Decision under Article
instituted by herein petitioner Leonila
448 of the Civil Code. SARMIENTO was
SARMIENTO against private respondents,
required, within 60 days, to exercise the
the spouses ERNESTO Valentino and
option to reimburse ERNESTO and wife the
Rebecca Lorenzo. For the facts, therefore,
sum of 40,000.00 as the value of the
we have to look to the evidence presented
RESIDENTIAL HOUSE, or the option to
by the parties at the original level.
allow them to purchase the LAND for
P25,000.00. SARMIENTO did not exercise
It appears that while ERNESTO was still any of the two options within the indicated
courting his wife, the latter's mother had told period, and ERNESTO was then allowed to
him the couple could build a RESIDENTIAL deposit the sum of P25,000.00 with the
HOUSE on a lot of 145 sq. ms., being Lot D Court as the purchase price for the LAND.
of a subdivision in Paranaque (the LAND, This is the hub of the controversy.
for short). In 1967, ERNESTO did construct SARMIENTO then instituted the instant
a RESIDENTIAL HOUSE on the LAND at a certiorari proceedings.
cost of P8,000.00 to P10,000.00. It was
probably assumed that the wife's mother
We agree that ERNESTO and wife were not have been very much more than that
builders in good faith in view of the peculiar amount during the following January when
circumstances under which they had ERNESTO and wife were asked to vacate.
constructed the RESIDENTIAL HOUSE. As However, ERNESTO and wife have not
far as they knew, the LAND was owned by questioned the P25,000.00 valuation
ERNESTO's mother-in-law who, having determined by the Court of First Instance.
stated they could build on the property,
could reasonably be expected to later on In regards to the valuation of the
give them the LAND. RESIDENTIAL HOUSE, the only evidence
presented was the testimony of ERNESTO
In regards to builders in good faith, Article that its worth at the time of the trial should
448 of the Code provides: têñ.£îhqw ⣠be from P30,000.00 to P40,000.00. The
Municipal Court chose to assess its value at
ART. 448. The owner of the P20,000.00, or below the minimum testified
land on which anything has by ERNESTO, while the Court of First
been built, sown or planted in Instance chose the maximum of
good faith, P40,000.00. In the latter case, it cannot be
said that the Court of First Instance had
shall have the right abused its discretion.

to appropriate as his own the The challenged decision of respondent


works, sowing or planting, Court, based on valuations of P25,000.00
after payment of the for the LAND and P40,000.00 for the
indemnity provided for in RESIDENTIAL HOUSE, cannot be viewed
articles 546 and 548, or as not supported by the evidence. The
provision for the exercise by petitioner
to oblige the one who built or SARMIENTO of either the option to
planted to pay the price of indemnify private respondents in the
the land, and the one who amount of P40,000.00, or the option to allow
sowed, the proper rent. private respondents to purchase the LAND
at P25,000.00, in our opinion, was a correct
However, the builder or decision.têñ.£îhqw â£

planter cannot be obliged to


buy the land if its value is The owner of the building
considerably more than that erected in good faith on a
of the building or trees. In land owned by another, is
such case, he shall pay entitled to retain the
reasonable rent, if the owner possession of the land until
of the land does not choose he is paid the value of his
to appropriate the building or building, under article 453
trees after proper indemnity. (now Article 546). The owner,
The parties shall agree upon of the land. upon, the other
the terms of the lease and in hand, has the option, under
case of disagreement, the article 361 (now Article 448),
court shall fix the terms either to pay for the building
thereof. (Paragraphing or to sell his land to the
supplied) owner of the building. But he
cannot, as respondents here
The value of the LAND, purchased for did, refuse both to pay for the
P15,000.00 on September 7, 1974, could building and to sell the
land and compel the owner the LAND had been titled in the name of Mr.
of the building to remove it & Mrs. Jose C. Santo, Jr. who, sold the
from the land where it is same to petitioner SARMIENTO.
erected. He is entitled to SARMIENTO filed an Ejectment suit against
such remotion only when, them. In the evidentiary hearings before the
after having chosen to sell Municipal Court, SARMIENTO submitted
his land, the other party fails the deed of sale of the LAND in her favor,
to pay for the same. which showed the price to be P15,000.00.
(Emphasis ours) On the other hand, ERNESTO testified that
the then cost of the RESIDENTIAL HOUSE
We hold, therefore, that the would be from P30,000.00 to
order of Judge Natividad P40,000.00.Sarmiento refuse to pay and
compelling defendants- give option to buy the property.
petitioners to remove their
buildings from the land Issue: 1.Whether or not Ernesto was in
belonging to plaintiffs- good faith.
respondents only because
the latter chose neither to 2.Whether or not Sarmiento could
pay for such buildings nor to exercise both refusal to pay the spouses
sell the land, is null and void, and give option to purchase.
for it amends substantially
the judgment sought to be Held:
executed and is, furthermore,
offensive to articles 361 (now 1.Yes. We agree that ERNESTO
Article 448) and 453 (now and wife were builders in good faith in view
Article 546) of the Civil Code. of the peculiar circumstances under which
(Ignacio vs. Hilario, 76 Phil. they had constructed the RESIDENTIAL
605, 608 [1946]). HOUSE. As far as they knew, the LAND
was owned by ERNESTO's mother-in-law
WHEREFORE, the Petition for Certiorari is who, having stated they could build on the
hereby ordered dismissed, without property, could reasonably be expected to
pronouncement as to costs. later on give them the LAND.

SO ORDERED. 1äw phï1.ñët

In regards to builders in good faith, Article


448 of the Code provides:têñ.£îhqwâ£
Sarmiento vs. Agana 129 ART. 448. The owner of the
scra 122 land on which anything has
been built, sown or planted in
Facts: good faith,shall have the
rightto appropriate as his
ERNESTO was still courting his wife, own the works, sowing or
the latter's mother had told him the couple planting, after payment of the
could build a RESIDENTIAL HOUSE whom indemnity provided for in
Ernesto did construct a RESIDENTIAL articles 546 and 548, or to
HOUSE on the LAND at a cost of P8,000.00 oblige the one who built or
to P10,000.00 who probably assumed that planted to pay the price of
the wife's mother was the owner of the the land, and the one who
LAND and that, it would be transferred to sowed, the proper
the spouses. Subsequently turned out that rent.However, the builder or
planter cannot be obliged to Disposition: WHEREFORE, the Petition
buy the land if its value is for Certiorari is hereby ordered dismissed,
considerably more than that without pronouncement as to costs.
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.

2.No. The owner of the building


erected in good faith on a land owned by
another, is entitled to retain the possession
of the land until he is paid the value of his
building, under article 453 (now Article 546).
The owner, of the land. upon, the other
hand, has the option, under article 361 (now
Article 448), either to pay for the building or
to sell his land to the owner of the building.
But he cannot, as respondents here did,
refuse both to pay for the building and to
sell the land and compel the owner of the
building to remove it from the land where it
is erected. He is entitled to such remotion
only when, after having chosen to sell his
land, the other party fails to pay for the
same.

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 nor to
sell the land, is null and void,
for it amends substantially
the judgment sought to be
executed and is, furthermore,
offensive to articles 361 (now
Article 448) and 453 (now
Article 546) of the Civil Code.
(Ignacio vs. Hilario, 76 Phil.
605, 608 [1946]).