Floreza v Evangelista

This case started when the Evangelistas, borrowed a sum of money for 100 php pesos
from Floreza. Thereafter, the Evangelistas gave Floreza the permission to use a residential lot
owned by the former owing to the fact that the Evangelista has a withstanding loan; a barong-
barong was constructed by Florenda thereon.

Additional loans were made in favor of the Evangelistas amounted to 740 php including
the 1st loan, thus, the residential lot was executed as a security of loan payable for 6 years without
interest.

The barong-barong was demolished by Floreza (kay iya gi-ilisan og mas STRONG NGA
MATERIALS…) Later on, the Evangelistas sold the residential lot for 1,000 php (the loan was
compensated) to Floreza with the right to repurchase within a period of 6 years.

Seven Months before the expiry of the repurchase period, the Evangelistas paid the full
repurchase price of 1,000 php, hence, Floreza was given a year to vacate and move his house to
another but Floreza refused to vacate unless a reimbursement will be made to the house he
constructed on the lot.

This case was filed thereafter by the Evangelistas…

The Evangelistas prayed that: 1.) they be declared as the owner of the house constructed
by Floreza or order the same to remove said house 2.) or that Floreza pay them 10 php per month
as a reasonable value of rentals starting from the date of repurchase was paid until such time that
Floreza remove the house and deliver the residential lot to them; and 3) to declare transaction
between them as a mortgage and not of a pacto de retro.

Floreza answered admitting the repurchase of lot and would leave the premises upon
reasonable payment of the house for 7,000 php.

CFI decided infavor of the Evangelistas, granting them the right to select a remedy
provided under Art 488 (Nah.. master naman ni ninyo ang rules) and further ruled that upon the
question if the transaction is a mortgage or pacto de retro, is immaterial as the debt of 1,000 php
has been paid.

CA reversed the ruling of CFI, stating that Art. 448 is not applicable that Floreza is not
entitled for any reimbursement but he could remove his house at his expense. It was also further
ruled that Floreza shall vacate the lot and pay the Evangelistas the reasonable rentals for 10 php
from the time demand was made to vacate the premise until Floreda would actually vacate the
lot.

Hence, this case was raised in the Supreme Court with the following ISSUE/S:
1. WON Evangelistas are likewise in bad faith so that both parties may be considered
having acted in good faith, thereby, Art. 453 may apply?
2. WON Art. 448 is applicable in the case?
 3. WON rentals must be paid?
While pending in the Supreme Court, Evangelista died, Sergio (the son of Evangelista,) the
legal representative, filed a motion to dismiss stating that Floreza died and that his heirs has also
voluntarily vacated the premise. However, the heirs of Floreza objected the dismissal contending
that issue on rentals is still pending.
HELD:
Art 488 nor Art 445 is applicable;
Because the petitioner makes no pretension of ownership. (Remember the distinction
made between Art. 447 & 448?)
Was petitioner (Floreza) vendee in retro?
No, the house was constructed as far back as when the lot was subject to a security of
loan incurred by the Evangelistas.
The conclusion is;
Since 448, 445 and vendee in retro do not apply, Floreza has no right to the
reimbursement of the value of the house and much less to the retention to possess the premise.
The right akin to Floreza is depicted on Art. 579; which is of a usufructuary, wherein he could
make useful improvement but with no right to be indemnified. He may however remove such
improvement as long as it does not create damage or injury to the property. If indemnification is
allowed on improvements made by usufructuary, it is unjust to compel the owner of the property
to force him to pay for the improvement that he would not have made.
With regards to the issue of rentals;
Floreza is held liable for damages at the rate of 10 php monthly in a form of rentals from
the date redemption price was paid and not on the date of demand to vacate as rule by CA,
because the right to use the lot has ceased.

SORRY LATE UPLOAD KAY NAG BROWN OUT SA AMOA WALAY INTERNET.