1

Republic of the Philippines

SUPREME COURT
Manila

EN BANC
G.R. No. L-4529 December 29, 1952
VICENTE
M.
COLEONGCO, petitioner,
vs.
PEDRO F. REGALADO and LEONOR MONTILLA, respondents.
Jose
Ur.
Carbonell
for
petitioner.
Jose M. Estacion and Remigio M. Pea for respondents.
JUGO, J.:
The Court of Appeals (5th Division) rendered the following decision, the
facts of which cannot be reviewed by this court:
DECISION
FELIX, J.:
Antecedents. Prior to September of 1944, Pedro F. Regalado was the
owner of lot No. 1205-A of plan Psd. 12393, G.L.R.O. cadastral record No.
55, situated at barrio Mandalagan, Municipality of Bacolod, Province of
Negros Occidental, of which lot No. 157 of the subdivision plan Psd. 12395
was a portion. In this lot there was erected a building which in September
of 1944, was being occupied by the forces of the Japanese Army. In that
month of September Pedro F. Regalado sold lot No. 157 to Vicente M.
Coleongco who thus became the owner of the lot, covered by transfer
certificate of title No. 663 of the Land Records of Negros Occidental. The
total area of the lot was 1,000 square meters, and the land occupied by
the house was 245 square meters. Until the year of 1947, the assessed
value of the whole lot and the house was P1,156 and P4,500, respectively.
It appears from the records that Vicente M. Coleongco contended that the
house erected on lot 157 was included in the sale to him of this property,
and when the City of Bacolod was liberated by the American Forces that
succeeded the Japanese and occupied said house for about two months,
Coleongco received from the local office of the AFWESPAC as rentals for
such occupation the sum of $93.75 or P137.50. It so happened, however,
that after the American Forces vacated the house, Pedro F. Regalado
occupied the same, so Vicente M. Coleongco instituted Civil Case No. 185
of the Court of First Instance of Negros Occidental, which on March 21,
1947, decided that the improvement of lot No. 157, consisting of a
residential house, was the property of the defendant therein Pedro F.

Regalado. From that decision Coleongco appealed to the Court of Appeals,

but on August 28, 1947, this tribunal declared the appeal abandoned.
The case. One month before this outcome in the Court of Appeals of
said case No. 185, or on July 21, 1947, Vicente M. Coleongco filed the
complaint that gave rise to the present action. On September 20, 1947,
Pedro F. Regalado, in consideration of the sum of P3,500, deeded and sold
said house to Leonor Montilla Vda. de Pea, who was duly apprised of the
present case that was pending against the vendor (Annex A). This
transaction was supplemented by contract Annex B, dated October 3,
1947, wherein the vendee Leonor Montilla expressly admitted that she
had knowledge of the existence of this civil case (docket No. 718 of the
Court of First Instance of Negros Occidental) concerning the house object
of the sale, assumed whatever rights and obligations might arise with
respect to such civil case, and freed and liberated the vendor Regalado
from the result of the case. Because of these transactions between
Regalado and Mrs. Montilla, on or about October 22, 1947, the plaintif
amended his complaint including Leonor Montilla as party defendant. In
the amended complaint it is prayed that after due hearing
the defendants be condemned:
1. To pay unto the plaintif the monthly rental of sixty pesos (P60) for his
premises during the period occupied by said defendants;
2. To order the defendants to remove or clear the house from the plaintif's
premises;
3. To pay the costs of the suit; and
4. To grant such relief or other remedies which the court may consider just
and equitable.
On November 3, 1947, Atty. Vivencio T. Ibrado, signing over the title of
"Attorney for the Defendant", filed an answer to the amended complaint
with counterclaim, praying the court that:
1. The complaint of the plaintif be dismissed, with costs against the
plaintif;
2. That the Honorable Court fix the rental for the occupation of the 245
square meters of the lot in question and that said rental be made efective
only from August 28, 1947;
3. That the plaintif be ordered to pay to the defendant the sum of ninetythree dollars and seventy-five cents ($93.75);
4. That the Honorable Court fix the value of the lot in question and order
the plaintif to sell the lot to the defendant;
5. To grant such other remedies as this Honorable Court may deem just
and equitable in the premises;
lawphil.net

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Defendant Leonor Montilla did not file a separate answer to the amended
complaint, and on motion of the plaintif the court by order of February 11,
1948, declared Leonor Montilla in default over the objection of both
defendants who claimed that the answer to the amended complaint filed
by Attorney Ibrado on November 3, 1947, used the words "defendants" in
various parts of the answer, and that it was intended to be the answer for
both.
After proper proceedings and hearing, on January 3, 1949, the court
rendered judgment, the dispositive part of which, translated into English,
is as follows:
"In view of the foregoing, the court renders judgment in this case,
sentencing the defendants to pay the plaintif the monthly sum of P14.06
from September, 1945, as rentals, with legal interest thereon from the
date of the filing of the complaint in this case, and providing that the sum
of $93.75 or P187.50, its equivalent in Philippine currency, he deducted
from the total sum of said rents.
"Defendants are ordered to vacate the building from the portion of the lot
on which it is erected within the period of two months from the date this
decision becomes final, and to that end they are ordered to remove the
building from the said portion of the lot within the aforementioned period.
"The costs are taxed against the defendants."
From this decision both defendants appealed, and in this instance their
counsel maintains that the lower court erred:
1. In declaring the appellant Leonor Montilla in default;
2. In sentencing the defendants to pay the plaintif the monthly rental of
P14.06 for the portion of lot No. 157 of subdivision plan Psd-12395 from
the month of September, 1945, with legal-interest from the date of the
presentation of the complaint;
3. In ordering the appellants to remove their house from the portion of the
lot occupied by the same within the period of two months from the date
its decision becomes final; and
4. In not absolving the defendants from the complaint and in sentencing
them to pay the costs of this suit.
Discussion of the controversy. Before the presentation of evidence at
the hearing, the parties entered into the following stipulation of facts, to
wit:
"1. That the parties are all of legal age and residents of the City of
Bacolod, Philippines;
"2. That since the month of September, 1944, the plaintif became the
registered owner of lot No. 157 of the subdivision plan Psd-12395, which is
lawphil.net

a portion of lot No. 1205-A of subdivision plan Psd-12393, G.L.R.O.

cadastral record No. 55, situated in the City of Bacolod and described in
the transfer certificate of title No. 663 (P.R.);
"3. That be decision rendered in civil case No. 185 by this same court and
which is now final, defendant Pedro F. Regalado was declared the owner of
the building of strong materials erected on said lot;
"4. That actual assessed value of said lot is P5,625;
"5. That said building is also assessed at P4,500;
"6. That on October 30, 1946, the lot in question was assessed at
P1,312.50;
"7. That said lot has an area of 1,000 square meters;
"8. That the portion of the same occupied by the building existing thereon
is of an area of 245 square meters;
"9. That in the month of September of 1947, defendant Pedro F. Regalado
sold said building to his co-defendant Leonor Montilla for the sum of
P3,500, of which amount the vendee paid the vendor, at the time of the
execution of the deed of sale, the sum of P2,000, binding herself to pay
the balance of P1,500 on or before October 31, 1947. Defendants Pedro F.
Regalado and Leonor Montilla have executed a contract supplementary to
the previous deed of sale, by virtue of which said Leonor Montilla
acknowledged the existence of the present case and assumed the
obligation of paying whatever rents and of complying with whatever
obligations the court would impose on the defendant Pedro F. Regalado."
Aside from this stipulation and the facts appearing in the preceding
narration of the antecedents and of the statement of the case, plaintifappellee declared that he desired to take possession of the portion of the
lot occupied by the questioned building because he intended to construct
his own house, as he was then paying rents for the lease of his residence
at a rate higher than the amount he is entitled to receive as rents from the
portion of the land occupied by the building of the defendants.
A perusal of the record discloses that the present action for ejectment was
instituted on July 21, 1947,before plaintif's appeal in Case No. 185 was
finally declared abandoned in the Court of Appeals, and the fact that in
said case Coleongco unsuccessfully claimed to be the owner of the house
in litigation does not preclude his right to depart from his former
contention and to institute these ejectment proceedings to compel the
defendants to vacate his lot and to remove therefrom the building which
at first he maintained to be his, and to further demand payment of the
corresponding rentals for the occupancy of the lot by said building
from September, 1944, when he bought the property, up to the time said

3
building is actually removed, except, of course, for the period that he
might have occupied or used that building. But the record is silent about
such use and all indications are that from September of 1944, the house
was first occupied by the Japanese, then by the American Forces, after
liberation, and right afterwards in September of 1945 by defendant
Regalado himself and by his successors in interest. The lower court,
however, sentenced the defendants to pay rents from September, 1945,
and as plaintif has not appealed from that ruling, We can only consider
the adequacy of the amount fixed by the court as rentals from September,
1945.
With regard to defendant Leonor Montilla's alleged default, and despite
the considerations made by the lower court in its order of February 11,
1948, we are of the opinion that the answer with the counterclaim filed by
Attorney Ibrado on November 3, 1947, should have been considered as
submitted for both defendants: firstly, because the attorney that filed that
answer specifically so stated; and, secondly, because the grammatical
errors in the use of the verbs in connection with the word "defendants", as
for example in the expression of "defendants alleges", should not be
charged against any of them who did not prepare that pleading and, under
the circumstances, should not be deprived of any right on account of the
careless preparation thereof. Notwithstanding this opinion, we hold that
the ruling of the lower court on this point is of no sequence, because both
defendants had common interests and the defenses, and the rights of
appellant Leonor Montilla have been properly attended to by her coappellant Pedro F. Regalado.
The action which originally was instituted as an ejectment case for the
main purpose of causing the removal of defendants' building from
plaintif's lot and was filed directly in the Court of First Instance of
Occidental Negros because the right of action had accrued since
September of 1944 was enlarged by defendants' counterclaim to
include plaintif's right of accession prescribed in article 361 of the old
Civil Code. In passing upon the merits of the controversy on this question
at issue, we may state that it is not disputed that the building in litigation
was formerly the property of Pedro F. Regalado and presently of Leonor
Montilla, that this building was constructed in good faith, and
consequently, that the enjoyment and possession thereof must be
considered to have been always in good faith. Our Civil Code provides:
"ART. 358. What is built, planted or sown on another's land and any
improvements or repair made on it, belongs to the owner of the
land, subject to the provisions of the following articles.

"ART. 361. The 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 456, or to compel the person who has built or planned to pay him
the value of the land, and the person who sowed thereon to pay the
proper rent therefor.
"ART. 453. Necessary expenditures shall be refunded to every possessor;
but only the possessor in good faith may retain the thing until they are
repaid to him.
Useful expenditures shall be paid to the possessor in good faith with the
same right of retention, the person who has defeated him in his
possession having the option of refunding the amount of such
expenditures or paying him the increase in value which the thing has
acquired by reason thereof.
"ART. 454. Expenditures purely for ostentation or mere pleasure shall not
be repaid the possessor in good faith; but he may remove the ornaments
with which he has established the principal thing if it does not sufer injury
thereby and if the successor in the possession does no prefer to refund
the amount expended.
"In view of this legal provisions, we have to declare that the right of the
owner of a lot to have the same vacated or cleared from any construction
or improvement belonging to another which built it in good faith, is to be
subordinated to and without prejudice of whatever rights the owner and
builder in good faith of the improvement may have. We, therefore, cannot
now act favorably on plaintif's complaint for ejectment disregarding
defendants' rights either to pay for the acquisition of lot No. 157 or of
being paid the value of the building erected thereon, at the option of the
plaintif.
"As regards the amount of monthly rents that appellants were condemned
to pay the plaintif, the following considerations must be taken into
account, to wit: (a) that although the portion of lot 157 actually occupied
by the building is of an area of 245 square meters, for the purpose of
fixing the rent in this case the assessed value of the whole lot should be
had in mind, as there is no evidence that the occupied portion of said lot
had been devoted to any use other than as site of the house in question;
(b) that the amount of the rent that defendants should have been
sentenced to pay for the period of from September, 1945, to the end of
1946 should have been fixed in accordance with its former assessed value
of P1,312.50; (c) that from January of 1947, the assessed value of P5,625
should be the one determining the proper amount of the rents; (d) that

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section 3 of Commonwealth Act No. 689 promulgated October 15, 1945,
prescribes that "in the case of the lease for the occupation of the lot, the
rents shall be presumed unjust and unreasonable if the amount
thereof per annum likewise exceeds twenty per centum of the annual
assessment value of said lot"; (e) that although Executive Order No. 62,
issued on June 21, 1947, reduced the annual rent demandable to an
amount not exceeding twelve per centum of the assessed value, said
Executive Order was declared null and void for having been issued without
authority of law (Araneta vs. Dinglasan, * 45 Of. Gaz., No. 10, p. 4411); (f) that on the
strength of the provisions of law quoted, the amount of the rent that ought to have been fixed as monthlyrent
in this case is P21.875 from September, 1944, up to December, 1946, and P93.75 from January of 1947, up
to the time of actual removal of the building form the lot, or to the time when the parties would come to an
agreement as per article 361 of the old Civil Code; (g) that the aggregate sum of such rents being greater
than the amount fixed by the lower court, and even greater than the amount that plaintif prayed for in the
complaint, and as plaintif has not appealed from the amount fixed in this decision of the lower court, we are
not in a position to increase or modify the amount of the rents the defendants have been sentenced to pay
to the plaintif.

Wherefore, the decision appealed from is hereby affirmed in so far as it

condemns the defendants to pay to the plaintif as monthly rents the sum
of P14.06 from September, 1945, with legal interest thereon from the date
of the filing of the complaint (July 21, 1947), from the total of which the
sum of P187.50 should be deducted. The decision is reversed as to the
rest and this case is returned to the lower court, with instructions to give
the plaintif an opportunity to exercise his right of option granted to him
by article 361 of the old Civil Code, without pronouncement as to cost. It is
so ordered.
ALFONSO
FELIX
Associate Justice
We concur:
M.
L.
DE
LA
ROSA EMILIO
PEA
Associate Justice
Associate Justice
Coleongco contended that in September, 1944, he bought not only the lot
above-mentioned but also the house erected thereon. He instituted an
action in civil case No. 185 of the Court of First Instance of Occidental
Negros, in order to be declared the owner of the house. However, the
Court of First Instance, on March 21, 1947, decided that said house was
the property of the defendant Pedro F. Regalado, not sold to Coleongco.
Coleongco appealed to the Court of Appeals but latter on said Court
declared the appeal abandoned and the decision of the Court of First
Instance became final. This decision is to the efect that Regalado, being
the owner of both the lot and the house, sold only the lot to Coleongco,
retaining ownership of the house. Consequently, Regalado or his

successor Leonor Montilla should remove said house from the lot without
any compensation from Coleongco.
Article 361 of the old Civil Code is not applicable in this case, for Regalado
constructed the house on his own land before he sold said land to
Coleongco. Article 361 applies only in the cases where a person constructs
a building on the land of another in good or in bad faith, as the case may
be. It does not apply to a case where a person constructs a building on his
own land, for then there can be no question as to good or bad faith on the
part of the builder.
In view of the foregoing, the decision of the Court of Appeals is modified
by ordering Regalado and his successor Leonor Montilla to remove the
above-mentioned house from the lot of Coleongco, without any obligation
on the part of the latter to pay any compensation to Regalado or his
successor Montilla. In all other respects, the decision of the Court of
Appeals is affirmed with costs against respondents Regalado and Montilla.
So ordered.
Paras, C.J., Pablo, Bengzon, Padilla, Bautista Angelo and Labrador, JJ.,
concur.

5
EN BANC
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
Pedro
de
Leon
for
respondent
No appearance for the other respondent.

for
Santo

Domingo

petitioner.
Bernardo.

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 dueo 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.

Republic of the Philippines

SUPREME COURT
Manila

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

6
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.

7
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.
Mauricio M. Monta for respondents.

Esliza

for

petitioners.

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
Republic of the Philippines
SUPREME COURT
Manila

(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.

EN BANC
No pronouncement is made as to damages and costs.
G.R. No. L-175

April 30, 1946

8
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 another, is entitled to
retain the possession of the land until he is paid the value of his building, under article
453. The owner of the land, upon the other hand, has the option, under article 361, 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. But this is not the case before us.
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 is, furthermore, offensive
to articles 361 and 453 of the Civil Code.
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, 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 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 how much, and within what time may the option be exercised, and certainly no
authority is vested in him to settle these matters which 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
remained unsettled up to the time the petition is filed in the instant case.
For all the foregoing, the writ of execution issued by Judge Natividad is hereby set aside
and the lower court ordered to hold a hearing in the principal case wherein it must
determine the prices of the buildings and of the residential lot where they are erected, as
well as the period of time within which the plaintiffs-respondents may exercise their
option either to pay for the buildings or to sell their land, and, in the last instance, the
period of time within which the defendants-petitioners may pay for the land, all these
periods to be counted from the date the judgment becomes executory or unappealable.
After such hearing, the court shall render a final judgment according to the evidence
presented by the parties.
The costs shall be paid by plaintiffs-respondents.

9
G.R. No. L-12812

September 29, 1959

FILIPINAS
COLLEGES,
vs.
MARIA GARCIA TIMBANG, ET AL., defendants.

INC., plaintiff-appellee,

-----------------------------G.R. No. L-12813

September 29, 1959

MARIA
GARCIA
TIMBANG,
MARIA
GARICA
vs.
MARIA GERVACIO BLAS, defendant-appellee.

ET
AL., plaintiffs.
TIMBANG, plaintiff-appellant,

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. 2a 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.
Republic of the Philippines
SUPREME COURT
Manila
EN BANC

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:
1wphl.nt

10
(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.
1wphl.nt

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.

11
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:

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:

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

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

12
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.

SECOND DIVISION
G.R. No. L-32974 July 30, 1979
BARTOLOME
ORTIZ, petitioner,
vs.
HON. UNION C. KAYANAN, in his capacity as Judge of the Court of First Instance
of Quezon, Branch IV; ELEUTERIO ZAMORA, QUIRINO COMINTAN, VICENTE
FERRO, AND GREGORIO PAMISARAN, respondents.
Salonga, Ordo;ez, Yap, Sicat & Associates and Salvador, Ulgado & Carbon for
petitioner.
Jose A. Cusi for private respondents.

ANTONIO, J.:

1wph1.t

Petition for certiorari and Prohibition with Preliminary Injunction to nullify the Order of
respondent Judge directing the execution of the final judgment in Civil Case No. C-90,
entitled "Bartolome Ortiz vs. Secretary of Agriculture and Natural Resources, et al.," and
the Writ of Execution issued to implement said Order, allegedly for being inconsistent
with the judgment sought to be enforced.
Civil Case No. C-90 was filed by Bartolome Ortiz who sought the review and/or
annulment of the decision of the Secretary of Agriculture and Natural Resources, giving
preference to the sales applications of private respondents Quirino Comintan and
Eleuterio Zamora over Lot No. 5785, PLS-45, located at Barrio Cabuluan, Calauag,
Quezon.
I
The factual background of the case, as found by respondent Court, is as follows:

Republic of the Philippines

SUPREME COURT
Manila

t.hqw

... The lot in controversy was formerly the subject of Homestead

Application No. 122417 of Martin Dolorico II, plaintiff's ward who died on
August 20, 1931; that since then it was plaintiff who continued the
cultivation and possession of the property, without however filing any
application to acquire title thereon; that in the Homestead Application No.

13
122417, Martin Dolorico II named his uncle, Martin Dolorico I as his heir
and successor in interest, so that in 1951 Martin Dolorico I executed an
affidavit relinquishing his rights over the property in favor of defendants
Quirino Comintan and Eleuterio Zamora, his grandson and son-in-law,
respectively, and requested the Director of Lands to cancel the
homestead application; that on the strength of the affidavit, Homestead
Application No. 122417 was cancelled and thereafter, defendants
Comintan and Zamora filed their respective sales applications Nos. 8433
and 9258; that plaintiff filed his protest on November 26, 1951 alleging
that he should be given preference to purchase the lot inasmuch as he is
the actual occupant and has been in continuous possession of the same
since 1931; and inspite of plaintiff's opposition, "Portion A" of the property
was sold at public auction wherein defendant Comintan was the only
bidder; that on June 8, 1957, investigation was conducted on plaintiff's
protest by Assistant Public Lands Inspector Serapion Bauzon who
submitted his report to the Regional Land Officer, and who in turn
rendered a decision on April 9, 1958, dismissing plaintiff's claim and
giving due course to defendants' sales applications on the ground that
the relinquishment of the homestead rights of Martin Dolorico I in favor of
Comintan and Zamora is proper, the former having been designated as
successor in interest of the original homestead applicant and that
because plaintiff failed to participate in the public auction, he is forever
barred to claim the property; that plaintiff filed a motion for
reconsideration of this decision which was denied by the Director of
Lands in his order dated June 10, 1959; that, finally, on appeal to the
Secretary of Agriculture and Natural Resources, the decision rendered by
the Regional Land Officer was affirmed in toto. 1
On March 22, 1966, respondent Court rendered judgment in the afore-mentioned civil
case, the dispositive portion of which reads as follows:

bidder thereof, defendants Quirino Comintan and Eleuterio Zamora are

ordered to reimburse jointly said plaintiff the improvements he has
introduced on the whole property in the amount of THIRTEEN
THOUSAND SIX HUNDRED THIRTY-TWO (P13,632.00) PESOS, the
latter having the right to retain the property until after he has been fully
paid therefor, without interest since he enjoys the fruits of the property in
question, with prejudice and with costs again the plaintiff. 2
Plaintiff appealed the decision to the Court of Appeals.
Two (2) years after the rendition of the judgment by the court a quo, while the case was
pending appeal and upon petition of private respondents Quirino Comintan and Eleuterio
Zamora, respondent Court appointed respondent Vicente Ferro, Clerk of Court, as
Receiver to collect tolls on a portion of the property used as a diversion road. On August
19, 1969, the Court of Appeals issued a Resolution annulling the Order appointing the
Receiver. Subsequently, on February 19, 1970, the Appellate Court affirmed the decision
of the trial court. A petition for review on certiorari of the decision of the Court of Appeals
was denied by this Court on April 6, 1970. At this point, private respondents filed a
petition for appointment of a new receiver with the court a quo. This petition was granted
and the receiver was reappointed. Petitioner sought the annulment of this Order with the
Court of Appeals, but said Court ruled that its decision had already become final and that
the records of the case were to be remanded to the trial court.
Not satisfied with such denial, petitioner filed a petitioner for certiorari, prohibition and
mandamus with preliminary injunction before this Court, 3 praying for the annulment of the
Order reappointing the Receiver. On July 13, 1970, the petition was dismissed by this Court
on the ground of insufficient showing of grave abuse of discretion.
II

t.hqw

IN VIEW OF THE FOREGOING CONSIDERATIONS, judgment is hereby

rendered awarding Lot No. 5785-A of PLS-45, (Calauag Public Land
Subdivision) one-half portion of the property in litigation located at Bo.
Cabuluan, Calauag, Quezon, in favor of defendant QUIRINO
COMINTAN, being the successful bidder in the public auction conducted
by the bureau of Lands on April 18, 1955, and hereby giving due course
to the Sales Application No. 9258 of defendant Eleuterio Zamora over the
other half, Lot No. 5785-B of PLS-45, Calauag, without prejudice to the
right of plaintiff BARTOLOME ORTIZ to participate in the public bidding of
the same to be announced by the Bureau of Lands, Manila.
However, should plaintiff Bartolome Ortiz be not declared the successful

The judgment having become final and executory private respondents filed a motion for
the execution of the same, praying as follows:
t.hqw

WHEREFORE, it is respectfully prayed of this Honorable Court to order

the issuance of a writ of execution in accordance with the judgment of
this Honorable Court, confirmed by the Court of Appeals and the
Supreme Court, commanding any lawful officer to deliver to defendants
Comintan and Zamora the land subject of the decision in this case but
allowing defendants to file a bond in such amount as this Honorable
Court may fix, in lieu of the P13,632.00 required to be paid to plaintiff,
conditioned that after the accounting of the tools collected by plaintiff,

14
there is still an amount due and payable to said plaintiff, then if such
amount is not paid on demand, including the legal interests, said bond
shall be held answerable.

by the Receiver of the tolls collected by the plaintiff, the defendants pray
that they allowed to put up a bond in lieu of the said P13,632.00 to
answer for damages of the former, if any.

Ordering further the plaintiff to render an accounting of the tolls he

collected from March of 1967 to December 31, 1968 and from September
1969 to March 31, 1970, and deliver said tolls collected to the receiver
and if judgment is already executed, then to Quirino Comintan and
Eleuterio Zamora; and,

On the other hand, plaintiff contends in his opposition, admitting that the
decision of the Supreme Court has become final and executory; (1) the
offer of a bond in lieu of payment of P13,632.00 does not, and cannot,
satisfy the condition imposed in the decision of this Court which was
affirmed in toto;(2) the public sale of Portion "B" of the land has still to
take place as ordained before the decision could be executed; and, (3)
that whatever sums plaintiff may derive from the property cannot be set
off against what is due him for the improvements he made, for which he
has to be reimbursed as ordered.

Finally, to condemn plaintiff to pay moral damages for withholding the

tools which belong to your movant in an amount this Court may deem just
in the premises. 4
Acting upon the foregoing motion, respondent Judge issued an Order, dated September
23, 1970, stating, among others, the following:

xxx xxx xxx

t.hqw

The records further disclosed that from March 1967 to December 31,
1968, piaintiff Bartolome Ortiz collected tolls on a portion of the propertv
in question wherein he has not introduced anv improvement particularlv
on Lot No. 5785-A; PLS-45 awarded to defendant Quirino Comintan, thru
which vehicular traffic was detoured or diverted, and again from
September 1969 to March 31, 1970, the plaintiff resumed the collection of
tools on the same portion without rendering any accounting on said tolls
to the Receiver, who, was reappointed after submitting the required bond
and specifically authorized only to collect tolls leaving the harvesting of
the improvements to the plaintiff.
xxx xxx xxx
ln virtue of he findings of this Court as contained in the dispositive portion
of its decision, the defendants are jointly obligated to pay the plaintiff in
the amount of P13,632.00 as reasonable value of the improvements he
introduced on the whole property in question, and that he has the right of
retention until fully paid. It can be gleaned from the motion of the
defendants that if plaintiff submits an accounting of the tolls he collected
during the periods above alluded to, their damages of about P25,000.00
can more than offset their obligation of P13,362.00 in favor of the plaintiff,
thereafter the possession of the land be delivered to the defendants since
the decision of the Supreme Court has already become final and
executory, but in the interregnum pending such accounting and recovery

Let it be known that plaintiff does not dispute his having collected tolls
during the periods from March 1967 to December 31, 1968 and from
September 1969 to March 31, 1970. The Supreme Court affirmed the
decision of this Court its findings that said tolls belong to the defendant,
considering that the same were collected on a portion of the land
question where the plaintiff did not introduce any improvement. The
reimbursement to the plaintiff pertains only to the value of the
improvements, like coconut trees and other plants which he introduced
on the whole property. The tolls collected by the plaintiff on an
unimproved portion naturally belong to the defendants, following the
doctrine on accretion. Further, the reappointment of a Receiver by this
Court was upheld by the Supreme Court when it denied the petition for
certiorari filed by the plaintiff, bolstering the legal claim of defendants over
said tolls. Thus, the decision of the Supreme Court rendered the decision
of this Court retroactive from March 22, 1966 although pending
accounting of the tolls collected by the plaintiff is justified and will not
prejudice anybody, but certainly would substantially satisfy the conditions
imposed in the decision. However, insofar as the one-half portion "B" of
the property, the decision may be executed only after public sale by the
Bureau of Lands shall be accomplished.
WHEREFORE, finding the Motion for Execution filed by the defendants to
be meritorious, the same is granted; provided, however, that they put up
a bond equal the adjudicated amount of P13,632.00 accruing in favor of
the plaintiff, from a reputable or recognized bonding or surety company,

15
conditioned that after an accounting of the tolls collected by the plaintiff
should there be found out any balance due and payable to him after
reckoning said obligation of P13,632.00 the bond shall be held
answerable therefor. 5

It goes without saying that defendant Comintan is entitled to be placed in

possession of lot No. 5785-A of PLS-45 (Calauag Public Land
Subdivision) and enjoyment of the tolls from March, 1967 to March, 1968
and from September, 1969 to March 31, l970 which were received by
plaintiff Bartolome Ortiz, collected from the property by reason of the
diversion road where vehicular traffic was detoured. To defendant
Comintan belongs the tolls thus collected from a portion of the land
awarded to him used as a diversionary road by the doctrine of accretion
and his right over the same is ipso jure, there being no need of any action
to possess said addition. It is so because as consistently maintained by
the Supreme Court, an applicant who has complied with all the terms and
conditions which entitle him to a patent for a particular tract of publlic
land, acquires a vested right therein and is to be regarded as equitable
owner thereof so that even without a patent, a perfected homestead or
sales application is a property right in the fullest sense, unaffectcd by the
fact that the paramount title is still in the Government and no subsequent
law can deprive him of that vested right The question of the actual
damages suffered by defendant Comintan by reason of the unaccounted
tolls received by plaintiff had already been fully discussed in the order of
September 23, 1970 and the Court is honestly convinced and believes it
to be proper and regular under the circumstances.

Accordingly, a Writ of Execution was issued after private respondent Quirino Comintan
had filed the required bond. The writ directed the Sheriff to enforce the decision of the
Court, and stated, part in, the following:
t.hqw

But should there be found any amount collectible after accounting and
deducting the amount of P3,632.00, you are hereby ordered that of the
goods and chattels of Bartolome Ortiz of Bo. Kabuluan, Calauag,
Quezon, be caused to be made any excess in the above-metioned
amount together with your lawful fees and that you render same to
defendant Quirino Comintan. If sufficient personal property cannot be
found thereof to satisfy this execution and lawful fees thereon, then you
are commanded that of the lands and buildings of the said BARTOLOME
ORTIZ you make the said excess amount in the manner required by the
Rules of Court, and make return of your proceedings within this Court
within sixty (60) days from date of service.
You are also ordered to cause Bartolome Ortiz to vacate the property
within fifteen (15) days after service thereof the defendant Quirino
Comintan having filed the required bond in the amount of THIRTEEN
THOUSAND SIX HUNDRED THIRTY-TWO (P13,632.00) PESOS. 6

Incidentally, the Court stands to correct itself when in the same order, it
directed the execution of he decision with respect to the one-half portion
"B" of the property only after the public sale by the Bureau of Lands, the
same being an oversight, it appearing that the Sales Application of
defendant Eleuterio Zamora had already been recognized and full
confirmed by the Supreme Court.

On October 12, 1970, petitioner filed a Motion for Reconsideration of the aforesaid Order
and Writ of Execution, alleging:
t.hqw

In view thereof, finding the motion filed by plaintiff to be without merit, the
Court hereby denies the same and the order of September 23, 1970 shall
remain in full force subject to the amendment that the execution of the
decision with respect to the one-half portion "B" shall not be conditioned
to the public sale by the Bureau of Lands.

(a) That the respondent judge has no authority to place respondents in

possession of the property;
(b) That the Supreme Court has never affirmed any decision of the trial
court that tolls collected from the diversionary road on the property, which
is public land, belong to said respondents;
(c) That to assess petitioner a P25,000.00 liability for damages is purely
punitive imposition without factual or legal justification.
The foregoing Motion for Reconsideration was denied by respondent Judge per Order
dated November 18, 1970. Saod Order states, in part:
t.hqw

SO ORDERED. 7
III
Petitioner thus filed the instant petition, contending that in having issued the Order and
Writ of Execution, respondent Court "acted without or in excess of jurisdiction, and/or

16
with grave abuse of discretion, because the said order and writ in effect vary the terms of
the judgment they purportedly seek to enforce." He argued that since said judgment
declared the petitioner a possessor in good faith, he is entitled to the payment of the
value of the improvements introduced by him on the whole property, with right to retain
the land until he has been fully paid such value. He likewise averred that no payment for
improvements has been made and, instead, a bond therefor had been filed by
defendants (private respondents), which, according to petitioner, is not the payment
envisaged in the decision which would entitle private respondents to the possession of
the property. Furthermore, with respect to portion "B", petitioner alleges that, under the
decision, he has the right to retain the same until after he has participated and lost in the
public bidding of the land to be conducted by the Bureau of Lands. It is claimed that it is
only in the event that he loses in the bidding that he can be legally dispossessed thereof.
It is the position of petitioner that all the fruits of the property, including the tolls collected
by him from the passing vehicles, which according to the trial court amounts to
P25,000.00, belongs to petitioner and not to defendant/private respondent Quirino
Comintan, in accordance with the decision itself, which decreed that the fruits of the
property shall be in lieu of interest on the amount to be paid to petitioner as
reimbursement for improvements. Any contrary opinion, in his view, would be tantamount
to an amendment of a decision which has long become final and executory and,
therefore, cannot be lawfully done.
Petitioner, therefore, prayed that: (1) a Writ of Preliminary Injunction be issued enjoining
the enforcement of the Orders of September 23, 1970 and November 18, 1970, and the
Writ of Execution issued thereto, or restoring to petitioner the possession of the property
if the private respondents had been placed in possession thereof; (2) annulling said
Orders as well as the Writ of Execution, dissolving the receivership established over the
property; and (3) ordering private respondents to account to petitioner all the fruits they
may have gathered or collected from the property in question from the time of petitioiier's
illegal dispossession thereof.
On January 29, 1971, this Court issued the Writ of Preliminary Injunction. On January 30,
1971, private respondents filed a Motion for Reconsideration and/or Modification of the
Order dated January 29, 1971. This was followed by a Supplemental Motion for
Reconsideration and Manifestation on February 3, 1971. In the latter motion, private
respondents manifested that the amount of P14,040.96, representing the amount
decreed in the judgment as reimbursement to petitioner for the improvements, plus
interest for six months, has already been deposited by them in court, "with the
understanding that said amount shall be turned over to the plaintiff after the court a
quo shall have determined the improvement on Lot 5785-A, and subsequently the
remaining balance of the deposit shall be delivered to the petitioner (plaintiff therein) in
the event he loses the bid for Lot 5785-B in favor of private respondent Eleuterio

Zamora." 8 The deposit is evidenced by a certification made by the Clerk of the Court a
quo. 9 Contending that said deposit was a faithful compliance with the judgment of the trial
court, private respondent Quirino Comintan prayed for the dissolution of the Writ of Injunction.
It appears that as a consequence of the deposit made by private respondents, the
Deputy, Sheriff of Calauag, Quezon ousted petitioner's representative from the land in
question and put private respondents in possession thereof. 10
On March 10, 1971, petitioner filed a "Comment on Respondents' 'Motion for
Reconsideration' dated January 29, 1971' and 'Supplemental Motion for Reconsideration
and Manifestation,'" contending that the tender of deposit mentioned in the Suplemental
Motion was not really and officially made, "inasmuch as the same is not supported by
any official receipt from the lower court, or from its clerk or cashier, as required by law;"
that said deposit does not constitute sufficient compliance with the judgment sought to be
enforced, neither was it legally and validly made because the requisites for consignation
had not been complied with; that the tender of legal interest for six months cannot
substitute petitioner's enjoyment of the fruits of the property as long as the judgment in
Civil Case No. C-90 has not been implemented in the manner decreed therein; that
contrary to the allegations of private respondents, the value of the improvements on the
whole property had been determined by the lower court, and the segregation of the
improvements for each lot should have been raised by them at the opportune moment by
asking for the modification of the decision before it became final and executory; and that
the tolls on the property constituted "civil fruits" to which the petitioner is entitled under
the terms of the decision.
IV
The issue decisive of the controvery isafter the rendition by the trial court of its
judgment in Civil Case No. C-90 on March 22, 1966 confirming the award of one-half of
the property to Quirino Comintanwhether or not petitioner is still entitled to retain for his
own exclusive benefit all the fruits of the property, such as the tolls collected by him from
March 1967 to December 1968, and September 1969 to March 31, 1970, amounting to
about P25,000.00. In other words, petitioner contends that so long as the aforesaid
amount of P13,632,00 decreed in the judgment representing the expenses for clearing
the land and the value of the coconuts and fruit trees planted by him remains unpaid, he
can appropriate for his exclusive benefit all the fruits which he may derive from the
property, without any obligation to apply any portion thereof to the payment of the interest
and the principal of the debt.
We find this contention untenable.

17
There is no question that a possessor in good faith is entitled to the fruits received before
the possession is legally interrupted. 11 Possession in good faith ceases or is legally
interrupted from the moment defects in the title are made known to the possessor, by
extraneous evidence or by the filing of an action in court by the true owner for the recovery of
the property. 12 Hence, all the fruits that the possessor may receive from the time he is
summoned in court, or when he answers the complaint, must be delivered and paid by him to
the owner or lawful possessor. 13
However, even after his good faith ceases, the possessor in fact can still retain the
property, pursuant to Article 546 of the New Civil Code, until he has been fully
reimbursed for all the necessary and useful expenses made by him on the property. This
right of retention has been considered as one of the conglomerate of measures devised
by the law for the protection of the possessor in good faith. Its object is to guarantee the
reimbursement of the expenses, such as those for the preservation of the property, 14 or
for the enhancement of its utility or productivity. 15It permits the actual possessor to remain in
possession while he has not been reimbursed by the person who defeated him in the
possession for those necessary expenses and useful improvements made by him on the
thing possessed. The principal characteristic of the right of retention is its accessory
character. It is accessory to a principal obligation. Considering that the right of the possessor
to receive the fruits terminates when his good faith ceases, it is necessary, in order that this
right to retain may be useful, to concede to the creditor the right to secure reimbursement
from the fruits of the property by utilizing its proceeds for the payment of the interest as well
as the principal of the debt while he remains in possession. This right of retention of the
property by the creditor, according to Scaevola, in the light of the provisions of Article 502 of
the Spanish Civil Code, 16 is considered not a coercive measure to oblige the debtor to pay,
depriving him temporarily of the enjoyment of the fruits of his property, but as a means of
obtainitig compensation for the debt. The right of retention in this case is analogous to a
contract of antichresis and it cati be considered as a means of extinguishing the obligation,
inasmuch as the right to retain the thing lasts only for the period necessary to enable the
creditor to be reimbursed from the fruits for the necessary and useful expenses. 17
According to Manresa, the right of retention is, therefore, analogous to that of a pledge, if
the property retained is a movable, and to that of antichresis, if the property held is
immovable. 18 This construction appears to be in harmony with similar provisions of the civil
law which employs the right of retention as a means or device by which a creditor is able to
obtain the payment of a debt. Thus, under Article 1731 of the New Civil Code, any person
who has performed work upon a movable has a right to retain it by way of pledge until he is
paid. Similarly, under Article 1914 of the same Code, the agent may retain in pledge the
things which are the object of the agency until the principal effects reimbursement of the
funds advanced by the former for the execution of the agency, or he is indemnified for all
damages which he may have suffered as a consequence of the execution of the agency,
provided he is free from fault. To the same effect, the depositary, under Article 1994 of the
same Code, may retain the thing in pledge until the full payment of what may be due him by

reason of the deposit. The usufructuary, pursuant to Article 612 of the same Code, may retain
the property until he is reimbursed for the amount paid for taxes levied on the capital (Article
597) and tor extraordinary repairs (Article 594).

In all of these cases, the right of retention is used as a means of extinguishing the
obligation. As amply observed by Manresa: "El derecho de retencion, lo hemos dicho, es
el derecho de prenda o el de anticresis constituido por la ley con independencia de las
partes." 19 In a pledge, if the thing pledged earns or produces fruits, income, dividends or
interests, the creditor shall compensate what he receives with those which are owing him. 20 In
the same manner, in a contract of antichresis, the creditor acquires the right to receive the
fruits of an immovable of his debtor with the obligation to apply them to payment of the
interest, if owing, and thereafter to the principal of his credit. 21 The debtor can not reacquire
enjoyment of the immovable until he has actually paid what he owes the creditor. 22
Applying the afore-cited principles to the case at bar, petitioner cannot appropriate for his
own exclusive benefit the tolls which he collected from the property retained by him. It
was his duty under the law, after deducting the necessary expenses for his
administration, to apply such amount collected to the payment of the interest, and the
balance to the payment of the obligation.
We hold, therefore, that the disputed tolls, after deducting petitioner's expenses for
administration, belong to Quirino Comintan, owner of the land through which the toll road
passed, further considering that the same was on portions of the property on which
petitioner had not introduced any improvement. The trial court itself clarified this matter
when it placed the toll road under receivership. The omission of any mention of the tolls
in the decision itself may be attributed to the fact that the tolls appear to have been
collected after the rendition of the judgment of the trial court.
The records further reveal that earnest efforts have been made by private respondents to
have the judgment executed in the most practicable manner. They deposited in court the
amount of the judgment in the sum of P13,632.00 in cash, subject only to the accounting
of the tolls collected by the petitioner so that whatever is due from him may be set off
with the amount of reimbursement. This is just and proper under the circumstances and,
under the law, compensation or set off may take place, either totally or partially.
Considering that petitioner is the creditor with respect to the judgment obligation and the
debtor with respect to the tolls collected, Comintan being the owner thereof, the trial
court's order for an accounting and compensation is in accord with law. 23
With respect to the amount of reimbursement to be paid by Comintan, it appears that the
dispositive portion of the decision was lacking in specificity, as it merely provided that
Comintan and Zamora are jointly liable therefor. When two persons are liable under a
contract or under a judgment, and no words appear in the contract or judgment to make

18
each liable for the entire obligation, the presumption is that their obligation is joint
or mancomunada, and each debtor is liable only for a proportionate part of the
obligation. 24 The judgment debt of P13,632.00 should, therefore, be pro-rated in equal
shares to Comintan and Zamora.

RESTITUTO
CALMA, petitioner,
vs.
THE HON. COURT OF APPEALS (FIFTH DIVISION) and PLEASANTVILLE
DEVELOPMENT CORPORATION,respondents.

Regarding Lot 5785-B, it appears that no public sale has yet been conducted by the
Bureau of Lands and, therefore, petitioner is entitled to remain in possession thereof.
This is not disputed by respondent Eleuterio Zamora. 25 After public sale is had and in the
event that Ortiz is not declared the successful bidder, then he should be reimbursed by
respondent Zamora in the corresponding amount for the improvements on Lot 5785-B.

Restituto S. Calma and Carlos S. Ayeng for petitioner.

WHEREFORE, in view hereof, the Order of respondent Court of November 18, 1970 is
hereby modified to conform to the foregoing judgment. The Writ of Preliminary Injunction,
dated January 29, 1971, is hereby dissolved. Without special pronouncement as to
costs.

William N. Mirano & Associates for respondents.

CORTES, J.:
Petitioner Restituto Calma, through this Petition for Review on certiorari, seeks to set
aside the decision of the Court of Appeals in CA-G.R. SP. No. 10684 dated 26 February
1987 declaring null and void an order of the Human Settlements Regulatory Commission
(hereinafter referred to as the COMMISSION) dated 30 September 1986 calling for the
issuance of a writ of execution to enforce its decision of 22 May 1985.
The antecedents of this case are as follows:

Republic of the Philippines

SUPREME COURT
Manila
THIRD DIVISION
G.R. No. 78447 August 17, 1989

Sometime in August 1975, the spouses Restituto and Pilar Calma purchased a lot in
respondent Pleasantville Development Corporation's (hereinafter referred to as
PLEASANTVILLE) subdivision in Bacolod City, known as City Heights Phase II. In 1976,
they built a house on said lot and established residence therein. Fabian and Nenita Ong
also purchased from PLEASANTVILLE a lot fronting that of the Calma spouses
sometime in the years 1979-1980, and constructed their own buildings where they
resided and conducted their business. On 25 April 1981, petitioner Calma wrote the
president of the Association of Residents of City Heights, Inc. (ARCHI) complaining that
the compound of the Ongs was being utilized as a lumber yard and that a "loathsome
noise and nervous developing sound" emanating therefrom disturbed him and his family
and caused them and their son to suffer nervous tension and illness [Rollo, p. 58]. The
president of the association, in his reply, stated that the association's board had referred
the matter to Fabian Ong who had already taken immediate action on petitioner's
complaint, i.e., by ordering the transfer of the lumber cutting machine and by instructing
his laborers not to do any carpentry or foundry works in the early morning or afternoon
and in the evening. Finding the measures taken by the association and Fabian Ong
unsatisfactory, petitioner on 17 June 1981 wrote and asked PLEASANTVILLE, as its duty
and obligation, to abate the nuisance emanating from the compound of the Ong family.
Failing to get an answer, the Calma spouses filed a complaint for damages against the
Ong spouses and PLEASANTVILLE on 28 July 1981 before the Court of First Instance of

19
Negros Occidental docketed as Civil Case No. 16113, alleging inter alia that were it not
for PLEASANTVILLE's act of selling the lot to the Ongs and its failure to exercise its right
to cause the demolition of the alleged illegal constructions, the nuisance could not have
existed and petitioner and his family would not have sustained damage. Thus, the
complaint prayed for actual, moral and exemplary damages and attomey's fees and
expenses of litigation.
Petitioner also filed with the National Housing Authority (NHA), on 31 August 1981, a
complaint for "Violation of the Provisions, Rules and Regulations of the Subdivision and
Condominium Buyers Protective Decree under Presidential Decree No. 957,"
claiming inter alia that were it not for the negligent acts of PLEASANTVILLE in selling the
parcel of land to the spouses Fabian and Nenita Ong and its refusal to exercise its right
to cause the demolition of the structures built by the Ongs in violation of the contractual
provision that the land shall be used only for residential purposes, the illness of petitioner
and as soon would not have happened. Petitioner prayed that PLEASANTVILLE be
ordered to abate the nuisance and/or demolish the offending structures; to refund the
amortization payments made on petitioner's lot; and to provide petitioner and his son with
medication until their recovery. He also prayed that PLEASANTVILLE be penalized
under Sec. 39 of P.D. No. 957 and that its license be revoked.
After the answer to the complaint was filed, the issues joined and the respective position
papers submitted, the COMMISSION (which had in the meantime taken over the powers
of the NHA,)*rendered its decision in HSRC No. REM-92181-0547 on 22 May 1985 dismissing the complaint of the
petitioner for lack of merit, finding that PLEASANTVILLE did not violate Sections 9(b), 19 and 23 of P.D. No. 957, but
included a portion holding PLEASANTVILLE responsible for the abatement of the alleged nuisance on the ground that it was
part of its implied warranty that its subdivision lots would be used solely and primarily for residential purpose.

Thus, the dispositive portion of the COMMISSION's decision read:

In view of the foregoing, the complaint for violation of Sections 9(f) and
23 of P.D. 957 is hereby DISMISSED. Respondent, however is hereby
ordered to take appropriate measures for the prevention and abatement
of the activities/nuisance complained of so as to ensure complainant's
peaceful and pleasant living in the residential subdivision of respondent.
In this regard, respondent within 15 days from finality of this decision,
shall submit a timetable of the action to be taken in compliance with this
directive and thereafter, a periodic status report of the progress of
compliance. [Rollo, p. 35; Emphasis supplied.]
On 27 August 1986, respondent COMMISSION issued the order granting the issuance of
a writ of execution of its decision. Aggrieved, PLEASANTVILLE filed a petition for
prohibition with preliminary injunction with this Court assailing the portion of the

COMMISSION's decision ordering it to "take appropriate measures for the prevention

and abatement of the nuisance complained of," and its directive requiring
PLEASANTVILLE to submit a timetable of the action to be taken and a periodic status
report of the progress of its compliance. PLEASANTVILLE asserted that since the
COMMISSION had found that it did not violate any provision of P.D. No. 957, the
COMMISSION exceeded its jurisdiction when it ordered PLEASANTVILLE to
prevent/abate the alleged nuisance complained of.
The Court referred the petition to the Court of Appeals which rendered judgment holding
that the COMMISSION "acted capriciously and in excess of its jurisdiction in imposing an
obligation upon the petitioner after absolving it of the complaint filed against it" [Rollo, p.
38], the relevant portion of which decision is quoted below:
We find the petition impressed with merit. Presidential Decree No. 957 is
a regulatory decree with penal sanctions. While it absolved the petitioner
of any penal liability by dismissing the complaint against it because it has
not violated the pertinent provisions of Sections 9(f), 19 and 23, P.D. 957,
yet it imposed an obligation to perform something that was not proven in
the complaint-that is to abate the occurrence of nuisance and to submit
a timetable of action and a periodic report of the progress of compliance.
The order does not only appear overbearing and/or arbitrary, but it is
without any basis in fact. . . .
Thus, the Court of Appeals ruled:
WHEREFORE, in view of the foregoing, We find merit in the petition and
the same is hereby GRANTED, It is hereby ORDERED:
1) That order of respondent Commission dated 27 August 1986 for the
issuance of a writ of execution is SET ASIDE as null and void;
2) That should any writ relative thereto been (sic) issued, the same is
DISSOLVED or CANCELLED;
3) That portion of the dispositive portion of the decision of respondent
Commission of May 22, 1985, ordering petitioner respondent to take
appropriate measure for the prevention and abatement of
activities/nuisance complained of in said case and the submission of
timetable of action and periodic report is SET ASIDE as null and void.
No pronouncement as to costs.

20
SO ORDERED. [Rollo, pp. 38-39.]
Petitioner moved for reconsideration of the decision but the Court of Appeals denied his
motion. Hence, petitioner brought the instant petition for review on certiorari seeking the
reversal of the decision of the Court of Appeals and the reinstatement of the
COMMISSION'S decision.
1. The power to abate a nuisance, is not one of those enumerated under
P.D. No. 957, the Subdivision and Condominium Buyers Protective
Decree. However, as pointed out by the Solicitor General before the
Court of Appeals, the COMMISSION has been specifically authorized by
Executive Order No. 648 dated February 7, 1981 (otherwise known as
the "Charter of the Human Settlements Regulatory Commission"), toIssue orders after conducting the appropriate investigation for the
cessation or closure of any use or activity and to issue orders to vacate
or demolish any building or structure that it determines to have violated or
failed to comply with any of the laws, presidential decrees, letter of
instructions, executive orders and other presidential issuances and
directives being implemented by it, either on its own motion or upon
complaint of any interested party. [Sec, 5 (p).] **

Thus, we find in this case a complete disregard of the cardinal primary rights in
administrative proceedings, which had been hornbook law since the leading case of Ang
Tibay v. Court of Industrial Relations, 69 Phil. 635 (1940).
lwph1.t

Consequently, the COMMISSION gravely abused its discretion amounting to lack or

excess of jurisdiction when it ordered PLEASANTVILLE to "take appropriate measure for
the prevention/abatement of the nuisance complained of."
2. Petitioner insists that the Ong spouses were not indispensable parties
in the case before the COMMISSION, hence no violation of due process
was committed, because the action was primarily based on
PLEASANTVILLE's violation of its contractual and statutory obligations to
petitioner. He advances the view that PLEASANTVILLE breached its
warranty that the subdivision shall be exclusively residential.
In testing the validity of this contention, the following provisions of the printed Contract to
Sell on Installment [Annex "E" of the Petition] between PLEASANTVILLE and petitioner,
which petitioner claims to be uniform for all lot-buyers in the subdivision (but which was
not established by evidence in the proceedings before the COMMISSION), are to be
considered:
xxx xxx xxx

At this point the Court finds it unnecessary to go into whether or not the COMMISSION's
order to PLEASANTVILLE to take measures for the prevention and abatement of the
nuisance complained of finds solid support in this provision because, as found by the
Court of Appeals, the COMMISSION's conclusion that the activities being conducted and
the structures in the property of the Ongs constituted a nuisance was not supported by
any evidence. The Solicitor General himself, in his comment filed in the Court of Appeals,
admits that the decision of the COMMISSION did not make any finding of a nuisance [CA
Rollo, p. 93]. Apparently, on the basis of position papers, the COMMISSION assumed
the existence of the nuisance, without receiving evidence on the matter, to support its
order for the prevention or abatement of the alleged nuisance.
Moreover, the spouses Ong, were not even party to the proceedings before the
COMMISSION which culminated in the order for the prevention or abatement of the
alleged nuisance. The parties before the COMMISSION were petitioner and
PLEASANTVILLE only, although the persons who would be directly affected by a
decision favorable to petitioner would be the Ong spouses. Certainly, to declare their
property or the activities being conducted therein a nuisance, and to order prevention
and abatement, without giving them an opportunity to be heard would be in violation of
their basic right to due process.

12. The Vendee agrees to constitute as permanent lien on the property

subject-matter of this agreement the following conditions and regulations:
a) That the land shall be used exclusively for commercial
residential purposes;
xxx xxx xxx
22. That the lot or lots subject-matter of this contract shall be used
exclusively for residential purposes and only one single family residential
building will be constructed on each lot provided that the VENDEE may
construct a separate servant's quarter;
xxx xxx xxx
[Rollo, p. 55; Emphasis supplied.]

21
These provisions of the contract do not unequivocally express a warranty that the
subdivision lots shall be used exclusively for residential purpose. On the contrary, the
contract also explicitiy authorizes the use of the lots forcommercial or residential
purposes.
Because of the confusing language of items 12 and 22 of the printed contract to sell, it is
not possible to read from the text alone a warranty that the subdivision shall be purely
residential. Other evidence of such warranty, including representations, if any, made by
PLEASANTVILLE to petitioner, would be needed to establish its enforceability.
Petitioner also made reference to a "statutory" implied warranty, but failed to cite the
provision of law imposing the warranty. It could not be the Civil Code, as the title on sales
provides for only two classes of implied warranties: in case of eviction and against
hidden defects of or encumbrances upon the thing sold [Arts. 1547; 1548-1560; 15611581]. Neither is any warranty imposed by P.D. No. 957.

inaction, is the primary basis for the complaint for abatement and damages. Here he can
prove the existence of the warranty and show how it was breached. It is also in this case
where the determination of whether or not the activities conducted in the property of the
Ong spouses or the structures thereat constitute a nuisance will have to be made. Also
herein is the proper forum where, following another theory, it could be determined
whether the Contract to Sell (assuming that the contract between PLEASANTVILLE and
the Ongs is similar) establishes an enforceable obligation in favor of third parties, i.e.,
other lot-buyers in the subdivision. In said proceeding the factual issues can be fully
threshed out and the Ong spouses, the parties who shall be directly affected by any
adverse judgment, shall be afforded the opportunity to be heard as they had been
impleaded as defendants therein together with PLEASANTVILLE.
WHEREFORE, there being no cogent reasons to reverse the decision of the Court of
Appeals, the same is hereby AFFIRMED and the petition DENIED for lack of merit.
SO ORDERED

As the party suing on the basis of breach of warranty, petitioner would have to come up
with something better than a bare assertion that there was a breach. He would have to
prove first and foremost that there is indeed a warranty that had been breached, then
establish how the breach was committed.
3. A final word. There is no denying that in instituting the complaint for
damages before the trial court and the complaint for violation of P.D. 957
before the COMMISSION petitioner was motivated by the twin purposes
of seeking the abatement of the alleged nuisance and recovering
damages for the medical problems purportedly caused by the nuisance.
He certainly cannot be faulted for seeking redress in all available venues
for the alleged violation of his family home's tranquility, for the defense of
one's home and family is a natural instinct. However, redress for
petitioner's grievances will have to be tempered by the guiding hand of
due process. Thus, the nullification of the assailed portion of the
COMMISSION's judgment becomes inevitable if we are to adhere to the
basic tenets of law. A wrong cannot be corrected by another wrong.
Hence, no reversible error was committed by the Court of Appeals when it nullified the
assailed portion of the COMMISSION's decision, the order granting the writ of execution,
and any writ of execution issued pursuant thereto.
But all is not lost for petitioner and his family. As mentioned earlier, there is a pending
civil case (Civil Case No. 16113, Regional Trial Court of Negros Occidental), instituted by
petitioner, where the alleged breach of warranty, coupled with PLEASANTVILLE's