Property Cases 1 (Incomplete, No: Ayala Land V Ray Burton (1969)

THIRD DIVISION [G.R. No. 134692. August 1, 2000] ELISEO FAJARDO, JR., and MARISSA FAJARDO, petitioners, vs.
FREEDOM TO BUILD, INC., respondent. DECISION VITUG, J.: Freedom To Build, Incorporated, an owner-developer and seller of low-cost housing, sold to petitioner-spouses, a house and lot designated Lot No. 33, Block 14, of the De la Costa Homes in Barangka, Marikina, Metro Manila. The Contract to Sell executed between the parties, contained a Restrictive 1 Covenant providing certain prohibitions, to wit: "Easements . For the good of the entire community, the homeowner must observe a two-meter easement in front. No structure of any kind (store, garage, bodega, etc.) may be built on the front easement. "x x x............................. x x x............................. x x x "Upward expansion . A second storey is not prohibited. But the second storey expansion must be placed above the back portion of the house and should not extend forward beyond the apex of the original building. "x x x............................. x x x............................. x x x "Front expansion : 2nd Storey: No unit may be extended in the front beyond the line as designed and implemented by the developer in the 60 sq. m. unit. In other words, the 2nd floor expansion, in front, is 6 meters back from the front property line and 4 meters back from the 2 front wall of the house, just as provided in the 60 sq. m. units." The above restrictions were also contained in Transfer Certificate of Title No. N-115384 covering the lot issued in the name of petitioner-spouses. The controversy arose when petitioners, despite repeated warnings from respondent, extended the roof of their house to the property line and expanded the second floor of their house to a point directly above the original 3 front wall. Respondent filed before the Regional Trial Court, National Capital Judicial Region, Branch 261, Pasig City, an action to demolish the unauthorized structures.
1: PROPERTY Law 2B Manahan, Jierah R.
After trial, judgment was rendered against petitioners; thus: "WHEREFORE, premises considered, defendant spouses Eliseo B. Fajardo, Jr., and Marissa F. Fajardo are hereby directed to immediately demolish and remove the extension of their expanded housing unit that exceeds the limitations imposed by the Restrictive Covenant, otherwise the Branch Sheriff of this Court shall execute this decision at theexpense of the defendants. "As to damages and attorney's fees, it appearing from the records of this case that no evidence to sustain the same was adduced by either of the parties, the Court deems itproper not to award any. "SO ORDERED."
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On appeal to it, the Court of Appeals affirmed the decision of the trial court. In their petition for review to this Court, the spouses contest the judgment of the courts below. Adjacent owners reportedly have no objection to the construction, and have even expressed interest in undertaking a similar expansion in their respective residences. Moreover, the couple's two children, a son and a daughter, might soon get married and then share, with their families, living quarters with petitioners. The latter also assail the personality of private respondent to question the construction which have effectively relinquished its ownership, right or interest over the subdivision upon the execution of the Deed of Absolute Sale in favor of the individual homeowners. Per the contract between Freedom to Build Incorporated and the De la Costa Low Income Project Homeowners' Association (hereinafter homeowners' association), petitioners aver, the enforcement of the prohibitions contained in the "Restrictive Covenant" originally residing on respondent is now lodged in the homeowners' association. Petitioners maintain that it is incumbent upon the homeowners' association, not on respondent, to enforce compliance with the provisions of the covenant. A perusal of the provisions of the covenant would show that the restrictions therein imposed were intended "For the protection and benefit of the De La Costa Low Income Housing Project, and of all the persons who may now, or hereafter become owners of any part of the project, and as part of the consideration for the conveyance of the housing unit, these restrictions are promulgated in order that; the intents and purposes for which the project was designed shall be upheld; to wit: subsequent duly approved sale and assignments of housing units shall be made only to low income families; a certain level of privacy shall be observed; a community spirit shall be fostered; and an
undisturbed possession and occupancy at the homeowners shall be 5 maintained." Restrictive covenants are not, strictly speaking, synonymous with easements. While it may be correct to state that restrictive covenants on the use of land or the location or character of buildings or other structures thereon may broadly be said to create easements or rights, it can also be contended that such covenants, being limitations on the manner in which one may use his own 7 6 property, do not result in true easements, but a case of servitudes (burden), sometimes characterized to be negative easements or reciprocal negative easements. Negative easement is the most common easement created by covenant or agreement whose effect is to preclude the owner of the land from 8 doing an act, which, if no easement existed, he would be entitled to do. Courts which generally view restrictive covenants with disfavor for being a restriction on the use of one's property, have, nevertheless, sustained 10 11 9 them where the covenants are reasonable, not contrary to public policy, or 12 13 to law, and not in restraint of trade. Subject to these limitations, courts enforce restrictions to the same extent that will lend judicial sanction to any 14 other valid contractual relationship. In general, frontline restrictions on 15 constructions have been held to be valid stipulations. The provisions in a restrictive covenant prescribing the type of the building to be erected are crafted not solely for the purpose of creating easements, generally of light and view, nor as a restriction as to the type of construction,16 but may also be aimed as a check on the subsequent uses of the building17 conformably with what the developer originally might have intended the stipulations to be. In its Memorandum, respondent states in arguing for the validity of the restrictive covenant that the "x x x restrictions are not without specific purpose. In a low costsocialized housing, it is of public knowledge that owners-developers are constrained to build as many number of houses on a limited land area precisely to accommodatemarginalized lot buyers, providing as much as possible the safety, aesthetic and decent living condition by controlling overcrowding. Such project has been designed to 18 accommodate at least 100 families per hectare." There appears to be no cogent reasons for not upholding restrictive covenants aimed to promote aesthetics, health, and privacy or to prevent overcrowding. Viewed accordingly, the statement of petitioners that their immediate neighbors have not opposed the construction is unavailing to their cause, the subject restrictive covenant not being intended for the benefit of adjacent owners but to prescribe the uses of the building, i.e., to ensure, among other things, that the structures built on De la Costa Homes Subdivision would prevent overcrowding and promote privacy among subdivision dwellers. The
argument then of petitioners that expansion is necessary in order to accommodate the individual families of their two children must fail for like reason. Nor can petitioners claim good faith; the restrictive covenants are explicitly written in the Contract To Sell and annotated at the back of the Transfer Certificate of Title. Petitioners raise the issue of the personality of respondent to enforce the provisions of the covenant. Broadly speaking, a suit for equitable enforcement of a restrictive covenant can only be made by one for whose benefit it is 19 intended. It is not thus normally enforceable by one who has no right nor interest in the land for the benefit of which the restriction has been 20 imposed. Thus, a developer of a subdivision can enforce restrictions, even 21 as against remote grantees of lots, only if he retains part of the land. There would have been merit in the argument of petitioners - that respondent, having relinquished ownership of the subdivision to the homeowners, is precluded from claiming any right or interest on the same property - had not the homeowners' association, confirmed by its board of directors, allowed respondent to enforce the provisions of the restrictive covenant. Finally, petitioners argue that for lack of a specific provision, prescribing the penalty of demolition in the "Restrictive Covenant" in the event of a breach thereof, the prayer of respondent to demolish the structure should fail. This argument has no merit; Article 1168 of the New Civil Code states: "When the obligation consists in not doing and the obligor does what has been forbidden him, it shall be undone at his expense." This Court is not unaware of its ruling in Ayala Corporation vs. Ray Burton 22 Development Corporation, which has merely adjudged the payment of damages in lieu of demolition. In the aforementioned case, however, the elaborate mathematical formula for the determination of compensatory damages which takes into account the current construction cost index during the immediately preceding 5 years based on the weighted average of wholesale price and wage indices of the National Census and Statistics Office and the Bureau of Labor Statistics is explicitly provided for in the Deed of Restrictions entered into by the parties. This unique and peculiar circumstance, among other strong justifications therein mentioned, is not extant in the case at bar. In sum, the Court holds that (1).... The provisions of the Restrictive Covenant are valid; (2).... Petitioners must be held to be bound thereby; and (3).... Since the extension constructed exceeds the floor area limits of the Restrictive Covenant, petitioner-spouses can be required to
demolish the structure to the extent that it exceeds the prescribed floor area limits. WHEREFORE , the assailed decision, dated 13 July 1998, of the Court of Appeals in CA-G.R. CV No. 50085, sustaining that of the court a quo, is AFFIRMED. No costs. SO ORDERED. Melo, (Chairman), Panganiban, Purisima, and Gonzaga-Reyes, JJ., concur.
Petitioner, in its answer, asserted that when it acquired the lot and the building sometime in 1981 from then Mayor Bienvenido Ignacio, the encroachment already was in existence and to remedy the situation, Mayor Ignacio offered to sell the area in question (which then also belonged to Ignacio) to petitioner at P100.00 per square meter which offer the latter claimed to have accepted. The sale, however, did not materialize when, without the knowledge and consent of petitioner, Mayor Ignacio later mortgaged the lot to the Development Bank of the Philippines. The trial court decided the case in favor of respondent declaring him to be the rightful owner of the disputed 124-square-meter portion of the lot and ordering petitioner to surrender possession of the property to respondent and to cause, at its expense, the removal of any improvement thereon. The Court of Appeals, on appeal, sustained the trial court but it ordered to be deleted the award to respondent of attorneys fees, as well as moral and exemplary damages, and litigation expenses. Petitioner went to this Court, via a petition for review, after the appellate court had denied the banks motion for reconsideration, here now contending that 1. THE COURT OF APPEALS GRAVELY ERRED IN LAW IN ADJUDGING PNB A BUILDER IN BAD FAITH OVER THE ENCROACHED PROPERTY IN QUESTION; 2. THE COURT OF APPEALS GRAVELY ERRED IN LAW IN NOT APPLYING IN FAVOR OF PNB THE PROVISION OF ARTICLE 448 OF THE CIVIL CODE AND THE RULING IN TECNOGAS PHILIPPINES MANUFACTURING CORP. VS. COURT OF APPEALS, G.R. No. 108894, February 10, 1997, 268 SCRA 7.[1 The Regional Trial Court and the Court of Appeals have both rejected the idea that petitioner can be considered a builder in good faith. In the context that such term is used in particular reference to Article 448, et seq., of the Civil Code, a builder in good faith is one who, not being the owner of the land, builds on that land believing himself to be its owner and unaware of any defect in his title or mode of acquisition. The various provisions of the Civil Code, pertinent to the subject, read: Article 448. The owner of the land on which anything has been built, sown, or planted in good faith, shall have the right to appropriate as his own the works, sowing or planting, after payment of the indemnity provided for in Articles 546 and 548, or to oblige the one who built or planted to pay the price of the land, and the one who sowed, the proper rent. However, the builder or planter cannot be obliged to buy the land if its value is considerably more than that of the building or trees. In such a 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.
FIRST DIVISION G.R. No. 149295. September 23, 2003] PHILIPPINE NATIONAL BANK,, Petitioner, v. GENEROSO DE JESUS, represented by his Attorney-in-Fact, CHRISTIAN DE JESUS, respondent. DECISION VITUG, J.: Petitioner Philippine National Bank disputes the decision handed down by the Court of Appeals promulgated on 23 March 2001 in CA-G.R. CV No. 56001, entitled Generoso De Jesus, represented by his Attorney-in-Fact, Christian De Jesus, versus Philippine National Bank. The assailed decision has affirmed the judgment rendered by the Regional Trial Court, Branch 44, of Mamburao, Occidental Mindoro, declaring respondent Generoso de Jesus as being the true and lawful owner of the 124-squaremeter portion of the land covered by Transfer Certificate of Title (TCT) No. T-17197 and ordering petitioner bank to vacate the premises, to deliver possession thereof to respondent, and to remove the improvement thereon. It would appear that on 10 June 1995, respondent filed a complaint against petitioner before the Regional Trial Court of Occidental Mindoro for recovery of ownership and possession, with damages, over the questioned property. In his complaint, respondent stated that he had acquired a parcel of land situated in Mamburao, Occidental Mindoro, with an area of 1,144 square meters covered by TCT No. T-17197, and that on 26 March 1993, he had caused a verification survey of the property and discovered that the northern portion of the lot was being encroached upon by a building of petitioner to the extent of 124 square meters. Despite two letters of demand sent by respondent, petitioner failed and refused to vacate the area.
Article 449. He who builds, plants, or sows in bad faith on the land of another, loses what is built, planted or sown without right to indemnity. Article 450. The owner of the land on which anything has been built, planted or sown in bad faith may demand the demolition of the work, or that the planting or sowing be removed, in order to replace things in their former condition at the expense of the person who built, planted or sowed; or he may compel the builder or planter to pay the price of the land, and the sower the proper rent. A builder in good faith can, under the foregoing provisions, compel the landowner to make a choice between appropriating the building by paying the proper indemnity or obliging the builder to pay the price of the land. The choice belongs to the owner of the land, a rule that accords with the principle of accession, i.e., that the accessory follows 2 the principal and not the other way around. Even as the option lies with the landowner, the grant to him, nevertheless, is preclusive. He much choose one. He cannot, for instance, compel the owner of the building to instead remove it from the land.[3 In order, however, that the builder can invoke that accruing benefit and enjoy his corresponding right to demand that a choice be made by the landowner, he should be able to prove good faith on his part. Good faith, here understood, is an intangible and abstract quality with no technical meaning or statutory definition, and it encompasses, among other things, an honest belief, the absence of malice and the absence of design to defraud or to seek an unconscionable advantage. An individuals personal good faith is a concept of his own mind and, therefore, may not conclusively be determined by his protestations alone. It implies honesty of intention, and freedom from knowledge of circumstances which ought to put the holder upon inquiry.[4 The essence of good faith lies in an honest belief in the validity of ones right, ignorance of a superior claim, and absence of 5 intention to overreach another. Applied to possession, one is considered in good faith if he is not aware that there exists in his title or mode of acquisition any flaw which invalidates it.6 Given the findings of both the trial court and the appellate court, it should be evident enough that petitioner would fall much too short from its claim of good faith. Evidently, petitioner was quite aware, and indeed advised, prior to its acquisition of the land and building from Ignacio that a part of the building sold to it stood on the land not covered by the land conveyed to it. Equally significant is the fact that the building, constructed on the land by Ignacio, has in actuality been part of the property transferred to petitioner. Article 448, of the Civil Code refers to a piece of land whose ownership is claimed by two or more parties, one of whom has built some works (or sown or planted something) and not to a case where the owner of the land is the builder, sower, or planter who then later loses ownership of the land by sale or otherwise for, elsewise stated, where the true owner himself is the builder of works on his own land, the issue of good faith or bad faith is entirely irrelevant.[7
In fine, petitioner is not in a valid position to invoke the provisions of Article 448 of the Civil Code. The Court commiserates with petitioner in its present predicament; upon the other hand, respondent, too, is entitled to his rights under the law, particularly after having long been deprived of the enjoyment of his property. Nevertheless, the Court expresses hope that the parties will still be able to come up with an arrangement that can be mutually suitable and acceptable to them. WHEREFORE, the decision of the Court of Appeals in CA-G.R. CV No. 56001 is AFFIRMED. No costs. SO ORDERED. Davide, Jr., C.J., (Chairman), Ynares-Santiago, and Carpio, JJ., concur. Azcuna, J., on sick leave. G.R. No. L-26694 December 18, 1973 NELITA MORENO VDA. DE BACALING, Petitioner, vs. HECTOR LAGUNA, HON. VALERION ROVIRA, Judge, Court of First Instance and HON. JUDGE ROSENDO BALTAZAR, Judge, City Court of Iloilo, Respondents. ESGUERRA, J.: I.chanroblesvirtualawlibrary chanrobles virtual law library Nature of the Case chanrobles virtual law library The petitioner seeks a writ of certiorari with preliminary injunction to annul an Order of Hon. Rosendo Baltazar, as Judge of the City Court of Iloilo, dated June 30, 1966, 1 ordering the demolition of the residential house of petitioner. Assailed likewise is an Order, dated August 25, 1966, of Hon. Valerio V. Rovira, as Judge of the Court of First Instance of Iloilo, stationed at Iloilo City, approving said demolition. 2 chanrobles virtual law library II.chanroblesvirtualawlibrary chanrobles virtual law library Facts of the Case chanrobles virtual law library The record of this case discloses the following facts: chanrobles virtual law library Private respondent Hector Laguda is the registered owner of a residential land known 3 as lot No. 3508 situated at La Paz, Iloilo City many years back, petitioner and her late husband, Dr. Ramon Bacaling, with the acquiescence of private respondent Laguda,
constructed a residential house on a portion of said lot fronting Huevana Street, paying 4 a monthly rental of P80.00. Unable to pay the lease rental from July 1959 to September 1961, totalling P2,160.00, an action for ejectment (Civil Case No. 6823) was filed by private respondent Laguda against petitioner in her capacity as judicial administratrix of the estate of her late husband, Dr. Bacaling, in the City Court of Iloilo 5 City. The filing of said case spawned various court suits.chanroblesvirtualawlibrary chanrobles virtual law library Petitioner on July 23, 1962, filed certiorari proceedings in this Court (G.R. No. 6 L-20061) but was dismissed for lack of merit on August 3, 1962. With this setback, petitioner on November 12, 1962, filed with the Court of First Instance of Iloilo a petition for certiorari with preliminary injunction (Civil Case No. 6162) but the same was 7 dismissed on December 1, 1962. Unsuccessful in her motion for reconsideration, petitioner went to the Court of Appeals by way of certiorari (CA-G.R. No. 31882-R) but her petition was dismissed by that Court on March 7, 1967. 8 chanrobles virtual law library Suffering from these series of legal reverses, the petitioner entered into a compromise agreement on July 29, 1964, with private respondent Laguda relative to Civil Case No. 9 6823. Said agreement inter alia, provides as follows: 1. Defendant (petitioner herein) agreed to vacate the premises and remove ... the residential house therefrom ... before December 31, 1966; chanrobles virtual law library 2. For the use and occupation ... of the said premises ... from June 1964 to December 31, 1969, the said defendant will pay plaintiff a monthly rent ... of Eighty (P80.00) Pesos per calendar month ...; chanrobles virtual law library 3. Upon failure of defendant to comply with any ... provision of the amicable settlement within ... fifty (50) days ... the plaintiff shall be entitled to "immediate execution to restore plaintiff in possession of the premises and to recover all the unpaid monthly rents from June 1, 1964 until said premises are vacated" by defendant; chanrobles virtual law library 4. Defendant "waive her right, under Sec. 6, Rule 39, Rules of Court, to bar enforcement of the execution of the judgment in the case at anytime within one year from December 31, 1969". In a decision dated July 30, 1964, the City Court of Iloilo City approved the amicable settlement and enjoined the parties to comply with its terms. For failure of the petitioner to satisfy the conditions of the settlement within the 50-day period, private respondent 10 Laguda moved for execution which the Court granted on July 7, 1965. chanrobles virtual law library On July 14, 1965, petitioner moved for reconsideration to quash the writ of execution, but before the Court could resolve the motion, petitioner on July 19, 1965, served notice of her intention to take the case to the Court of Appeals. 11 Meanwhile on July
23, 1965, respondent Laguda filed an opposition to the petitioner's July 14, 1965, motion, alleging that as judicial administratrix as of July 29, 1964, she was legally authorized to enter into the amicable settlement which was the basis of the decision dated July 30, 1964, of the City Court of Iloilo sought to be executed and, therefore, her act was binding upon the present judicial administrator, Atty. Roberto Dineros, who 12 replaced petitioner upon her discharge as such on November 28, 1964. chanrobles virtual law library Denying the petitioner's motion for reconsideration and to quash writ of execution on September 30, 1965, the City Court however, held in abeyance the enforcement of the alias writ of execution until the Court of First Instance of Iloilo stamped its imprimatur considering the pendency of Special Proceedings No. 1469 and of the 13 fact that the properties involved therein are in custodia legis. Thereafter, on October 25, 1965, private respondent Laguda moved the Court of First Instance of Iloilo in Special Proceedings No. 1469 for the approval of the City Court's order of execution which was granted despite petitioner's opposition. 14 With the denial of petitioner's motion for reconsideration on December 4, 1965, a petition for certiorari with preliminary injunction was brought before the Court of Appeals (CA-G.R. No. 36939-R) 15 which dismissed the same on January 18, 1966. chanrobles virtual law library On April 14, 1966, the respondent City Judge of Iloilo City issued an alias writ of execution upon representations of private respondent Laguda, copies of which were served sheriff upon the petitioner and Atty. Roberto Dineros in his capacity as judicial administrator of the estate of the deceased, Dr. Ramon Bacaling, in Special 16 Proceedings No. 1469. chanrobles virtual law library On June 30, 1966, a Special Order of Demolition was issued by the respondent City Judge upon motion of private respondent Laguda and over petitioner's opposition, subject, however, to the approval of the Court of First Instance of Iloilo in Special 17 Proceedings No. 1469. Upon the denial of petitioner's motion for reconsideration, respondent Laguda on July 12, 1966, filed a manifestation in the Court of First Instance of Iloilo in Special Proceedings No. 1469, praying for the confirmation of the Order to 18 demolish the house under custodia legis. chanrobles virtual law library On August 4, 1966, petitioner interposed an opposition alleging: 1. That she was no longer in control of the estate funds when the stipulated obligations in the amicable settlement became due and payable; chanrobles virtual law library 2. That the residential house to be demolished is worth P35,000.00 for which she is entitled to reimbursement as a builder in good faith, in addition to reasonable expenses they may incur in transferring the same to another place; and chanrobles virtual law library 3. That the guardian ad litem of the minor children was not notified of the motion for the issuance of an order of demolition; 19 chanrobles virtual law library
On August 25, 1966, respondent Laguda by way of reply disputed petitioner's claim and 20 supported the legality of the court's ruling. On the same date, the probate court in Special Proceedings No. 1469 approved the order of demolition of the house in controversy. 21 Impugning the said Order as violative of the provisions of Sec. 14, Rule 39, of the Rules of Court, and of the constitutional mandate on due process, petitioner moved to reconsider the same but the motion was denied by the Court on September 26, 1966. 22 Frustrated in her effort to set aside the Order of Demolition, petitioner brought this present action of certiorari with preliminary injunction. Upon giving due course to the petition, this Court issued a temporary restraining order on October 21, 1966, to prevent the enforcement of the order of demolition in Special Proceedings No. 1469 of the Court of First Instance of Iloilo, but when served upon the respondents, the building in question was already partially demolished. 23 Upon petitioner's posting a bond of P1,000.00, this Court on November 10, 1966, issued a writ of preliminary injunction restraining the herein respondents from proceeding with the order of demolition, until further orders. 24 chanrobles virtual law library III.chanroblesvirtualawlibrary chanrobles virtual law library Issues of the Case chanrobles virtual law library The issues raised in the instant petition boil down to the following: 1. Whether or not the acts of the petitioner as judicial administratrix prior to her discharge or removal are valid and binding upon her successor; chanrobles virtual law library 2. Whether or not petitioner is a builder in good faith and, therefore, entitled to reimbursement, and/or reasonable expenses that may be incurred in transferring the house to another place; chanrobles virtual law library 3. Whether or not due process was denied to the minor children of deceased Ramon Bacaling, and petitioner in connection with the motion for the issuance of the order of demolition. IV.chanroblesvirtualawlibrary chanrobles virtual law library Discussion chanrobles virtual law library Petitioner claims before this Court that since she was no longer the judicial administratrix of the estate of her late husband, Dr. Ramon Bacaling, and was no longer in control of estate funds when the stipulated obligations in the amicable settlement became due and payable, the special order of demolition could not be enforced.chanroblesvirtualawlibrary chanrobles virtual law library Such a view is not tenable. Under Section 3, Rule 82 of the Rules of Court, petitioner's lawful acts before the revocation of her letters of administration or before her removal
shall have the same validity as if there was no such revocation or removal. It is elementary that the effect of revocation of letters testamentary or of administration is to terminate the authority of the executor or administrator, but the acts of the executor or administrator, done in good faith prior to the revocation of the letters, will be protected, and a similar protection will be extended to rights acquired under a previous grant of 25 administration. chanrobles virtual law library In connection with the petitioner's contention that she be considered a builder in good faith and, therefore, entitled to reimbursement in addition to reasonable expenses that may be incurred in transferring the house to another place, the same cannot stand legal scrutiny. The rule is well-settled that lessees, like petitioner, are not possessors in good faith, because they knew that their occupancy of the premises continues only during the life of the lease, and they cannot as a matter of right, recover the value of their improvements from the lessor, much less retain the premises until they are reimbursed. Their rights are governed by Article 1678 of the Civil Code which allows reimbursement of lessees up to one-half of the value of their improvements if the lessor so 26 elects. chanrobles virtual law library It is next urged by petitioner that there was a denial of process for failure of private respondent to notify the guardian ad litem of the minor children of the deceased Ramon Bacaling, of the motion for execution.chanroblesvirtualawlibrary chanrobles virtual law library A perusal of the pleadings yields the conclusion that petitioner failed to meet the burden of demonstrating that there was denial of due process. On the contrary, there is evidence to show that Acting Fiscal Alfonso Illemberger guardian ad litem of the minor children of the late Ramon Bacaling, has been duly apprised of the issuance of the assailed special order to demolish, as shown by the certification of the counsel for 27 petitioner at the foot of his opposition dated August 4, 1966, filed with the Court of First Instance of Iloilo, and as also shown by the certification of private respondent's counsel at the foot of his opposition dated September 15, 1966, 28 likewise filed with the same Court.chanroblesvirtualawlibrary chanrobles virtual law library V.chanroblesvirtualawlibrary chanrobles virtual law library Conclusion chanrobles virtual law library The petitioner is not entitled to the writ of certiorari. In the case at bar, there is absolutely no showing that the respondent courts acted so "arbitrarily", "despotically" or "capriciously" as to amount to lack of jurisdiction in issuing the questioned orders.chanroblesvirtualawlibrary chanrobles virtual law library "Grave abuse of discretion" which is a ground for certiorari means "such capricious and arbitrary exercise of judgment as is equivalent, in the eyes of the law, to lack of jurisdiction." 29 Even mere abuse of discretion is not sufficient by itself to justify the issuance of a writ of certiorari. For that purpose the abuse of discretion must be grave
and patent, and it must be shown that it was exercised arbitrarily or despotically, which 30 is not the case made out by the present petition. chanrobles virtual law library There is something more to be said about the nature and apparent purpose of this case which has its genesis in the case for illegal detainer (Civil Case No. 6823) brought before the Iloilo City Court. What transpired therein presents a glaring example of a summary proceeding which was deliberately protracted and made to suffer undue delay in its disposal. It was originally filed on September 13, 1960; 31 it reached the appellate 32 courts five (5) times, twice before the Court of Appeals , Once before the Court of 33 34 First Instance of Iloilo , and twice before this Court. The present petition smacks of a dilatory tactic and a frivolous attempt resorted to by petitioner to frustrate the prompt termination of the ejectment case and to prolong litigation unnecessarily. Such conduct on the part of petitioner and her counsel deserves the vigorous condemnation of this 35 Court, because it evinces a flagrant misuse of the remedy of certiorari which should only be resorted to in case of lack of jurisdiction or grave abuse of discretion by a inferior court. A recourse of this kind unduly taxes the energy and patience of courts and simply wastes the precious time that they could well devote to really meritorious cases.chanroblesvirtualawlibrary chanrobles virtual law library VI.chanroblesvirtualawlibrary chanrobles virtual law library Judgment chanrobles virtual law library
x - - - - - - - - - - - - - - - - - - - - - - - - - - - - - - - - - - - - - - - - -x DECISION CORONA, J.: cralawIn this petition filed under Rule 45 of the Rules of Court, petitioner ProgrammeIncorporated contests the Court of Appeals (CA) decision[2] and resolution[3] upholding respondent Province of Bataan's ownership of Piazza Hotel and the land on which it stands. The assailed decision in CA-G.R. CV No. 49135 affirmed the decision of the Regional Trial Court (RTC), Branch 4, Balanga, Bataan in a suit for preliminary injunction and sum of money filed by petitioner against Bataan Shipyard and Engineering Co., Inc. (BASECO).The case was docketed as Civil Case No. 129-ML. The dispositive portion of the trial court decision read: cralawWHEREFORE, in view of all the foregoing considerations, judgment is hereby rendered dismissing the complaint, without pronouncement as to costs. cralawSimilarly, [BASECO's ] counterclaim is dismissed.
IN THE LIGHT OF THE FOREGOING CONSIDERATIONS, the instant petition should be, as it is hereby, dismissed.chanroblesvirtualawlibrary chanrobles virtual law library The writ of preliminary injunction issued by this Court on November 10, 1966, is 36 immediately set aside. chanrobles virtual law library Treble costs against the petitioner for the reasons above set forth. 37 Makalintal, Castro, Teehankee, Makasiar and Muoz Palma, JJ., concur. PROGRAMME INCORPORATED,cralawG.R. No. 144635cralaw Petitioner, Present: PUNO, J., Chairperson, - v e r s u s-cralawSANDOVAL-GUTIERREZ, CORONA, AZCUNA and GARCIA, JJ. PROVINCE OF BATAAN,[1] Respondent.cralawPromulgated: June 26, 2006
cralawOn the complaint in intervention, judgment is hereby rendered ordering [petitioner] to pay [respondent] the rentals for the leased premises in question, namely, the Piazza Hotel and the Mariveles Lodge, situated at theBataan Export Processing Zone (BEPZ) Compound in Mariveles, Bataan, at the rate of six thousand five hundred pesos (P6,500.00) per month for both establishments, starting in August 1989 with legal interest at 6% per annum, up to and until the legal arrearages shall have been fully paid, and to pay the succeeding rentals therefor at the same rate. cralawSO ORDERED.[4]chanroblesvirtuallawlibrary cralaw The controversy arose from the following facts. cralawBASECO was the owner of Piazza Hotel and Mariveles Lodge, both located in Mariveles,Bataan. cralaw On May 14, 1986, BASECO granted petitioner a contract of lease over Piazza Hotel at a monthly rental of P6,500 for three years, i.e., from January 1, 1986 to January 1, 1989, subject to renewal by mutual agreement of the parties.After the expiration of the three-year lease period, petitioner was allowed to continue operating the hotel on monthly extensions of the lease.
cralaw In April 1989, however, the Presidential Commission on Good Government (PCGG) issued a sequestration order against BASECO pursuant to Executive Order No. 1 of former President Corazon C. Aquino.[5] Among the properties provisionally seized and taken over was the lot on which Piazza Hotel stood. On July 19, 1989, however, Piazza Hotel was sold at a public auction for nonpayment of taxes to respondent Province of Bataan. The title of the property was transferred to respondent. BASECO's Transfer Certificate of Title (TCT) No. T59631 was cancelled and a new one, TCT No. T-128456, was issued to the Province of Bataan. cralaw On July 21, 1989, petitioner filed a complaint for preliminary injunction and collection of sum of money against BASECO (Civil Case No. 129ML).[6]Respondent, as the new owner of the property, filed a motion for leave to intervene on November 22, 1990. After its motion was granted, respondent filed a complaint-in-intervention praying, inter alia, that petitioner be ordered to vacate Piazza Hotel and Mariveles Lodge for lack of legal interest. cralaw During the pre-trial of the complaint-in-intervention, the parties agreed that the case[7]be tried on the sole issue of whether respondent province, as complainant-intervenor, was the legitimate owner of the Piazza Hotel and Mariveles Lodge. cralaw On February 3, 1995, after trial on the merits, the trial court rendered judgment in favor of respondent. cralaw On appeal, the CA addressed the issue of ownership of Piazza Hotel and Mariveles Lodge as follows: [W]e affirm the trial court's ruling that [respondent] Province of Bataan has established by preponderance of evidence its claim of ownership of Piazza Hotel and Mariveles Lodge. In fact, [petitioner] has not presented evidence proving its ownership of the said buildings[, whereas respondent presented] a tax declaration and certificate of title over the same properties, over which it now exercises full control and dominion.The fact that the subject properties were placed under sequestration is of no moment for the PCGG is not an owner but a conservator who can exercise only powers of administration over property sequestered, frozen or provisionally taken over. As the owner of said properties, [respondent-intervenor] is entitled to the payment of the monthly rental in the sum of P6,500.00 as ruled by the trial court.[8] (emphasis ours) cralawWe agree with the appellate court. cralaw cralawTime and again, we have ruled that factual matters are best evaluated by trial courts which can scrutinize evidence and hear testimony presented and
offered by the parties (in this case, on the issue of ownership of the subject property).All the more does this principle ring true in this petition since such factual determination by the RTC was upheld by the CA.[9] Only questions of law are the proper subject of a petition for review on certiorari in this Court, unless any of the known exceptions is extant in this case.[10]There is none. cralaw The evidence clearly established respondent's ownership of Piazza Hotel.[11] First, the title of the land on which Piazza Hotel stands was in the name of respondent.[12] Second, Tax Declaration No. 12782 was in the name of respondent as owner of Piazza Hotel.[13] A note at the back of the tax declaration read: Transferred by virtue of a final bill of sale executed by the Provincial [Treasurer] of Bataan in favor of the Provincial Government on Feb. 13, 1989[, a] year after the expiration of the redemption period from date of auction sale held on Feb. 12, 1988 of all real property declared in the name of [BASECO].[14] (emphasis ours) cralawThird, petitioner was doubtlessly just a lessee.In the lease contract annexed to the complaint, petitioner in fact admitted BASECO's (respondent's predecessor-in-interest) ownership then of the subject property. A stipulation in the contract read: WHEREAS, the lessor (BASECO) is the owner of the building PIAZZA HOTELand its outlet MARIVELES LODGE located at BASECO, Mariveles, Bataanxxx[15] (emphasis ours) cralawThe Rules of Court states that '[a]n admission, verbal or written, made by a party in the course of the proceedings in the same case, does not require proof. The admission may be contradicted only by showing that it was made through palpable mistake or that no such admission was made.[16] [Such admissions] may be made in (a) the pleadings filed by the parties, (b) in the course of the trial either by verbal or written manifestations or stipulations, or (c) in other stages of the judicial proceeding, as in the pre-trial of the case. Admissions obtained through depositions, written interrogatories or requests for admission are also considered judicial admissions.[17] (emphasis ours) To be considered as a judicial admission, the same must be made in the same case in which it is offered.[18]chanroblesvirtuallawlibrary In its own complaint[19] for preliminary injunction and sum of money, petitioner acknowledged that it was not the owner of the property when it stated that
'[BASECO] lease[d] to [petitioner] the building Piazza Hotel and its outlet Mariveles Lodge xxx for monthly rentals of P6,500.00.[20] Petitioner could not possibly be the owner of a building merely leased to it.[21] cralaw
WHEREFORE, the petition is hereby DENIED. The decision and resolution of the Court of Appeals in CA-G.R. CV No. 49135 are AFFIRMED. Costs against petitioner.Same costs against Atty. Benito R. Cuesta I, petitioner's counsel, for filing this flimsy appeal, payable within ten (10) days from finality of this decision. cralawSO ORDERED. RENATO C. CORONA Associate Justice G.R. No. 170923 : January 20, 2009
Furthermore, petitioner's reference to Article 448[22] of the Civil Code to justify its supposed rights as 'possessor in good faith was erroneous. The benefits granted to a possessor in good faith cannot be maintained by the lessee against the lessor because, such benefits are intended to apply only to a case where one builds or sows or plants on land which he believes himself to have a claim of title and not to lands wherein one's only interest is that of a tenant under a rental contract, otherwise, it would always be in the power of a tenant to improve his landlord out of his property.Besides, as between lessorand lessee, the Code applies specific provisions designed to cover their rights. Hence, the lessee cannot claim reimbursement, as a matter of right, for useful improvements he has made on the property, nor can he assert a right of retention until reimbursed.His only remedy is to remove the improvement if the lessor does not choose to pay its value; but the court cannot give him the right to buy the land.[23]chanroblesvirtuallawlibrary
SULO SA NAYON, INC. and/or PHILIPPINE VILLAGE HOTEL, INC. and JOSE MA PANLILIO, Petitioners, vs. NAYONG PILIPINO FOUNDATION, Responden
DECISION
PUNO, C.J.:
On appeal are the Court of Appeals (CAs) October 4, 2005 Decision in CA-G.R. SP No. 74631 and December 22, 2005 Resolution,[2] reversing the November 29, 2002 [3] Decision of the Regional Trial Court (RTC) of Pasay City in Civil Case No. 02[4] 0133. The RTC modified the Decision cralaw of the Metropolitan Trial Court (MeTC) of Pasay City which ruled against petitioners and ordered them to vacate the premises and pay their arrears. The RTC declared petitioners as builders in good faith and upheld their right to indemnity. chanroblesvirtuallawlibrary
[1]
Petitioner's assertion that Piazza Hotel was constructed 'at (its) expense found no support in the records. Neither did any document or testimony prove this claim. At best, what was confirmed was that petitioner managed and operated the hotel. There was no evidence that petitioner was the one which spent for the construction or renovation of the property. And since petitioner's alleged expenditures were never proven, it could not even seek reimbursement of onehalf of the value of the improvements upon termination of the lease under Article 1678[24] of the Civil Code. cralaw Finally, both the trial and appellate courts declared that the land as well as the improvement thereon (Piazza Hotel) belonged to respondent.We find no reason to overturn this factual conclusion. Since this petition for review on certiorari was clearly without legal and factual basis, petitioner's counsel should not have even filed this appeal.It is obvious that the intention was merely to delay the disposition of the case. cralaw
The facts are as follows: Respondent Nayong Pilipino Foundation, a government-owned and controlled corporation, is the owner of a parcel of land in Pasay City, known as the Nayong Pilipino Complex. Petitioner Philippine Village Hotel, Inc. (PVHI), formerly called Sulo sa Nayon, Inc., is a domestic corporation duly organized and existing under Philippine laws. Petitioner Jose Marcel E. Panlilio is its Senior Executive Vice President. chanroblesvirtuallawlibrary
On June 1, 1975, respondent leased a portion of the Nayong Pilipino Complex, consisting of 36,289 square meters, to petitioner Sulo sa Nayon, Inc. for the
construction and operation of a hotel building, to be known as the Philippine Village Hotel. The lease was for an initial period of 21 years, or until May 1996. It is renewable for a period of 25 years under the same terms and conditions upon due notice in writing to respondent of the intention to renew at least 6 months before its expiration. Thus, on March 7, 1995, petitioners sent respondent a letter notifying the latter of their intention to renew the contract for another 25 years. On July 4, 1995, the parties executed a Voluntary Addendum to the Lease Agreement. The addendum was signed by petitioner Jose Marcel E. Panlilio in his official capacity as Senior Executive Vice President of the PVHI and by Chairman Alberto A. Lim of the Nayong Pilipino Foundation. They agreed to the renewal of the contract for another 25 years, or until 2021. Under the new agreement, petitioner PVHI was bound to pay the monthly rental on a per square meter basis at the rate of P20.00 per square meter, which shall be subject to an increase of 20% at the end of every 3-year period. At the time of the renewal of the lease contract, the monthly rental amounted to P725,780.00. chanroblesvirtuallawlibrary
x x x chanroblesvirtuallawlibrary
Beginning January 2001, petitioners defaulted in the payment of their monthly rental. Respondent repeatedly demanded petitioners to pay the arrears and vacate the premises. The last demand letter was sent on March 26, 2001. chanroblesvirtuallawlibrary
. . . . Improvements made by a lessee such as the defendants herein on leased premises are not valid reasons for their retention thereof. The Supreme Court has occasion to address a similar issue in which it ruled that: The fact that petitioners allegedly made repairs on the premises in question is not a reason for them to retain the possession of the premises. There is no provision of law which grants the lessee a right of retention over the leased premises on that ground. Article 448 of the Civil Code, in relation to Article 546, which provides for full reimbursement of useful improvements and retention of the premises until reimbursement is made, applies only to a possessor in good faith, i.e., one who builds on a land in the belief that he is the owner thereof. This right of retention does not apply to a mere lessee, like the petitioners, otherwise, it would always be in his power to improve his landlord out of the latters property (Jose L. Chua and Co Sio Eng vs. Court of Appeals and Ramon Ibarra, G.R. No. 109840, January 21, 1999). chanroblesvirtuallawlibrary
On September 5, 2001, respondent filed a complaint for unlawful detainer before the MeTC of Pasay City. The complaint was docketed as Civil Case No. 70801. Respondent computed the arrears of petitioners in the amount of twenty-six million one hundred eighty-three thousand two hundred twenty-five pesos and fourteen centavos (P26,183,225.14), as of July 31, 2001. chanroblesvirtuallawlibrary
Although the Contract of Lease stipulates that the building and all the improvements in the leased premises belong to the defendants herein, such will not defeat the right of the plaintiff to its property as the defendants failed to pay their rentals in violation of the terms of the contract. At most, defendants can only invoke [their] right under Article 1678 of the New Civil Code which grants them the right to be reimbursed one-half of the value of the building upon the termination of the lease, or, in the alternative, to remove the improvements if the lessor refuses to make reimbursement. chanroblesvirtuallawlibrary
The dispositive portion of the decision reads as follows: chanroblesvirtuallawlibrary On February 26, 2002, the MeTC rendered its decision in favor of respondent. It ruled, thus: chanroblesvirtuallawlibrary WHEREFORE, premises considered, judgment is hereby rendered in favor of Nayong Pilipino Foundation, and against the defendant Philippine Village Hotel, Inc[.], and all persons claiming rights under it, ordering the latter to: chanroblesvirtuallawlibrary 1. VACATE the subject premises and possession thereof plaintiff;chanroblesvirtuallawlibrary surrender to
. . . . The court is convinced by the evidence that indeed, defendants defaulted in the payment of their rentals. It is basic that the lessee is obliged to pay the price of the lease according to the terms stipulated (Art. 1657, Civil Code). Upon the failure of the lessee to pay the stipulated rentals, the lessor may eject (sic) and treat the lease as rescinded and sue to eject the lessee (C. Vda[.] De Pamintuan v. Tiglao, 53 Phil. 1).For non-payment of rentals, the lessor may rescind the lease, recover the back rentals and recover possession of the leased premises. . . chanroblesvirtuallawlibrary
2.
PAY plaintiff its rental arrearages in the sum of TWENTY SIX MILLION ONE HUNDRED EIGHTY THREE THOUSAND TWO HUNDRED TWENTY FIVE PESOS AND 14/100 (P26,183,225.14)
incurred as of 2001; chanroblesvirtuallawlibrary 3.
July
31,
x x x chanroblesvirtuallawlibrary Considering therefore, the elements of permanency of the construction and substantial value of the improvements as well as the undispute[d] ownership over the land improvements, these, immensely engender the application of Art. 448 of the Civil Code. The only remaining and most crucial issue to be resolved is whether or not the appellants as builders have acted in good faith in order for Art. 448 in relation to Art. 546 of the Civil Code may apply with respect to their rights over improvements. chanroblesvirtuallawlibrary x x x chanroblesvirtuallawlibrary . . . it is undeniable that the improvement of the hotel building of appellants (sic) PVHI was constructed with the written consent and knowledge of appellee. In fact, it was precisely the primary purpose for which they entered into an agreement. Thus, it could not be denied that appellants were builders in good faith. chanroblesvirtuallawlibrary Accordingly, and pursuant to Article 448 in relation to Art. 546 of the Civil Code, plaintiff-appellee has the sole option or choice, either to appropriate the building, upon payment of proper indemnity consonant to Art. 546 or compel the appellants to purchase the land whereon the building was erected. Until such time that plaintiffappellee has elected an option or choice, it has no right of removal or demolitionagainst appellants unless after having selected a compulsory sale, appellants fail to pay for the land (Ignacio vs. Hilario; 76 Phil. 605). This, however, is without prejudice from the parties agreeing to adjust their rights in some other way as they may mutually deem fit and proper. chanroblesvirtuallawlibrary
PAY plaintiff the sum of SEVEN HUNDRED TWENTY FIVE THOUSAND SEVEN HUNDRED EIGHTY PESOS (P725,780.00) per month starting from August 2001 and every month thereafter by way of reasonable compensation for the use and occupation of the premises; chanroblesvirtuallawlibrary PAY plaintiff the sum of FIFTY THOUSAND PESOS (P50,000.00) by way of attorneys fees[; and] chanroblesvirtuallawlibrary PAY the costs of suit. chanroblesvirtuallawlibrary
4.
5.
The complaint against defendant Jose Marcel E. Panlilio is hereby dismissed for lack of cause of action. The said defendants counterclaim however is likewise dismissed as the complaint does not appear to be frivolous or maliciously instituted. chanroblesvirtuallawlibrary SO ORDERED.[5] chanroblesvirtuallawlibrary
Petitioners appealed to the RTC which modified the ruling of the MeTC. It held that: chanroblesvirtuallawlibrary . . . it is clear and undisputed that appellants-lessees were expressly required to construct a first-class hotel with complete facilities. The appellants were also unequivocally declared in the Lease Agreement as the owner of the improvements so constructed. They were even explicitly allowed to use the improvements and building as security or collateral on loans and credit accommodations that the Lessee may secure for the purpose of financing the construction of the building and other improvements (Section 2; pars. A to B, Lease Agreement). Moreover, a time frame was setforth (sic) with respect to the duration of the lease initially for 21 years and renewable for another 25 years in order to enable the appellants-lessees to recoup their huge money investments relative to the construction and maintenance of the improvements. chanroblesvirtuallawlibrary
The
dispositive
portion
of
the
decision
of
the
RTC
reads
as
follows: chanroblesvirtuallawlibrary WHEREFORE, and in view of the foregoing, judgment is hereby rendered modifying the decision of [the] MTC, Branch 45 of Pasay City rendered on February 26, 2002 as follows: chanroblesvirtuallawlibrary 1. Ordering plaintiff-appellee to submit within thirty (30) days from receipt of a copy of this decision a written manifestation of the option or choice it selected, i.e., to
appropriate the improvements upon payment of proper indemnity or compulsory sale of the land whereon the hotel building of PVHI and related improvements or facilities were erected; chanroblesvirtuallawlibrary 2. Directing the plaintiff-appellee to desist and/or refrain from doing acts in the furtherance or exercise of its rights and demolition against appellants unless and after having selected the option of compulsory sale and appellants failed to pay [and] purchase the land within a reasonable time or at such time as this court will direct; chanroblesvirtuallawlibrary Ordering defendants-appellants to pay plaintiffappellee [their] arrears in rent incurred as of July 31, 2001 in the amount of P26,183,225.14; chanroblesvirtuallawlibrary Ordering defendants-appellants to pay to plaintiffappellee the unpaid monthly rentals for the use and occupation of the premises pending this appeal from July to November 2002 only at P725,780.00 per month; chanroblesvirtuallawlibrary The fourth and fifth directives in the dispositive portion of the trial courts decision including that the last paragraph thereof JME Panlilios complaint is hereby affirmed; chanroblesvirtuallawlibrary The parties are directed to adjust their respective rights in the interest of justice as they may deem fit and proper if necessary. chanroblesvirtuallawlibrary
[6]
good faith in order to solicit the application of Articles 448 and 546 of the Civil Code in their favor. As it is, it is glaring error on the part of the RTC to apply the aforesaid legal provisions on the supposition that the improvements, which are of substantial value, had been introduced on the leased premises with the permission of the petitioner. To grant the respondents the right of retention and reimbursement as builders in good faith merely because of the valuable and substantial improvements that they introduced to the leased premises plainly contravenes the law and settled jurisprudential doctrines and would, as stated, allow the lessee to easily improve the lessor out of its property. chanroblesvirtuallawlibrary . . . . Introduction of valuable improvements on the leased premises does not strip the petitioner of its right to avail of recourses under the law and the lease contract itself in case of breach thereof. Neither does it deprive the petitioner of its right under Article 1678 to exercise its option to acquire the improvements or to let the respondents remove the same. chanroblesvirtuallawlibrary
3.
4.
Petitioners Motion for Reconsideration was denied. chanroblesvirtuallawlibrary
5.
Hence, this appeal.
[7]
chanroblesvirtuallawlibrary
6.
Petitioners assign the following errors: chanroblesvirtuallawlibrary I chanroblesvirtuallawlibrary
SO ORDERED.
chanroblesvirtuallawlibrary
Respondent appealed to the CA which held that the RTC erroneously applied the rules on accession, as found in Articles 448 and 546 of the Civil Code when it held that petitioners were builders in good faith and, thus, have the right to indemnity. The CA held: chanroblesvirtuallawlibrary
THE HONORABLE COURT OF APPEALS COMMITTED A GRAVE REVERSIBLE ERROR IN NOT HOLDING THAT PETITIONERS WERE BUILDERS IN GOOD FAITH OVER THE SUBSTANTIAL AND VALUABLE IMPROVEMENTS WHICH THEY HAD INTRODUCED ON THE SUBJECT PROPERTY, THUS COMPELLING THE APPLICATION OF ARTICLE 448 OF THE CIVIL CODE IN RELATION TO ARTICLE 546 OF THE SAME CODE, INSTEAD OF ARTICLE 1678 OF THE CIVIL CODE. chanroblesvirtuallawlibrary
By and large, respondents are admittedly mere lessees of the subject premises and as such, cannot validly claim that they are builders in
II chanroblesvirtuallawlibrary
THE HONORABLE COURT OF APPEALS COMMITTED A SERIOUS REVERSIBLE ERROR WHEN IT DISREGARDED THE FACT THAT THE LEASE CONTRACT GOVERNS THE RELATIONSHIP OF THE PARTIES AND CONSEQUENTLY THE PARTIES MAY BE CONSIDERED TO HAVE IMPLIEDLY WAIVED THE APPLICATION OF ARTICLE 1678 OF THE CIVIL CODE TO THE INSTANT CASE. chanroblesvirtuallawlibrary
First, we settle the issue of jurisdiction. Petitioners argue that the MeTC did not acquire jurisdiction to hear and decide the ejectment case because they never received any demand from respondent to pay rentals and vacate the premises, since such demand is a jurisdictional requisite. We reiterate the ruling of the MeTC, RTC and CA. Contrary to the claim of petitioners, documentary evidence proved that a demand letter dated March 26, 2001 was sent by respondent through registered mail to petitioners, requesting them to pay the rental arrears or else it will be constrained to file the appropriate legal action and possess the leased premises. chanroblesvirtuallawlibrary
III chanroblesvirtuallawlibrary ASSUMING ARGUENDO THAT THE PETITIONERS ARE NOT BUILDERS IN GOOD FAITH, THE HONORABLE COURT OF APPEALS COMMITTED A GRAVE REVERSIBLE ERROR WHEN IT OVERLOOKED THE FACT THAT RESPONDENT ALSO ACTED IN BAD FAITH WHEN IT DID NOT HONOR AND INSTEAD BREACHED THE LEASE CONTRACT BETWEEN THE PARTIES, THUS BOTH PARTIES ACTED AS IF THEY ARE IN GOOD FAITH. chanroblesvirtuallawlibrary Further, petitioners argument that the demand letter is inadequate because it contained no demand to vacate the leased premises does not persuade. We have ruled that: chanroblesvirtuallawlibrary
IV chanroblesvirtuallawlibrary TO SANCTION THE APPLICATION OF ARTICLE 1678 OF THE CIVIL CODE INSTEAD OF ARTICLE 448 OF THE CIVIL CODE IN RELATION TO ARTICLE 546 OF THE SAME CODE WOULD NOT ONLY WREAK HAVOC AND CAUSE SUBSTANTIAL INJURY TO THE RIGHTS AND INTERESTS OF PETITIONER PHILIPPINE VILLAGE HOTEL, INC. WHILE RESPONDENT NAYONG PILIPINO FOUNDATION, IN COMPARISON THERETO, WOULD SUFFER ONLY SLIGHT OR INCONSEQUENTIAL INJURY OR LOSS, BUT ALSO WOULD CONSTITUTE UNJUST ENRICHMENT ON THE PART OF RESPONDENT AT GREAT EXPENSE AND GRAVE PREJUDICE OF PETITIONERS. chanroblesvirtuallawlibrary
. . . . The word vacate is not a talismanic word that must be employed in all notices.The alternatives in this case are clear cut. The tenants must pay rentals which are fixed and which became payable in the past, failing which they must move out. There can be no other interpretation of the notice given to them. Hence, when the petitioners demanded that either he pays P18,000 in five days or a case of ejectment would be filed against him, he was placed on notice to move out if he does not pay.There was, in effect, a notice or demand to vacate.[9]cralaw chanroblesvirtuallawlibrary
In the case at bar, the language of the demand letter is plain and simple: respondent demanded payment of the rental arrears amounting to P26,183,225.14 within ten days from receipt by petitioners, or respondent will be constrained to file an appropriate legal action against petitioners to recover the said amount. The demand letter further stated that respondent will possess the leased premises in case of petitioners failure to pay the rental arrears within ten days. Thus, it is clear that the demand letter is intended as a notice to petitioners to pay the rental arrears, and a notice to vacate the premises in case of failure of petitioners to perform their obligation to pay.chanroblesvirtuallawlibrary
V chanroblesvirtuallawlibrary THE HONORABLE COURT OF APPEALS COMMITTED A GRAVE REVERSIBLE ERROR IN NOT HOLDING THAT THE COURTS A QUO DID NOT ACQUIRE JURISDICTION OVER THE UNLAWFUL DETAINER CASE FOR NON-COMPLIANCE WITH JURISDICTIONAL REQUIREMENTS DUE TO THE ABSENCE OF A NOTICE TO VACATE UPON [8] PETITIONERS. cralaw chanroblesvirtuallawlibrary
Second, we resolve the main issue of whether the rules on accession, as found in Articles 448 and 546 of the Civil Code, apply to the instant case. chanroblesvirtuallawlibrary
Article 448 and Article 546 provide: chanroblesvirtuallawlibrary
Art. 448. The owner of the land on which anything has been built, sown or planted in good faith, shall have the right to appropriate as his own the works, sowing or planting, after payment of the indemnity provided for in Articles 546 and 548, or to oblige the one who built or planted to pay the price of the land, and the one who sowed, the proper rent. However, the builder or planter cannot 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 been reimbursed therefor. chanroblesvirtuallawlibrary 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 the option of refunding the amount of the expenses or of paying the increase in value which the thing may have acquired by reason thereof. chanroblesvirtuallawlibrary
We affirm the ruling of the CA that introduction of valuable improvements on the leased premises does not give the petitioners the right of retention and reimbursement which rightfully belongs to a builder in good faith. Otherwise, such a situation would allow the lessee to easily improve the lessor out of its property. We reiterate the doctrine that a [12] lessee is neither a builder in good faith nor in bad faith cralaw that would call for the application of Articles 448 and 546 of the Civil Code. His rights are governed by Article 1678 of the Civil Code, which reads: Art. 1678. If the lessee makes, in good faith, useful improvements which are suitable to the use for which the lease is intended, without altering the form or substance of the property leased, the lessor upon the termination of the lease shall pay the lessee one-half of the value of the improvements at that time. Should the lessor refuse to reimburse said amount, the lessee may remove the improvements, even though the principal thing may suffer damage thereby. He shall not, however, cause any more impairment upon the property leased than is necessary. chanroblesvirtuallawlibrary
With regard to ornamental expenses, the lessee shall not be entitled to any reimbursement, but he may remove the ornamental objects, provided no damage is caused to the principal thing, and the lessor does not choose to retain them by paying their value at the time the lease is extinguished. chanroblesvirtuallawlibrary
We uphold the ruling of the CA. chanroblesvirtuallawlibrary
The late Senator Arturo M. Tolentino, explains: chanroblesvirtuallawlibrary
leading
expert
in
Civil
Law,
Under Article 1678, the lessor has the option of paying one-half of the value of the improvements which the lessee made in good faith, which are suitable for the use for which the lease is intended, and which have not altered the form and substance of the land. On the other hand, the lessee may remove the improvements should the lessor refuse to reimburse. chanroblesvirtuallawlibrary
This article [Article 448] is manifestly intended to apply only to a case where one builds, plants, or sows on land in which he believes himself to have a claim of title,[10]cralawand not to lands where the only interest of the builder, planter or sower is that of a holder, such [11] as a tenant. cralaw chanroblesvirtuallawlibrary
In the case at bar, petitioners have no adverse claim or title to the land. In fact, as lessees, they recognize that the respondent is the owner of the land. What petitioners insist is that because of the improvements, which are of substantial value, that they have introduced on the leased premises with the permission of respondent, they should be considered builders in good faith who have the right to retain possession of the property until reimbursement by respondent. chanroblesvirtuallawlibrary
Petitioners argue that to apply Article 1678 to their case would result to sheer injustice, as it would amount to giving away the hotel and its other structures at virtually bargain prices. They allege that the value of the hotel and its appurtenant facilities amounts to more than two billion pesos, while the monetary claim of respondent against them only amounts to a little more than twenty six-million pesos. Thus, they contend that it is the lease contract that governs the relationship of the parties, and consequently, the parties may be considered to have impliedly waived the application of Article 1678. chanroblesvirtuallawlibrary
We cannot sustain this line of argument by petitioners. Basic is the doctrine that laws are deemed incorporated in each and every contract. Existing laws always form part of any contract. Further, the lease contract in the case at bar shows no special kind of agreement between the parties as to how to proceed in cases of default or breach of the contract. Petitioners maintain that the lease contract contains a default provision which does not give respondent the right to appropriate the improvements nor evict petitioners in cases of cancellation or termination of the contract due to default or breach of its terms. They cite paragraph 10 of the lease contract, which provides that:chanroblesvirtuallawlibrary
R.D. Hipolito & B. P. Fabir for petitioner. E.G. Tanjuatco & Associates for respondents.
MELENCIO-HERRERA, J: This is a Petition for Review on certiorari of the Decision of the Court of Appeals (CAG.R. No. 23516-R) promulgated on November 4, 1965, entitled "Maria de Evangelista and Sergio Evangelists, (now the respondents) vs. Mariano Floreza (petitioner herein)," reversing the judgment of the Court of First Instance of Rizal rendered on July 17, 1957, and instead ordering petitioner to vacate respondents' residential lot, to remove his house at his own expenses and to pay rental from May 5, 1956. Plaintiffs Maria de Evangelista and Sergio Evangelista, who are mother and son, (the EVANGELISTAS, for short) are the owners of a residential lot located at Sumilang St., Tanay, Rizal, with an area of 204.08 sq. ms., assessed at P410.00. In May 1945, the EVANGELISTAS borrowed from FLOREZA the amount of P100.00. On or about November 1945, with the consent of the EVANGELISTAS, FLOREZA occupied the above residential lot and built thereon a house of light materials (barong- barong) without any agreement as to payment for the use of said residential lot owing to the fact 1 that the EVANGELISTAS has then a standing loan of P100.00 in favor of FLOREZA. On the following dates, the EVANGELISTAS again borrowed the indicated amounts: September 16, 1946 P100.00; 2 August 17, 1947 P200,00; 3 January 30, 1949 P200.00; 4 April 1, 1949 P140.00, 5 or a total of P740.00 including the first loan. The last three items are evidenced by private documents stating that the residential lot stands as security therefor and that the amounts covered thereunder are payable within six years from date, without mention of interest. The document executed on September 16, 1946 stated specifically that the loan was without interest "walang anumang patubo." On January 10, 1949, FLOREZA demolished this house of light materials and in its place constructed one of strong materials assessed in his name at P1,410.00 under 6 Tax Declaration No. 4448. FLOREZA paid no rental as before. On August 1, 1949, the EVANGELISTAS, for and in consideration of P1,000.00 representing the total outstanding loan of P740.00 plus P260.00 in cash, sold their residential lot to FLOREZA, with a right to repurchase within a period of 6 years from date, or up to August 1, 1955, as evidenced by a notarial document, Exh. B, registered under Act 3344 on December 6, 1949, as Inscription No. 2147. 7 On January 2, 1955, or seven months before the expiry of the repurchase period, the EVANGELISTAS paid in full the repurchase price of P1,000.00.
10. DEFAULT. - . . . Default shall automatically take place upon the failure of the LESSEE to pay or perform its obligation during the time fixed herein for such obligations without necessity of demand, or, if no time is fixed, after 90 days from the receipt of notice or demand from the LESSOR. . . chanroblesvirtuallawlibrary
In case of cancellation or termination of this contract due to the default or breach of its terms, the LESSEE will pay all reasonable attorneys fees, costs and expenses of litigation that may be incurred by the LESSOR in enforcing its rights under this contract or any of its provisions, as well as all unpaid rents, fees, charges, taxes, assessment and others which the LESSOR may be entitled to.
Petitioners assert that respondent committed a breach of the lease contract when it filed the ejectment suit against them. However, we find nothing in the above quoted provision that prohibits respondent to proceed the way it did in enforcing its rights as lessor. It can rightfully file for ejectment to evict petitioners, as it did before the court a quo. IN VIEW WHEREOF, petitioners appeal is DENIED. The October 4, 2005 Decision of the Court of Appeals in CA-G.R. SP No. 74631 and its December 22, 2005 Resolution are AFFIRMED. Costs against petitioners.
SO ORDERED. G.R. No. L-25462 February 21, 1980 MARIANO FLOREZA, petitioner, vs. MARIA D. de EVANGELISTA and SERGIO EVANGELISTA, respondents.
On April 25, 1956, the EVANGELISTAS, through their counsel, wrote FLOREZA a 8 letter asking him to vacate the premises as they wanted to make use of their residential lot besides the fact that FLOREZA had already been given by them more than one year within which to move his house to another site. On May 4, 1956, the EVANGELISTAS made a formal written demand to vacate, within five days from notice, explaining that they had already fully paid the consideration for the repurchase of the lot. 9 FLOREZA refused to vacate unless he was first reimbursed the value of his house. Hence, the filing of this Complaint on May 18, 1956 by the EVANGELISTAS. The EVANGELISTAS prayed that: 1) they be declared the owners of the house of strong materials built by FLOREZA on their residential lot, without payment of indemnity; or, in the alternative to order FLOREZA to remove said house; 2) that FLOREZA pay them the sum of P10.00 per month as the reasonable value for the use and occupation of the same from January 2, 1955 (the date the repurchase price was paid) until FLOREZA removes the house and delivers the lot to them; and 3) to declare the transaction between them and FLOREZA as one of mortgage and not of pacto de retro. In his Answer, FLOREZA admitted the repurchase but controverted by stating that he would execute a deed of repurchase and leave the premises upon payment to him of the reasonable value of the house worth P7,000.00. In a Decision dated July 17, 1957, the Court of First Instance of Rizal opined that the question of whether the transaction between the parties is one of mortgage or pacto de retro is no longer material as the indebtedness of P1,000.00 of the EVANGELISTAS to FLOREZA had already been fully paid. And, applying Article 448 of the Civil Code, 10 it rendered a decision dispositively decreeing: FOR ALL THE FOREGOING CONSIDERATIONS, the Court hereby renders judgment granting the plaintiffs the right to elect, as owners of the land, to purchase the house built, on the said lot in question by the defendant for P2,500 or to sell their said land to e defendant for P1,500. In the event that the plaintiffs shall decide not to purchase the house in question the defendant should be allowed to remain in plaintiffs' premises by, paying a monthly rental of P10.00 which is the reasonable value for the use of the same per month as alleged by plaintiffs in their complaint. The Court also orders the defendant to pay a monthly rental of P10.00 for the use of the land in question from May 18, 1956, the date of the commencement of this action. The counterclaim of the defendant is hereby ordered dismissed. Without pronouncement as to costs. SO ORDERED.
11
On November 4, 1965, the Court of Appeals concluded that Article 448 of the Civil Code, supra, was inapplicable; that FLOREZA was not entitled to reimbursement for his house but that he could remove the same at his expense; and accordingly rendered judgment thus: WHEREFORE, judgment is hereby rendered: (1) adjudging the defendant-appellant Mariano Floreza to vacate plaintiffs' residential lot described in the complaint and to pay rental of P10.00 a month from May 5, 1956, until he (defendant) shall have vacated the premises; (2) ordering defendant to remove his house from the land in question within 30 days from the time this decision becomes final and executory; (3) ordering the Register of Deeds of Rizal to cancel inscription No. 2147, Page 210, Vol. 36, in the Registration Book under Act 3344 upon payment of his lawful fees; and (4) taxing the costs in both instances against defendant-appellant Mariano Floreza. 12 Hence, this Petition for Review on certiorari by FLOREZA, seeking a reversal of the aforestated judgment and ascribing the following errors: 1) That the Court of Appeals erred in holding that petitioner Floreza was a builder in bad faith without likewise holding that respondents as owners of the land in dispute, were likewise in bad faith and therefore both parties should in accordance with Art. 453 of the New Civil Code be considered as having acted in good faith. 2) That the Court of Appeals erred in completely ignoring the issue raised on appeal as to whether or not respondents as owners of the questioned lot, were in bad faith in the sense that they had knowledge of and acquiseced to the construction of the house of petitioner on their lot. 3) That the Court of Appeals erred in not applying Art. 448 of the New Civil Code in the adjudication of the rights of petitioner and respondent. 4) That the Court of Appeals erred in declaring that petitioner is not entitled to reimbursement for the value of his house and that he should instead remove the same at his expense. 5) That the Court of Appeals erred in adjudging petitioner to vacate respondents' lot in question and to pay rentals commencing from May 5, 1956, until he shall have vacated the premises, notwithstanding that petitioner is entitled under Arts. 448 and 546 of the New Civil Code, to retention without payment of rental while the corresponding indemnity of his house had not been paid.
Both parties appealed to the Court of Appeals.
6) That the Court of Appeals erred in taxing costs against petitioner. 7) That the Court of Appeals erred in not awarding petitioner's counterclaim. During the pendency of this appeal, petitioner Maria D. de Evangelista died and was ordered substituted by her son, petitioner Sergio, as her legal representative, in a Resolution dated May 14, 1976. On October 20, 1978. the EVANGELISTAS filed a Motion to Dismiss stating that FLOREZA had since died and that his heirs had voluntarily vacated the residential lot in question. The date FLOREZA passed away and the date his heirs had voluntarily vacated the property has not been stated. Required to comment, "petitioner (represented by his heirs)", through counsel, confirmed his death and the removal of the house and manifested that thereby the question of reimbursement had moot and academic. He objected to the dismissal of the case, however, on the ground that the issue of rentals still pends. On January 21, 1980, complying with a Resolution of 'his Court, the EVANGELISTAS clarified that the dismissal they were praying for was not of the entire case but only of this Petition for Review on Certiorari. We are not in agreement that the question of reimbursement of the value of the improvement erected on the subject property has become moot. Petitioner's right of retention of subject property until he is reimbursed for the value of his house, as he had demanded, is inextricably linked with the question of rentals. For if petitioner has the right to indemnity, he has the right of retention and no rentals need be paid. Conversely, if no right of retention exists, damages in the form of rentals for the continued use and occupation of the property should be allowed. We uphold the Court of Appeals in its conclusion that Article 448 of the Civil Code is inapplicable to the factual milieu herein. Said codal provision applies only when the builder, planter, or sower believes he had the right so to build, plant or sow because he 13 thinks he owns the land or believes himself to have a claim of title. In this case, petitioner makes no pretensions of ownership whatsoever. Petitioner concedes that he was a builder in bad faith but maintains that' the EVANGELISTAS should also be held in bad faith, so that both of them being in bad faith, Article 453 of the Civil Code 14 should apply. By the same token, however, that Article 448 of the same Code is not applicable, neither is Article 453 under the ambiance of this case. Would petitioner, as vendee a retro, then be entitled to the rights granted iii Article 1616 of the Civil Code (Art. 1518 of the old Code)? To quote: Art. 1616. The vendor cannot avail himself of the right of repurchase without returning to the vendee the price of the sale, and in addition:
(1) The expenses of the contract, and any other legitimate payments made by reason of the sale; (2) The necessary and useful expenses made on the thing sold. The question again calls for a negative answer. It should be noted that petitioner did not construct his house as a vendee a retro. The house had already been constructed as far back as 1949 (1945 for the house of light materials) even before the pacto de retro sale in 1949. Petitioner incurred no useful expense, therefore, after that sale. The house was already there at the tolerance of the EVANGELISTAS in consideration of the several loans extended to them. Since petitioner cannot be classified as a builder in good faith within the purview of Article 448 of the Civil Code, nor as a vendee a retro, who made useful improvements during the lifetime of the pacto de retro, petitioner has no right to reimbursement of the value of the house which he had erected on the residential lot of the EVANGELISTAS, much less to retention of the premises until he is reimbursed.The rights of petitioner are more akin to those of a usufructuary who, under Article 579 of the Civil (Art. 487 of the old Code), may make on the property useful improvements but with no right to be indemnified therefor. He may, however, remove such improvements should it be possible to do so without damage to the property: For if the improvements made by the usufructuary were subject to indemnity, we would have a dangerous and unjust situation in which the usufructuary could dispose of the owner's funds by compelling him to pay for improvements which perhaps he would not have made. 15 We come now to the issue of rentals. It is clear that from the date that the redemption price had been paid by the EVANGELISTAS on January 2, 1955, petitioner's right to the use of the residential lot without charge had ceased. Having retained the property although a redemption had been made, he should be held liable for damages in the 16 form of rentals for the continued use of the subject residential lot at the rate of P10.00 monthly from January 3, 1955, and not merely from the date of demand on May 4, 1956, as held by the Court of Appeals, until the house was removed and the property vacated by petitioner or his heirs. WHEREFORE, the judgment appealed from is hereby affirmed, with the modification that payment of rentals by the heir, of Mariano Floreza, who are hereby ordered substituted for him, shall commence on January 3, 1955 until the date that the residential lot in question was vacated. Costs against petitioner. SO ORDERED. Teehankee (Chairman), Makasiar, Fernandez, Guerrero, and De Castro, JJ., concur.

Property Cases 1 (Incomplete, No: Ayala Land V Ray Burton (1969)

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Property Cases 1 (Incomplete, No: Ayala Land V Ray Burton (1969)

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THIRD DIVISION [G.R. No. 134692. August 1, 2000] ELISEO FAJARDO, JR., and MARISSA FAJARDO, petitioners, vs.

3: PROPERTY Law 2B Manahan, Jierah R.

4: PROPERTY Law 2B Manahan, Jierah R.

10: PROPERTY Law 2B Manahan, Jierah R.

incurred as of 2001; chanroblesvirtuallawlibrary 3.

11: PROPERTY Law 2B Manahan, Jierah R.

Petitioners Motion for Reconsideration was denied. chanroblesvirtuallawlibrary

Hence, this appeal.

Petitioners assign the following errors: chanroblesvirtuallawlibrary I chanroblesvirtuallawlibrary

Article 448 and Article 546 provide: chanroblesvirtuallawlibrary

We uphold the ruling of the CA. chanroblesvirtuallawlibrary

The late Senator Arturo M. Tolentino, explains: chanroblesvirtuallawlibrary

Both parties appealed to the Court of Appeals.

16: PROPERTY Law 2B Manahan, Jierah R.

17: PROPERTY Law 2B Manahan, Jierah R.

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