Professional Documents
Culture Documents
FIRST DIVISION
G.R. No. 149418*
Property (accretion)
Property (accretion)
WILLARD, J.:
Upon the merits of this case the only question is one of fact, namely,
is the boundary line between the land formerly owned by Fidel Salud,
the father of the defendant, and land owned by Claro Quison, father
and uncle of the plaintiffs, the estero or River Nagsaulay, or is it, as
found by the court below, a straight line of mango and bamboo trees
to the south of the above-mentioned estero? The land in controversy
is situated between this line of trees and the estero.
That Claro Quison owned land to the north of the estero, is undisputed,
but the defendant claims that he [Quison] never owned any land south of
the estero. A large amount of evidence, principally parol, was introduced
upon this question, and after an examination thereof, we are satisfied that
it clearly preponderates in favor of the decision of the court below, and
that it was proven at the trial that the land in question belongs to the heirs
of Quison.
The defendant relied to a great extent upon the record of an action
brought by Claro Quison in 1887 against one Perdeguera. Quison alleged
in his complaint in that action that the defendant therein had in unlawfully
possessed himself of a portion of his, the then plaintiff's land. The land
there in question was in the extreme northern part of the land of Quison,
and therefore entirely north of the Estero Nagsaulay. Judgment was
rendered in that action in favor of the plaintiff, and the gobernadorcillo of
the two of San Juan de Bocboc was ordered to restore the plaintiff to the
possession of the land detained by Perdeguera. In executing this
judgment the officers of the law apparently gave Quison possession of the
land which he had described in his complaint in that action, which
description was as follows: "On the east, the sea; on the south, land of
Fidel Salud; on the west, lands of Juan de Chaves and Camilo Perez; and
on the north with the arroyo called Amoyongan." Fidel Salud was cited to
appear, and did appear when possession was given to Quison. It will be
noticed that, while the land of Quison is described as being bounded on
the south by the property of Salud, nothing is said about the Estero
Nagsaulay, nor does that estero appear upon the plan which accompanied
the complaint in that action an which the officers had before them when
possession was restored. The minute of the proceeding concerning the
restitution was signed by Salud.
The importance of these documents for the defendant's case lies in the
fact that in them the land described as being in the barrio of Subuquin. We
think the evidence establishes that the land here in controversy is in the
barrio of Bataan, and that the dividing line between the barrios of Bataan
and Subuquin was the River Nagsaulay, Bataan being to the south of the
river and Subuquin to the north, and the argument of the defendant is that,
according to these documents, the entire property owned by Claro Quison
was situated in Subuquin, and therefore was north of the Estero
Nagsaulay.
Even giving the document all the weight which the defendant claims it is
entitled to, it would then be merely evidence upon the question of fact as
to whether Quison did or did not own lands to the south of the River
Nagsaulay, and as such evidence we think it can not overcome the
evidence of the many witnesses presented by the plaintiffs who swore that
as a matter of fact, they had occupied and cultivated lands belonging to
Claro Quison situated to the south of this river. It may be, perhaps, that, in
view of the fact that the land in controversy in that action commenced in
1887 was a small parcel which itself was in the barrio of Subuquin, in
describing the land in question the then plaintiff did not have in mind so
much where all of his land lay as where the particular tract then in
controversy lay.
The defendant also claims that Fidel Salud was given judicial possession
of the property here in controversy in 1895. No written documents were
presented to prove this possession, but admitting that proceedings
relating to judicial possession were then taken in accordance with the
provisions of title 13 of the Spanish Law of Civil Procedure, such
proceedings could in no way prejudice the plaintiffs according to the
Property (accretion)
express provisions of article 2016. The law did not require for such
proceedings the citation of the adjoining proprietors, nor was there
any evidence that they were in fact cited in this proceeding, and,
according to the testimony of Gregorio de Villa, any possession
which Fidel Salud obtained in 1895 was lost in 1901, when Quison
again took possession of the premises and held them until the
reconcentration when the defendant, in 1903, by reason of such
reconcentration again possessed herself of the property.
We hold that the finding of the court below in favor of the plaintiffs as
to the true boundary line between the respective properties is
sustained by the evidence.
Some questions of procedure remain to be considered.
This action was first brought against Fidel Salud and Gregorio de
Villa, the father and husband, respectively, of the defendant Higina
Salud. They answered, alleging that the property in question had
been conveyed to Higina Salud in 1895, and that she was the only
owner thereof.
Upon the presentation of this answer, the plaintiffs asked leave to
present a supplementary complaint against Higina Salud. The court,
in disposing of that motion, ordered the dismissal of the action so far
as the defendant Fidel Salud and Gregorio de Villa were concerned,
with costs against the plaintiffs, and permitted the plaintiffs to present
a complaint against Higina Salud. The plaintiffs excepted to this order
and insisted that the two defendants above-named should be
included in this case, but the court refused to vacate his order of
dismissal. The plaintiffs then presented a complaint against Higina
Salud as the only defendant. She made a motion that the complaint
be stricken out, but it does not appear that the court ever made any
ruling thereon. She afterwards answered then complaint and the trial
was had upon the pleadings then in the case, namely, on the
complaint against Higina Salud and her answer.
Higina Salud was the only one who appealed from the judgment and
she now alleges in her brief that the court erred in dismissing the
case as to the other defendants. This dismissal only prejudiced the
plaintiffs and they have not appealed. The complaint against Higina
Salud was improperly called by the plaintiffs as supplementary
complaint. But the name given to it was of no importance. At the time
it was presented she was the only defendant. It perhaps was error to
permit the filing of that new complaint against Higina Salud in this
action and perhaps the complaint should have constituted a new
case, but the fact that it was placed among the papers in this case
and that the trial and judgment were had and rendered therein, if it
were error, was an error which in no way prejudiced the substantial
rights of the defendant Higina Salud upon the merits, and is therefore
no ground for reversal. (Sec. 503, Code of the Civil Procedure.)
Claro Quison died in 1902. It was proven at the trial that the present
plaintiffs are the next of kin and heirs, but it is said by the appellant
that they are not entitled to maintain this action because there is no
evidence that any proceedings have been taken in court for the
settlement of the estate of Claro Quison, and that, without such
settlement, the heirs can not maintain this action. There is nothing in
this point. As well by the Civil Code as by the Code of Procedure, the
title to property owned by a person who dies intestate passes at once
to his heirs. Such transmission is, under the present law, subject to
the claims of the administration and the property may be taken from the
claims of the purpose of paying debts and expenses, but this does not
prevent the immediate passage of the title, upon the death of the intestate,
from himself to his heirs. Without some showing that a judicial
administrator had been appointed in proceedings to settle the estate of
Claro Quison, the right of the plaintiffs to maintain this action is
established.
The court below gave the plaintiffs P900 as damages. While the
defendant has assigned this part of the judgment as error in her brief, it
has not been argued therein. While it is true that the evidence relating to
the damages is in some respects vague and uncertain, yet, after an
examination of all of it, we are satisfied that it supports the judgment of the
court below, at least to the extent of P900.
The appellant finally claims that the action can not be maintained,
because some of the plaintiffs are married women whose husbands did
not join with them in the action. An examination of the record shows that at
least one of the plaintiffs, Lorenza Quison, was a married woman and that
her husband did not join with her in the action. Section 115 of the Code of
Civil Procedure is as follows:
Married women as a party. When a married women is a party,
her husband must be joined with her, except:
1. When the action concerns her property, in which her husband
can have no interest or right;lawphil.net
2. When the action is between herself and her husband;
3. When, for just cause, she is living separate and apart from
her husband, or by reason of an agreement in writing entered
into between them.
In either of which cases she may sue or be sued alone.
The action was brought not only to recover the possession of the land and
to secure a declaration that the plaintiffs were the owners thereof, but also
to recover the sum of P6,720, damages which the plaintiff have suffered
by the wrongful occupation of the land by the defendant. These damages
consisted of the products of the land which the defendant had received
during the time of such occupation.
Passing the question whether, as to the land itself, it being the separate
property of the wife, the husband of Lorenza Quison could have any
interest or right therein, we think that it is very clear that as to the rents
and profits of the land he does necessarily have such an interest or right.
The most that can be said in favor of the plaintiffs is that these lands were
bienes parafernales. In regard to the rents of such lands, articles 1385
and 1401 of the Civil Code provides as follows:
ART. 1385. The fruits of the paraphernal property form a part of
the assets of the conjugal partnership, and are liable for the
payment of the marriage expenses.
The property itself also be liable, in the case of article 1362,
provided that of the husband and the dowry property should be
insufficient to cover the liabilities referred to therein.
Property (accretion)
For the reasons above stated, the court on the 5th day of October, made
an order stating that on the payment by the plaintiffs of P50 for the benefit
of the defendant, the motion would be granted. These terms were
imposed upon the plaintiffs for the reason that the attention of their
counsel was called to the defect several times in the Court of First
Instance and in this court also by the brief of the appellant and that,
notwithstanding this fact, he took no steps to correct the error. The
plaintiffs have paid into the clerk's office the P50 mentioned in the
resolution of October 5, and it is therefore now ordered that the complaint
in the action be amended by adding thereto as plaintiffs the names of
Santiago Sevilla, husband of Lorenza Quison; Simeon Guerra, husband of
Maximina Quison; Dionisio Bravo, husband of Roberta Quison, and
Vicente Amador, husband of Petra Quison.
The judgment of the court below is affirmed, without costs to either party
in the court. So ordered.
EN BANC
G.R. No. 133879
Property (accretion)
The Facts
The main factual antecedents of the present Petition are matters of
record, because it arose out of an earlier case decided by this Court
on November 21, 1996, entitled Equatorial Realty Development, Inc.
v. Mayfair Theater, Inc.5 (henceforth referred to as the "mother case"),
docketed as G.R No. 106063.
Carmelo & Bauermann, Inc. ("Camelo" ) used to own a parcel of
land, together with two 2-storey buildings constructed thereon,
located at Claro M. Recto Avenue, Manila, and covered by TCT No.
18529 issued in its name by the Register of Deeds of Manila.
On June 1, 1967, Carmelo entered into a Contract of Lease with
Mayfair Theater Inc. ("Mayfair") for a period of 20 years. The lease
covered a portion of the second floor and mezzanine of a two-storey
building with about 1,610 square meters of floor area, which
respondent used as a movie house known as Maxim Theater.
Two years later, on March 31, 1969, Mayfair entered into a second
Contract of Lease with Carmelo for the lease of another portion of the
latter's property namely, a part of the second floor of the twostorey building, with a floor area of about 1,064 square meters; and
two store spaces on the ground floor and the mezzanine, with a
combined floor area of about 300 square meters. In that space,
Mayfair put up another movie house known as Miramar Theater. The
Contract of Lease was likewise for a period of 20 years.
Both leases contained a provision granting Mayfair a right of first
refusal to purchase the subject properties. However, on July 30, 1978
within the 20-year-lease term the subject properties were sold
by Carmelo to Equatorial Realty Development, Inc. ("Equatorial") for
the total sum of P11,300,000, without their first being offered to
Mayfair.
As a result of the sale of the subject properties to Equatorial, Mayfair
filed a Complaint before the Regional Trial Court of Manila (Branch 7)
for (a) the annulment of the Deed of Absolute Sale between Carmelo
and Equatorial, (b) specific performance, and (c) damages. After trial
on the merits, the lower court rendered a Decision in favor of
Carmelo and Equatorial. This case, entitled "Mayfair" Theater, Inc. v.
Carmelo and Bauermann, Inc., et al.," was docketed as Civil Case
No. 118019.
On appeal (docketed as CA-GR CV No. 32918), the Court of Appeals
(CA) completely reversed and set aside the judgment of the lower
court.
The controversy reached this Court via G.R No. 106063. In this
mother case, it denied the Petition for Review in this wise:
"WHEREFORE, the petition for review of the decision of
the Court of Appeals, dated June 23, 1992, in CA-G.R. CV
No. 32918, is HEREBY DENIED. The Deed of Absolute
Sale between petitioners Equatorial Realty Development,
Inc. and Carmelo & Bauermann, Inc. is hereby deemed
rescinded; Carmelo & Bauermann is ordered to return to
petitioner Equatorial Realty Development the purchase
price. The latter is directed to execute the deeds and
Property (accretion)
As earlier stated, the trial court dismissed the Complaint via the
herein assailed Order and denied the Motion for Reconsideration
filed by Equatorial.11
The lower court debunked the claim of petitioner for unpaid back
rentals, holding that the rescission of the Deed of Absolute Sale in
the mother case did not confer on Equatorial any vested or residual
proprietary rights, even in expectancy.
In granting the Motion to Dismiss, the court a quo held that the critical
issue was whether Equatorial was the owner of the subject property
and could thus enjoy the fruits or rentals therefrom. It declared the
rescinded Deed of Absolute Sale as avoid at its inception as though it
did not happen."
The trial court ratiocinated as follows:
"The meaning of rescind in the aforequoted decision is to
set aside. In the case of Ocampo v. Court of Appeals, G.R.
No. 97442, June 30, 1994, the Supreme Court held that, 'to
rescind is to declare a contract void in its inception and to
put an end as though it never were. It is not merely to
terminate it and release parties from further obligations to
each other but to abrogate it from the beginning and
restore parties to relative positions which they would have
occupied had no contract ever been made.'
"Relative to the foregoing definition, the Deed of Absolute
Sale between Equatorial and Carmelo dated July 31, 1978
is void at its inception as though it did not happen.
"The argument of Equatorial that this complaint for back
rentals as 'reasonable compensation for use of the subject
property after expiration of the lease contracts presumes
that the Deed of Absolute Sale dated July 30, 1978 from
whence the fountain of Equatorial's all rights flows is still
valid and existing.
xxx
xxx
xxx
Issues
Petitioner submits, for the consideration of this Court, the following
issues:15
"A
First Issue:
Ownership of Subject Properties
We hold that under the peculiar facts and circumstances of the case at
bar, as found by this Court en banc in its Decision promulgated in 1996 in
the mother case, no right of ownership was transferred from Carmelo to
Property (accretion)
Property (accretion)
Padilla in the mother case also said that Equatorial was "deriving
rental income" from the disputed property. Even herein ponente's
Separate Concurring Opinion in the mother case recognized these
rentals. The question now is: Do all these statements concede actual
delivery?
The answer is "No." The fact that Mayfair paid rentals to Equatorial
during the litigation should not be interpreted to mean either actual
delivery or ipso facto recognition of Equatorial's title.
The CA Records of the mother case 35 show that Equatorial as
alleged buyer of the disputed properties and as alleged successor-ininterest of Carmelo's rights as lessor submitted two ejectment
suits against Mayfair. Filed in the Metropolitan Trial Court of Manila,
the first was docketed as Civil Case No. 121570 on July 9, 1987; and
the second, as Civil Case No. 131944 on May 28, 1990. Mayfair
eventually won them both. However, to be able to maintain physical
possession of the premises while awaiting the outcome of the mother
case, it had no choice but to pay the rentals.
The rental payments made by Mayfair should not be construed as a
recognition of Equatorial as the new owner. They were made merely
to avoid imminent eviction. It is in this context that one should
understand the aforequoted factual statements in the ponencia in the
mother case, as well as the Separate Opinion of Mr. Justice Padilla
and the Separate Concurring Opinion of the herein ponente.
At bottom, it may be conceded that, theoretically, a rescissible
contract is valid until rescinded. However, this general principle is not
decisive to the issue of whether Equatorial ever acquired the right to
collect rentals. What is decisive is the civil law rule that ownership is
acquired, not by mere agreement, but by tradition or delivery. Under
the factual environment of this controversy as found by this Court in
the mother case, Equatorial was never put in actual and effective
control or possession of the property because of Mayfair's timely
objection.
As pointed out by Justice Holmes, general propositions do not decide
specific cases. Rather, "laws are interpreted in the context of the
peculiar factual situation of each case. Each case has its own flesh
and blood and cannot be decided on the basis of isolated clinical
classroom principles."36
In short, the sale to Equatorial may have been valid from inception,
but it was judicially rescinded before it could be consummated.
Petitioner never acquired ownership, not because the sale was void,
as erroneously claimed by the trial court, but because the sale was
not consummated by a legally effective delivery of the property sold.
Benefits Precluded by
Petitioner's Bad Faith
Furthermore, assuming for the sake of argument that there was valid
delivery, petitioner is not entitled to any benefits from the "rescinded"
Deed of Absolute Sale because of its bad faith. This being the law of
the mother case decided in 1996, it may no longer be changed
because it has long become final and executory. Petitioner's bad faith
is set forth in the following pertinent portions of the mother case:
xxx
xxx
xxx
xxx
xxx
xxx
Property (accretion) 10
Procedurally, petitioner claims that the trial court deviated from the
accepted and usual course of judicial proceedings when it dismissed
Civil Case No. 97-85141 on a ground not raised in respondent's
Motion to Dismiss. Worse, it allegedly based its dismissal on a
ground not provided for in a motion to dismiss as enunciated in the
Rules of Court.@lawphil.net
We are not convinced A review of respondent's Motion to Dismiss
Civil Case No. 97-85141 shows that there were two grounds invoked,
as follows:
prior judgment in G.R No. 106063 has already resolved the issue of back
rentals.
On the basis of the evidence presented during the hearing of Mayfair's
Motion to Dismiss, the trial court found that the issue of ownership of the
subject property has been decided by this Court in favor of Mayfair. We
quote the RTC:
"The Supreme Court in the Equatorial case, G.R. No. 106063
has categorically stated that the Deed of Absolute Sale dated
July 31, 1978 has been rescinded subjecting the present
complaint to res judicata."43 (Emphasis in the original)
"(A)
Plaintiff is guilty of forum-shopping.itc-alf
"(B)
Plaintiff's cause of action, if any, is barred by prior
judgment."39
The court a quo ruled, inter alia, that the cause of action of petitioner
plaintiff in the case below) had been barred by a prior judgment of
this Court in G.R No. 106063, the mother case.
Although it erred in its interpretation of the said Decision when it
argued that the rescinded Deed of Absolute Sale was avoid," we
hold, nonetheless, that petitioner's cause of action is indeed barred
by a prior judgment of this Court. As already discussed, our Decision
in G.R No. 106063 shows that petitioner is not entitled to back
rentals, because it never became the owner of the disputed
properties due to a failure of delivery. And even assuming arguendo
that there was a valid delivery, petitioner's bad faith negates its
entitlement to the civil fruits of ownership, like interest and rentals.
Under the doctrine of res judicata or bar by prior judgment, a matter
that has been adjudicated by a court of competent jurisdiction must
be deemed to have been finally and conclusively settled if it arises in
any subsequent litigation between the same parties and for the same
cause.40 Thus, "[a] final judgment on the merits rendered by a court of
competent jurisdiction is conclusive as to the rights of the parties and
their privies and constitutes an absolute bar to subsequent actions
involving the same claim, demand, or cause of action."41 Res judicata
is based on the ground that the "party to be affected, or some other
with whom he is in privity, has litigated the same matter in a former
action in a court of competent jurisdiction, and should not be
permitted to litigate it again.42
It frees the parties from undergoing all over again the rigors of
unnecessary suits and repetitive trials. At the same time, it prevents
the clogging of court dockets. Equally important, it stabilizes rights
and promotes the rule of law.@lawphil.net
We find no need to repeat the foregoing disquisitions on the first
issue to show satisfaction of the elements of res judicata. Suffice it to
say that, clearly, our ruling in the mother case bars petitioner from
claiming back rentals from respondent. Although the court a quo
erred when it declared "void from inception" the Deed of Absolute
Sale between Carmelo and petitioner, our foregoing discussion
supports the grant of the Motion to Dismiss on the ground that our
Hence, the trial court decided the Motion to Dismiss on the basis of res
judicata, even if it erred in interpreting the meaning of "rescinded" as
equivalent to "void" In short, it ruled on the ground raised; namely, bar by
prior judgment. By granting the Motion, it disposed correctly, even if its
legal reason for nullifying the sale was wrong. The correct reasons are
given in this Decision.
WHEREFORE, the Petition is hereby DENIED. Costs against
petitioner.itc-alf
SO ORDERED.
Davide Jr., C.J., Quisumbing, Pardo, Buena, Ynares-Santiago and Carpio,
JJ., concur.
Bellosillo, J., I join the dissent of J. Gutierrez.
Melo, J., concurring opinion.
Puno, J., concur and also join the concurring opinion of J. Melo.
Vitug, J., see dissenting opinion.
Kapunan, J., join the dissenting opinions of Justices Vitug and SandovalGutierrez.
Mendoza, J., concur in this and Melo, J.'s concurring opinion.
De Leon, Jr., J., join the dissenting opinion of Justice J.C. Vitug.
GABOYA V. CUI
38 SCRA 85
FACTS:
Don Mariano sold his three lots prodiviso to his three children. One of his
children, due to lack of funds, wasnt able to purchase part of the land.
This reverted back to the father. As part of the sale, the father reserved for
himself the usufruct of the property. He co-owned the land with his
children then. A building was then constructed in a portion of the land,
wherein rentals was given to the father. Thereafter, the two children who
were co-owners obtained a loan, secured by a mortgage, with authority of
the father, to construct a commercial building. The father alleges that
since he has usufruct over the land, he has usufruct or share in the rentals
earned through the constructed building.
HELD:
The reserved right of vendor on a parcel of land doesnt include rentals
from the buildings subsequently constructed on the vacant lots, but that it
Property (accretion)
THIRD DIVISION
G.R. Nos. 154391-92
11
The Facts
Petitioners Ismael and Teresita5 Macasaet and Respondents Vicente and
Rosario Macasaet are first-degree relatives. Ismael is the son of
respondents, and Teresita is his wife.6
On December 10, 1997, the parents filed with the Municipal Trial Court in
Cities (MTCC) of Lipa City an ejectment suit against the children. 7
Respondents alleged that they were the owners of two (2) parcels of land
covered by Transfer Certificate of Title (TCT) Nos. T-78521 and T-103141,
situated at Banay-banay, Lipa City; that by way of a verbal lease
agreement, Ismael and Teresita occupied these lots in March 1992 and
used them as their residence and the situs of their construction business;
and that despite repeated demands, petitioners failed to pay the agreed
rental of P500 per week.8
Ismael and Teresita denied the existence of any verbal lease agreement.
They claimed that respondents had invited them to construct their
residence and business on the subject lots in order that they could all live
near one other, employ Marivic (the sister of Ismael), and help in resolving
the problems of the family.9 They added that it was the policy of
respondents to allot the land they owned as an advance grant of
inheritance in favor of their children. Thus, they contended that the lot
covered by TCT No. T-103141 had been allotted to Ismael as advance
inheritance. On the other hand, the lot covered by TCT No. T-78521 was
allegedly given to petitioners as payment for construction materials used
in the renovation of respondents house.10
The MTCC11 ruled in favor of respondents and ordered petitioners to
vacate the premises. It opined that Ismael and Teresita had occupied the
lots, not by virtue of a verbal lease agreement, but by tolerance of Vicente
and Rosario.12 As their stay was by mere tolerance, petitioners were
necessarily bound by an implied promise to vacate the lots upon
demand.13 The MTCC dismissed their contention that one lot had been
allotted as an advance inheritance, on the ground that successional rights
were inchoate. Moreover, it disbelieved petitioners allegation that the
other parcel had been given as payment for construction materials. 14
On appeal, the regional trial court15 (RTC) upheld the findings of the
MTCC. However, the RTC allowed respondents to appropriate the building
and other improvements introduced by petitioners, after payment of the
indemnity provided for by Article 448 in relation to Articles 546 and 548 of
the Civil Code.16 It added that respondents could oblige petitioners to
purchase the land, unless its value was considerably more than the
building. In the latter situation, petitioners should pay rent if respondents
would not choose to appropriate the building. 17
Property (accretion) 12
Not satisfied with the CAs ruling, petitioners brought this recourse to
this Court.25
The Issues
Petitioners allege that they cannot be ejected from the lots, because
respondents based their Complaint regarding the nonpayment of rentals
on a verbal lease agreement, which the latter failed to prove. 29 Petitioners
contend that the lower courts erred in using another ground (tolerance of
possession) to eject them.
In actions for unlawful detainer, possession that was originally lawful
becomes unlawful upon the expiration or termination of the defendants
right to possess, arising from an express or implied contract. 30 In other
words, the plaintiffs cause of action comes from the expiration or
termination of the defendants right to continue possession. 31 The case
resulting therefrom must be filed within one year from the date of the last
demand.
To show a cause of action in an unlawful detainer, an allegation that the
defendant is illegally withholding possession from the plaintiff is sufficient.
The complaint may lie even if it does not employ the terminology of the
law, provided the said pleading is couched in a language adequately
stating that the withholding of possession or the refusal to vacate has
become unlawful.32 It is equally settled that the jurisdiction of the court, as
well as the nature of the action, is determined from the averments of the
complaint.33
In the present case, the Complaint alleged that despite demands,
petitioners "refused to pay the accrued rentals and [to] vacate the leased
premises."34 It prayed that judgment be rendered "[o]rdering [petitioners]
and all those claiming rights under them to vacate the properties x x x and
remove the structures x x x constructed thereon." 35 Effectively then,
respondents averred that petitioners original lawful occupation of the
subject lots had become unlawful.
The MTCC found sufficient cause to eject petitioners. While it disbelieved
the existence of a verbal lease agreement, it nevertheless concluded that
petitioners occupation of the subject lots was by mere tolerance of
respondents. Basing its conclusion on the fact that the parties were close
relatives, the MTCC ruled thus:
"x x x [T]he parties herein are first degree relatives. Because of
this relationship, this Court takes judicial notice of the love, care,
concern and protection imbued upon the parents towards their
[children], i.e., in the instant case, the love, care, concern and
protection of the [respondents] to the [petitioners]. With this in
mind, this Court is inclined to believe the position of the
Property (accretion) 13
respondents had invited them to occupy the subject lots in order that they
could all live near one other and help in resolving family problems. 46 By
occupying those lots, petitioners demonstrated their acceptance of the
invitation. Hence, there was a meeting of minds, and an agreement
regarding possession of the lots impliedly arose between the parties.
The occupancy of the subject lots by petitioners was not merely
"something not wholly approved of" by respondents. Neither did it arise
from what Tolentino refers to as "neighborliness or familiarity." In point of
fact, their possession was upon the invitation of and with the complete
approval of respondents, who desired that their children would occupy the
premises. It arose from familial love and a desire for family solidarity,
which are basic Filipino traits.
Right to Use the Lots Terminated
That Ismael and Teresita had a right to occupy the lots is therefore clear.
The issue is the duration of possession. In the absence of a stipulation on
this point, Article 1197 of the Civil Code allows the courts to fix the
duration or the period.
"Article 1197. If the obligation does not fix a period, but from its
nature and the circumstances it can be inferred that a period
was intended, the courts may fix the duration thereof.
"The courts shall also fix the duration of the period when it
depends upon the will of the debtor.
"In every case the courts shall determine such period as may
under the circumstances have been probably contemplated by
the parties. Once fixed by the courts, the period cannot be
changed by them."
Article 1197, however, applies to a situation in which the parties intended
a period. Such qualification cannot be inferred from the facts of the
present case.
To repeat, when Vicente and Rosario invited their children to use the lots,
they did so out of parental love and a desire for solidarity expected from
Filipino parents. No period was intended by the parties. Their mere failure
to fix the duration of their agreement does not necessarily justify or
authorize the courts to do so.47
Based on respondents reasons for gratuitously allowing petitioners to use
the lots, it can be safely concluded that the agreement subsisted as long
as the parents and the children mutually benefited from the arrangement.
Effectively, there is a resolutory condition in such an agreement. 48 Thus,
when a change in the condition existing between the parties occurs -- like
a change of ownership, necessity, death of either party or unresolved
conflict or animosity -- the agreement may be deemed terminated. Having
been based on parental love, the agreement would end upon the
dissipation of the affection.
When persistent conflict and animosity overtook the love and solidarity
between the parents and the children, the purpose of the agreement
ceased.49 Thus, petitioners no longer had any cause for continued
possession of the lots. Their right to use the properties became untenable.
It ceased upon their receipt of the notice to vacate. And because they
Property (accretion) 14
Property (accretion) 15
petitioners may be deemed to have been in good faith when they built the
structures on those lots.
The instant case is factually similar to Javier v. Javier. 74 In that case, this
Court deemed the son to be in good faith for building the improvement
(the house) with the knowledge and consent of his father, to whom
belonged the land upon which it was built. Thus, Article 448 75 was applied.
Rule on Useful Expenses
The structures built by petitioners were "useful" improvements, because
they augmented the value or income of the bare lots. 76 Thus, the
indemnity to be paid by respondents under Article 448 is provided for by
Article 546, which we quote:
"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.
"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."
Consequently, respondents have the right to appropriate -- as their own -the building and other improvements on the subject lots, but only after (1)
refunding the expenses of petitioners or (2) paying the increase in value
acquired by the properties by reason thereof. They have the option to
oblige petitioners to pay the price of the land, unless its value is
considerably more than that of the structures -- in which case, petitioners
shall pay reasonable rent.
In accordance with Depra v. Dumlao,77 this case must be remanded to the
trial court to determine matters necessary for the proper application of
Article 448 in relation to Article 546. Such matters include the option that
respondents would take and the amount of indemnity that they would pay,
should they decide to appropriate the improvements on the lots. We
disagree with the CAs computation of useful expenses, which were based
only on petitioners bare allegations in their Answer. 78
Ruling on Improvement Justified
While, ordinarily, the jurisdiction of the MTCC on ejectment proceedings is
limited to the issue of physical or material possession of the property in
question, this Court finds it necessary to abbreviate the issue on the
improvements in relation to Article 448. First, the determination of the
parties right to those improvements is intimately connected with the
MTCC proceedings in the light of the ejectment of petitioners. Second,
there is no dispute that while they constructed the improvements,
respondents owned the land. Third, both parties raised no objection when
the RTC and the CA ruled accordingly on this matter.
Equitable considerations compel us to settle this point immediately, pro
hoc vice, to avoid needless delay. Both parties have already been heard
on this issue; to dillydally or equivocate would not serve the cause of
substantial justice.
Property (accretion) 16
March 3, 2006
DECISION
Property (accretion) 17
Josefa appealed the decision to the Regional Trial Court (RTC). On June
27, 2001, the RTC rendered its Decision15 reversing and setting aside the
ruling of the MeTC and dismissing San Buenaventuras complaint. The
decretal portion of the decision reads:
The RTC held that the inclusion of the renewal clause in the contract
showed the intent on the part of both parties to extend the lease without
any condition or requirement of mutual agreement. It declared that the
phrase was merely a useless addition "for the convenience of any party
who may wish, in bad faith, to back out of the extension of the lease."
According to the RTC, "the only time that phrase may come into play is
when both parties mutually decline to extend the lease, but when only one
party insists on the extension while the other refuses, the latter party is
bound by the term."17
Other reliefs just and equitable under the premises are likewise
prayed for.10
In his Answer,11 Josefa averred that San Buenaventura had no cause
of action against him because, under the contract, she (San
Buenaventura) was obliged to renew the lease. Josefa pointed out
that because of this commitment to renew the contract, he had made
renovations and improvements on the land. Josefa also set up
attorneys fees as counterclaim against San Buenaventura. He
likewise prayed that should the lease contract not be renewed, San
Buenaventura be ordered to reimburse to him the cost of the
improvements in the amount of not less than P3 million.
On July 15, 1999, the MeTC rendered its Decision,12 the dispositive
portion of which reads:
WHEREFORE, premises considered, judgment is hereby rendered
ordering herein defendant and all persons claiming rights under him
to vacate the subject leased premises located as (sic) A. Mabini St.,
Capasigan, Pasig City and surrender possession thereof to the
plaintiff; ordering defendant to pay P10,000.00 as and for attorneys
fees, the same being deemed just and equitable, and to pay the
costs of suit.
The claim for moral and exemplary damages is denied, the same not
being recoverable in an ejectment suit. Moreover, for lack of basis,
the claim for deficit in monthly rentals from August 1, 1995 is likewise
denied. Defendant is, therefore, directed to continue to pay
reasonable compensation for his continued use and occupation of
the subject premises at the old rate of P15,000.00 a month from the
time of the institution of this complaint until defendant and all
person[s] claiming rights under him shall have completely vacated
the premises.
Defendants counterclaim is dismissed for want of basis.
SO ORDERED.13
The MeTC declared that the phrase "renewable upon agreement of
the parties" in the lease contract implied mutuality, i.e., both parties
consent to the renewal of the lease. Thus, San Buenaventuras
demand for Josefa to vacate the premises after the expiration of the
lease necessarily negates the idea of her consent to such renewal.
The court also held that the clause does not and cannot constitute a
commitment or a promise on the part of San Buenaventura to renew
the lease.14
This time, San Buenaventura appealed to the CA via a Petition for Review
under Rule 42 of the Revised Rules of Court, where she alleged the
following:
5.1 Petitioner respectfully submits that the REGIONAL TRIAL
COURT erred in finding that the phrase "renewable upon
agreement of the parties" is an outright intent of the parties to
renew the contract upon its expiration.
5.2 Petitioner respectfully submits that the REGIONAL TRIAL
COURT erred in finding that the phrase "renewable upon
agreement of the parties" does not mean that there has to be
mutual consent before the lease contract may be extended.
5.3 Petitioner respectfully submits that the REGIONAL TRIAL
COURT erred in finding that the phrase "renewable upon
agreement of the parties" is indeed renewable and without any
condition or requirement of mutual agreement notwithstanding
the phrase upon agreement of the parties which the Court found
as a useless addition for the convenience of any party who may
wish, in bad faith, to back out of the extension.
5.4 Petitioner respectfully submits that the REGIONAL TRIAL
COURT erred in finding that the act of sending defendant a
demand to vacate, signifying her lack of intention to renew the
lease is in violation of the terms and conditions of the lease
contract.
5.5 Petitioner submits that the Regional Trial Court erred in not
ordering respondent to pay PHP 30,000.00 monthly rental.
5.6 Petitioner respectfully submits that the REGIONAL TRIAL
COURT erred in dismissing the ejectment Complaint.18
San Buenaventura argued that the RTC failed to apply the ruling of this
Court in Fernandez v. Court of Appeals,19 where a similar clause in the
lease contract of the parties was construed.
Property (accretion) 18
On November 22, 2002, the CA granted the petition and reversed the
decision of the RTC. The fallo of the decision reads:
IN VIEW OF ALL THE FOREGOING, the challenged RTC Decision is
hereby REVERSED and SET ASIDE, reinstating in the process the
earlier judgment of the MTC in Civil Case No. 6798, with a
modification that herein respondent Josefa is ordered to pay
petitioner San Buenaventura rentals in the sum of P30,000.00 a
month from the first demand therefor until he vacates the leased
premises. In all other respect[s], the MTC Decision stands. No cost.
SO ORDERED.20
The appellate court declared that, after the expiration of the five-year
period in the lease contract, the owner of the property had the right
not only to terminate the lease but to demand a new rental rate. It
held that it was unfair for the lessee to refuse to pay the demanded
increased rate and still remain in possession of the property. The CA
also ruled that Josefa could not claim to be a builder in good faith
since he knew that he was only a lessee, whose rights relative to the
improvements he introduced on the property are governed by Article
1678 of the New Civil Code.
It bears stressing that after the subject lease contract expired on July 15,
1995, petitioner was already unlawfully withholding possession of the
leased premises from respondent as to entitle the latter to file her
complaint for ejectment against petitioner as defendant. 26 Since the lease
contract was executed for a determinate time, such contract ceased on
the day fixed without need of further demand.27 A notice to vacate
constitutes an express act on the part of the lessor that he no longer
consents to the continued occupation by the lessee of the property. 28
Hence, respondent, as plaintiff in the trial court, had a cause of action for
ejectment against petitioner who was the defendant below.
It is true that petitioner and respondent agreed that the subject lease
contract was "renewable upon agreement." The Court notes, however,
that the effect of petitioners intransigent refusal to pay the P30,000.00
monthly rental proposed by respondent was the failure of the parties to
agree on the renewal of the contract. The clause "renewable upon
agreement of the parties" in the lease contract is clear and admits of no
other interpretation: the contract is renewable only upon agreement of the
parties. If no such agreement is forged, petitioner has no other option
except to vacate the property.
Even petitioner himself admits that under the subject clause, the lease
contract would not be automatically renewed upon its expiration on July
31, 1995. Respondent, as the owner of the property whose title is
recognized in the lease contract, was not obliged to agree to renew the
lease contract, much less negotiate with petitioner for such renewal if she
opts not to renew the agreement. Since the renewal of the contract
contemplates the death of the old contract, it is necessary that a new one
be executed by the parties.29 A contract can only be renewed upon the
mutual agreement of the parties or at the will of both of them. After all, as
the Court ruled in Buce v. Court of Appeals:30
On the first issue, petitioner recalls that his predecessor had leased
the property way back in 1939, and that said lease had always been
renewed. Petitioner insists that when his lease contract with
respondent was executed on July 15, 1990, a commitment was made
to renew it upon its expiration on July 31, 1995, which was why the
clause "renewable upon agreement of the parties" was incorporated
in the lease contract. He posits that respondent could not unilaterally
cancel the lease contract without affording him an opportunity to
negotiate for its renewal. While the clause could not be construed to
mean that the lease contract would be automatically renewed after its
expiry, the provision negates the right of respondent to terminate the
lease until after negotiations for its renewal should prove to be
unsuccessful. However, he also maintains that respondent had the
obligation to renew the lease contract without modifying any of its
terms and conditions. He posits that the ruling of this Court in
Fernandez v. Court of Appeals21 is not controlling in this case.
In the case at bar, it was not specifically indicated who may exercise the
option to renew, neither was it stated that the option was given for the
benefit of herein petitioner. Thus, pursuant to the Fernandez ruling and
Article 1196 of the Civil Code, the period of the lease contract is deemed
to have been set for the benefit of both parties. Renewal of the contract
may be had only upon their mutual agreement or at the will of both of
them. Since the private respondents were not amenable to a renewal,
they cannot be compelled to execute a new contract when the old contract
terminated on 1 June 1994. It is the owner-lessors prerogative to
terminate the lease at its expiration. The continuance, effectivity and
fulfillment of a contract of lease cannot be made to depend exclusively
upon the free and uncontrolled choice of the lessee between continuing
the payment of the rentals or not, completely depriving the owner of any
say in the matter. Mutuality does not obtain in such a contract of lease and
no equality exists between the lessor and the lessee since the life of the
contract would be dictated solely by the lessee.31
Respondent, for her part, avers that a similar issue was raised and
resolved by this Court in the following cases: Fernandez v. Court of
Appeals,22 Heirs of Amando Dalisay v. Court of Appeals,23 Buce v.
Court of Appeals,24 and LL and Company Development and AgroIndustrial Corporation v. Huang Chao Chun.25 Respondent asserts
that the rulings of this Court in said cases should apply.
Property (accretion) 19
SEC. 17. Judgment. If after trial the court finds that the allegations of the
complaint are true, it shall render judgment in favor of the plaintiff for the
restitution of the premises, the sum justly due as arrears of rent or as
reasonable compensation for the use and occupation of the premises,
attorneys fees and costs. If it finds that said allegations are not true, it
shall render judgment for the defendant to recover his costs. If a
counterclaim is established, the court shall render judgment for the sum
found in arrears from either party and award costs as justice requires.
(Emphasis added)
Property (accretion) 20
With respect to the rental fixed by the trial court, suffice it to say that
petitioner failed to present controverting evidence as to the fair rental
value of the leased premises. The burden of proof to show that the
rental demanded is unconscionable or exorbitant rests upon the
lessee. The trial court had the authority to fix the reasonable value for
the continued use and occupancy of the premises after termination of
the lease contract.
It must be underscored that the respondent was the plaintiff in the
MTC. It had the burden to adduce evidence to prove the fair rental
value or reasonable compensation for the leased property. If the
respondent failed to discharge its burden, the petitioner was not
obligated to adduce controverting evidence. The burden of evidence
would be shifted to the petitioner only if the respondent, as plaintiff,
would be able to adduce preponderant evidence to prove its claim. 45
The Court holds that the trial courts award of P15,000.00 as
reasonable compensation for petitioners occupancy of the property
after the expiration of the lease should be maintained.
IN LIGHT OF ALL THE FOREGOING, the petition is PARTIALLY
GRANTED. The decision of the Court of Appeals is AFFIRMED WITH
MODIFICATION. The award of P30,000.00 a month, by way of
reasonable compensation for petitioner Johnny Josefas occupancy
of the property from July 31, 1995, is DELETED, and the award of
P15,000.00 a month made by the MeTC of Pasig City, Branch 69, is
REINSTATED. No costs.
SO ORDERED.