FIRST DIVISION
G.R. No. 182754, June 29, 2015
SPOUSES CRISPIN AQUINO AND TERESA V. AQUINO, HEREIN REPRESENTED BY THEIR ATTORNEY-IN-FACT, AMADOR D. LEDESMA, Petitioners, v. SPOUSES EUSEBIO AGUILAR AND JOSEFINA V. AGUILAR, Respondents.
D E C I S I O N
SERENO, C.J.:
2.3 That the construction of the three (3) storey building was also at the uncompensated supervision of defendant Eusebio Aguilar, of which only P 2 Million was spent by plaintiffs while defendants spent around P 1 Million as contribution to the construction cost. It was defendants who introduced improvements on subject lot because at the time plaintiffs bought the property it was marshy which was filled up by defendants (sic) truck load with builders, adobe and scumbro that elevated the ground;Since they were allegedly co-owners of the building and builders in good faith, respondents claimed that they had the right to be compensated for the current value of their contribution.16 Accordingly, they prayed for the dismissal of the Complaint and the award of P5 million as compensation for their contributions to the construction of the building, as well as moral damages, attorney’s fees and costs of litigation.17chanrobleslaw
2.4 The original agreement was for my client to contribute his share so that they will have the portion of the subject building for their own exclusive use. It turned out later that the agreement they had was disowned by plaintiffs when they saw the totality of the building constructed thereon coupled by the fact, that the value of the lot has tremendously appreciated due to the commercialization of the vicinity which will command higher price and windfall profits should plaintiffs sell the property which they are now contemplating on (sic);
2.5 The portion which plaintiffs want defendants to vacate is a portion which the latter built with their own money upon your clients agreement and consent whom they built in good faith knowing and hoping that later on the same will be theirs exclusively. It was never an act of generosity, liberality and tolerance. Conversely, it was one of the implied co-ownership or partnership, because aside from the fact that defendants, who were then peacefully residing in Laguna, made unquantifiable contributions in terms of money and services arising from his uncompensated management and supervision over the entire subject property while plaintiffs are abroad. By legal implications he is an industrial partner responsible for the development and improvements of the subject property. His contribution was never without the consent of plaintiffs. Whatever contribution defendants introduced over the said property was made and built in good faith;15
WHEREFORE, premises considered, judgment is hereby rendered ordering defendants Eusebio & Josefina Aguilar and all persons claiming rights under them to immediately vacate the subject property, and deliver peaceful possession thereof to the plaintiffs. Defendants are likewise ordered to pay plaintiffs P7,000.00 monthly rental commencing 22 October 2003 until such time that defendant finally vacate the premises, P10,000.00 as and by way of attorney’s fees, and the cost of suit.24On 14 September 2005, respondents appealed the MeTC’s Decision to the RTC.25chanrobleslaw
The Supreme Court has consistently held that those who occupy the land of another at the latter’s tolerance or permission, without any contract between them, are necessarily bound by an implied promise that the occupants will vacate the property upon demand. Based on the principles enunciated in Calubayan v. Pascual, the status of petitioners is analogous to that of a lessee or a tenant whose term of lease has expired but whose occupancy continued by tolerance of the owner. In such a case, the unlawful deprivation or withholding of possession is to be reckoned from the date of the demand to vacate.42 (Citations omitted)Nevertheless, the CA declared that respondents should be reimbursed for the necessary and useful expenses they had introduced on petitioners’ property, pursuant to Articles 1678 and 548 of the Civil Code.43 The dispositive portion of the CA Decision dated 25 April 200844 reads:chanRoblesvirtualLawlibrary
WHEREFORE, the assailed Decision is AFFIRMED with the following MODIFICATIONS:ChanRoblesVirtualawlibraryRespondents no longer appealed the Decision of the CA. This time, petitioners elevated the matter to this Court through the instant Petition for Review46 under Rule 45 of the Rules of Court.
1. The case is REMANDED to the court of origin for further proceedings to determine the facts essential to the application of Article 1678 and Article 546 of the Civil Code, specifically on the following matters:chanRoblesvirtualLawlibrary2. After said amounts shall have been determined by competent evidence:chanRoblesvirtualLawlibrary
a) To determine the cost of necessary expenses incurred by petitioners during their period of possession. b) To determine the cost of useful improvements introduced by petitioners in the construction of the building.SO ORDERED.45
a) Respondents Aquino are ordered to pay petitioners the costs of necessary improvements incurred during the period of their occupation. b) Petitioners Aguilar are to be reimbursed one half (1/2) of the amount they expended on the construction of the building should respondents decided to appropriate the same. Should respondents refuse to reimburse the costs of the improvements, petitioners may remove the improvements even though the principal thing may suffer damage thereby. c) In both instances, petitioners shall have no right of retention over the subject premises. d) In any event, petitioners shall pay respondents the amount of Php7,000.00 as monthly rental commencing 22 October 2003 until such time that petitioners finally vacate the premises. No pronouncement as to costs.
Both the MeTC and the RTC have rejected the idea that petitioners are builders in good faith. We agree. The resolution of the issues at bar calls for the application of the rules on accession under the Civil Code. The term “builder in good faith” as used in reference to Article 448 of the Civil Code, refers to one who, not being the owner of the land, builds on that land believing himself to be its owner and unaware of the land, builds on that land, believing himself to be its owner and unaware of the defect in his title or mode of acquisition. The essence of good faith lies in an honest belief in the validity of one’s right, ignorance of a superior claim, and absence of intention to overreach another.Respondents are deemed to have acquiesced to the foregoing findings when they failed to appeal the CA Decision. A party who does not appeal from a judgment can no longer seek the modification or reversal thereof.56 Accordingly, the only issue left for this Court to determine is that which is now raised by petitioners – whether the CA erred in remanding this case to the court of origin for the determination of the necessary and useful expenses to be reimbursed to respondents pursuant to Articles 1678 and 546 of the Civil Code.
In the instant case, the Spouses Aguilar cannot be considered as builders in good faith on account of their admission that the subject lot belonged to the Spouses Aquino when they constructed the building. At the onset, petitioners were aware of a flaw in their title and a limit to their right to possess the property. By law, 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.55
To begin with, it would appear that although the defendant is regarded by the plaintiffs as a "squatter" his occupancy of the questioned premises had been permitted or tolerated even before the Philippine Realty Corporation sold the lots to the plaintiffs. Otherwise, the latter would not have found him on the premises. It may be true that upon their acquisition of the parcels of land in 1957, plaintiffs notified and requested defendant to see them, but despite defendant's failure to heed these requests, plaintiffs did not choose to bring an action in court but suffered the defendant instead to remain in the premises for almost six years. Only on February 2, 1963, did the plaintiffs for the first time notify the defendant that "they now need the two parcels of land in question" and requested him to vacate the same. In allowing several years to pass without requiring the occupant to vacate the premises nor filing an action to eject him, plaintiffs have acquiesced to defendant's possession and use of the premises. It has been held that a person who occupies the land of another at the latter's tolerance or permission, without any contract between them, is necessarily bound by an implied promise that he will vacate upon demand, failing which a summary action for ejectment is the proper remedy against them. The status of defendant is analogous to that of a lessee or tenant whose term of lease has expired but whose occupancy continued by tolerance of the owner. In such a case, the unlawful deprivation or withholding of possession is to be counted from the date of the demand to vacate.60 (Emphasis in the original)It is clear from the above that Calubayan is not sufficient basis to confer the status and rights of a lessee on those who occupy property by mere tolerance of the owner.
Likewise, in a letter dated 15 July 1983 sent by plaintiffs to the defendants marked as Exhibit “2” of defendants’ Position Paper, Teresa Aquino made known to the defendants not to construct on the premises as she planned to sell the same when the value of the property shall increase (sic). Defendants are undoubtedly builders in bad faith for despite the prohibition made upon them, they continued their construction activities upon respondents’ property.62This ruling was affirmed by the RTC in its Decision dated 3 January 2006, which reads:chanRoblesvirtualLawlibrary
An examination of appellants’ Exhibit “2” which is a letter dated July 15, 1983, sent to appellant Josefina Aguilar, the sister of appellee Teresa Aquino, abundantly shows that their occupancy of the premises in question is by tolerance of the appellees. Thus, the letter expressly states that the appellants are advised not to put up a shop, as the appellees had plan (sic) then of disposing the property (the land) in question for a reasonable profit after a period of three or four years, thereby placing on notice them (appellants) that their possession of the said property is temporary in nature and by mere generosity of the appellees, they being sisters.We find no reason to depart from the conclusions of the trial courts. Respondents were evidently prohibited by petitioners from building improvements on the land because the latter had every intention of selling it. That this sale did not materialize is irrelevant. What is crucial is that petitioners left respondents clear instructions not to build on the land.
The letter likewise advised them to apply for a housing project so that by the time the property in question is sold, they have a place to transfer to. All these undisputed antecedents which can be considered as judicially admitted by the appellants being their own evidence marked as Exhibit “2”, coupled with the fact that since the time they occupied the premises in 1983 up to the time when the complaint was filed, they were not asked to pay any monthly rental for the use, enjoyment and occupancy of the said property, ineluctably established the fact that their possession of the said property is by mere tolerance of the appellees.63chanrobleslaw
x x x x
Their contention that pursuant to Article 453 of the Civil Code, they should be considered builders in good faith even if they have acted in bad faith, since their act of introducing improvements to one-half of the third floor of the three storey building was with knowledge and without opposition on the part of the appellants, cannot be sustained, principally on the ground that as stated earlier, their Exhibit “2” is very limpid on the act that they were already forewarned as early as 1983 not to introduce any improvements thereon as the property is slated to be sold as it was only bought for investment purposes. The fact that the appellees did not thereafter remind them of this, is of no moment, as this letter was not likewise withdrawn by a subsequent one or modified by the appellees.64
Art. 449. He who builds, plants or sows in bad faith on the land of another, loses what is built, planted or sown without right of indemnity.Respondents may recover the necessary expenses incurred for the preservation of the property but without the right of retention.
Art. 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.
Art. 451. In the cases of the two preceding articles, the landowner is entitled to damages from the builder, planter or sower.chanroblesvirtuallawlibrary
Endnotes:
1Rollo, pp. 29-39.
2 Id. at 41-52; penned by Associate Justice Ricardo R. Rosario and concurred in by Associate Justices Arcangelita Romillo-Lontok and Mariano C. Del Castillo (now a member of this Court).
3 Id. at 51-52.
4 Id. at 85-86.
5 Id. at 42.
6 Id. at 148-149.
7 Id. at 261.
8 Id. at 250.
9 Id. at 78.
10 Id. at 250
11 Id. at 251.
12 Id. at 77-82.
13 Id. at 79-80.
14 Id. at 95-102.
15 Id. at 96-97.
16 Id. at 99.
17 Id. at 100.
18 Id. at 250-253; penned by Judge Perpetua Atal-Paño
19 Id. at 251.
20 Id.
21 Id. at 252.
22 Id.
23 Id. at 252-253.
24 Id. at 253.
25 Id. at 34.
26 Id. at 103-116.
27 Id. at 110-112.
28 Id. at 106.
29 Id. at 112-115.
30 Id. at 112.
31 Id.
32 Id. at 127-131; penned by Judge Cesar D. Santamaria.
33 Id. at 129.
34 Id. at 130.
35 Id.
36 Id.
37 Id.
38 Id.
39 Id. at 131.
40 Id. at 48.
41 Id. at 49
42 Id.
43 Id. at 50.
44 Id. at 9-20; CA-G.R. SP No. 92778 penned by Associate Justice Ricardo R. Rosario and concurred in by Associate Justices Arcangelita Romillo-Lontok and Mariano C. del Castillo (now a member of this court).
45 Id. at 51-52.
46 Id. at 29-39.
47 Id. at 34.
48 Id. at 211-214.
49 Article 1678 of the Civil Code states:chanRoblesvirtualLawlibraryArt. 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 the 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.50 Article 546 of the Civil Code provides: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.chanroblesvirtuallawlibraryArt. 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.51 Id. at 212.
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
52 Id. at 220-223.
53 Id. at 220.
54 Id. at 41-52.
55 Id. at 48.
56Taganito Mining Corporation v. Commissioner of Internal Revenue, G..R. No. 197591, 18 June 2014; Raquel-Santos, et al. v. Court of Appeals and Finvest Securities Co., Inc., 601 Phil. 631, 651 (2009).
57Rollo, p. 17.
58 Id. at 49.
59128 Phil. 160-165 (1967).
60 Id.
61Spouses Ismael and Teresita Macasaet v. Spouses Vicente and Rosario Macasaet, 482 Phil 853-876, (2004); Boyer-Roxas v. Court of Appeals, G.R. No. 100866, 14 July 1992, 211 SCRA 470; De Guzman v. De la Fuente, 55 Phil. 501-504 (1930); Aringo v. Arena, 14 Phil. 263-270 (1909); Javier v. Javier, 7 Phil. 261-268 (1907).
62Rollo, p. 252.
63 Id. at 130.
64 Id.
65Heirs of Durano, Sr. v. Spouses Uy, 398 Phil. 125-127 (2000).
66Tan Queto v. Court of Appeals, 232 Phil. 57-64 (1983).
67 Article 452 of the Civil Code states:chanRoblesvirtualLawlibraryArt. 452. The builder, planter or sower in bad faith is entitled to reimbursement for the necessary expenses of preservation of the land.chanroblesvirtuallawlibrary68 Article 546 of the Civil Code states:chanRoblesvirtualLawlibraryART. 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.69Rollo, pp. 148-149.
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
70Spouses Cruz v. Spouses Fernando, 513 Phil 280-293 (2005); Rivera v. Rivera, 453 Phil 404-41 (2003); Spouses Pengson v. Ocampo, Jr., 412 Phil 860-868 (2001); Arcal v. Court of Appeals, 348 Phil 813-830 (1998); Spouses Refugia v. Court of Appeals, 327 Phil 982-1011 (1996).
71Lopez v. David, GR No. 152145, 30 March 2004, 426 SCRA 535; Arcal v. Court of Appeals, 348 Phil. 813, 823 (1998); Villaluz v. Court of Appeals, 344 Phil. 77, 89 (1997).
72 See Reyes v. Court of Appeals, 148 Phil. 135 (1971).chanroblesvirtuallawlibrary