[G.R. No. 31339. November 27, 1929.

THOS. N. POWELL, Plaintiff-Appellee, v. THE PHILIPPINE NATIONAL BANK, Defendant-Appellant.

Roman J. Lacson, for Appellant.

Alva J. Hill, for Appellee.
SYLLABUS

1. MORTGAGE; CREDITS, PREFERRED AND ORDINARY. — A mortgage creditor who is at the same time a holder of promissory notes for the value of fertilizers used in the cultivation of the mortgaged lands, and who collects the products thereof and applies them to
his mortgage credit, waives the preferential right to said products granted to him by article 1922, case 6, of the Civil Code, the amount of said promissory notes becoming an ordinary credit.

2. ID., JUDGMENT DEBTOR’S RIGHT TO FRUITS OF PROPERTY EXECUTED. — The judgment debtor in possession of a land is entitled to collect its fruits and rents during the year fixed by the law for the redemption. (Riosa v. Verzosa and Bulan, 26 Phil., 85;
Velasco v. Rosenberg’s Incorporated, 32 Phil., 72.)

3. ID.; CONSOLIDATION OF OWNERSHIP. — If the period for redemption expires without the judgment debtor having made use of his right, the ownership of the land sold becomes consolidated in the purchaser, who thereupon becomes entitled to collect its fruits and
rents, paying the judgment debtor the expenses of cultivation, harvesting and preservation (article 356, Civil Code).
DECISION
VILLA-REAL, J.:
The present appeal Was taken by the PHILIPPINE NATIONAL BANK from a judgment of the Court of First Instance of Iloilo ordering it to pay the sum of P7,926.18 to the plaintiff, Thomas N. Powell, together with the legal interest thereon from October 9, 1928 until fully
paid, with the costs of the trial.

In support of its appeal, the bank assigns the following alleged errors as committed by the lower court in its decision, to wit:

"The lower court erred:

"1. In not holding that the fact that the fertilizer purchased by Severino Aldeguer of Felipe Gomez was used on the sugar cane planted on the land in question, has created a Lien upon said sugar cane to secure the payment of the promissory notes issued for the
fertilizers.

"2. In holding that there is no legal provision in force in these Islands applicable to said Lien.

"3. In not holding that the provisions of articles 356 and 1922 of the Civil Code are applicable to the instant case.

"4. In not absolving the PHILIPPINE NATIONAL BANK from the complaint with costs against the plaintiff."

The following facts, agreed upon by the parties, are pertinent and necessary to the solution of the questions raised in this appeal:

On December 17, 1920, in order to secure the payment of the sum of P17,000 with 12 per cent interest per annum, Severino P. Aldeguer executed a mortgage deed in favor of the PHILIPPINE NATIONAL BANK on lots Nos. 1318 and 470 of the cadastral survey of
Pontevedra, Occidental Negros, appearing upon the original certificates of title Nos. 10977 and 10978, issued by the registrar of deeds of said Province of Occidental Negros (Exhibit E).

On July 5, 1923, after a liquidation of accounts between Severino P. Aldeguer and the PHILIPPINE NATIONAL BANK, from which it appeared that the former owed the latter the sum of P33,348.75, the former mortgage deed (Exhibit E) was amended making the
mortgaged property liable for the new amount with 8 per cent interest per annum, and retaining the other conditions of the contract (Exhibit F).

On July 6, 1923, in order to secure the payment to the PHILIPPINE NATIONAL BANK of the additional sum of P12,000 with interest, Severino P. Aldeguer executed a second mortgage in favor of said bank on the said lots, Nos. 1318 and 470 of the Pontevedra
cadastre, and a first mortgage on the sugar-cane harvest of 1923-1924 on said land, as well as on twenty-two head of labor cattle (Exhibit G).

On February 23, 1925, in pursuance of a writ of execution issued by the Court of First Instance of Manila, dated October 31, 1924, in civil case No. 25663 of said court, wherein the Asia Banking Corporation was the plaintiff, and Severino P. Aldeguer and others were
the defendants, the sheriff of the Province of Occidental Negros levied execution on the aforementioned lots, Nos. 1318 and 470, mortgaged to the PHILIPPINE NATIONAL BANK (Exhibit B).

Following the procedure prescribed by law, the provincial sheriff of Occidental Negros on March 30, 1925 sold at public auction, all Severino P. Aldeguer's rights, title and interest in said lots Nos, 1318 and 470 to the Asia Banking Corporation, as the highest bidder for
the sum of P4,000. The writ of execution was for the sum of P4,625 with interest at 9 per centum per annum from September 20, 1920, plus the costs, which amounted to P58.52 (Exhibits C and D). The sheriff issued a deed of sale of said lands, which were described
in certificates of title Nos. 10977 and 10978, in favor of the Asia Banking Corporation and sent it to the register of deeds of Occidental Negros by registered mail on May 29, 1925, having been recorded upon receipt thereof in Bacolod.
On March 28, 1925, Severino P. Aldeguer bought 40 tons of fertilizer from Felipe Gomez for use in the cultivation of the two parcels of land mortgaged by him to the PHILIPPINE NATIONAL BANK, executing a promissory note for P5,200 payable on February 28, 1926.

On February 15, 1926, Severino P. Aldeguer again bought 3 tons of fertilizer from Felipe Gomez for use upon the said land, executing a promissory note for P390, payable on January 15, 1927.

These promissory notes were endorsed by Felipe Gomez to the PHILIPPINE NATIONAL BANK.

For some reason or other Severino P. Aldeguer failed to exercise his right of repurchase, and on April 23, 1928 the provincial sheriff of Occidental Negros executed the final deed of sale of Severino P. Aldeguer's land mortgaged to the PHILIPPINE NATIONAL BANK,
in favor of the Asia Banking Corporation (Exhibit 1).

On April 25, 1928, the Asia Banking Corporation sold said lots Nos. 1318 and 470 to Urquijo Hermanos for P45,000, after undertaking to liberate them from all liens (Exhibit J).

On April 25, 1928, the PHILIPPINE NATIONAL BANK furnished the Asia Banking Corporation the following statement of Severino P. Aldeguer's account up to April 25,1928 :

To remaining balance of P/Note signed by

Mr. Severino P. Aldeguer on July 6, 1923 P32,373.64 P29,500.00
for
To interest unpaid up to August 31, 1924 756.18
To interest due on P29,500 from September 1,
1924 to April 25, 1928, at 8% per annum 8,636.24
(3 yrs. 7 months and 25 days)
9,392.42
Less: Payment made on April 4, 1928 2,074.06
7,318.36
Total 36,818.35

On April 26,1928, the Asia Banking Corporation, through its attorneys tendered the PHILIPPINE NATIONAL BANK a check for P29,307 in payment of Severino P. Aldeguer's debt to the latter, secured by the mortgage of the lands above- mentioned.

On April 27,1928, the PHILIPPINE NATIONAL BANK returned the check to the Asia Banking Corporation with the following statement of Severino P. Aldeguer's account with it:

To remaining balance of P/Note signed by

Mr. Severino P. Aldeguer on July 5, 1923 P29,500.00
for P32,373.64
To interest unpaid up to August 31, 1924 P756.18
To interest on P29,500 from September 1,
1924 to February 28, 1926 at 8% per am 3,540.00
num (1 yr. and 6 months)
To interest on P29,500 from March 1, 1926 to
April 27, 1928, at 9% per annum (2 yrs. 5,737.75
1 month and 27 days)
10,033.93
Less: Payment made on April 4, 1926 2,074.06
7,959.87
Total 37,459.87
Upon receipt of said statement, and on the same day, April 27,1928, the attorneys of the Asia Banking Corporation addressed a letter to the PHILIPPINE NATIONAL BANK requesting the reconsideration thereof.

The PHILIPPINE NATIONAL BANK declined to make the reconsideration but expressed its willingness to accept an additional sum of P7,511.36 in full payment.

In order to comply with its obligation to Urquijo Hermanos, the Asia Banking Corporation was forced to pay the PHILIPPINE NATIONAL BANK the amount of P7,511.36 under protest, made in a letter dated April 28, 1928.

On receipt of said amount, the PHILIPPINE NATIONAL BANK, on May 3, 1928, executed in favor of the Asia Banking Corporation a release of the mortgages on the lands in question (Exhibit H).

The real and exact state of accounts of Severino P. Aldeguer with the PHILIPPINE NATIONAL BANK from September 4, 1924 to April 25, 1928, is as follows:

1. Unpaid balance, as of April 11,1924, of his

P32,373.64 P29,500.00
B/Note, of July 5, 192S, for
Unpaid interest due thereon at 8% to April
9,392.42 P38,892.42
25, 1928

2. His promissory note, dated March 28,1925,

signed in favor of Felipe Gomez, payable 5,200.00
ah February 28,1926, negotiated with us
on September 8,1925
Unpaid interest due thereon at 10% from, 4
1,122.33 6,322.33
February 28, 1926 to April 25, 1928
3. His promissory note, dated February 15,
1926, signed in favor of Felipe Gomez,
300.00
payable on January 15, 1927, negotiated
with us on June 30, 1926
Unpaid interest due thereon at 10% from
49.93 439.93
February 15, 1927 to April 25, 1928
Total 45,654.68
LESS PAYMENTS MADE:
September 4, 1924 from his 1923/24
239.37
C/Loan
August 5,1925 from his 1924/25 C/Loan 756.18
August 5,1925 from his 1924/25 C/Loan 1,010.68
September 5, 1925 from his 1924/25
27.18
C/Loan
October 24,1925 from his 1924/25 C/Loan 129,96
November 25, 1925 from his 1924/25
1,209.07
C/Loan
April 22, 1927 from Ynchausti & Co.
surplus of his 1926/27 C/Loan a/c 4 2,166.75
with said Company
May 24, 1927 do 1,193.50
June 24, 1927 do 1,193.49
April 4, 1928 from Ynchausti & Co 2,074.06 10,000.24
Balance, April 25, 1928 35,654.44
With respect to the first assignment of error, the pertinent part of article 1922 of the Civil Code states:

"ART. 1922. With respect to determinate personal property of the debtor, the following are preferred:

*******

"6. Credits for seed and expenses of cultivation and harvesting, advanced to the debtor, with respect to the fruits of the crops which they were used to produce;

*******

"If the personal property, with respect to which the preference is allowed, has been removed, the creditor may claim it from the person who has the same, within the term of thirty days counted from the time it was so removed."

According to this legal provision, the PHILIPPINE NATIONAL BANK, having acquired the promissory notes executed by Severino P. Aldeguer in payment of the fertilizer used in the cultivation of the two parcels of land mortgaged to said Bank, had a preferred right to
the crops harvested on said lands from February 28, 1926 and January 15, 1927, on which dates the promissory notes fell due, and also the dates in which the crops produced by the fertilizer were presumably harvested. According to the agreed statement of facts,
Ynchausti & Co. delivered to the PHILIPPINE NATIONAL BANK sugar milled in its central from the cane grown upon Severino P. Aldeguer's land mortgaged to said bank. Instead of applying that sugar to the payment of the promissory notes acquired by it from Felipe
Gomez, applied it to the payment of its credit against Severino P. Aldeguer secured by the two parcels of land that produced said crops. In doing so, it waived its preferred right to said sugar for the payment of said promissory notes, because that preferred right
subsisted in so far as the sugar continued to belong to the debtor. From the time the PHILIPPINE NATIONAL BANK applied it to the payment of its credit against Severino P. Aldeguer, with the latter's consent, said sugar ceased to belong to said Severino P. Aldeguer,
and became the property of the aforesaid PHILIPPINE NATIONAL BANK. (12 Manresa, 635.)

With regard to the defendant-appellant's contention that Severino P. Aldeguer had a right to compel the PHILIPPINE NATIONAL BANK to apply said sugar to the payment of the promissory notes for the fertilizer, such debts being the most burdensome tp him, in
accordance with the provisions of articles 1172 and 1174 of the Civil Code, suffice it to say that such application should have been made at the time of payment, and not afterwards, when his account with the bank had already been credited.

The second question to be decided in this appeal is whether the Asia Banking Corporation had any right td the fruits and rents of the lands purchased at public auction, up to the 25th of April, 1928, when the sheriff of Occidental Negros issued the final deed of sale of
said lands in "its favor.

The pertinent part of the English text of section 463 of the Code of Civil Procedure, says:

"SEC. 463. Sale of real property and certificate thereof. Upon a sale of real property, the purchaser shall be substituted, to, and acquire all the right, interest, title, and claim of the judgment debtor thereto, subject to the right of redemption as hereinafter provided. * * *."
In the case of Riosa vs. Verzosa and Bulan (26 Phil., 86), this court laid down the following doctrine:

"SALE OF REALTY UNDER EXECUTION; RIGHT OF OWNER TO RETAIN POSSESSION DURING PERIOD OF EQUITY OF REDEMPTION; EJECTMENT OF OWNER BY PURCHASER.When real estate is sold under an execution and the owner is in possession
thereof, he is entitled to remain in possession of the property sold and to collect the rents and profits of the same during the period of the equity of redemption. (Sections 464, 465, 468, and 469 of Act No. 190; De la Rosa vs. Santos, 10 Phil., 148.) By virtue of the
provisions of section 469 (Act No. 190) where the land is in possession of a tenant at the time of the sale under execution, a different rule prevails."

In the case of Velasco vs. Rosenberg's Incorporated (32 Phil., 72), this court likewise laid down the following doctrine:

"EXECUTION SALE; RIGHT OF PURCHASER TO COLLECT RENT DURING PERIOD OP REDEMPTION.The judgment debtor who is in possession of property sold under execution cannot be required to pay the purchaser rent for such property, during the period of
redemption."

And in the case of Pabico vs. Ong Pauco (43 Phil., 572), this court also laid down the following doctrine:

"1. SHERIFFS'; EXECUTION SALES; PLACING PURCHASER IN POSSESSION.The doctrine of caveat emptor applies. to execution sales and the sheriff has no authority to place a purchaser of land under such a sale in possession. In attempting to do so he
becomes a trespasser and an action for forcible entry and detainer may be maintained against the person so placed in possession.

"2. TRANSLATION.Correction of the Spanish translation of section 463 of the Code of Civil Procedure."

Section 465 of the Code of Civil Procedure, provides as follows:

"SEC. 465. Time and manner of redemption.The judgment debtor, or redemptioner, may redeem the property from the purchaser, at any time within twelve months after the sale, on paying the purchaser the amount of his purchase, with one per cent per month interest
thereon in addition, up to the time of redemption, together with the amount of any assessments or taxes which .the purchaser may have paid thereon after purchase, and interest on such last-named amount at the same rate. * * *"

According to the doctrines quoted above, the purchaser of a debtor's real property at public auction by virtue of a writ of execution of a judgment, has no right to collect the rents or receive the products thereof during the period of legal redemption when said debtor is in
possession of them. Nothing could be more just or equitable; for, if by section 465 of the Code of Civil Procedure quoted above, the debtor must pay 1 per centum monthly interest on the purchase price, at the time of the redemption, the purchaser would profit twice, if
in addition to said interest he were entitled to the rents and fruits of the land sold which remained in the possession of the debtor. If the debtor is unable to make the repurchase, the interest on the purchaser's capital during the period of redemption, is compensated by
the difference between he true value of the land sold and the purchase price; for, it is well-known that the price obtained at judicial sales for land subject to execution is usually less than the market value.

Now then, from what time is the purchaser entitled to the fruits and rents of the real property purchased remaining in possession of the debtor in case the debtor failed to take advantage of his right to repurchase?

Section 465 of the Code of Civil Procedure, quoted above, provides that the judgment debtor may redeem the thing sold from the purchaser within twelve months following the day of the sale, by paying the selling price plus interest at the rate of one per centum per
month; and section 466 of the same law provides that if within the twelve months following the sale no redemption is made, the purchaser or his successor in interest is entitled to the proper deed of conveyance, or, what amounts to the same thing, the purchaser
becomes the owner of the property purchased, otherwise he would not be entitled to the proper deed of conveyance. As absolute owner of the land, the purchaser is entitled to its possession and to receive the rents and fruits thereof, and the judgment debtor is obliged
to deliver said land, together with the fruits and rents collected since the ownership was consolidated by reason of failure of redemption, except that he is entitled to reimbursement for expenses of cultivation, harvesting, and preservation, according to article 356 of the
Civil Code.

In the instant case, while it is true that the judgment debtor Severino P. Aldeguer was entitled to retain possession of the parcels of land acquired by the Asia Banking Corporation at public auction by virtue of execution, and to collect the fruits and rents pending the
expiration of the period of redemption, inasmuch as he failed to exercise his right of redemption within the twelve months following the day of the sale, which took place on March 30, 1925, the ownership of the same became consolidated in the purchaser, the Asia
Banking Corporation, and from March 30, 1926, said bank was entitled to collect the fruits and rents of said lands, until the final delivery of the latter to it on April 23,1928, when the final deed of sale of the lands was executed in favor of said Asia Banking-Corporation.

According to the statement of Severino P. Aldeguer's account with the PHILIPPINE NATIONAL BANK, submitted by the latter to the Asia Banking Corporation, all the products of said lands up to April 4, 1928 were delivered by Ynchausti & Co. to said PHILIPPINE
NATIONAL BANK, and credited to said Severino P. Aldeguer's account with the latter. When said PHILIPPINE NATIONAL BANK, then, applied the products of the lands mortgaged to it to secure the payment of Severino P. Aldeguer's mortgage debt, from 1927 to
1928, said products already belonged to the Asia Banking Corporation.

Summarizing, then: (1) When the PHILIPPINE NATIONAL BANK, as mortgage creditor of Severino P. Aldeguer and assignee of Felipe Gomez's rights to the promissory notes for the fertilizer used by Severino P. Aldeguer in the cultivation of the lands mortgaged to
said bank, applied the products of said lands to the payment of its mortgage credit, it waived its preferential right over said products for the amount of the aforesaid promissory notes; (2) from March 30, 1925 when Severino P. Aldeguer's right of redemption of the two
parcels of land in question was sold at public auction to the Asia Banking Corporation by virtue of execution, until March 30, 1926, when the period of redemption expired, the fruits and rents collected from said lands belonged to said Severino P. Aldeguer as judgment
debtor in possession thereof; and (3) that from March 30,1926, when the ownership of the Asia Banking Corporation was consolidated, the latter being the purchaser at public auction of Severino P. Aldeguer's right of redemption, until April 23, 1928, when the final
deed of sale of the fruits and rents was issued in favor of said Asia Banking Corporation, the said fruits and rents from said lands, belonged to the last mentioned banking corporation.

Wherefore, we are of opinion and so hold: (1) That a mortgagee who, at the same time, is a holder of promissory notes for the value of fertilizer used in the cultivation of the mortgaged lands, and who collects said products and applies them to his mortgage credit,
waives the preferential right granted to him by article 1922, case 6, of the Civil Code, upon said products, the amount of said promissory notes becoming an ordinary credit; (2) that the judgment debtor in possession of land by virtue of execution is entitled to collect its
fruits and rents during the year fixed by the law for the redemption (Riosa vs. Verzosa and Bulan, 26 Phil., 86; Velasco vs. Rosenberg's Incorporated, 32 Phil, 72); and (3) that if the period for redemption expires without the judgment debtor having made use of his right,
the ownership of the land sold becomes consolidated in the purchaser, who thereupon becomes entitled to collect its fruits and rents, paying the judgment debtor the expenses of cultivation, harvesting and preservation (article 356, Civil Code).

As to the question of procedure raised by the defendant-appellant, who contends that to affirm the judgment appealed from Would amount to ordering Severino P. Aldeguer, who is not a party in this case, to pay the amount of said judgment, we hold that there is no
merit in such contention, because, as he is not a party to this case, the decision cannot affect him; and, furthermore, as he is not a necessary party for the final solution of the questions raised by the parties herein between themselves, he need not be impleaded.

For the foregoing considerations, and finding no error in the judgment appealed from, the same is affirmed' in its dispositive part, with costs against the appellant. So ordered.
 G.R. No. L-4013 February 4, 1909
JUSTO GUIDO, ET AL.,Plaintiffs-Appellees, v.AGUSTIN DE BORJA, ET AL.,Defendants-Appellants.
W.A. Kincaid, for appellants.
Pedro Concepcion, for appellees.
ARELLANO, C.J. :chanrobles virtual law library
This action was instituted by the heirs and successors of Francisco Guido and Dominga Santa Ana, to recover the ownership and possession of the hacienda of Angono, against the defendant, who, being tenants of the said hacienda until the year 1903, denied the ownership of the plaintiffs and
themselves pretended to be the owners of the hacienda. The Court of First Instance of the Province of Rizal rendered final judgment, the findings of which, impugned upon appeal by the defendants, are the following: chanrobles virtual law library
1. That the ownership and possession of the hacienda of Angono, as it appears described in the decision of said court, in accordance with the amended complaint, pertains to Justo Guido, Juliana Guido, Buenaventura Guido and other participants with them in said hacienda; by virtue thereof the court
below ordered the defendants to restore said possession to the plaintiffs.chanroblesvirtualawlibrary chanrobles virtual law library
2. That the fruits or crops and plantings of the defendants on the said hacienda of Angono do not belong to the plaintiffs, and in lieu thereof the court below sentences each one of the defendants respectively to pay the plaintiffs and their participants such sums in money and paddy as they may owe
them, as itemized in the statements attached to the complaint under numbers 1, 2, 3, and 4. A list of the names of the defendants with the statement of the respective amounts to the payment of which they were sentenced, follows.chanroblesvirtualawlibrary chanrobles virtual law library
3. That the costs of this suit should be paid by the defendants. By virtue of their appeal to this court the defendants and appellants presented in their brief the following assignment of errors:
I. The lower court erred in considering that all the defendant appellants are properly joined in the complaint of the plaintiff appellees.chanroblesvirtualawlibrary chanrobles virtual law library
II. The lower court erred in holding that it had jurisdiction of the claim brought by the plaintiff appellees.chanroblesvirtualawlibrary chanrobles virtual law library
III. The lower court erred in declaring that the ownership and possession of the land in question by the plaintiff appellees had been proven.chanroblesvirtualawlibrary chanrobles virtual law library
IV. The lower court erred in declaring that it had been proven that all the defendant appellants were tenants and lessees on shares of the hacienda on Angono.chanroblesvirtualawlibrary chanrobles virtual law library
V. The lower court erred in considering as proven that the defendant appellants owe the plaintiff appellees for ground rent, or for lease on shares, the amounts in money and in products which are itemized in the statements Nos. 1, 2, 3, and 4 attached at the complaint.
The two first errors are of form or procedure, and the three following deal with the merits of the case; beginning with the last three, let us discuss the third error: chanrobles virtual law library
THIRD ERROR.chanroblesvirtualawlibrary chanrobles virtual law library
The ownership of the appellees, with respect to the hacienda of Angono, is discussed in this point; the appellants produce the documentary evidence, Exhibits A, B, C, 6, 7, 8, 9, and D, which constitute principally the titles of ownership of the appellees; and in brief, they saw that it is necessary to
consider the Hacienda as divided in two parts - one half corresponding to Francisco Guido and the other half to Dominga Santa Ana, the principals, as has been said, of the appellees.chanroblesvirtualawlibrary chanrobles virtual law library
With regard to the whole of the Hacienda and of the original titles of acquisition thereto, which are in no way impugned, it is now alleged by the appellants: 1. That originally the estancia or small farm of Angono was granted to General Don Domingo Antonio de Otero Bermudez, who was a Spaniard, to
the prejudice of the inhabitants of Angono, who were Indios, in violation of laws 7 and 8, title 12, book 3 [4], of the Recopilacion de las Leyes de Indias; and that when the title was issued, with royal approval, in favor of the Alferez Real Don Andres Blanco Bermudez, as successor to Don Domingo
Antonio de Otero Bermudez, it was done without prejudice to third persons who might show a better right, which indicates that the ownership and possession of Don Andres Blanco Bermudez were not absolute.chanroblesvirtualawlibrary chanrobles virtual law library
With reference to the half of the Hacienda derived from Francisco Guido, the appellants allege that the said half is not entered in the registry of property, and that, according to article 23 of the Mortgage Law, the titles can not prejudice third persons. The said article provides that:
The instruments mentioned in article 2 and 5 which are not duly recorded or entered in the registry can not prejudice third persons.chanroblesvirtualawlibrary chanrobles virtual law library
The record of real property and property of rights, acquired through an inheritance or legacy, shall not prejudice third persons until five years have elapsed since the date thereof, excepting in cases of testate or intestate inheritances, legacies and additions thereto ( mejoras), when left to legal heirs.
Therefore, the defendants being third parties with respect to the plaintiff, the titles of property presented by the latter can not prejudice the former.chanroblesvirtualawlibrary chanrobles virtual law library
With respect to the other half derived from the succession of Dominga Santa Ana, it is alleged that, although the possession is recorded in the registry of property, as such registration dates only from the 15th of July, 1899, it can not convert the title of possession into a title of ownership except at the
expiration of twenty-years, according to the provisions of article 393 of the Mortgage Law, and consequently the present title is not one of ownership.chanroblesvirtualawlibrary chanrobles virtual law library
The original title to the whole hacienda of Angono is by composicion and royal approval issued on the 16th of December, 1749, and 15th of September, 1752; the former being an order of the following tenor:
ORDER. - In the farmhouse of the Hacienda of Angono, which is in the Province of La Laguna de Bay, on the 16th day of the month of December in the year 1749, the Señor Licenciado Don Pedro Calderon Enriquez, of His Majesty's council, oidor (associate justice) of the Real Audiencia of these
Islands and special judge of the Commission for the sale and composition of lands in the whole district thereof. Having seen the instruments of title that General Don Domingo Antonio de Otero Bermudez has produced for the purpose of substantiating the legitimate ownership and possession and that
he has of the so-called hacienda of Angono, together with the other lands and estancia of Binangonan and the lime quarries of San Guillermo, all of them consolidated under the name of hacienda and estancia of Angono, with the acknowledgment and declaration which, in view of the said original
documents, was made by Señor Don Juan de Ozaeta y Oro, who was a member of His Majesty's council, oidor of the Real Audiencia of these Islands, and special judge of the said land commission for the year 1699, approving the said titles and holding of the same to be good; and having also seen
the record of the proceedings instituted by the natives of the town of Binangonan before the Superior Government of these Islands, wherein they claim to be entitled to certain lands belonging to said estancia, which record was forwarded to this land court; and bearing also in mind the proceedings
upon the visit, demarkation and survey just made of the limits of said hacienda, together with the claims of the natives leading to the greater and better knowledge of the true boundaries of the said hacienda, the said oidor said: That it was his duty to declare, and he does hereby declare, that the titles
presented by the said General Don Domingo Bermudez are good and legitimate, and in consequence thereof the true limits of the said hacienda run through the places and localities stated in the proceedings in connection with the demarkation and survey just made.chanroblesvirtualawlibrary
chanrobles virtual law library
ORDER - At the city of Manila on the 15th day of the month of September, 1752, Señor Don Pedron Calderon Enriquez, of His Majesty's council, oidor and alcalde del crimen of the Real Audiencia of the Islands and special judge of the Commission for the sale and composition of land in the whole of
its territory, having seen the record of proceedings in which are described the demarkation and survey of the estancia of Angono, with the prayer of the Alferez Real Don Andres Blanco Bermudez, who succeeds to said lands by reason of the death of said General Don Domingo de Otero Bermudez,
his uncle to the effect that his title to the said estancia and lime quarries be affirmed by means of resolution, and after examining everything that was proper to see and examine the said gentlemen stated that it was his duty to order, and that he does hereby order that title of confirmation in due form be
issued to the said Alferez Real of this most noble city, Don Andres Blanco Bermudez of the aforesaid titles, and in view of the said instruments and declaratory order above inserted he directed that the present title of confirmation of the said titles be issued in proper form in order that may be held and
considered as such true and legitimate titles, and the Alferez Real Don Andres Blanco Bermudez as the lawful possessor and owner of the said hacienda, and he hereby orders every one not to presume to molest, disturb the legitimacy or the aforesaid titles: Provided, however, That they shall not
prejudice third persons having a better right, and that the said declaratory orders and this confirmation shall be observed by all judges and their substitutes until His Majesty may order otherwise.
The first order was at the same time a resolution entered in the proceedings had before the Superior Government of these Islands by the people of Binangonan, and, in connection with the proceedings the said order contains this declaration:
That the said natives do not possess, nor have they produced any lawful title to prove the ownership or possession of the lands belonging to said hacienda which they took and occupied by force of arms in the year 1745, at a time when several towns mutinied and revolted, and that none of the said
natives, although they were summoned and saw the tape passed through the limits and neighborhood of their town, came forward to claim, contradict, or protest in any way or point out a different stream or river named Mabalan, and the said gentleman ordered that the inhabitants of the said town be
notified to abstain in future from working the lands that they occupied and which are separated by said stream, as otherwise they would be punished for inference and for again occupying them without the will and consent of the owner thereof; for the same act the gobernadorcillo, officials and cabezas
de barangay are sentenced to be deprived of their offices and to be confined with hard labor, in the Cavite Prison on ration and without salary, and otherwise as may be proper.
From the foregoing it appears that the absolute ownerships granted by the State to the first persons to acquire the property, Otero and Blanco, is fully proven; their titles of ownership are made final by virtue of the provision of the real cedula of October 15, 1754, article 5 of which reads as follows:
Neither shall possessors of lands sold or adjusted by the various subdelegates from the year 1700 to the present time be molested, disturbed, or denounced, now or at any other time, with respect to such possession, if such sales or adjustments shall have been confirmed by me, or by the viceroy or
the president of the court of the district in which the lands are located, while authorized to exercise this power. In cases where the sales of adjustments shall not have been so confirmed, the possessors will present to the courts of their respective districts and to the other officials hereby empowered to
receive the same, a petition asking for the confirmation of said sales and adjustments. After the proceedings outlined by the subdelegates in their order with respect to the measurement and valuation of the said lands, and with reference to the title issued officials will make an examination of the same
for the purpose of ascertaining whether the sale or adjustment has been made without fraud or collusion, and for an adequate and equitable price, and a similar examination shall be made by the prosecuting attorney of the district, to the end that, in view of all the proceedings, etc., there will be issued
to the possessor, in my royal name, a confirmation of his title, by authority of which his possession and ownership of lands and waters represented will be fully legalized, to the end that at no time will be or his heirs or assigns be distributed or molested therein. (Cited in the case of Andres Valenton vs.
Manual Murciano, 3 Phil. Rep., 537, 546.)
The said titles are therefore absolute and unconditional notwithstanding the clause, of mere matter of form, of "without prejudice to third persons who may prove a better right." The natives or residents of the town of Angono could never be such persons with a better right either as against Otero, or
Blanco, nor against their successors Miguel Cacho, Pascual Santa Ana, and Francisco Guido, because, in the first place, they constituted a town within the same Estancia or Hacienda of Angono, and they could hardly constitute a different entity which for the time being - that is, at the commencement
of the hacienda - might invoke a right of its own, when those tenants of the hacienda had but a precarious right in opposition to the owners thereof; and in the second place, because similarly to those of Binangonan who expressed their opposition, it may be said and shown as stated and established in
the judgment appealed from, that up to this day they have not been able to produce their title of ownership or of possession.chanroblesvirtualawlibrary chanrobles virtual law library
It must be added to this that if they ever had any right, they can not exercise it except in the form and manner prescribed in article 8 of the royal decree of the 26th of January, 1889, and article 5 of the royal decree of the 26th of October, 1881; they could only direct their claims against the
administration, and in no wise against the grantees of the land. (Valenton vs. Murciano, 3 Phil. Rep., 537, 554, 555.) chanrobles virtual law library
With respect to the half of the hacienda that according to the last transfers, was derived from Francisco Guido, the appellants have only alleged, as has been seen, that at the present time said titles of ownership lack force as against third persons, such as they hold themselves to be, for the reason that
they are not registered in the registry of property.chanroblesvirtualawlibrary chanrobles virtual law library
It is frequent error to mistake the third person of the civil law for the third person of the Mortgage Law; this error arises from the lack of knowledge, evidenced in many cases which have been heard by this Supreme Court, of the character of the latter law which operates in favor of third persons against
third persons, in relation to the solemnity and efficiency of the registration of a real right, in no wise in favor of a person who turns out to be and calls himself a third party because there are two other prior parties between whom some act or contract of acquisition or conveyance of ownership or of some
other real right exists; the appellants themselves have cited a paragraph of the commentaries to the Mortgage Law by Galindo and Escosura, of which the first lines reveal the intent and purposes of said law: "The object of the present mortgage system was to protect the rights of the person who
register his property against him who has not registered ...." (2, p. 419), and Manresa, the commentator of the Civil Code, in speaking of the Mortgage Law, says:
The law always tends to protect registered rights, to favor him who registers, and therefore, that the registration made shall prejudice those who have not registered. As a general rule it may be affirmed that where the law speaks of prejudice to a third person, said third person is the one defined by
article 27, as he who has not registered, nor participated in the act or contract that was registered; and whenever it says that a third person can not be prejudiced such third person is he who bases his right on a registered title. (4 Civil Code, 302.) chanrobles virtual law library
The different persons who may generally be considered as third parties with respect to each act or contract, are divided by the Mortgage Law into two groups; third parties of the effects of the civil law, and third parties for the effects of the Mortgage Law. While no registered title exist the civil law
governs; real rights arise or not independently of the registration, and the third parties may or may not be prejudiced without the intervention of the Mortgage Law. From the time that a written act or contract exists, there are third parties for the effects of said law, and registration, determines preference
and acquisition of rights to their prejudice. ( Ibid., 302.)
The provisions of the Mortgage Law are absolutely inapplicable to the present contention because the matter at issue does not fall within the purpose of said law; no one of the rights that are contested is registered; they are rights which can only be discussed and decided under the precepts of the civil
law or of the Civil Code now in force; and in the force of the Civil Code in force, against the titles of ownership put forward by the appellees, for the purpose of effecting the recovery of possession of the hacienda of Angono, the residents of said town, the appellants herein, set up no title whatever,
either of ownership or of possession; they only oppose the mere fact of the material possession of certain parcels of land of the said hacienda, which they held on lease or lease on shares until the year when, as one of the appellees states, they rose against the ownership of the
hacienda.chanroblesvirtualawlibrary chanrobles virtual law library
FOURTH AND FIFTH ERRORS.chanroblesvirtualawlibrary chanrobles virtual law library
The court below has no erred in considering as proven that all the appellants are tenants or lessees on shares of the hacienda of Angono.chanroblesvirtualawlibrary chanrobles virtual law library
Neither has it erred in considering as proven that they own the appellees for ground rent, tenancy, or lease on shares, the amounts in money or in products itemized in the statements Nos. 1, 2, 3, and 4 filed with the complaint.chanroblesvirtualawlibrary chanrobles virtual law library
These allegations of error are based on the lack of identity of the defendants herein as such tenants or lessees on shares of the hacienda of Angono. It is admitted in the brief that out of 155 defendants 51 are shown to be tenants according to the documentary evidence offered and admitted at the trial;
it appears therein that they subscribed to proceedings served in February, 1898, on them personally as such tenants of the said hacienda, to compel them to deposit what they respectively had to pay for ground rent, tenancy, or lease on shares; but that it has not been proven that the others are such
tenants, except by the testimony of one witness and the four statements which accompany the complaint.chanroblesvirtualawlibrary chanrobles virtual law library
For the purpose of deciding this question, the reason alleged by the appellees in their answer is conclusive.
The identity said in the brief of the adverse party to be lacking with respect to some of the defendant appellants is altogether unnecessary and immaterial from the moment that the defendants, all of them, have appeared before the lower court and answered the complaint by their own names, as they
are named in the complaint. No question has been raised in the court below with respect to any of the names of the defendant appellants; on the contrary, as has been said they all appeared, and all of them answered the complaint by the same names that appear therein, which fact show their
admission of and conformity to this part of the complaint. (Brief, 17.)
FIRST ERROR.chanroblesvirtualawlibrary chanrobles virtual law library
The court below did not err in considering that all the defendants are properly joined in the complaint of the plaintiff appellees.chanroblesvirtualawlibrary chanrobles virtual law library
The appellants allege that they are not united in one sole contract so that by reason thereof, they may be sued jointly, and that the parcels of land which they respectively hold constitute matter for separate and distinct causes of action.chanroblesvirtualawlibrary chanrobles virtual law library
The accumulation of parties in this case is a result of the unity of action, unity of object, and unity of defense. Unity of action inasmuch as, in view of the attitude of the defendants, who seek to obtain the ownership of the hacienda, the complaint has for its object the recovery of possession of the lawful
owners who, until 1903, allowed the defendants to remain in possession of certain parcels thereof under contract of lease or lease on shares; unity of object, which can not be less than the entire hacienda, because it is detained in its entirety by the defendants, united together with the manifest intent
for the purpose; and unity of defense, because the pretension of the defendants is one, to wit, that of being themselves the owners of the hacienda. Joinder could not have been more imperative even if, after considerable expense and delay, a separate action had been brought against each one of the
tenants who now detain the hacienda. Section 114 of the Code of Civil Procedure, which the court below took into consideration, is applicable herein:
Any person should be made a defendant who has or claims an interest in the controversy or the subject-matter thereof adverse to the plaintiff, or who is necessary party to a complete determination or settlement of the questions involved therein.
Exhibit P, offered in evidence by the plaintiffs and admitted by the lower court over the exception of the defendants, which exception however, has not been brought before this court, is a notarial act drawn up at the instance of one of the plaintiffs, Justo Guido, for the purpose of obtaining a copy of the
resolution agreed upon by the tenants, and which Guido testified was delivered to him by Dominador Gomez, to whom the original was returned. It reads thus:
. . . all the residents of this town (Angono) attended a meeting, and, being assembled, Councilor Januario Villamayor, as president, took the floor and informed those present at the meeting that in consequence of the oppressed condition of this town, the inhabited portion of which is surrounded by an
hacienda possessed by the heirs of Doña Dominga Santa Ana, an investigation and search for documentary proofs to permit those who claim to be the owners to exercise acts of ownership was contemplated ... ; hence, in order to avoid, as much as possible, disturbing the peace of the inhabitants as
always happens in litigious questions of this kind, it is the opinion of the majority of the residents that an agreement should be entered into between the latter and the owners of the former, with the intervention of the Honorable W. Kincaid and Doctor Gomez, who promise to settle this matter peacefully
upon an offer to pay them with one-half of the level lands of the Hacienda within a reasonable period of time. Thereupon all parties present, after an extensive discussion of the matter, assented to said agreement being carried out and that adequate and clear contracts should be drawn up and
subjected to sound and indulgent criticism . . . .
It is evident that they unanimously promised to dispose of one-half of the hacienda in payment for their defense as though they were co-owners, knowing that they disposed of one-half of the hacienda which as they say, "surrounds the inhabited portion of the town," "the hacienda that is possessed by
the heirs of Doña Dominga Santa Ana," whom "within a reasonable period of time," they purposed to spoliate of the whole of it, and immediately thereafter to dispose of one-half of its level lands in order to pay their lawyer and the above-named Doctor Gomez.chanroblesvirtualawlibrary chanrobles
virtual law library
SECOND ERROR.chanroblesvirtualawlibrary chanrobles virtual law library
Neither has the court below erred in holding that it had jurisdiction to hear the claim brought by the plaintiff appellees - that is to say, the second cause of action with reference to the prayer that the defendants, now the appellants, be sentenced to pay the plaintiffs the amounts owing for ground rent,
tenancy, or lease on shares, as itemized in the statements filed with the complaint as a part thereof.chanroblesvirtualawlibrary chanrobles virtual law library
The argument on appeal consists of the citation of paragraph 3, section 56 of Act No. 136, and of the fact that, "from the same judgment appealed from, it has been fully demonstrated that, with the exception of Felix Miranda, none of the other defendants owe any one or all of the plaintiffs any amount
in money or in products equal to the sum of 100 dollars or more, excluding interest," which is the amount fixed by said section with reference to the jurisdiction of a Court of First Instance.chanroblesvirtualawlibrary chanrobles virtual law library
In proof of jurisdiction the court below cites section 90 of the Code of Civil Procedure, and the appellees cite in corroboration section 427 of the Code of California, according to which plaintiff may join several causes of action in complaint when they are based on "claims to recover a specific piece of
realty, with or without damages for its retention or injury, and the rents and products of the same." chanrobles virtual law library
The natural effect of an action for recovery is the restoration of the thing together with the fruits, accessories, and payment of damages. In the second finding of the judgment appealed from, the plaintiffs were not granted the fruits or crops and plantings of the defendants on the hacienda of Angono, but
in exchange, each of them was sentenced to pay the amounts in cash and in palay (paddy) which they appeared to be owing, as specified in the statements attached to the complaint as a part thereof.chanroblesvirtualawlibrary chanrobles virtual law library
The fruits that the defendants are obliged to restore, together with the thing not belonging to but retained by them, are not only the naturals fruits, which have justly been denied by the judgment appealed from, but also the civil fruits which consist of the rent for the buildings and the price of the lease of
the lands. (Civil Code, 335.) chanrobles virtual law library
Beginning with fact that the crops or products of the detained lands are fruits obtained by those who, as tenants, worked the lands, it was not proper to deprive them of the same; but from the moment that they desired to usurp the ownership of the hacienda, and commenced to act in the bad faith with
which they present retain possession, instead of owing those fruits they owe the civil, not, however, by virtue of a contract which they now disown, but by virtue of the right of accession which accompanies the right of recovery. And if they were sued as one sole party for the restitution of the hacienda,
they must be sued as such for the restitution of its civil fruits, in their character of accessories not as matter of compliance with a lease contract; for all of which reasons the finding in the judgment is fully in accordance with the law.chanroblesvirtualawlibrary chanrobles virtual law library
In view of the foregoing, the judgment appealed from is hereby affirmed with the costs of this instance against the appellants.chanr
Bachrach Motors v. Talisay-Silay Milling [G.R. No. 35223. September 17, 1931.]

En Banc, Romualdez (J): 7 concurring

Facts: On 22 December 1923, the Talisay-Silay Milling Co., Inc., was indebted to the PNB. To secure the payment of its debt, it succeeded in inducing its planters, among whom
was Mariano Lacson Ledesma, to mortgage their land to the bank. And in order to compensate those planters for the risk they were running with their property under that mortgage,
the aforesaid central, by a resolution passed on the same date, and amended on 23 March 1928, undertook to credit the owners of the plantation thus mortgaged every year with a
sum equal to 2% of the debt secured according to the yearly balance, the payment of the bonus being made at once, or in part from time to time, as soon as the central became free of
its obligations to the bank, and of those contracted by virtue of the contract of supervision, and had funds which might be so used, or as soon as it obtained from said bank authority
to make such payment.

<It seems Mariano Lacson Ledesma is indebted from Bachrach Motor; the circumstance of which is not found in the case facts.>

Bachrach Motor Co., Inc. filed a complaint against the Talisay-Silay Milling Co., Inc., for the delivery of the amount of P13,850 or promissory notes or other instruments of credit
for that sum payable on 30 June 1930, as bonus in favor of Mariano Lacson Ledesma. The complaint further prays that the sugar central be ordered to render an accounting of the
amounts it owes Mariano Lacson Ledesma by way of bonus, dividends, or otherwise, and to pay Bachrach Motors a sum sufficient to satisfy the judgment mentioned in the
complaint, and that the sale made by said Mariano Lacson Ledesma be declared null and void. The PNB filed a third

party claim alleging a preferential right to receive any amount which Mariano Lacson Ledesma might be entitled from Talisay-Silay Milling as bonus. Talisay-Silay answered the
complaint that Mariano Lacson Ledesma’s credit (P7,500) belonged to Cesar Ledesma because he had purchase it. Cesar Ledesma claimed to be an owner by purchase in good faith.
At the trial all the parties agreed to recognize and respect the sale made in favor of Cesar Ledesma of the P7,500 part of the credit in question, for which reason the trial court
dismissed the complaint and cross-complaint against Cesar Ledesma authorizing the central to deliver to him the sum of P7,500. And upon conclusion of the hearing, the court held
that the Bachrach Motor Co., Inc., had a preferred right to receive the amount of P11,076.02 which was Mariano Lacson Ledesma’s bonus, and it ordered the central to deliver said
sum to Bachrach Motors. PNB appealed.

The Supreme Court affirmed the judgment appealed from, as it found no merit in the appeal;, without express finding as to costs.

1. Civil Fruits under Article 355 of the Civil Code

Article 355 of the Civil Code considers three things as civil fruits: First, the rents of buildings;

second, the proceeds from leases of lands; and, third, the income from perpetual or life annuities, or other similar sources of revenue. According to the context of the law, the phrase
“u otras analogas” refers only to rents or income, for the adjectives “otras” and “analogas” agree with the noun “rentas,” as do also the other adjectives “perpetuas” and “vitalicias.”
The “civil fruits” the Civil Code understands one of three and only three things, to wit: the rent of a building, the rent of land, and certain kinds of income.

2. Bonus not a civil fruit; not an income of the land

The amount of the bonus, according to the resolution of the central granting it, is not based upon the value, importance or any other circumstance of the mortgaged property, but upon
the total value of the debt thereby secured, according to the annual balance, which is something quite distinct from and independent of the property referred to. As the bonus is not
obtained from the land, it is not civil fruits of that land. It is neither rent of buildings, proceeds from lease of lands, or income under Article 355 of the Civil Code.
 G.R. No. L-30240 August 23, 1929
AQUILINA TACAS, ET AL., Plaintiffs-Appellees, v. EVARISTO TOBON, Defendant-Appellant.
Simeon Ramos, Benito Soliven and J. Belmonte for the appellant.
Vicente Paz for appellee.
VILLAMOR, J.:
This is an action to recover from the defendant the ownership and possession of three parcels of land described in the sketch attached to the complaint, together with the fruits collected by him during the time he was in possession of said land that is, since January, 1912, it being alleged that the
defendant unlawfully took said parcels upon the death of Francisco Dumadag, predecessor in interest of the plaintiffs; and that he remained in possession, enjoying the fruits to the value of P700 annually.chanroblesvirtualawlibrary chanrobles virtual law library
In his answer the defendant alleges that he is the owner of said lands, having purchased from one Exequiel or Gil Tacas, deceased, about fifteen years before the amended answer dated December 5, 1924.chanroblesvirtualawlibrary chanrobles virtual law library
At the trial the parties adduced their respective evidence, and thereafter the trial court declared it sufficiently proven by a preponderance of the evidence that the three parcels of land under discussion, were parts of an estate belonging to Francisco Dumadag, whose title is a possessory information
recorded in the registry of deeds of Ilocos Sur, having inherited them from his parents (Exhibit H); that during his lifetime, said Francisco Dumadag was in possession of the land as owner from many years, until his death on November 17, 1911, enjoying its fruits, consisting in rice, corn, tobacco, and
vegetables; that said Francisco Dumadag had filed a declaration for tax purposes in his own name; that the land tax had been paid by Francisco Dumadag during the years 1908 and 1911, and in his name in the years from 1912 to 1914 (Exhibits I to P); that in January, 1912, during the season for
planting tobacco immediately following the death of Francisco Dumadag, Evaristo Tobon took possession of the three parcels of land in question planting them with tobacco; that from 1912 up to the present, the defendant Evaristo Tobon has been collecting the fruits therefrom, consisting of 300
sheaves of rice and 300 manos of first, second, and third-class tobacco each year, at the approximate rate of P0.30 for each sheaf of rice, and P 3 for each mano of first-class tobacco, P 2.50 for second-class tobacco, and P 2 for third-class tobacco. There is no evidence of record regarding the
amount and price of the corn collected by the defendant. And by virtue thereof, the trial court declared the plaintiffs to be the absolute owners of the three parcels of land in litigation, and ordered the defendant Evaristo Tobon to deliver said parcels of land to the plaintiffs, together with the fruits
collected each year since 1912 until the complete termination of this case, and in default thereof, to pay to said plaintiffs the sum of P 11,040, which is the total value of the rice and tobacco from 1912 to 1927, at P 0.30 per sheaf of rice, and P 2 per mano of tobacco. From this judgment, the defendant
duly appealed in time, prosecuting his appeal to this court by the proper bill of exceptions.chanroblesvirtualawlibrary chanrobles virtual law library
The appellant had made several assignments of error. In the first place, he contends that the identity of the pieces of land in litigation has not been established. We find no merit in this contention. It appears from the allegations of the complaint and the answer, that the case refers to the lands held by
defendant and alleged by the latter to have been purchased from one Exequiel or Gil Tacas, brother to the plaintiff Aquilina Tacas.chanroblesvirtualawlibrary chanrobles virtual law library
With regard to the probatory value of the documents presented by the parties, to wit, Exhibit H of the plaintiffs, and Exhibits 1 and 2 of the defendant, it is well to note that Exhibit H is a possessory information record duly approved on March 22, 1895 and inscribed in the registry of deeds of Ilocos Sur
on November 4, 1917 in favor of Francisco Dumadag, covering some land situated in the sitio of Sisin, municipality of Magsingal, Ilocos Sur.chanroblesvirtualawlibrary chanrobles virtual law library
On the other hand, Exhibit 1 of the defendant is an instrument executed on January 17, 1905 whereby one Exequiel or Gil Tacas sold three parcels of farm land in the place called Sisin to Evaristo Tobon for P 300 conan. And Exhibit 2 of the same defendant is another instrument executed on May 15,
1909 from which it appears that Francisco Dumadag and his brother-in-law, Gil Tacas, agreed that the three parcels of land belonging to the latter, together with the two parcels of the former in Anteng, Barrio of Carisquis, would be put in Dumadag's name in the possessory
proceedings.chanroblesvirtualawlibrary chanrobles virtual law library
The court below made a detailed analysis of the signature of Ramon G. Tolentino who, as justice of the peace, signed the ratification of the document Exhibit 1, comparing it with the unquestioned signatures of the same person, appearing in Exhibit 2, and concludes that the instrument Exhibit 1 is
false.chanroblesvirtualawlibrary chanrobles virtual law library
It is unnecessary to descend to the discussion of the characteristics of Ramon G. Tolentino's signature, he being the justice of the peace who ratified the document Exhibit 1, for, even granting that said instrument is genuine, it appears that Gil or Exequiel Tacas could not validly convey the lands in
question to the defendant Evaristo Tobon, inasmuch as according to the possessory information, said lands belong to and were in possession of Francisco Dumadag even before 1895, until his death, which took place in November, 1911.chanroblesvirtualawlibrary chanrobles virtual law library
The document Exhibit 2 argues nothing against our conclusion, for it is a contradiction to hold that in 1909 Francisco Dumadag agreed with his brother-in-law, Exequiel Tacas, that the three parcels of land belonging to the latter should be included in the former's possessory proceeding, considering that
the latter had already been approved by this order of March 22, 1895. In the ordinary course of events, if such an agreement had already been entered into, it should have been at the time of the institution of the possessory proceeding. Dumadag did not know how to sign his name, and besides, no
one had identified said document, Exhibit 2.chanroblesvirtualawlibrary chanrobles virtual law library
There is another reason why Exhibit 1 cannot prevail over Exhibit H, namely, that supposing that a sale was made in favor of the defendant in 1905, it was only in 1909 that Exhibit 2 was drawn in order to legalize the alleged transfer. Besides, despite the transfer of the lands in favor of the defendant
having taken place in 1905, according to Exhibit 1, the defendant did not enter upon the possession of said lands until after the death of the original owner Francisco Dumadag, which occurred in November, 1911.chanroblesvirtualawlibrary chanrobles virtual law library
Another error alleged by the appellant is that the trial court ordered him to deliver to the plaintiffs the fruits of the land from 1912 to 1927, or to pay their value, P 11,040.chanroblesvirtualawlibrary chanrobles virtual law library
The complaint in this case was filed on February 1, 1918. The bill of exceptions does not show when the defendant was summoned but it does not show that the letter docketed his answer to the complaint on April 11, 1918.chanroblesvirtualawlibrary chanrobles virtual law library
Evidence being lacking to show that when he entered upon the possession of the lands in question, he was aware of any flaw in his title or mode of acquiring it, he is deemed a possessor in good faith (article 433, Civil Code), and in accordance with article 451 of the Civil Code, the fruits of said lands
were his, until he was summoned upon the complaint, or until he has filed his answer thereto. (Saul vs. Hawkins, 1 Phil., 275; Javier vs. Javier, 6 Phil., 493; Cleto vs. Salvador, 11 Phil., 416; Valencia vs. Jimenez and Fuster, 11 Phil., 492; Araujo vs. Celis, 16 Phil., 329; Alcala and Alviedo vs.
Hernandez and Pacleb, 32 Phil., 628; Tolentino vs. Vitug, 39 Phil., 126; Aquino vs. Ta�edo, 39 Phil., 517; Rivera vs. Roman Catholic Archbishop of Manila, 40 Phil., 717; and Velasquez vs. Teodoro, 46 Phil., 757.)chanrobles virtual law library
Art 451 of the same Code provides:
Art. 451. Fruits received by one in possession in good faith before possession is legally interrupted become his own.chanroblesvirtualawlibrary chanrobles virtual law library
Natural and industrial fruits are deemed to have been received as soon as they are gathered and harvested.chanroblesvirtualawlibrary chanrobles virtual law library
Civil fruits are deemed to accrue from day to day, and belong to the possessor in good faith in this proportion.
In his comments upon this article of the Civil Code, Manresa, among other things, says:
But to every possessor in good faith there comes a time when he is considered a possessor in bad faith. When the owner or possessor with a better right comes along, where he becomes aware that what he had taken for granted is at least doubtful, and when he learns the grounds in support of the
adverse contention, good faith ceases. The possessor may still believe that his right is more secure, because we resign ourselves with difficulty to the sight of our vanishing hopes; but when the final judgment of the court deprives him of the possession, all illusion necessarily disappears. Although he
may not have been convinced of it before, the possessor becomes aware that his possession is unlawful from the time he learns of the complaint, from the time he is summoned to the trial. It is at this time that his possession is interrupted, according to article 1945, and that he ceases to receive the
fruits, according to the first paragraph of article 451. The ruling of the court retroacts to that time; but shall good faith be deemed to cease then ? Although there is a great difference between requiring the possessor in good faith to return the fruits he received from the time when his possession was
legally interrupted, and considering him a possessor in bad faith for all legal purposes from that time, the law had to establish a definite rule in the matter, which is none other than that deducible from a combination of articles 452, 1945 and 435. Whether or not the defendant be a possessor in bad faith,
for there is no doubt that he can be, and the law makes no attempt to deny it, from the service of judicial summons, there exists an act that this possessor knows that his right is not secure, that someone disputes it, and that he may yet lose it; and if the court holds that restitution be made, that time
determines all the legal consequences of the interruption, the time when the possession in good faith ceased to be so before the law.chanroblesvirtualawlibrary chanrobles virtual law library
The decisions of April 27, 1877, April 22, May 10 and June 13, 1878, February 11, and October 5, 1885, March 17, 1891, March 4, and May 17, 1893, held that good faith ceased when the answer to the complaint was filed, taking this doctrine from the Partidas. By analogy, the service of the summons,
doubtless more certain and more difficult to evade, is now admitted, according to articles 451 and 1945 of the Code, and it is in this sense that the decisions of the Supreme Court of January 28, 1896, December 7, 1899, November 23, 1900, and July 11, 1903, must be understood, all of them holding
that even the possessor in good faith must return the fruits received from the time the answer to the complaint was filed, that is, from the time he became aware that he was in undue possession. (Manresa, Commentaries on the Spanish Civil Code, vol. 4, pp. 270, 271.)
By virtue of the foregoing, the judgment appealed from must be, as it is hereby, affirmed in so far as it holds that the plaintiffs are the owners of the lands in question, and that the defendant is bound to return to them the former.chanroblesvirtualawlibrary chanrobles virtual law library
And with regard to the award of damages, said judgment is hereby modified so that the defendant is only bound to return to the plaintiffs the fruits received from April, 1918 to 1927, that is, 300 sheaves of rice and 300 manos of tobacco, with the right to deduct the expenses of planting and harvesting
(art. 365 of the Civil Code), which shall be determined by the trial court, after hearing both parties.chanroblesvirtualawlibrary chanrobles virtual law library
The appellant shall pay the costs of this trial. So ordered.
Tacas vs. Tobon August 23, 1929

Facts: 3 parcels of land under discussion, were parts of an estate belonging to Francisco Dumadag, that during his lifetime, said Francisco Dumadag was in possession of the land as owner for many years, until his death on November 17,
1911, enjoying its fruits, consisting in rice, corn, tobacco, and vegetables; that said Francisco Dumadag had filed a declaration for tax purposes in his own name; that the land tax had been paid by Francisco Dumadag during the years 1908 and
1911, and in his name in the years from 1912 to 1914. Following the death of Francisco Dumadag, Evaristo Tobon took possession of the three parcels of land in question planting them with tobacco; that from 1912 up to the present, the
defendant Evaristo Tobon has been collecting the fruits therefrom, consisting of 300 sheaves of rice and 300 manos of first, second, and third-class tobacco each year.

RTC: Declared the plaintiffs to be the absolute owners of the three parcels of land in litigation, and ordered the defendant Evaristo Tobon to deliver said parcels of land to the plaintiffs, together with the fruits collected each year since 1912
until the complete termination.

Issue: Whether or not the defendant be a possessor in good faith.

Held:

That the case refers to the lands held by defendant and alleged by the latter to have been purchased from one Exequiel or Gil Tacas, brother to the plaintiff Aquilina Tacas. That supposing that a sale was made in favor of the defendant in 1905,
it was only in 1909 that drawn in order to legalize the alleged transfer. Besides, despite the transfer of the lands in favor of the defendant having taking place in 1905, the defendant did not enter upon the possession of said lands until after the
death of the original owner Francisco Dumadag, which occurred in November, 1911.

When the owner or possessor with a better right-comes along, when he becomes aware that what he had taken for granted is at least doubtful, and when he learns the grounds in support of the adverse contention, good faith ceases. Though
when the final judgment of the court deprives him of the possession, all illusion necessarily disappears. The possessor becomes aware that his possession is unlawful from the time he learns of the complaint, from the time he is summoned to
the trial. It is at this time that his possession is interrupted, according to article 1945, and that he ceases to receive the fruits, according to the first paragraph of article 451. Although there is a great difference between requiring the possessor in
good faith to return the fruits he received from the time when his possession was legally interrupted, and considering him a possessor in bad faith for all legal purposes from that time. That even the possessor in good faith must return the fruits
received from the time the answer to the complaint was filed, that is, from the time he became aware that he was in undue possession.
 HEIRS OF NICOLAS Y. OROSA, petitioners, this case has to be set for hearing to enable Goldenrod to prove its claim to the
vs. land in question
THE HON. EUTROPIO MIGRINO, and GOLDENROD, INC., .
respondents. Goldenrod claims that in 1977, during the pendency of this case, Delta Motors
G.R. Nos. 99338-40 February 1, 1993 Corporation acquired for value the contingent rights of Nicolas Orosa over the property, as well
FACTS: as the conflicting claims thereto of one Jose Velasquez.
In Maria Mayug Vda.de Cailles v Dominador Mayuga, et al., In 1980, the land registration court
the Court affirmed the trying Jose Velasquez' claims in LRC No. N-5416 excluded therefrom the land referred to as Lot
decision of the Court of Appeals, confirming ownership over a fifty-three (53) hectare parcel of 9 Psu-11411 Amd-2. Meanwhile, Delta somehow managed to obtain transfer certificates of
land located in Las Piñas, Rizal, more particularly referred to as Lot 9 Psu-11411 Amd-2, in titles over the land and sold this acquisition to Goldenrod in 1987.
favor of one Dominador Mayuga. The Court also extended the benefit of such confirmation to The latter then succeeded in
the latter's successor-in-interest, the late Nicolas Orosa. obtaining issuance in its favor of Transfer Certificates of Title Nos. 4893 and 4901, whose
After the case was remanded to Branch 151 of theRegional Trial Court, Pasig, where it technical descriptions overlapped "big portions" of the land referred to as Lot 9 Psu-11411
was originally docketed in 1958 as Land Registration Case No. 2839, the heirs of Nicolas Orosa Amd-2. In February 1989, Goldenrod sold the land covered by said transfer certificates of title
(petitioners herein) moved for execution of judgment. This motion was granted by the lower to a consortium composed of Fil Estate Management Inc., Arturo Y. Dy, Megatop Realty
court in its Order dated 25 October 1989, directing the Land Registration Authority to submit Development Inc., Peaksun Enterprises and Export Corporation, and Elena D. Jao
the property's amended technical description for approval. ("Consortium").
However, the LRA did not comply with said order because, among others, its records The contract of sale contained an undertaking on Goldenrod's part to
indicated that the property had previously been decreed in favor of one Jose T. Velasquez, to "defend the title of the VENDEES to the property against claims of any third person
whom was issued Original Certificate of Title No. 6122. whatsoever."
On 10 September 1990, Goldenrod, Inc. filed a motion for leave to intervene in the execution It is on the basis of this stipulation that Goldenrod seeks to intervene in the
proceeding, alleging an interest in the property which is the subject matter of LRC No. 2839. execution Proceedings of LRC
Petitioners opposed Goldenrod's motion, without success. The lower court permitted No. 2839.
Goldenrod to file its pleading in intervention through its Order dated 7 December 1990. Taking Goldenrod's own admissions at their face value, it is quite apparent that
Petitioners' motion for reconsideration therefrom was likewise denied in an Order dated 11 whatever
April 1991. direct and actual
5
legal interest it may have had over the land had been disposed of by
Hence this Petition for it for value in favor of the consortium in 1989 and that whatever residual legal interest in the
Certiorari property can be premised on Goldenrod's contractual undertaking, actually an express
and Prohibition.
warranty against eviction, is
ISSUE:
expectant or contingent
Whether Goldenrod has shown in its pleadings in intervention a sufficient legal interest
in nature. Presently, Goldenrod has no
in the land which is the subject matter of LRC No. 2839. legal interest in the property and its warranty can only be enforced by the consortium if the
HELD latter is dispossessed of the land by virtue of a proper action instituted by the Orosa heirs as
No. registered owners thereof.
The Court must observe that the lower court had evaded resolving this matter
But, the legal interest which entitles a person to intervene in a suit must be actual and
before permitting Goldenrod's intervention: material, direct and immediate. A party seeking to intervene in a pending case must show that
The Orosa heirs also contend that the purported intervenor failed to establish its he will either gain or lose by the direct legal operation and effect of a judgment.
alleged legal interest in these proceedings to the subject parcel of land 14
. In the present case, Goldenrod has failed to meet this criteria and the lower court gravely
Precisely, abused its discretion in permitting intervention after having overlooked this matter
1. CIVIL LAW; ACTIONS; INTERVENTION; MOVANT MUST HAVE DIRECT AND ACTUAL LEGAL INTEREST ON THE DISPUTED PROPERTY; ABSENCE THEREOF IN CASE AT BAR. — Taking Goldenrod’s own admissions at their face value, it is
quite apparent that whatever direct and actual legal interest it may have had over the land had been disposed of by it for value in favor of the consortium in 1989 and that whatever residual legal interest in the property can be premised on Goldenrod’s contractual
undertaking, actually an express warranty against eviction, is expectant or contingent in nature. Presently, Goldenrod has no legal interest in the property and its warranty can only be enforced by the consortium if the latter is dispossessed of the land by virtue of a proper
action instituted by the Orosa heirs as registered owners thereof. But, the legal interest which entitles a person to intervene in a suit must be actual and material, direct and immediate. A party seeking to intervene in a pending case must show that he will either gain or lose
by the direct legal operation and effect of a judgment. In the present case, Goldenrod has failed to meet this criteria and the lower court gravely abused its discretion in permitting intervention after having overlooked this matter.

2. ID.; ID.; REOPENING OF DECREE OF REGISTRATION WITHIN ONE YEAR FROM ENTRY UNDER PRESIDENTIAL DECREE NO. 1529; ACTUAL INTEREST IN THE LAND, INDISPENSABLE; CASE AT BAR. — It appears that the lower court cited
Section 32 of P.D. 1529, permitting the reopening of a decree of registration within one year after its entry, if the same was procured through actual fraud and a person is thereby deprived of any interest over the affected land. The difficulty with this view is that, as earlier
noted, Goldenrod had not shown any actual interest in the land of which it could have been deprived, on the basis of an actual or extrinsic fraud perpetrated by petitioners in the course of procuring their decree of confirmation. Goldenrod had merely alleged, rather
ambiguously, a cause of action against petitioners in that they "suddenly breached and disregarded the 1977 Agreement" (the sale between Nicolas Orosa and Delta). Even the public respondent made no finding that Goldenrod was the apparent victim of an actual fraud.
Hence its invocation of the remedy provided in Section 32 of P.D. 1529 was bereft of basis.

3. ID.; TORRENS SYSTEM OF LAND REGISTRATION; REGISTRATION COURT; ENTRY OF JUDGMENT; DIVESTS THE LOWER COURT IPSO FACTO OF ITS JURISDICTION. — Upon entry of the Court’s judgment in G.R. No. L-30859, the confirmation
of a registerable title, and the consequent adjudication of ownership over Lot 9 Psu-11411 Amd-2, in favor of petitioners’ predecessors-in-interest became a final and settled matter. Such entry of judgment operated ipso facto to divest the lower court of its general
jurisdiction to act in LRC No. 2839, save for the limited matter of supervising the process of executing the Court’s decision. The public respondent simply cannot, as it appears to be trying to do in this case, interpret or reverse the implication of this Court’s ruling that
petitioners are entitled to a Torrens title over Lot 9 Psu-11411 Amd-2, just because Goldenrod seeks to recall execution by making a supervening allegation that petitioners are no longer the owners thereof.

4. ID.; QUIETING OF TITLE; PLAINTIFF MUST HAVE AT LEAST EQUITABLE TITLE TO OR INTEREST IN THE PROPERTY IN LITIGATION; CASE AT BAR. — Under Article 447 of the Civil Code, the plaintiff in an action for quieting of title must at least
have equitable title to or an interest in the real property which is the subject matter of the action. Evidence of Goldenrod’s capacity on this point is inexistent because Goldenrod is not asserting a claim to the property. On the contrary, it had admitted having alienated its
interest in the land referred to as Lot 9 Psu-11411 Amd-2 to the consortium. Thus, Goldenrod is not an interested party capable of instituting an action to quiet title, either by intervening in LRC No. 2839 or by instituting a separate action. The right to commence such a
separate action pertains to its Vendee, if the latter wishes to defend the validity of its 1987 purchase from Goldenrod and to hold the Vendor Goldenrod liable on its warranty of title.
Pacific Farms, Inc. vs Simplicio Esguerra, et al.

Gr L-21783

November 29,1969

Facts:

Insular Farms, Inc. failed to pay ₱4,710.18 of the purchase price for lumber and other
construction materials used for construction of six buildings from Carried Lumber
Company.The Company instituted a civil case to recover the balance. The CFI ruled in favor
of the Company causing the sheriff to levy the six buildings constructed by Insular Farms.
Pacific Farms, Inc. filed a third-party claim claiming to be the owner of the buildings even
before the institution of the case by the Company. Still the buildings were judicially sold to
Carried Lumber Company.

On May 24, 1962, Pacific Farms filed a complaint seeking the nullification of the sale.

Issue:

Whether or not Article 447 of the Civil Code is applicable.

Decision:

The court ruled the Article 447 applies by analogy because it contemplates the constriction
of accessories, which in the case at bar are buildings, through the use of materials owned by
another person by the owner of the land.

Pacific Farms cannot be considered as a purchaser in good faith since Atty. Antonio Arante
was the counsel of Pacific Farms who signed the complaint and is also the president of
Insular Farms. Therefore, if such sale was in fact made, the fact that the property was
already purchased should have already been raised by the petitioner from the institution of
the case.

Therefore, in applying Article 447, the owner of the materials may have the materials
removed if no injury would be resulted, otherwise, he must be reimbursed of their value.
 Vicente Sto. Domingo Bernardo vs Catalino Bataclan

Gr L-44606

November 28, 1938

Facts:

Bernardo learned when he entered into the premises of the property purchased from Pastor Samonte that the latter authorised Catalino Bataclan to make improvements thereon. In a
civil case to secure possession, the court ruled that Baraclan was a builder and possessor in good faith and was entitled to reimbursement for the works and improvements,

The court gave the plaintiff 30 days within which to choose between the sale of the land or to buy the works. Bernardo decided to sell the land to the defendant but the latter informed
the court that he is unable to pay the sum required. The court then awarded the respondent 30 days to purchase the land or else the property will be sold in a public auction.

In the auction sale, Toribio Teodoro was the highest bidder. The purchaser sought judicial remedy for the possession of the property.

Issue:

Whether or not the defendant lost his right to retain the property pending payment for indemnity.

Decision:

The court ruled that the right to retain the property has already been lost. Due to the failure and inability of the defendant to pay the purchase price the subject property was sold in a
public auction which he himself asked for. Furthermore, he already received his share of the purchase price. Therefore, the court find no reason to keep the property in the possession
of the defendant.
 G.R. No. L-44606 November 28, 1938
VICENTE STO. DOMINGO BERNARDO, Plaintiff-Appellant, vs. CATALINO BATACLAN, Defendant-Appellant.
TORIBIO TEODORO, purchaser-appellee.
Pedro de Leon for plaintiff-appellant.
Angel H. Mojica and Francisco Lavides for defendant appellant.
Jose Y. Garde for appellee.
chanrobles virtual law library
LAUREL, J.: chanrobles virtual law library
This is an appeal taken by both the plaintiff and the defendant from the order of September 26, 1935, hereinabove referred to, of the Court of First Instance of Cavite in Civil Case No. 2428.chanroblesvirtualawlibrary chanrobles virtual law library

There is no controversy as to the facts. By a contract of sale executed from Pastor Samonte and others ownership of a parcel of land of about 90 hectares situated in sitio Balayunan, Silang, Cavite. To secure possession of the land from the vendors the said plaintiff, on July 20, 1929, instituted Civil
Case No. 1935 in the Court of First Instance of Cavite. The trial court found for the plaintiff in a decision which was affirmed by this Supreme Court on appeal (G.R. No. 33017). 1 When plaintiff entered upon the premises, however, he found the defendant herein, Catalino Bataclan, who appears to have
been authorized by former owners, as far back as 1922, to clear the land and make improvements thereon. As Bataclan was not a party in Case No. 1935, plaintiff, on June 11, 1931, instituted against him, in the Court of First Instance of Cavite, Civil Case No. 2428. In this case, plaintiff was declared
owner but the defendant was held to be a possessor in good faith, entitled to reimbursement in the total sum of P1,642, for work done and improvements made. The dispositive part of the decision reads:

Por las consideraciones expuestas, se declara al demandante Vicente Santo Domingo Bernardo dueño con derecho a la posesion del terreno que se describe en la demanda, y al demandado Catalino Bataclan con derecho a que del demandante le pague la suma de P1,642 por gastos utiles hechos
de buena fe en el terreno, y por el cerco y ponos de coco y abaca existentes en el mismo, y con derecho, ademas a retener la posesion del terreno hasta que se le pague dicha cantidad. Al demandante puede optar, en el plazo de treinta dias, a partir de la fecha en que fuere notificado de la presente,
por pagar esa suma al demandado, haciendo asi suyos el cerco y todas las plantaciones existentes en el terreno, u obligar al demandado a pagarle el precio terreno, a razon de trescientos pesos la hectarea. En el caso de que el demandante optara por que el demandado le pagara el precio del
terreno, el demandado efectuara el pago en el plazo convenientes por las partes o que sera fijado por el Juzgado. Sin costas.

Both parties appealed to this court (G. R. No. 37319). 2 The decision appealed from was modified by allowing the defendant to recover compensation amounting to P2,212 and by reducing the price at which the plaintiff could require the defendant to purchase the land in question from P300 to P200 per
hectare. Plaintiff was given by this court 30 days from the date when the decision became final within which to exercise his option, either to sell the land to the defendant or to buy the improvements from him. On January 9, 1934, the plaintiff manifested to the lower court his desire "to require the
defendant to pay him the value of the land at the rate of P200 per hectare or a total price of P18,000 for the whole tract of land." The defendant informed the lower court that he was unable to pay the land and, on January 24, 1934, an order was issued giving the plaintiff 30 days within which to pay the
defendant the sum of P2,212 stating that, in the event of failure to make such payment, the land would be ordered sold at public auction " Para hacer pago al demandante de la suma de P2,212 y el remanente despues de deducidos los gastos legales de la venta en publica subasta sera entregado al
demandante." On February 21, 1934, plaintiff moved to reconsider the foregoing order so that he would have preference over the defendant in the order of payment. The motion was denied on March 1, 1934 but on March 16 following the court below, motu proprio modified its order of January 24, " en
el sentido de que el demandante tiene derecho preferente al importe del terreno no se vendiere en publica subasta, a razon de P200 por hectares y el remanente, si acaso lo hubiere se entregara al demandado en pago de la cantidad de P2,212 por la limpieza del terreno y las mejoras introducidas en
el mismo por el citado demandado." On April 24, 1934, the court below, at the instance of the plaintiff and without objection on the part of the defendant, ordered the sale of the land in question at public auction. The land was sold on April 5, 1935 to Toribio Teodoro, the highest bidder, for P8,000. In
the certificate of sale issued to said purchaser on the very day of sale, it was stated that the period of redemption of the land sold was to expire on April 5, 1936. Upon petition of Toribio Teodoro the court below ordered the provincial sheriff to issue another certificate not qualified by any equity of
redemption. This was complied with by the sheriff on July 30, 1935. On September 18, 1935, Teodoro moved that he be placed in possession of the land purchased by him. The motion was granted by order of September 26, 1935, the dispositive part of which is as follows:

Por tanto, se ordena al Sheriff Provincial de Cavite ponga a Toribio Teodoro en posesion del terreno comprado por el en subasta publica y por el cual se le expidio certificado de venta definitiva, reservando al demandado su derecho de ejercitar una accion ordinaria para reclamar del demandante la
cantidad de P2,212 a que tiene derecho por la limpieza y mejoras del terreno y cuya suma, en justicia y equidad, debe ser descontada y deducida de la suma de P8,000 que ya ha recibido el demandante.

The Civil Code confirms certain time-honored principles of the law of property. One of these is the principle of accession whereby the owner of property acquires not only that which it produces but that which is united to it either naturally or artificially. (Art. 353.) Whatever is built, planted or sown on the
land of another, and the improvements or repairs made thereon, belong to the owner of the land (art. 358). Where, however, the planter, builder, or sower has acted in good faith, a conflict of rights arises between the owners and it becomes necessary to protect the owner of the improvements without
causing injustice to the owner of the land. In view of the impracticability of creating what Manresa calls a state of "forced coownership" (vol. 3, 4th ed., p. 213), the law has provided a just and equitable solution by giving the owner of the land the option to acquire the improvements after payment of the
proper indemnity or to oblige the builder or planter to pay for the land and the sower to pay the proper rent (art. 361). It is the owner of the land who is allowed to exercise the option because his right is older and because, by the principle of accession, he is entitled to the ownership of the accessory
thing (3 Manresa, 4th ed., p. 213). In the case before us, the plaintiff, as owner of the land, chose to require the defendant, as owner of the improvements, to pay for the land.chanroblesvirtualawlibrary chanrobles virtual law library

The defendant states that he is a possessor in good faith and that the amount of P2,212 to which he is entitled has not yet been paid to him. Therefore, he says, he has a right to retain the land in accordance with the provisions of article 453 of the Civil Code. We do not doubt the validity of the
premises stated. " Considera la ley tan saarada y legitima la deuda, que, hasta que sea pagada, no consiente que la cosa se restituya all vencedor." (4 Manresa, 4th ed, p., 304.) We find, however, that the defendant has lost his right of retention. In obedience to the decision of this court in G.R. No.
37319, the plaintiff expressed his desire to require the defendant to pay for the value of the land. The said defendant could have become owner of both land and improvements and continued in possession thereof. But he said he could not pay and the land was sold at public auction to Toribio Teodoro.
The law, as we have already said, requires no more than that the owner of the land should choose between indemnifying the owner of the improvements or requiring the latter to pay for the land. When he failed to pay for the land, the defendant herein lost his right of retention.chanroblesvirtualawlibrary
chanrobles virtual law library

The sale at public auction having been asked by the plaintiff himself (p. 22, bill of exceptions) and the purchase price of P8,000 received by him from Toribio Teodoro, we find no reason to justify a rapture of the situation thus created between them, the defendant-appellant not being entitled, after all, to
recover from the plaintiff the sum of P2,212.chanroblesvirtualawlibrary chanrobles virtual law library

The judgment of the lower court is accordingly modified by eliminating therefrom the reservation made in favor of the defendant-appellant to recover from the plaintiff the sum of P2,212. In all the respects, the same is affirmed, without pronouncement regarding costs. So
ordered.chanroblesvirtualawlibrary
G.R. No. L-175 April 30, 1946
DAMIAN IGNACIO, FRANCISCO IGNACIO and LUIS IGNACIO, petitioners,
vs.
ELIAS HILARIO and his wife DIONISIA DRES, and FELIPE NATIVIDAD, Judge of First Instance of Pangasinan, respondents.
Leoncio R. Esliza for petitioners.
Mauricio M. Monta for respondents.
MORAN, C.J.:
This is a petition for certiorari arising from a case in the Court of First Instance of Pangasinan between the herein respondents Elias Hilario and his wife Dionisia Dres as plaintiffs, and the herein petitioners Damian, Francisco and Luis, surnamed Ignacio, as defendants, concerning the ownership of a
parcel of land, partly rice-land and partly residential. After the trial of the case, the lower court, presided over by Hon. Alfonso Felix, rendered judgment holding plaintiffs as the legal owners of the whole property but conceding to defendants the ownership of the houses and granaries built by them on
the residential portion with the rights of a possessor in good faith, in accordance with article 361 of the Civil Code. The dispositive part of the decision, hub of this controversy, follows:
Wherefore, judgment is hereby rendered declaring:
(1) That the plaintiffs are the owners of the whole property described in transfer certificate of title No. 12872 (Exhibit A) issued in their name, and entitled to the possession of the same;
(2) That the defendants are entitled to hold the position of the residential lot until after they are paid the actual market value of their houses and granaries erected thereon, unless the plaintiffs prefer to sell them said residential lot, in which case defendants shall pay the plaintiffs the proportionate value
of said residential lot taking as a basis the price paid for the whole land according to Exhibit B; and
(3) That upon defendant's failure to purchase the residential lot in question, said defendants shall remove their houses and granaries after this decision becomes final and within the period of sixty (60) days from the date that the court is informed in writing of the attitude of the parties in this respect.
No pronouncement is made as to damages and costs.
Once this decision becomes final, the plaintiffs and defendants may appear again before this court for the purpose of determining their respective rights under article 361 of the Civil Code, if they cannot come to an extra-judicial settlement with regard to said rights.
Subsequently, in a motion filed in the same Court of First Instance but now presided over by the herein respondent Judge Hon. Felipe Natividad, the plaintiffs prayed for an order of execution alleging that since they chose neither to pay defendants for the buildings nor to sell to them the residential lot,
said defendants should be ordered to remove the structure at their own expense and to restore plaintiffs in the possession of said lot. Defendants objected to this motion which, after hearing, was granted by Judge Natividad. Hence, this petition by defendants praying for (a) a restraint and annulment of
the order of execution issued by Judge Natividad; (b) an order to compel plaintiffs to pay them the sum of P2,000 for the buildings, or sell to them the residential lot for P45; or (c), a rehearing of the case for a determination of the rights of the parties upon failure of extra-judicial settlement.
The judgment rendered by Judge Felix is founded on articles 361 and 453 of the Civil Code which are as follows:
ART. 361. The owner of land on which anything has been built, sown or planted in good faith, shall have the right to appropriate as his own the work, sowing or planting, after the payment of the indemnity stated in articles 453 and 454, or to oblige the one who built or planted to pay the price of the
land, and the one who sowed, the proper rent.
ART. 453. Necessary expenses shall be refunded to every possessor; but only the possessor in good faith may retain the thing until such expenses are made good to him.
Useful expenses shall be refunded to the possessor in good faith with the same right of retention, the person who has defeated him in the possession having the option of refunding the amount of the expenses or paying the increase in value which the thing may have acquired in consequence thereof.
The owner of the building erected in good faith on a land owned by another, is entitled to retain the possession of the land until he is paid the value of his building, under article 453. The owner of the land, upon the other hand, has the option, under article 361, either to pay for the building or to sell his
land to the owner of the building. But he cannot, as respondents here did, refuse both to pay for the building and to sell the land and compel the owner of the building to remove it from the land where it is erected. He is entitled to such remotion only when, after having chosen to sell his land, the other
party fails to pay for the same. But this is not the case before us.
We hold, therefore, that the order of Judge Natividad compelling defendants-petitioners to remove their buildings from the land belonging to plaintiffs-respondents only because the latter chose neither to pay for such buildings not to sell the land, is null and void, for it amends substantially the judgment
sought to be executed and is, furthermore, offensive to articles 361 and 453 of the Civil Code.
There is, however, in the decision of Judge Felix a question of procedure which calls for the clarification, to avoid uncertainty and delay in the disposition of cases. In that decision, the rights of both parties are well defined under articles 361 and 453 of the Civil Code, but it fails to determine the value of
the buildings and of the lot where they are erected as well as the periods of time within which the option may be exercised and payment should be made, these particulars having been left for determination apparently after the judgment has become final. This procedure is erroneous, for after the
judgment has become final, no additions can be made thereto and nothing can be done therewith except its execution. And execution cannot be had, the sheriff being ignorant as to how, for how much, and within what time may the option be exercised, and certainly no authority is vested in him to
settle these matters which involve exercise of judicial discretion. Thus the judgment rendered by Judge Felix has never become final, it having left matters to be settled for its completion in a subsequent proceeding, matters which remained unsettled up to the time the petition is filed in the instant case.
For all the foregoing, the writ of execution issued by Judge Natividad is hereby set aside and the lower court ordered to hold a hearing in the principal case wherein it must determine the prices of the buildings and of the residential lot where they are erected, as well as the period of time within which
the plaintiffs-respondents may exercise their option either to pay for the buildings or to sell their land, and, in the last instance, the period of time within which the defendants-petitioners may pay for the land, all these periods to be counted from the date the judgment becomes executory or
unappealable. After such hearing, the court shall render a final judgment according to the evidence presented by the parties.
The costs shall be paid by plaintiffs-respondents.
Damian Ignao et al. vs. Elisa Hilario
Gr L-175
April 30, 1946
Facts:
The lower court ruled in a case that the plaintiffs, Elias Hilario and Dionisia Dres, as the legal owners of a parcel of land but awarded the ownership of the house and granaries found therein in to defendants, Damian,
Francisco, and Luis Ignacio. The same ruling that in case of the Ignacios’ failure to purchase the land, they are ordered to remove the house and granaries.
Another case was filed by the plaintiff for the removal of the buildings because the plaintiffs neither chose to pay for the house nor the building, defendants should be ordered to remove them. A petition was then filed by
the defendants praying that plaintiffs can either purchase the buildings of to sell the land to the defendants.
Issue:
Whether or not the plaintiffs can refuse to exercise either options.
Decision:
The court ruled that the plaintiffs must either elect to pay for the building constructed in good faith or sell the land to the building according to Art. 367 of the Civil Code. The order to remove the construction is available
only when the other party fails to pay for the land after electing to sell it.
SARMIENTO v. AGANA

FACTS:
Before Ernesto Valentino and Rebecca Lorenzo wed, Rebecca’s mother offered a lot in Paranaque that they could build their house on. In 1967, they finally built their home which cost about PhP8,000-10,000, thinking that someday, the lot would be transferred to them in their name. It turns out,
though, that the lot was owned by the Spouses Santos who , in turn, sold the same to Leonila Sarmiento in 1974. A year later, Sarmiento ordered the Valentinos to vacate their lot, then eventually filed and Ejection Suit against them.

The lower court ruled in Sarmiento’s favor and ordered her to pay 20,000 as the value of the house. But the case was then elevated to the CFI of Pasay (w/ Agana as Judge), and pursuant to Art.448 of the CC (March 1979), the Court ordered Sarmiento to exercise the option in 60 days to pay Ernesto
40,000 as the value of the house or to let them purchase the land for 25,000. Sarmiento was not able to exercise this option, and the CFI allowed Ernesto to deposit the 25,000 purchase price with the Court.

ISSUE:
Whether or not the land owner is compelled to exercise either option: to buy the building or to sell the land?

HELD:
Ernesto and his wife (BPS) were clearly in good faith as they believed that Rebecca’s mother has the capacity to eventually transfer the title of the land to them. In line with this, Sarmiento (LO) was required to exercise only 2 options: To purchase the house or to sell the land to them, in this case,
based on the value decided by the courts. Since Sarmiento failed to exercise the option within the allotted period, and based on Art. 448, the LO is compelled by law to exercise either option. Not choosing either is a violation of the law.

FACTS:
Mother-in-law offered a lot for the construction of house by the spouses. Here comes Sarmiento, alleging himself to be the owner of the land. The trial court ordered Sarmiento to exercise option and there was failure to do so. The spouses then consigned the amount in court.

HELD:
The landowner cannot refuse both to appropriate or sell the land, and to compel the builder to remove it from the land on which it is located. He is entitled to such demolition only when after having chosen to sell the land, the other party fails to pay for the same.
G.R. No. L-57288 April 30, 1984
LEONILA SARMINETO, petitioner,
vs.
HON. ENRIQUE A. AGANA, District Judge, Court of First Instance of Rizal, Seventh Judicial District, Branch XXVIII, Pasay City, and SPOUSES ERNESTO VALENTINO and REBECCA LORENZO-VALENTINO, respondents.
MELENCIO-HERRERA, J.:ñé+.£ªwph!1
This Petition for certiorari questions a March 29, 1979 Decision rendered by the then Court of First Instance of Pasay City. The Decision was one made on memoranda, pursuant to the provisions of RA 6031, and it modified, on October 17, 1977, a judgment of the then Municipal Court of Paranaque,
Rizal, in an Ejectment suit instituted by herein petitioner Leonila SARMIENTO against private respondents, the spouses ERNESTO Valentino and Rebecca Lorenzo. For the facts, therefore, we have to look to the evidence presented by the parties at the original level.
It appears that while ERNESTO was still courting his wife, the latter's mother had told him the couple could build a RESIDENTIAL HOUSE on a lot of 145 sq. ms., being Lot D of a subdivision in Paranaque (the LAND, for short). In 1967, ERNESTO did construct a RESIDENTIAL HOUSE on the LAND
at a cost of P8,000.00 to P10,000.00. It was probably assumed that the wife's mother was the owner of the LAND and that, eventually, it would somehow be transferred to the spouses.
It subsequently turned out that the LAND had been titled in the name of Mr. & Mrs. Jose C. Santo, Jr. who, on September 7 , 1974, sold the same to petitioner SARMIENTO. The following January 6, 1975, SARMIENTO asked ERNESTO and wife to vacate and, on April 21, 1975, filed an Ejectment suit
against them. In the evidentiary hearings before the Municipal Court, SARMIENTO submitted the deed of sale of the LAND in her favor, which showed the price to be P15,000.00. On the other hand, ERNESTO testified that the then cost of the RESIDENTIAL HOUSE would be from P30,000.00 to
P40,000.00. The figures were not questioned by SARMIENTO.
The Municipal Court found that private respondents had built the RESIDENTIAL HOUSE in good faith, and, disregarding the testimony of ERNESTO, that it had a value of P20,000.00. It then ordered ERNESTO and wife to vacate the LAND after SARMIENTO has paid them the mentioned sum of
P20,000.00.
The Ejectment suit was elevated to the Court of First Instance of Pasay where, after the submission of memoranda, said Court rendered a modifying Decision under Article 448 of the Civil Code. SARMIENTO was required, within 60 days, to exercise the option to reimburse ERNESTO and wife the
sum of 40,000.00 as the value of the RESIDENTIAL HOUSE, or the option to allow them to purchase the LAND for P25,000.00. SARMIENTO did not exercise any of the two options within the indicated period, and ERNESTO was then allowed to deposit the sum of P25,000.00 with the Court as the
purchase price for the LAND. This is the hub of the controversy. SARMIENTO then instituted the instant certiorari proceedings.
We agree that ERNESTO and wife were builders in good faith in view of the peculiar circumstances under which they had constructed the RESIDENTIAL HOUSE. As far as they knew, the LAND was owned by ERNESTO's mother-in-law who, having stated they could build on the property, could
reasonably be expected to later on give them the LAND.
In regards to builders in good faith, Article 448 of the Code provides:têñ.£îhqwâ£
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. (Paragraphing supplied)
The value of the LAND, purchased for P15,000.00 on September 7, 1974, could not have been very much more than that amount during the following January when ERNESTO and wife were asked to vacate. However, ERNESTO and wife have not questioned the P25,000.00 valuation determined by
the Court of First Instance.
In regards to the valuation of the RESIDENTIAL HOUSE, the only evidence presented was the testimony of ERNESTO that its worth at the time of the trial should be from P30,000.00 to P40,000.00. The Municipal Court chose to assess its value at P20,000.00, or below the minimum testified by
ERNESTO, while the Court of First Instance chose the maximum of P40,000.00. In the latter case, it cannot be said that the Court of First Instance had abused its discretion.
The challenged decision of respondent Court, based on valuations of P25,000.00 for the LAND and P40,000.00 for the RESIDENTIAL HOUSE, cannot be viewed as not supported by the evidence. The provision for the exercise by petitioner SARMIENTO of either the option to indemnify private
respondents in the amount of P40,000.00, or the option to allow private respondents to purchase the LAND at P25,000.00, in our opinion, was a correct decision.têñ.£îhqwâ£
The owner of the building erected in good faith on a land owned by another, is entitled to retain the possession of the land until he is paid the value of his building, under article 453 (now Article 546). The owner, of the land. upon, the other hand, has the option, under article 361 (now Article 448), either
to pay for the building or to sell his land to the owner of the building. But he cannot, as respondents here did, refuse both to pay for the building and to sell the land and compel the owner of the building to remove it from the land where it is erected. He is entitled to such remotion only when, after having
chosen to sell his land, the other party fails to pay for the same. (Emphasis ours)
We hold, therefore, that the order of Judge Natividad compelling defendants-petitioners to remove their buildings from the land belonging to plaintiffs-respondents only because the latter chose neither to pay for such buildings nor to sell the land, is null and void, for it amends substantially the judgment
sought to be executed and is, furthermore, offensive to articles 361 (now Article 448) and 453 (now Article 546) of the Civil Code. (Ignacio vs. Hilario, 76 Phil. 605, 608 [1946]).
WHEREFORE, the Petition for Certiorari is hereby ordered dismissed, without pronouncement as to costs.
SO ORDERED.1äwphï1.ñët
 G.R. No. L-25462 February 21, 1980
MARIANO FLOREZA, petitioner,
vs.
MARIA D. de EVANGELISTA and SERGIO EVANGELISTA, respondents.
MELENCIO-HERRERA, J:
This is a Petition for Review on certiorari of the Decision of the Court of Appeals (CA-G.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 that the
EVANGELISTAS has then a standing loan of P100.00 in favor of FLOREZA. 1
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 Tax Declaration No. 4448. FLOREZA paid no rental as before. 6
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.
On April 25, 1956, the EVANGELISTAS, through their counsel, wrote FLOREZA a letter 8 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
Both parties appealed to the Court of Appeals.
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.
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 thinks he owns the land or believes himself to
have a claim of title. 13 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 form of rentals for the continued use of the subject residential lot16 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.
Francisco Depra VS Agustin Dumlao GR L-57348 16 May 1985Facts:

Depra is the owner of a parcel of land to which Dumlao, living in an adjoining lot, had built a kitchen that encroached an area of 34 square meters. The encroachment was discovered in a relocation survey of Depra’s property. Upon discovery, Depra’s mother wrote a demand letter asking Dumlao to
move back from his encroachment. She then filed a case of Unlawful Detainer against Dumlao.
In the trial court it was proven that Dumlao was a builder in good faith; thus the Municipal Court rendered it judgment that reads:
Ordering that a forced lease is created between the parties with the plaintiffs, as lessors, and the defendants as lessees, over the disputed portion with an area of thirty four (34) square meters, the rent to be paid is five (P5.00) pesos a month, payable by the lessee to the lessors within the first five (5)
days of the month the rent is due; and the lease shall commence on the day that this decision shall have become final.
Neither party appealed. However, Depra did not accept the payment of rentals so that Dumlao deposited such rentals with the Municipal Court.
Depra then filed a Complaint for Quieting of Title against Dumlao, the latter admitted the encroachment but alleged, that the present suit us barred by res judicate by virtue of the decision of the Municipal Court.
DEPRA claims that the Decision of the Municipal Court was null and void ab initio because its jurisdiction is limited to the sole issue of possession, whereas decisions affecting lease, which is an encumbrance on real property, may only be rendered by Courts of First Instance.

Issue:
I. Whether or not the Municipal Court’s decision was null and void ab initio because it has no jurisdiction over the case?
II. Whether or not the factual situations of DUMLAO and DEPRA conform to the juridical positions respectively defined by law, for a "builder in good faith" under Article 448, a "possessor in good faith" under Article 526 and a "landowner in good faith' under Article 448?

Held:
I. Addressing out selves to the issue of validity of the Decision of the
Municipal Court, we hold the same to be null and void. The judgment in a detainer case is effective in respect of possession only (Sec. 7, Rule 70, Rules of Court). The Municipal Court over-stepped its bounds when it imposed upon the parties a situation of "forced lease", which like "forced co-
ownership" is not favored in law. Furthermore, a lease is an interest in real property, jurisdiction over which belongs to Courts of First Instance (now Regional Trial Courts) (Sec. 44(b), Judiciary Act of 1948; Sec. 19 (2) Batas Pambansa Blg. 129). Since the Municipal Court, acted without jurisdiction, its
Decision was null and void and cannot operate as res judicata to the subject complaint for Queting of Title. Besides, even if the Decision were valid, the rule on res judicata would not apply due to difference in cause of action. In the Municipal Court, the cause of action was the deprivation of
possession, while in the action to quiet title, the cause of action was based on ownership. Furthermore, Sec. 7, Rule 70 of the Rules of Court explicitly provides that judgment in a detainer case "shall not bar an action between the same parties respecting title to the land. "

II. 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 (Paragraphing supplied)
Pursuant to the foregoing provision, DEPRA has the option either to pay for the encroaching part of DUMLAO's kitchen, or to sell the encroached 34 square meters of his lot to DUMLAO. He cannot refuse to pay for the encroaching part of the building, and to sell the encroached part of his land, 5 as he
had manifested before the Municipal Court. But that manifestation is not binding because it was made in a void proceeding.
However, the good faith of DUMLAO is part of the Stipulation of Facts in the Court of First Instance. It was thus error for the Trial Court to have ruled that DEPRA is "entitled to possession," without more, of the disputed portion implying thereby that he is entitled to have the kitchen removed. He is
entitled to such removal only when, after having chosen to sell his encroached land, DUMLAO fails to pay for the same. 6 In this case, DUMLAO had expressed his willingness to pay for the land, but DEPRA refused to sell.

DEPRA v. DUMLAO

FACTS:
Dumlao is the owner of a parcel of land in Iloilo, while Depra owns the lot adjoining his. Dumlao built his house on his own land, but the kitchen encroached about 34 sq.m on Depra’s property. Upon finding this, Depra’s mom ordered Dumlao to move back from his encroachment, then subsequently
filed an action for unlawful detainer against Dumlao.

The lower court found that Dumlao was a builder in good faith, and ordered him to pay rent (PhP5.00/month) – forced lease between the parties. Depra refused to accept the rentals so Dumlao deposited this with the MTC. Neither party appealed judgment so this became final and executory.

1 year later, though, Depra filed an complaint for Quieting of Title. Dumlao contested this, stating that the suit is barred by res judicata. But Depra averred that the lower court did not have jurisdiction to rule on encumbrances of real property – only the CFI has jurisdiction.

ISSUE:
1. Whether or not res judicata would apply to the case at bar?
2. Whether or not the land owner can be compelled to accept rent payments by the court (with both LO and BPS being in good faith)?

HELD:
In the first issue, res judicata would not apply should the first case be one for ejectment and the other for quieting of title. Article 448 of the Civil Code provides that the land owner has 2 options – to buy the building or to sell/rent his land. This is so because the rights of the owner of the land is older,
and by the principle of accession, he also has a right to the accessories.

The Court remanded the case to the RTC to determine the fair price of the land, the expenses incurred by the BPS (Dumlao), the increase in value of the land, and whether the value of the land is considerably more than the value of the kitchen built on it. The RTC shall then give Depra 15 days to
exercise such option.
G.R. No. 3003 January 2, 1907

LORENZA ALBURO, plaintiff-appellee,

vs.
CATALINA VILLANUEVA, defendant-appellant.

Ledesma, Sumulong & Quintos for appellant.

Hipolito Magsalin for appellee. CARSON, J.:

In this case no motion for a new trial was filed on the ground that the findings of fact of the trial judge were manifestly contrary to the weight of the evidence, and the facts found must be accepted as set out in the opinion of the lower court.

It appears that the plaintiff is the owner, by inheritance from her grandfather, of a certain lot of land in the city of Manila, which, by written contract, was rented on the 23d of January, 1892, to one Antonio Susano Goenco, for a term of six years, with the privilege of
renewal for a second term of six years; that the defendant, who is the wife of the said Goenco, came into possession by virtue of this rental contract; that the defendant had her husband expended a considerable sum of money filling in and leveling the lot and that they built
a house of hard materials thereon; and that the rental contract, while it expressly permitted the tenant to build upon the lot, is silent as to the disposition of the house at the expiration of the rental term and makes no express provision as to improvements to be made upon the
land by way of leveling or otherwise.

The defendant having refused to surrender the lot in question of the expiration of the rental term, this action was brought to recover possession thereof and judgment was rendered for the plaintiff, reserving to the defendant the right to remove the house from the lot.

Counsel for the defendant contends that she is entitled to a renewal of the rental contract for a third term of six years; or if this be denied, to be reimbursed for expenditures in filling in and leveling the lot, and to have the benefits of the provisions of article 361 of the Civil
Code, wherein it is provided that —

The owner of the land on which building, sowing, or planting is done in good faith shall have a right to appropriate as his own work, sowing, or planting, having previously paid the indemnity mentioned in articles four hundred and fifty-three and four hundred
and fifty-four, or to oblige the person who has built or planted to pay him the value of the land.

It is said that this rental contract should be construed in accordance with the provisions of articles 1281, 1282, 1288, and 1289 of the Civil Code so as to give the defendant the right to renew the contract for a third term of six years, and so on indefinitely so long as she
faithfully paid the rent, but we are of the opinion that there is no room for interpretation in accordance with the provisions of these articles since the contract expressly provides for a term of a definite number of years, with a privilege of renewal for a second term of definite
number of years. This is a very usual form of rental contract and its terms are so clear and explicit that they do not justify an attempt to read into it any alleged intention of the parties other than that which appears upon its face.

In support of her claim for reimbursement for expenses in filling in and leveling the lot, defendant relies on the provisions of paragraph 2 of article 1554 of the Civil Code, wherein it is provided that the landlord is obliged "during the lease to make all necessary repairs in
order to preserve the thing rented in condition to serve for the purpose to which it was destined." But, as Manresa points out, this article is strictly limited in its effect to repairs necessary to preserve the thing rented in a condition suitable to the use agreed upon ( para el uso
pactado). A repair implies the putting of something back into the condition in which it was originally and not an improvement in the condition thereof by adding something new thereto, unless the new thing be in substitution of something formerly in existence and is added
to preserve the original status of the subject-matter of the repairs; the filling in of a vacant lot can not be regarded as a repair as the word is used in this article; and even though it could be so considered, the remedy of the tenant under the provisions of article 1556, when the
landlord fails to make necessary repairs, is by demand for the annulment of the contract and indemnity by way of damages or without demanding annulment of the contract by demand for damages for negligence on the part of the landlord; and the tenant is not authorized to
make such repairs at the expense of the landlord, except when it is a matter of the most urgent necessity (reparacion urgentisima) "where the slightest delay would involve grave damages," when the tenant may take the absolutely necessary means to avoid the loss, at the
cost of the owner, doing only that which is required by the force of circumstances and no more, but this on the ground that "he had acted by virtue of the social duty of mutual aid and assistance." (Manresa, vol. 10, p. 473.)

It has been suggested that the claim of the defendant for compensation for the filling in and leveling of the lot may be based upon article 453 of the Civil Code which provides that "necessary expenditures will be repaid to all persons in possession (los gastos necesarios se
abonan a todo poseedor)." It may be doubted, however, whether the "possessor" referred to in this provision can be said to include one who stands in relation of tenant to his landlord, for the above-cited article 1554 of the Civil Code, and the chapter wherein it occurs,
seem to provide for such cases; and in any event we do not think that the filling in and improvement of a lot can be brought under the head of necessary expenses (gastos necesarios) as used in this connection. Manresa in his commentaries upon this article says that gastos
necesarios are no others than those made for the preservation of the thing upon which they have been expended.

The contention that the defendant is entitled to the benefits of the provisions of article 361 of the Civil Code can not be maintained because the right to indemnification secured in that article is manifestly intended to apply only to a case where one builds or sows or plants
an land in which he believes himself to have a claim of title and not to lands wherein one's only interest is that of tenant under a rental contract; otherwise it would always be in the power of the tenant to improve his landlord out of his property. The right of a tenant in
regard to improvements (mejoras) is expressly provided for in article 1573 read in connection with article 487, wherein it is provided that the tenant may make such improvements, either useful or convenient, as he considers advantageous, provided he does not alter the
form and substance of the thing rented, but that he will have no right for indemnification therefor, though he can take away such improvements if it is possible to do so without injury or damage to the thing rented.

The trial court authorized the removal of the house, apparently relying on the provisions of this article, but since no objection was made by the plaintiff in the court below, we are not authorized to review his action in this connection.

The judgment appealed from is affirmed, with the costs of this instance against the appellant. After the expiration of twenty days let judgment be entered in accordance herewith and ten days thereafter let the record in this case be remanded to the court of its origin for
execution.