Quemuel v. Olaes
REITERATIONFacts
The Antecedents: Angel S. Olaes and Juliana Prudente (defendants-appellees) were the registered owners of lot 1095. Alejandro Quemuel and Ruperta Solis (plaintiffs-appellants) were defendants in a prior case (Civil Case No. 5442) filed by the Olaes spouses. In Civil Case No. 5442, the Olaes spouses sought recovery of possession of lot 1095 and rentals. The Quemuel spouses admitted the ownership of the Olaes spouses but claimed their occupation was gratuitous. The trial court ordered the Quemuel spouses to return possession and pay P20.00 monthly rental from January 1954 until they vacated. This decision became final as the Quemuel spouses did not appeal. Procedural History: Following the finality of the decision in Civil Case No. 5442, the Olaes spouses sought execution. To prevent ejectment, the Quemuel spouses filed a new complaint (Civil Case No. 5518) seeking to reduce the monthly rental to P5.60 and to compel the Olaes spouses to sell them the portion of lot 1095 where their house was erected. The Olaes spouses filed a motion to dismiss, alleging lack of cause of action, res judicata, prescription, and failure to set up the claim as a counterclaim in the prior case. The trial court dismissed the complaint. The Quemuel spouses appealed to the Court of Appeals, which certified the case to the Supreme Court. An ex parte petition for prohibition and injunction filed by the appellants to stop demolition of their house was denied. The Petition: The plaintiffs-appellants alleged that the trial court erred in dismissing their complaint without trial on the merits and in not granting their reliefs. They argued that they would be entitled to a favorable decision upon establishing their allegations, particularly their claim as builders in good faith and their right to buy the lot based on the ruling in Belen Uy Tayao v. Rosario Yuseco.
Issue(s)
Whether the trial court erred in dismissing the complaint without trial on the merits. Whether the plaintiffs-appellants have a cause of action to reduce the monthly rental. Whether the plaintiffs-appellants have a cause of action to compel the defendants-appellees to sell a portion of the lot. Whether the causes of action are barred by prior judgment (res judicata). Whether the second cause of action is barred by the statute of limitations. Whether the causes of action are barred by the plaintiffs-appellants' failure to set them up as a counterclaim in the prior case.
Ruling
The Supreme Court affirmed the order of dismissal, holding that the trial court did not err in dismissing the complaint without trial on the merits. The Court found that the grounds for dismissal were valid and sufficiently established by the pleadings and documentary evidence presented.
Ratio Decidendi
On the issue of whether the trial court erred in dismissing the complaint without trial on the merits: The Court held that the dismissal was proper because the grounds invoked in the motion to dismiss, supported by documentary evidence and the records of the prior case, were sufficient to warrant dismissal without the need for a full trial on the merits. The Court distinguished the present case from De Jesus, et al. v. Belarmino, et al., noting that in this case, documentary evidence and records were considered, and multiple grounds for dismissal were raised, not solely lack of cause of action. On the first cause of action (reduction of rental): The Court found that the complaint stated no cause of action for the reduction of rental. The rental of P20.00 per month was fixed in a prior final and executory judgment (Civil Case No. 5442). The plaintiffs' belief that the rental should be lower or their assertion that they occupy only half the lot did not create a right to unilaterally reduce the judicially determined rental. The Court emphasized that the defendants were seeking to enforce the judgment for possession and rental, and the plaintiffs' recourse, if they found the rental excessive, was to vacate the premises, not to insist on possessing the property and fixing their own rental. On the second cause of action (compelling sale of the lot): The Court ruled that the plaintiffs were not builders in good faith and thus could not compel the landowners to sell the portion of the lot they occupied. The plaintiffs admitted the ownership of the Olaes spouses and their own occupation without right, except for the tolerance of the owners. Their claim of ownership by inheritance was unsubstantiated and contradicted by their admission in the prior case. The Court clarified that Article 448 of the Civil Code, which deals with builders in good faith, is not applicable to a lessee whose interest is that of a tenant under a rental contract. The plaintiffs' relationship was that of tenant and landlord, governed by Article 1573 in relation to Article 487 of the old Civil Code, which grants a lessee the right to useful improvements but not indemnification or the right to compel the owner to sell the land. On the issue of res judicata: The Court found that the doctrine of res judicata applied to the first cause of action concerning the rental amount. The parties were identical to Civil Case No. 5442, the subject matter (lot 1095) was the same, and the issue of rental was already litigated and decided in the prior case, which had become final. On the issue of prescription: The Court held that the second cause of action, if any, was barred by the statute of limitations. Assuming the cause of action for ownership accrued at the latest when the Torrens Title was issued to Agapita Solis on June 8, 1933, the plaintiffs filed their complaint on July 1, 1954, more than 21 years later, exceeding the ten-year prescriptive period. On the issue of failure to set up as a counterclaim: The Court concluded that whether the cause of action was for recovery of ownership, the right to purchase, or reimbursement for improvements, it should have been set up as a counterclaim in Civil Case No. 5442, as it was necessarily connected with the transaction involved in that case, pursuant to Section 6, Rule 10 of the Rules of Court.
Main Doctrine
A lessee cannot claim to be a builder in good faith and is not entitled to compel the landowner to sell the land occupied by the lessee's improvements, as their relationship is governed by contract of lease and relevant provisions on lessees' rights to improvements.