Cortez v. Manimbo
REITERATIONFacts
The Antecedents: Florentino Manimbo and Tomas Manimbo were month-to-month lessees of portions of a land. The land was sold to plaintiff Rufino M. Cortez in 1952, with Cortez aware of the defendants' houses on the property. In 1956, Cortez filed separate ejectment and recovery of rentals cases against the defendants. Procedural History: The Municipal Court ruled in favor of Cortez. The Court of First Instance (CFI) of Manila ordered the defendants to remove their improvements, vacate the premises, and pay rentals. The CFI also dismissed the defendants' counterclaims. The Court of Appeals ordered the execution of the judgment due to the defendants' failure to deposit monthly rentals and file a supersedeas bond, leading to a demolition order. Certiorari proceedings against this order were dismissed by the Supreme Court. The Petition: The defendants appealed to the Court of Appeals, which certified the cases to the Supreme Court on the ground that the issues raised were purely questions of law. The plaintiff moved for reconsideration, arguing the issue had become moot as the defendants had removed their houses in April 1958. The motion was denied.
Issue(s)
Whether the defendants are entitled to indemnity for the value of their houses built on the leased premises. Whether the lower court erred in dismissing the defendants' counterclaims.
Ruling
The appeal is dismissed, and the judgment appealed from is affirmed, with costs against the appellants.
Ratio Decidendi
On the entitlement to indemnity for improvements: The Court held that the defendants, as lessees, are not entitled to reimbursement for the useful expenses or improvements they incorporated into the premises, especially since the lessor, Cortez, did not choose to appropriate them. The law, specifically Article 1573 in conjunction with Article 487 of the old Civil Code, provides that a tenant may make useful or convenient improvements without altering the form and substance of the rented property, but they have no right to indemnification therefor. Their only right is to remove such improvements if it can be done without injury to the leased property. The Court reiterated that the principle of possession in good faith, which allows for indemnity, does not apply to a lessee because a lessee knows they are not the owner and their occupation is limited by the lease contract. Introducing improvements is done at the lessee's own risk. Furthermore, the Court noted that the defendants had already removed their houses, rendering the claim for indemnity moot and academic. The Court also rejected the argument that the defendants should be permitted to 'eat their cake and have it too.' On the dismissal of counterclaims: The Court found the defendants' contention regarding a supposed verbal agreement, wherein Cortez would respect their improvements and allow them to stay as long as they paid rentals, to be unmeritorious. The lower court did not find any basis for this claim and discredited the defendants' allegations, crediting Cortez's denial of such an agreement. The Court emphasized that the defendants admitted to being tenants on a verbal month-to-month contract and had failed to pay rentals, justifying their ejectment. The claim for indemnity for improvements was based on this alleged verbal agreement, which the Court found to be unsubstantiated. Therefore, the dismissal of the counterclaims was proper.
Main Doctrine
A lessee is not entitled to reimbursement for useful expenses or improvements made on the leased premises if the lessor does not choose to appropriate them; the lessee's sole right is to remove such improvements without causing damage to the property. The lessee cannot claim indemnity for improvements as they are considered introduced at their own risk, knowing they are not the owner and their occupation is temporary.