Sarmiento v. Agana
REITERATIONFacts
The Antecedents: Private respondents, spouses Ernesto and Rebecca Valentino, constructed a residential house on a 145 sq. ms. lot (the LAND) in 1967, believing it belonged to Rebecca's mother, who had given them permission to build. The house cost P8,000.00 to P10,000.00. Subsequently, it was discovered the LAND was titled in the name of Mr. & Mrs. Jose C. Santo, Jr., who sold it to petitioner Leonila Sarmiento on September 7, 1974. On January 6, 1975, Sarmiento demanded the Valentiños vacate, and on April 21, 1975, filed an ejectment suit. Procedural History: The Municipal Court found the Valentiños to be builders in good faith and ordered them to vacate upon payment by Sarmiento of P20,000.00 for the house. The Court of First Instance (CFI), on appeal and after memoranda submission, modified the judgment under Article 448 of the Civil Code. The CFI ordered Sarmiento to either reimburse the Valentiños P40,000.00 for the house or allow them to purchase the LAND for P25,000.00 within 60 days. Sarmiento failed to exercise either option. The Valentiños then deposited P25,000.00 with the court for the purchase price of the LAND. The Petition: Sarmiento filed a Petition for Certiorari questioning the CFI's decision, arguing that the Valentiños should be compelled to remove their house for failing to exercise either option within the given period.
Issue(s)
Whether the respondent Court of First Instance committed grave abuse of discretion in rendering its Decision modifying the Municipal Court's judgment, and whether the respondent Court correctly applied Article 448 of the Civil Code in its modified judgment. Whether the private respondents were builders in good faith. Whether the valuation of the land and the house were supported by evidence. Whether the builder has a right to retain possession.
Ruling
The Petition for Certiorari is dismissed. The decision of the respondent Court of First Instance is affirmed.
Ratio Decidendi
On the issue of grave abuse of discretion and the application of Article 448: The Court found that the respondent Court did not commit grave abuse of discretion. The Valentiños were considered builders in good faith due to the peculiar circumstances, believing the land belonged to the mother-in-law who permitted them to build. Article 448 of the Civil Code grants the landowner the option to appropriate the works after payment of indemnity or to oblige the builder to pay the price of the land. However, the landowner cannot refuse both options and compel the builder to remove the structure. The CFI's decision, requiring Sarmiento to either pay P40,000.00 for the house or sell the land for P25,000.00, was a correct application of Article 448. On the issue of good faith: The Valentiños were considered builders in good faith due to the peculiar circumstances, believing the land belonged to the mother-in-law who permitted them to build. On the valuation of the land and house: The Court found the valuations to be supported by the evidence. The land was purchased by Sarmiento for P15,000.00 in 1974, and the CFI's valuation of P25,000.00 was not questioned by the Valentiños. For the house, Ernesto Valentino testified its value was between P30,000.00 to P40,000.00. While the Municipal Court assessed it at P20,000.00, the CFI's choice of the maximum P40,000.00 was within the bounds of its discretion and supported by the testimony. On the builder's right to retain possession: Citing Ignacio vs. Hilario, the Court reiterated that the owner of a building erected in good faith on another's land is entitled to retain possession until paid the building's value. The landowner has the option to pay for the building or sell the land. The landowner cannot refuse both and demand removal of the building, as removal is only permissible if the builder fails to pay after the landowner opts to sell the land. The CFI's order compelling the Valentiños to remove their buildings because Sarmiento chose neither option was therefore null and void.
Main Doctrine
The owner of the land who chooses neither to pay for the building erected in good faith nor to sell the land to the builder, cannot compel the builder to remove the building. The builder is entitled to retain possession until paid.