Southwestern University v. Salvador
REITERATIONFacts
1. The Antecedents: Southwestern University (SU) acquired three parcels of land in Cebu City in July 1963. Subsequently, SU filed ejectment cases against Jose Baliguat and Julia Ilaya, who occupied portions of the land. SU alleged that Baliguat failed to pay the P20.00 monthly rental for an 84-square-meter lot on which he had built a house. Baliguat contended that the P20.00 rental was excessive, violating an agreement with the original owner, Philippine Railway Company, which stipulated a P5.00 monthly rental. 2. Procedural History: The City Court of Cebu, in a decision dated June 18, 1969, ruled that Jose Baliguat was entitled to P3,000.00 as indemnity for the house he built in good faith and could remain in possession until paid. It further stipulated that if SU failed to pay within 90 days, Baliguat could buy the land at an agreed price. SU appealed this decision to the Court of First Instance (CFI) of Cebu City on July 14, 1969, and later withdrew the appeal on February 1, 1973, stating it was convinced of the judgment's fairness. On October 9, 1973, SU moved for execution of the City Court's judgment, but the court denied this, ordering Baliguat to pay P8,400.00 for the land. SU's motion for reconsideration was also denied. SU then filed a petition for certiorari with the CFI, which dismissed the petition. This led to the instant petition for review on certiorari with the Supreme Court. 3. The Petition: SU filed a petition for review on certiorari, treated as a special civil action, challenging the lower courts' findings. The core issues raised were whether Baliguat was a builder in good faith, whether Article 448 of the Civil Code applied, the timeliness of the P3,000.00 indemnity payment, and the jurisdiction of the trial court to fix the purchase price of the land at P8,400.00. SU argued that Baliguat, as a lessee, could not be considered a builder in good faith and that the City Court erred in ordering him to buy the land at a price determined by the Assessor's Office, contrary to the judgment's stipulation for an agreed price approved by the court. The Supreme Court ultimately reversed the respondent court's decision, ordering Baliguat to vacate the land and accept the P3,000.00 deposit.
Issue(s)
Whether Jose Baliguat was a builder in good faith justifying the application of Article 448 of the Civil Code and granting him the right to buy the land. Whether the payment of indemnity of P3,000.00 was made within the 90-day period from the finality of the judgment, and the determination of when the judgment became final and executory. Whether the trial court had the jurisdiction to go outside the tenor of the judgment by decreeing that petitioner accept P8,400.00 as the price of the land, fixed by the City Assessor, instead of a price agreed upon by the parties and approved by the court; and the applicability of Article 448 versus Article 1678.
Ruling
The Supreme Court reversed the decision of the respondent court. Jose Baliguat was ordered to vacate the land and accept the P3,000.00 deposited with the Clerk of Court as payment for the value of the house built by him in good faith.
Ratio Decidendi
On the issue of Baliguat being a builder in good faith and the application of Article 448 of the Civil Code: The Court held that the petitioner's withdrawal of its appeal from the City Court's decision, which declared Baliguat a builder in good faith and entitled him to indemnity, was tantamount to acquiescence and acceptance of the judgment. By withdrawing the appeal, SU was estopped from questioning the decision anew. The Court cited Director of Lands vs. Alberto to support the principle that an appellant must face the consequences of withdrawal, which includes the lower court's decision becoming final and executory. Therefore, the finding that Baliguat was a builder in good faith could no longer be disturbed. On the finality and executory nature of the judgment and the timeliness of the indemnity payment: The Court disagreed with the City Court's ruling that the judgment became final and executory as to Baliguat on July 24, 1969, finding cases like Singh vs. Liberty Insurance Corporation and Firestone Tire and Rubber Co. vs. Tempongko inapplicable. The Court clarified that pending appeal, the decision is vacated, and a trial de novo occurs. Applying Rule 40, Section 9 of the Rules of Court (then applicable), the Court held that the withdrawal of an appeal is what makes the decision revived and subject to remand for execution. The appeal was withdrawn on February 1, 1973, and the case was remanded on August 14, 1973. Thus, the judgment was revived as of the time of withdrawal, and execution would lie upon remand. The Court found the City Court's order of retroactive finality "absurd." Furthermore, the Court noted that SU made a timely consignation of the P3,000.00 indemnity, which was deposited with the Clerk of Court, and less than 90 days expired from the receipt of the remanded case to the filing of SU's motion for execution. On the right of Baliguat to buy the land, the price thereof, and the applicable legal provision: The Court found that the respondent judge committed a grave error in giving Baliguat the right to buy the land for P8,400.00. The original judgment stipulated that if SU failed to pay the indemnity within 90 days, Baliguat would have the right to buy the land at a price agreed upon by the parties and approved by the court. The respondent judge's order fixing the price at P8,400.00 based on the City Assessor's valuation went beyond the terms of the judgment, which required an agreement between the parties and court approval. The Court also noted, through the concurring opinion of Justice Melencio-Herrera, that a lessee is not a builder in good faith under Article 448 but is governed by Article 1678, which grants the right to remove improvements or be paid one-half of their value, not the right to buy the land.
Main Doctrine
The withdrawal of an appeal revives the judgment of the lower court, making it final and executory upon remand to the court of origin for execution, and the appellate court's decision vacates the appealed judgment pending appeal.