EDUARDA DUELLOME, PETITIONER AND APPELLANT, VS. BONIFACIO GOTICO, BERNARDINA GOTICO, ET AL., RESPONDENTS AND APPELLEES.

Appeal by certiorari from the
decision of the Court of Appeals promulgated on August 27, 1960 and
from the Resolution of the same court dated December 5, 1960 denying
petitioner-appellant’s motion for reconsideration of the said decision.

In November 1945, herein petitioner, Eduarda Duellome, entered into a
lease contract with one Sixto Coronel. Under the said agreement, the
petitioner agreed to lease a portion of her land situated in Tacloban
City to Sixto Coronel at a rental of P10.00 per month and whereon the
latter was to construct a residential house of mixed materials. Soon
thereafter, the house was constructed with the express written consent
of the petitioner.

In 1949, the respondents-appellees, spouses Bernardina Gotico and
Bonifacio Gotico, daughter and son-in-law respectively, of Sixto,
Coronel, went to live in the house above mentioned. About a year later,
in 1950, Sixto Coronel and his wife Engraeia Coronel transferred
residence to Ormoc City leaving to their daughter and son-in-law, the
appellees herein, sole occupancy of the house.

For that purpose, respondents-appellees agreed to pay a monthly rental
of P20.00. The understanding between them and their parents was that
half of the amount of P10.00 would be remitted to the petitioner herein
as rental for the lot and balance of P10.00 to the Coronels. This was
on arrangement faithfully observed until September 1955.

Around October 1955, however, Engracia Coronel advised the Goticos of
her husband’s illness. At the same time, she requested the
respondents-appellees to remit to her the entire P20.00 monthly rental
as she was then pressed for medical funds. Promptly thereafter,
respondent spouses informed the petitioner herein of the request and
thereupon discontinued the land rentals to the petitioner.

When, therefore, despite repeated demands the respondent spouses failed
to pay the land rentals from October 1955 to September 1956,
petitioner-appellant addressed a letter to the Superintendent of Public
Schools, since the spouses Goticos were both public school teachers,
and complained that Bonifacio Gotico was “renting one of my lands in
Tacloban and for almost a year now did not pay the rent.” The same
communication requested the Superintendent to intervene towards making
the respondents herein pay the accrued rentals “as soon as possible.”

Taking action with dispatch, the Superintendent endorsed the
letter-complaint to Bonifacio Gotico, referring the latter to the
provisions of Section 619 of the Service Manual regarding immediate
settlement of just debts. In reply to the endorsement, however,
Bonifacio Gotico denied that he was “renting any of her lands.” He
asserted that “it is the house where we are residing now that we, are
renting and the said house belongs to another person to whom we are
paying promptly the monthly rental.”

Informed of the above reply, the petitioner-appellant filed on December
5, 1956 a complaint with the Municipal Court of Tacloban against the
spouses Goticos, herein appellees. The complaint alleged that the
herein defendants, herein respondents, have leased a portion of
petitioner’s land and have failed to pay the rentals for the months
there in specified. It prayed to evict the defendants from the land
leased, to pay the costs and attorney’s fees.

On learning of the ejectment suit, Engracia Coronel sold the house
immediately and paid the rentals due. As a result, the Municipal Court,
on January 12, 1957, dismissed the complaint in an order worded thus:

“In the complaint the plaintiff is claiming
P160.00 but after computing instead of said amount the defendants are
only indebted to the plaintiff in the amount of P150.00 which was
already paid on January 8, 1957 and on this ground the settlement was
made.

“Wherefore, this case is hereby dismissed without special pronouncement of costs.”

On January 5, 1957, respondents-appellees filed on action for
damages against the herein petitioner in the Court of First Instance of
Leyte. They charged that the suit in the Municipal Court was filed
“with the malignant purpose of besmirching the good reputation of
plaintiffs.’ that as a result, they had suffered a total of P66,000.00
in actual, moral and exemplary damages, lawyer’s fees and costs.

In answer to the complaint, herein petitioner alleged that “plaintiffs
(respondents-appellees) thru one Sixto Coronel, who is father-in-law
and father of plaintiffs respectively, made arrangement with defendant
for the rental of defendant’s land where plaintiffs constructed a
house.” She specifically denied that malice prompted her to write the
letter to the Superintendent of Public Schools and in filing the
complaint for ejectment with the Municipal Court. Aside from praying
for the dismissal of the case, therein defendant (petitioner herein)
likewise asked by way of counterclaim P65,000.00 as moral damages,
P5,000.00 as attorney’s fees and costs.

On the foregoing considerations, the Court of First Instance decided
against the defendant therein, herein petitioner, ordering him to pay
respondents-appellees P2,000.00 as actual and moral damags, P200.00 for
costs and P300.00 for lawyer’s fees.

Dissatisfied with the aforesaid decision, herein petitioner elevated
the same to the respondent peals contending that the trial court erred
in condemning her to pay actual and moral damages, attorney’s fees and
costs. On August 27, 1960, however, the above named respondent court
promulgated its own decision, the dispositive portion of which recited:

“Wherefore, modified in the sense that appellees are
entitled only to moral damages in the’ amount of P200.00 and atorney’s
fees in the sum of P300.00 the appealed decision is affrmed in other
respects, with costs against appellant.

IT IS SO ORDERED.”

And so this appeal by certiorari.

Herein petitioner has assigned four errors to the decision of the Court
of Appeals of August 27, 1960. Briefly stated, they were:

First: The Court of Appeals erred in holding that
under the facts of the case, respondent-appellees were leasing the
house alone and not the land on which it was built as well.

Second: The court of Appeals erred in declaring wrongful the acts of
the herein petitioner-appellant in seeking to collect directly form the
respondents-appellees the rentals due her which respondents’ parents
failed to pay; in writing the letter-complaint to the Superintendent of
Public Schools; and, in filling the complaint for ejectment in the
Municipal Court of Tacloban.

Third: The Court of Appeals erred in ruling that the letter complaint
to the Superintendent’ of Public Schools was not privileged
communication.

Fourth: The Court of Appeals erred in awarding moral damages and attorney’s fees to the respondents-appellees.

In other words, the question of law addressed to this Court by thb
appeal is whether the lease of a building necessarily includes the
lease of the lot on which it is built.

The
Court of Appeals answered the above query in the negative and declared
that it was maliciously false of the herein petitioner to have written
to the Superintendent of public Schools that appellee Bonifacio Gotico
was “renting one of my lands.” According to the same appel late
tribunal, the truth was Bonifacio Gotico was renting merely the house
which was constructed on the land of the petitioner and that this fact
was known to her.

We cannot accept the conclusion of the respondent court. It is opposed
to the doctrine consistently adopted by this Court that the lease of a
building would naturally include the lease of the lot and that the
rentals of the building include the rentals of the lot.—

“However, if the City of Manila is to receive the rentals of the
building from September 9, 1954 when the edifice should have been
delivered to it, then the City from that date would no longer have any
right to the monthly rental on the lot, because the lease of the
building would naturally include the lease of the lot.
The City could not vaiidly claim the lawful possession of the lot and
the building and receive the rents therefor since September 9, 1954,
and at the same time ask the defendant to continue paying the rental on
the lot after said date. Consequently, the obligation of the defendant
under the appealed decision to pay rental on the lot at the rate of
P300.00 a month from January, 1953, should be up to September 8, 1954.”
(Italics ours. City of Manila vs. Chan Kian, G. R. No. L-10276, July
24, 1957.)

“The real issue, therefore, boils down to who, as between appellant and
appellees, has the superior right to possess the premises in question
and niayf therefore, exclude the other from its possession. In
resolving this question, it is important to bear in mind that appellees
occupy not only the land in question but also the building thereon. It
should be noted, too, that appellees, both in their answers and in the
stipulation of facts of the parties, admitted that they are in
occupation of the building in question merely as sublessees of Zacarias
de Guzman, who was in turn appellant’s lessee. As
possessors of the building and the land on which it stands based on a
right derived from a mere sublessor appellees can invoke no right
possession superior to that of their sublessor. (Sipin vs. Court 74 Phil. 649; Madrigal vs. Ang Sam Ito, 46 Off. Gaz., 2173), who
in turn derives his right to possession from his lessor, appellant
herein. As mere sublessees of appellant’s lessee, therefore, appellees
can have no right to the premises better than the original lessee,
herein appellant.” (Italics ours. The Philippine Consolidated Freight Lines, Inc. vs. Emiliano Ajon, et al., 103 Phil., 318.)

“The view taken by appellees’is untenable for several reasons. In the
first place, appellees are, as already stated, occupying not only the
land of the government, but the building of appellant as well. If
appellees are in possession of the land, it is only because appellant’s
building stands thereon. Their possession of the land is, therefore,
dependent on and cannot be dissociated from their possession of the
building. * * * (Italics ours. The Phil. Consolidated Freight Lines, Inc. vs. Emiliano Ajon, et al., Supra.)

Furthermore, under our Civil Code, the
occupancy of a building or house, not only, suggests but implies the
tenancy or possession in fact of the land on which they are
constructed. This is not a new pronouncement. An extensive elaboration
of this rule was discussed by this Court in the case of Baquiran, et
al. vs. Baquiran, et al., 53 Off Gaz., p. 1130, the relevant portion of which said:

“Appellant’s house falls within the scope of the term ‘useful
expenses’. Since he built it in good faith, he has the right of
retention pending reimbursement. This right extends to the land itself,
because the right to retain the improvements while the indemnity is not
paid implies the tenancy or possession in fact of the land on which
they are built. It was so held by this Court in the case of Tufexis, et
al. vs. Chunaco, 36 Off. Gaz., No. 114 p. 2454, wherein the following comment of Q. Mucius Scaevola is cited:

‘Article 361 of the Code offers us also another case of the right of
retention. It does not expressly appear in the statute books, but the
basis of its application is deduced in an irrefutable way. The article
referred to grants the owner of the land on which building, sowing, or
planting has been done in good faith the right to appropriate, as his
own the thing so built, sown, or planted, upon paying the indemnity
provided for in Articles 453 and 454. The builder, the planter, and the
sower have the natural possession of the land on which they built,
planted, or sowed, because had they lacked this tenancy or possession
in fact, the building, planting, or sowing would not have been
possible. ***.)

“The right of a builder in good
faith to retain both the improvements and the land on which they have
been made until the necessary and useful expenses have been paid has
been recognized by the Supreme Court In other cases (Martinez vs.
Baganus, 28 Phil., 550; De Guzman vs. De la Fuente, 55 Phil., 501.)

Viewed in the light of the rules expressed in
the above cited cases of Chian Kian and Baquiran, the Court of Appeals
should have found the herein appellees lessees of the house, and for
all legal purposes, of the lot on which it was built as well. The
occupancy and tenancy of the first cannot be dissociated from the
second. Consequently, We cannot hold the herein appellant to have made
a false, much less a malicious declaration when she wrote that
Bonifacio Gotico was “renting pne of my lands in Tacloban and for
almost a year now did not pay the rant.”

With the foregoing findings, the second, third and fourth assignments
of errors must necessarily be sustained. They pertain to the
conclusions arrived at by the Court of Appeals which were premised on
the fact of falsehood of appellant’s declaration in the
letter-complaint to the Superintendent of Public Schools. Inasmuch as
we have already demonstrated the fallacy of the premise, it follows
that the1 various conclusions drawn there-from are themselves
fallacious.

There is one aspect of the second assignment of errors however, which
We believe merits further explanation. It was chargd that the Court of
Appeals “erred in declaring wrongful the acts of the herein
petitioner-appellant in seeking to collect directly from, the
respondents-appellees the rentals due her which respondents’ parents
failed to pay.” We believe this contention well and perfectly taken.

Article 1652 of the Civil Code provides:

“Art.
1652. The sublessee is subsidiarily liable to the lessor for any rent
due from the lessee. However, the sublessee shall not be responsible
beyond the amount of rent due’from him, in accordance with the terms of
the sublease, at the time of the extra-judicial demand by the lessor.

Payments
of rent in advance by the sublessee shall be deemed not to have been
made, so far as the lessor’s claim is concerned, unless said payments
were effected in virtue of the custom of the place.”

In the case of Sipin et al. vs. Court of First Instance of Manila, et
al., 74 Phil. 649, We have explained that by virtue of the above
provision, “the sublessee, therefore, can invoke no Tight superior to that of his sublessor,
and the moment the latter is duly ousted from the premises the former
has no leg to stand on. The sublessee’s right, if any, is to demand
reparation for damages from his sublessor, should the latter be at
fault.” And, in another case, We interpreted the same article to mean
that “the ª sublessees can only assert such right of possession as
could have been granted them by their sublessors, their right of
possession depending entirely upon that of the latter. (Madrigal vs. Ang Sam To, et al., 46 Off. Gaz., 2173).

Based on the above jurisprudence, the ultimate effect of the respondent
Court’s ruling that the herein petitioner should not have sought to
collect directly from the herein appellees would be to confer upon
their rights superior to that of their sublessor. Clearly, th
esublessor in this instance, the spouses Coronel, had no right to
resist or complain against any direct action for the collection of the
unpaid rentals which the herein petitioner might have pursued against
them. It cannot be denied that they were delinquent in their payment of
the same. When, therefore, the herein petitioner directed that action
not against the spouses Coronel because they were unavailable but
against the herein appellees who were then the sole occupants of the
house, the appellees had no legal justification to resent petitioner’s
conduct. Otherwise, they have been invested with rights superior to
that of their sub-lessor.”

As already intimated, We cannot agree wth the Court of Appeals in its
conclusions regarding the malice of the petitioner in causing the
letter-complaint to be written, the non-privileged nature of the same,
the award of moral and actual damages and finally, the award of
attorney’s fees to the respondents-appellees. They all resulted from
the untenable premises that the narration contained in 854 the letter
was false and that the petitioner has no right to address the same to
the proper authorities.

In view of the foregoing, the decision appealed from is reversed and
set aside and a new one is hereby entered dismissing
respondent-appellees’ complaint. Costs against appellees.

Bengzon, C. J., Padilla, Bautista Angelo, Labrador and Paredes, J.J., concur. Concepcion, Barrera, Dizon and Makalintal, JJ. concurs in the result.

Reyes, J. B. L., J.:

I concur on the ground that a sublessee is liable to the lessor upon
default of the lessee sublessor. Decision is reversed.