SPOUSES RAFAEL BENITEZ AND AVELINA BENITEZ, PETITIONERS, VS. COURT OF APPEALS, SPOUSES RENATO MACAPAGAL AND ELIZABETH MACAPAGAL, RESPONDENTS.

Benitez versus Macapagal

The Case

This is the case of Benitez versus Macapagal, decided by the Supreme Court in January 1997. Spouses Rafael and Avelina Benitez, the petitioners, were sued for ejectment by their neighbors, spouses Renato and Elizabeth Macapagal, the private respondents, after a relocation survey showed that a portion of the Benitez house stood on land belonging to the Macapagals. The Benitezes insist that the real action is one for recovery of possession, which belongs to the higher court, and not unlawful detainer, and that they may compel the Macapagals to sell them the encroached portion. The case matters because it gathers in one decision the jurisdictional boundaries of ejectment, the nature of the damages awarded in that action, and the rule that the option to sell the land belongs to the landowner alone.

Procedural History

The Macapagals filed a complaint for ejectment with the Metropolitan Trial Court of San Juan, Branch 58. The trial court rendered judgment for the plaintiffs, ordering the Benitezes and all persons claiming rights under them to vacate and surrender possession of the premises, to pay 930 pesos a month starting July 17, 1989 until they finally vacate, to pay 5,000 pesos as attorney's fees, and the costs of suit.

The Benitezes appealed to the Regional Trial Court of Pasig, Branch 167, which affirmed the decision in its entirety, with costs against the defendant-appellants. The Benitezes then went up to the Court of Appeals, Sixth Division, which in a Resolution dated March 24, 1992 denied due course to the appeal, with costs against the petitioners. Hence the present petition for review on certiorari before the Supreme Court.

Facts

On January 22, 1986, the Benitez spouses purchased a 303-square-meter parcel of land with improvement from the Cavite Development Bank. Later, the Macapagal spouses bought a 361-square-meter lot. On September 18, 1986, the Macapagals sued the Benitezes in the Regional Trial Court of Pasig for recovery of possession of an encroached portion of that lot. The parties reached a compromise in which the Macapagals sold the encroached portion to the Benitezes at the acquisition cost of 1,000 pesos per square meter.

On July 17, 1989, the Macapagals purchased still another property, a 285.70-square-meter lot adjacent to that of the Benitezes. After a relocation survey, the Macapagals discovered that some 46.50 square meters of their property was occupied by the Benitezes' house. Despite verbal and written demands, the Benitezes refused to vacate. A last notice to vacate was sent on October 26, 1989.

On January 18, 1990, the Macapagals filed the ejectment case with the Metropolitan Trial Court of San Juan. The Benitezes resisted, claiming that the trial court had no jurisdiction, that no rentals could be imposed absent a lease, and that they had a pre-emptive right to buy the encroached portion because they were builders in good faith.

Issues

• Whether or not the possession of the portion of the Macapagals' land encroached by the Benitezes' house may be recovered through an action for ejectment, and not through an action for recovery of possession, so that the Metropolitan Trial Court had jurisdiction.
• Whether or not the monthly award of 930 pesos for the occupancy of the encroached portion is a valid award of damages in the ejectment case.
• Whether or not the Benitezes have a pre-emptive right to purchase the encroached portion of the Macapagals' land.
• Whether or not the Supreme Court may review the Court of Appeals' factual finding of bad faith on the part of the Benitezes.

Applicable Provisions

Section 1 of Rule 70 of the Revised Rules of Court provides:

Section 1. Who may institute proceedings, and when. Subject to the provisions of the next succeeding section, a person deprived of the possession of any land or building by force, intimidation, threat, strategy, or stealth, or a landlord, vendor, vendee, or other person against whom the possession of any land or building is unlawfully withheld after the expiration or termination of the right to hold possession, by virtue of any contract, express or implied, or the legal representatives or assigns of any such landlord, vendor, vendee, or other person, may, at any time within one (1) year after such unlawful deprivation or withholding of possession, bring an action in the proper inferior court against the person or persons unlawfully withholding or depriving of possession, or any person or persons claiming under them, for the restitution of such possession, together with damages and costs.

This is the provision from which the Macapagals' cause of action springs, and it fixes both the one-year period and the inferior court that may hear the case.

Article 448 of the Civil Code provides:

Article 448. The owner of the land on which anything has been built, sown or planted in good faith, shall have the right to appropriate as his own the works, sowing or planting, after payment of the indemnity provided for in articles 546 and 548, or to oblige the one who built or planted to pay the price of the land, and the one who sowed, the proper rent. However, the builder or planter cannot be obliged to buy the land if its value is considerably more than that of the building or trees. In such case, he shall pay reasonable rent, if the owner of the land does not choose to appropriate the building or trees after proper indemnity. The parties shall agree upon the terms of the lease and in case of disagreement, the court shall fix the terms thereof.

This article is the basis of the Benitezes' claim of a right to buy, and the Court reads it to place the option in the landowner, not the builder.

Article 450 of the Civil Code provides:

Article 450. The owner of the land on which anything has been built, planted or sown in bad faith may demand the demolition of the work, or that the planting or sowing be removed, in order to replace things in their former condition at the expense of the person who built, planted or sowed; or he may compel the builder or planter to pay the price of the land, and the sower the proper rent.

This article governs the builder in bad faith, and the Court holds that even a declaration of bad faith does not shift the option to the builder.

Ruling

On the first issue, the Court held that the Metropolitan Trial Court had jurisdiction. The jurisdictional requirements were present: the encroachment was discovered after a relocation survey, notices to vacate were sent, the last on October 26, 1989, and the suit was filed on January 18, 1990, within one year from the last demand. That the Benitezes occupied the land before the Macapagals bought it does not negate ejectment, because prior possession is not always a condition for that action. In forcible entry the plaintiff must allege and prove prior possession, but in unlawful detainer the defendant unlawfully withholds possession after the expiration or termination of his right, and prior physical possession is not required. Possession may be acquired not only by material occupation but by the fact that a thing is subject to the action of one's will, and possession of land can be acquired upon the execution of the deed of sale. The Court added that, having voluntarily submitted to the proceedings, the Benitezes are estopped from assailing the jurisdiction of the trial court after receiving a decision adverse to their position.

On the second issue, the Court held that the monthly award is not rental but damages, recoverable in ejectment cases under Section 8 of Rule 70 of the Revised Rules of Court. These damages arise from the loss of the use and occupation of the property, and are limited to rent or fair rental value. The Court applied the maxim that no one shall enrich himself at the expense of another, since the Benitezes benefited from their occupation of a portion of the Macapagals' property.

On the third issue, the Court held that the option to sell belongs to the landowner. Article 448 is unequivocal that the option belongs to the landowner, and the option is to sell, not to buy. Not even a declaration of the builder's bad faith shifts this option to him under Article 450. The advantage is accorded the landowner because his right is older and because, by the principle of accession, he is entitled to the ownership of the accessory thing. There can be no pre-emptive right to buy even as a compromise, and an order compelling the landowner to sell would be invalid and illegal.

On the fourth issue, the Court held that a review of the factual findings is unwarranted. Review of the factual findings of the Court of Appeals is not a function normally undertaken in petitions for review under Rule 45, and such findings are generally binding and conclusive. The Court's jurisdiction is limited to reviewing errors of law unless the findings are totally devoid of support in the records or so glaringly erroneous as to constitute reversible error. The Benitezes offered mere allegations and arguments without sufficient evidence, and the mere fact that they bought their property ahead of the Macapagals does not establish good faith.

Doctrine

First, ejectment lies to recover possession of land unlawfully withheld, and prior physical possession by the plaintiff is not required in unlawful detainer, unlike forcible entry. Possession may be acquired by the execution of the deed of sale, and the action must be brought within one year from the last demand.

Second, the amount awarded for the use and occupation of the property in ejectment is damages, not rent, and is measured by the rent or fair rental value of the premises.

Third, under Article 448 of the Civil Code, the option to sell the land on which another has built belongs to the landowner, and even a builder in bad faith under Article 450 cannot compel the landowner to sell. There is no pre-emptive right to buy in favor of the builder.

Fourth, factual findings of the Court of Appeals are binding on the Supreme Court in a petition for review under Rule 45, absent a showing that they are totally devoid of support or glaringly erroneous.

Disposition

The petition was denied and the assailed Resolution of the Court of Appeals was affirmed, with the Macapagals prevailing.

Remember This

The one line to memorize is that the option to sell belongs to the landowner, not the builder, and ejectment lies even without prior possession by the plaintiff. Examiners use this case to test the distinction between forcible entry and unlawful detainer, the treatment of rentals as damages, and the Article 448 option in favor of the landowner.