G.R. No. 83722. August 09, 1991
MARITA CABANGIS AND RODOLFO CABANGIS, PETITIONERS, VS. HON. COURT OF APPEALS AND ELVIRA DEVIS NICANDRO, RESPONDENTS.
SARMIENTO, J.:
In this petition for review on certiorari, the petitioners
assail the decision[1]
of the Court of Appeals in CA-G.R. CV No. 06586 in so far as it reversed and
set aside the order of the Regional Trial Court (RTC) of Manila, Branch IV,
dismissing the complaint for indemnity of improvements with injunction filed by
the private respondent and docketed as Civil Case No. 84-27921. The dispositive
portion of this challenged decision reads:
WHEREFORE, subject to the findings and conclusions contained
herein, the order appealed from is hereby REVERSED AND SET ASIDE insofar as it
granted private defendants’ motion to
dismiss and Affirmed insofar as it denies the issuance of the writ of
preliminary injunction. Let the records
of the case be remanded to the court below for further proceedings. No special pronouncement as to costs.
SO ORDERED.
The antecedent facts are as follows:
In October 1968, the petitioners, Marita
and Rodolfo Cabangis, together with Oscar Cabangis and the deceased Arturo Cabangis,
filed an ejectment[2]
case against Gaspar Devis,
the deceased father of the private respondent Elvira Devis
Nicandro, in the then City Court of Manila (now
Metropolitan Trial Court) for non-payment of rents of a parcel of land situated
in Tondo, Manila, owned by the Cabangises
and leased to Devis.
On May 31, 1969,
the said court rendered a decision[3]
the dispositive portion of which states:
WHEREFORE, judgment on the merits is hereby rendered for the
plaintiffs and against the defendant, ordering the latter and all persons
claiming right under him to vacate the premises in question and to remove his
construction thereon denominated as No. 481 Penalosa
St., Tondo, Manila, ordering said defendant to pay
the sum of P445.00 as accrued
rentals and the sum of P30.00 a month from Nov. 1, 1968 until he vacates the
said premises, the further sum of
P300.00 as and for attorney’s fees, plus costs.
SO ORDERED.
On appeal to the then Court of First Instance (now Regional Trial
Court) of Manila, Branch VI, the
judgment was affirmed on February 21,
1972. The matter was
elevated to the Court of Appeals which likewise affirmed the decision of the
then Court of First Instance of Manila
on November 27, 1980.
On October 15, 1984, the Metropolitan
Trial Court of Manila, Branch VII, granted the motion of the petitioners for a
writ of execution since the said decision had already become final and executory.
However, on November 27, 1984, before the said
writ of execution could be implemented, herein private respondent Elvira Nicandro filed, in the Regional Trial Court of Manila, an
action[4]
for indemnity of improvements with prayer for the issuance of a writ of
preliminary injunction against the petitioners.
Nicandro was asking for reimbursements of the
following improvements made by her father on the properties:
xxx xxx xxx
4. That the lot before and at the commencement
of the lease and possession thereof by Gaspar Devis was swampy and muddy, that during rainy and high tide
seasons, the soil were (sic) being eroded and washed away;
5. That Gaspar Devis before commencing the construction of the family
residential house, in good faith pursuant to the lease agreement filled the lot
with truck loads of big stones, escumbro, enclosed
the same with hollow blocks and constructed the residential house that was
finished sometime in 1955 at the conservative
costs of P150,000.00;
6. That the previous owner of the lot, leased
by Gaspar Devis from the
City Government of Manila, where he constructed his house was the government of
the City of Manila, but which lot was included in the parcel of land that was
transferred to the herein private defendants, by virtue of the Contract of
Exchange, entered into between the government of the City of Manila and the
herein private defendants, who stepped into the shoes of the former;[5]
xxx xxx xxx
On December 11, 1984,
the petitioners Cabangis filed a motion to dismiss
the said complaint for indemnity stating, among others, that the said complaint
is barred by the statute of limitations.
On March 29, 1985,
the trial court dismissed the complaint and denied Nicandro’s
motion for preliminary injunction, as follows:
xxx xxx xxx
Without discussing the grounds relied upon by the defendant in his
motion to dismiss, the Court, after examining the pleadings and arguments of
the parties arrived at the conclusion that the plaintiff’s action is designed to alter the dispositive
portion of the decision that has long been final and executory
which provides that the defendants should vacate the premises and remove the
improvements introduced thereon, denominated as 481 Penalosa
St., Tondo, Manila.
This action of the plaintiff for indemnification for the improvements
introduced will constitute an alteration of the said decision.[6]
Accordingly, the trial court decreed:
Finding therefore plaintiff’s motion for issuance of a preliminary
injunction to be not meritorious, the same is hereby denied, and considering
the plaintiff’s lack of cause of action against the defendants, this case is,
as it is hereby dismissed, without pronouncement
as to costs.[7]
On appeal, however, the respondent appellate court reversed the
said order of dismissal while affirming the denial of the issuance of a writ of
injunction in a decision dated June 6,
1988.
The respondent court, in
its decision, declared:
xxx xxx xxx
Plaintiff’s instant action is “not designed to alter the dispositive portion of the decision that has long become
final and executory.” Plaintiff is not
contesting the decision in the ejectment case against
her father. She is not claiming prior possession
much less ownership of the land as the heir of her father. She is merely praying in her complaint for
the issuance of a cease-and-desist injunctive writ against the implementation
of the decision in the ejectment proceedings and the
consequent removal or demolition of her father’s house and improvements on the
lot “until plaintiff’s claims for
said house and improvements are paid by the private defendants” in the
principal sum of P150,000.00. Hence, she
did not file an action for annulment of the judgment in the ejectment
proceedings.
xxx xxx xxx
And her action has not prescribed.
Her cause of action is predicated on Articles 448 and 546 of the Civil
Code and hinges on the father of plaintiff’s good or bad faith as a builder of the house and introducer
of the improvements which converted the lot from a swampy land into a habitable one. Payment of indemnity or refund under said Articles are obligations created by law
and the action therefor should be brought within ten
(10) years from the time right of action accrues. (Art. 1144, Civil Code). The plaintiff’s right of action accrued only
on December 11, 1984 when private defendants’ filed their motion to dismiss
which, in effect, partook of a rejection of plaintiff’s claim for reimbursement
of the sum of P150,000.00 representing the value of the house and improvements
which her father had introduced on the land.[8]
The petitioners raise a question
of law to justify this Court’s review of the said decision of the respondent
court, to wit:
THE HOLDING OF THE
COURT OF APPEALS THAT THE ACTION
FOR INDEMNITY HAS NOT PRESCRIBED IS NOT
IN ACCORDANCE WITH THE LAW AND APPLICABLE DECISIONS OF THIS HONORABLE SUPREME
COURT.
To us, the crucial issues that are to be resolved in this
controversy are:
Whether or not the plaintiff in Civil Case No. 175034, the
private respondent herein, has a cause of action to bring a suit for indemnity of improvements
with injunction against the petitioners; and if she has,
Whether or not her cause of action has been abandoned, waived,
barred by prescription, or barred by failure to seasonably set it up as a
compulsory counterclaim.
The petition is impressed with
merit.
The reliance by the respondent Court of Appeals on Articles 448
and 546 of the Civil Code of the Philippines
is misplaced. These provisions have no
application to a contract of lease which is the subject matter of this
controversy. Instead, Article 1678 of
the Civil Code applies. We quote:
Art. 1678. If the lessee
makes, in good faith, useful improvements which are suitable to the use for
which the lease is intended, without altering the form or substance of the
property leased, the lessor upon termination of the
lease shall pay the lessee one-half of
the value of the improvements at that time.
Should the lessor refuse to reimburse said
amount, the lessee may remove the improvements, even though the principal thing
may suffer damage thereby. He
shall not, however, cause any more impairment upon the property leased than is
necessary.
xxx xxx xxx
On the other hand, Article 448 governs the right of accession
while Article 546 pertains to effects of possession. The very language of these two provisions
clearly manifest their inapplicability to lease contracts. They provide:
ART. 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 lease and in case of disagreement, the
court shall fix the terms thereof.
xxx xxx xxx
ART. 546. Necessary expenses
shall be refunded to every possessor; but only the possessor in good faith may
retain the thing until he has been reimbursed therefor.
Useful expenses shall be refunded only to the possessor in good
faith with the same right of retention, the person who has defeated him in the
possession having the option of refunding the amount of the expenses or of paying the increase in value which the
thing may have acquired by reason thereof.
The petitioners do not dispute the contention of the private
respondent that her father, Gaspar Devis, filled the leased parcel of land with truck loads of
big stones or rocks (escumbro), and enclosed or walled the same with hollow
blocks before constructing a residential
house thereon. All these, being in the
nature of expenses which augmented the value of the land,[9]
or increased the income from it, or improved its productivity, are useful
improvements within the purview of the law.[10]
But, it must be remembered, as in fact it is not controverted, that Gaspar Devis was a lessee by virtue of a lease contract between
him and the City of Manila. As a mere lessee, he knew that the parcel of
land in question was not his but belonged to the latter. Even the respondent court conceded this fact
when it stated that the private respondent was “not claiming prior
possession, much less ownership of the land as heir of her father.”[11]
Thus, the improvements that the private respondent’s father had
introduced in the leased premises were done at his own risk as lessee. The right to indemnity equivalent to one-half
of the value of the said improvements–the house, the filling materials, and
the hollow block fence or wall–is governed, as earlier adverted to, by the provisions of Art. 1678, first
paragraph of the Civil Code above-quoted.
But this right to indemnity exists only if the lessor
opts to appropriate the improvements.[12]
The refusal of the lessor to pay the lessee one-half
of the value of the useful improvements gives rise to the right of
removal. On this score, the commentary
of Justice Paras is enlightening.
Note that under the 1st paragraph of Art. 1678, the law on the
right of REMOVAL says that “should the lessor
refuse to reimburse said amount, the lessee
may remove the improvements, even though the principal thing may suffer thereby.” While the phrase
“even though” implies that Art. 1678 always applies regardless of
whether or not the improvements can be removed without injury to the leased
premises, it is believed that application of the Article cannot always be done. The rule is evidently intended for cases
where a true accession takes
place as when part of the land leased is, say, converted into a fishpond; and
certainly not where as easily
removable thing (such as a wooden
fence) has been introduced. There is no
doubt that in a case involving such a detachable fence, the
lessee can take the same away with him when the lease expires.[13]
Now then, indeed the private respondent would have a cause of action against the
petitioners for indemnity under Article 1678 of the Civil Code if the latter
had chosen to appropriate the said improvements. However, there is nothing in the records to
indicate that such choice was made. On
the other hand, there is no showing either that the private respondent
manifested her desire to remove these improvements absent any payment of the
required indemnity. She, or her deceased
father, should have removed the improvements at the time when the lease expired[14]
on July 26, 1968[15]
there being no true accession (the improvements consisting of the house, escumbro, and hollow blocks, being removable without really
destroying the land), or at the time of the filing of the unlawful detainer case which was
on October 19, 1968.[16]
Her failure to do so, we rule, constitutes a waiver or abandonment of her right
of removal of the improvements. But even
if there was no abandonment or waiver of her right of removal, still she could not later file
a complaint for the indemnity of the improvements because that cause of action
had long prescribed, accruing as it did when the petitioners effectively
appropriated the improvements when the lease expired on July 26, 1968, or even
when the ejectment case was filed on October 19,
1968. The complaint of the private
respondent for indemnity was filed on November
27, 1984, more than sixteen years from the accrual of the cause of
action. Hence, the complaint was filed six years after the
expiration of the prescriptive period of ten years as provided in Article 1144,
paragraph (2)[17]
of the Civil Code. The obligation of the
lessor to indemnify the lessee is created by law, viz., Article
1678, first paragraph, of the Civil Code earlier quoted.
In any event, well-established is the doctrine that the
counterclaim for reimbursement of the useful expenses is in the nature of a
compulsory counterclaim and the failure to set it up in the ejectment
suit bars the right to raise it in a subsequent litigation.[18]
WHEREFORE, the petition is GRANTED. The decision of the respondent Court of
Appeals is hereby REVERSED and the order of the Regional Trial Court dated March 29, 1985 is REINSTATED. Costs against the private respondent.
SO ORDERED.
Melencio-Herrera, (Chairman), Paras, Padilla, and Regalado, JJ., concur.
[1]
Luciano, Leonor Ines, J., Ponente; Lantin, Jaime M. and Santiago,
Fernando A., JJ., Concurring; promulgated on June 6, 1988.
[2]
Docketed as Civil Case No. 175034, Branch VII.
[3]
Rollo, 12.
[4]
Docketed as Civil Case No. 84-27921,
Branch IV.
[5]
Rollo, 13.
[6]
Cited in “Nicandro
v. Cabangis,” C.A. G.R. CV No. 06586, June 6,
1988, Rollo 15-16.
[7]
Id., 11.
[8]
Id., 16-17.
[9]
4 Manresa 270 cited in 2, A. TOLENTINO CIVIL CODE 110
(2nd ed., 1972).
[10]
Alburo vs. Villanueva, 7 Phil. 277 (1907); Valencia
vs. Roxas, 13 Phil. 45 (1909).
[11]
Rollo, 16.
[12]
Alburo vs. Villanueva, supra, note 10
at 279-280; Valencia
vs. Ayala de Roxas, supra, note 10 at
46.
[13]
5 E. PARAS, CIVIL CODE OF THE PHILIPPINES ANNOTATED 345 (11th ed., 1986).
[14]
Ibid.
[15]
Rollo, 20.
[16]
Ibid.
[17]
ART. 1144. The following actions must be brought within
ten years from the time the right of action accrues:
(1) Upon a written contract;
(2) Upon an obligation created by law;
(3) Upon a judgment.
[18]
Rule 9, section 4, The Revised Rules of
Court In
The Philippines; Cojuangco v. Villegas, G.R. No. 76838, April 17,
1990, 184 SCRA 374; Heirs of Agripina Baclayon, et al. v. Court of Appeals, et al., G.R
No. 89132, February 26, 1990, 182 SCRA 761; Camara,
et al. v. Aguilar, et al., 94 Phil. 527 (1954).