G.R.
No. 156437 March 1, 2004
NATIONAL
HOUSING AUTHORITY,
vs.
GRACE BAPTIST CHURCH and the COURT OF APPEALS,
Facts: On June 13, 1986,
respondent Grace Baptist Church (hereinafter, the Church) wrote a letter to
petitioner National Housing Authority (NHA), manifesting its interest in
acquiring Lots 4 and 17 of the General Mariano Alvarez Resettlement Project in
Cavite. In its letter-reply dated July 9, 1986, petitioner informed
respondent: In reference to your
request letter dated 13 June 1986, regarding your application for Lots 4 and
17, Block C-3-CL, we are glad to inform you that your request was granted and
you may now visit our Project Office at General Mariano Alvarez for processing
of your application to purchase said lots.
On February 22, 1991, the NHA’s Board of Directors
passed Resolution No. 2126, approving the sale of the subject lots to
respondent Church at the price of P700.00 per square meter, or a total price of
P430,500.00. The Church was duly informed of this Resolution through a letter
sent by the NHA.On
April 8, 1991, the Church tendered to the NHA a manager’s check in the amount
of P55,350.00, purportedly in full payment of the subject properties. The
Church insisted that this was the price quoted to them by the NHA Field Office,
as shown by an unsigned piece of paper with a handwritten computation scribbled
thereon. Petitioner NHA returned the check, stating that the amount
was insufficient considering that the price of the properties have changed. The
Church made several demands on the NHA to accept their tender of payment, but
the latter refused. Thus, the Church instituted a complaint for specific
performance and damages against the NHA with the Regional Trial Court of Quezon
City.
Issue: Can the NHA be
compelled to sell the subject lots to Grace Baptist Church in the absence of
any perfected contract of sale between the parties?
Ruling:
No.
The contract has not been perfected.In the case at bar, the offer of the NHA to
sell the subject property, as embodied in Resolution No. 2126, was similarly
not accepted by the respondent. Thus, the alleged contract involved in
this case should be more accurately denominated as inexistent.
There being no concurrence of the offer and acceptance, it did not pass the
stage of generation to the point of perfection. As such, it is without
force and effect from the very beginning or from its incipiency, as if it had
never been entered into, and hence, cannot be validated either by lapse of time
or ratification. Equity can not give validity to a void contract, and
this rule should apply with equal force to inexistent contracts. We note from
the records, however, that the Church, despite knowledge that its intended
contract of sale with the NHA had not been perfected, proceeded to introduce
improvements on the disputed land. On the other hand, the NHA knowingly granted
the Church temporary use of the subject properties and did not prevent the
Church from making improvements thereon. Thus, the Church and the NHA, who both
acted in bad faith, shall be treated as if they were both in good
faith. In this connection, Article 448 of the Civil Code provides: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 and 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.
G.R.
No. 151815 February 23, 2005
SPOUSES
JUAN NUGUID AND ERLINDA T. NUGUID,
vs.
HON. COURT OF APPEALS AND PEDRO P. PECSON
Facts: Pedro P. Pecson owned a commercial lot
located at 27 Kamias Road, Quezon City, on which he built a four-door
two-storey apartment building. For failure to pay realty taxes, the lot was
sold at public auction by the City Treasurer of Quezon City to Mamerto
Nepomuceno, who in turn sold it for P103,000 to the spouses Juan and
Erlinda Nuguid.Pecson challenged the validity of the auction sale before the
RTC of Quezon City . In its Decision, dated February 8, 1989, the RTC
upheld the spouses’ title but declared that the four-door two-storey apartment
building was not included in the auction sale. This was affirmed in toto
by the Court of Appeals and thereafter by this Court, in its
Decision dated May 25, 1993, in G.R. No. 105360 entitled Pecson v. Court
of Appeals.
On June 23, 1993, by virtue of
the Entry of Judgment of the aforesaid decision in G.R. No. 105360, the Nuguids
became the uncontested owners of the 256-square meter commercial lot.
As a result, the Nuguid spouses
moved for delivery of possession of the lot and the apartment building.
In the same order the RTC also
directed Pecson to pay the same amount of monthly rentals to the Nuguids as
paid by the tenants occupying the apartment units or P21,000 per month
from June 23, 1993, and allowed the offset of the amount of P53,000 due
from the Nuguids against the amount of rents collected by Pecson from June 23,
1993 to September 23, 1993 from the tenants of the apartment.
Pecson duly moved for
reconsideration, but on November 8, 1993, the RTC issued a Writ of Possession,
directing the deputy sheriff to put the spouses Nuguid in possession of
the subject property with all the improvements thereon and to eject all the
occupants therein.
Issue: W/Not the Nuguids
should reimburse Pecson for the benefits derived from the
apartment building.
Ruling: Yes. It is not
disputed that the construction of the four-door two-storey apartment, subject
of this dispute, was undertaken at the time when Pecson was still the owner of
the lot. When the Nuguids became the uncontested owner of the lot on June 23,
1993, by virtue of entry of judgment of the Court’s decision, dated May 25,
1993, in G.R. No. 105360, the apartment building was already in existence and
occupied by tenants. In its decision dated May 26, 1995 in G.R. No. 115814, the
Court declared the rights and obligations of the litigants in accordance with
Articles 448 and 546 of the Civil Code. These provisions of the Code are
directly applicable to the instant case.
Under Article 448,
the landowner is given the option, either to appropriate the improvement as his
own upon payment of the proper amount of indemnity or to sell the land to the
possessor in good faith. Relatedly, Article 546 provides that a builder in good
faith is entitled to full reimbursement for all the necessary and useful
expenses incurred; it also gives him right of retention until full
reimbursement is made. While the law aims to concentrate in one person the
ownership of the land and the improvements thereon in view of the
impracticability of creating a state of forced co-ownership, it guards
against unjust enrichment insofar as the good-faith builder’s improvements are
concerned. The right of retention is considered as one of the measures devised
by the law for the protection of builders in good faith. Its object is to
guarantee full and prompt reimbursement as it permits the actual possessor to
remain in possession while he has not been reimbursed (by the person who
defeated him in the case for possession of the property) for those necessary
expenses and useful improvements made by him on the thing possessed. Accordingly,
a builder in good faith cannot be compelled to pay rentals during the period of
retention nor be disturbed in his possession by ordering him
to vacate. In addition, as in this case, the owner of the land is prohibited
from offsetting or compensating the necessary and useful expenses with the
fruits received by the builder-possessor in good faith. Otherwise, the security
provided by law would be impaired. This is so because the right to the expenses
and the right to the fruits both pertain to the possessor, making compensation
juridically impossible; and one cannot be used to reduce the other.
As we earlier held, since
petitioners opted to appropriate the improvement for themselves as early as
June 1993, when they applied for a writ of execution despite knowledge that the
auction sale did not include the apartment building, they could not benefit
from the lot’s improvement, until they reimbursed the improver in full, based
on the current market value of the property.Given the circumstances of the
instant case where the builder in good faith has been clearly denied his right
of retention for almost half a decade, we find that the increased award of
rentals by the RTC was reasonable and equitable. The petitioners had reaped all
the benefits from the improvement introduced by the respondent during said
period, without paying any amount to the latter as reimbursement for his
construction costs and expenses. They should account and pay for such benefits.
PROGRAMME INCORPORATED, vs. PROVINCE OF
BATAAN
G.R. No. 144635 June 26, 2006
Facts: BASECO was the owner of Piazza Hotel and Mariveles Lodge,
both located in Mariveles, Bataan. On May 14, 1986, BASECO granted
petitioner a contract of lease over Piazza Hotel at a monthly rental
of P6,500 for three years,i.e., from January 1, 1986 to January 1,
1989, subject to renewal by mutual agreement of the parties. After
the expiration of the three-year lease period, petitioner was allowed to
continue operating the hotel on monthly extensions of the lease.
In
April 1989, however, the Presidential Commission on Good Government (PCGG)
issued a sequestration order against BASECO pursuant to Executive Order No. 1
of former President Corazon C. Aquino. Among the properties
provisionally seized and taken over was the lot on which Piazza Hotel stood.On
July 19, 1989, however, Piazza Hotel was sold at a public auction for
non-payment of taxes to respondent Province of Bataan. The title of
the property was transferred to respondent. BASECO’s Transfer
Certificate of Title (TCT) No. T-59631 was cancelled and a new one, TCT No.
T-128456, was issued to the Province of Bataan.
On
July 21, 1989, petitioner filed a complaint for preliminary injunction and
collection of sum of money against BASECO (Civil Case No.
129-ML). Respondent, as the new owner of the property, filed a
motion for leave to intervene on November 22, 1990. After its motion was
granted, respondent filed a complaint-in-intervention praying, inter alia,
that petitioner be ordered to vacate Piazza Hotel and Mariveles Lodge
for lack of legal interest.
Issue: W/Not
the petitioner is a possessor in good faith of the Piazza Hotel and Mariveles
Lodge.
Ruling: The
evidence clearly established respondent’s ownership of Piazza Hotel. First, the title of the land on which
Piazza Hotel stands was in the name of respondent. Second, Tax Declaration No. 12782 was
in the name of respondent as owner of Piazza Hotel. Third, petitioner was doubtlessly just a
lessee. In the lease
contract annexed to the complaint, petitioner in fact admitted BASECO’s (respondent’s
predecessor-in-interest) ownership then of the subject property.
Furthermore,
petitioner’s reference to Article 448 of the
Civil Code to justify its supposed
rights as “possessor in good faith” was erroneous.
The benefits granted to a
possessor in good faith cannot be maintained by the lessee against
the lessor because, such benefits are intended to apply only to a
case where one builds or sows or plants on land which he believes himself to
have a claim of title and not to lands wherein one’s only interest is that of a
tenant under a rental contract, otherwise, it would always be in the power of a
tenant to improve his landlord out of his property. Besides, as
between lessor and lessee, the Code applies specific provisions
designed to cover their rights.
Hence, the lessee cannot
claim reimbursement, as a matter of right, for useful improvements he has made
on the property, nor can he assert a right of retention until
reimbursed. His only remedy is to remove the improvement if
the lessor does not choose to pay its value; but the court cannot
give him the right to buy the land.
Petitioner’s assertion that Piazza Hotel was constructed
“at (its) expense” found no support in the records. Neither did any
document or testimony prove this claim. At best, what was confirmed
was that petitioner managed and operated the
hotel. There was no evidence that petitioner was the one which spent
for the construction or renovation of the property. And since petitioner’s
alleged expenditures were never proven, it could not even seek reimbursement of
one-half of the value of the improvements upon termination of the lease under
Article 1678 of the Civil Code.
Finally, both the trial and
appellate courts declared that the land as well as the improvement thereon
(Piazza Hotel) belonged to respondent. We find no reason to overturn
this factual conclusion.
G.R. No. 105387
November 11, 1993
JOHANNES SCHUBACK
& SONS PHILIPPINE TRADING CORPORATION
vs.
THE HON. COURT OF APPEALS, RAMON SAN JOSE, JR.,
Facts: Sometime
in 1981, defendant established contact with
plaintiff through the Philippine Consulate General in Hamburg, West
Germany, because he wanted to purchase MAN bus spare parts from Germany.
Plaintiff communicated with its trading partner. Johannes Schuback and Sohne
Handelsgesellschaft m.b.n. & Co. (Schuback Hamburg) regarding the spare
parts defendant wanted to order.On October 16, 1981, defendant submitted to plaintiff
a list of the parts (Exhibit B) he wanted to purchase with specific part
numbers and description. Plaintiff referred the list to Schuback Hamburg for
quotations. Upon receipt of the quotations, plaintiff sent to defendant a
letter dated 25 November, 1981 (Exh. C) enclosing its offer on the items listed
by defendant.On December 4, 1981, defendant informed plaintiff that he
preferred genuine to replacement parts,
and requested that he be given 15% on all items (Exh. D).On December 17, 1981,
plaintiff submitted its formal offer (Exh. E) containing the item number,
quantity, part number, description, unit price and total to defendant. On
December, 24, 1981, defendant informed plaintiff of his desire to avail of the
prices of the parts at that time and enclosed Purchase Order No. 0101 dated 14
December 1981 (Exh. F to F-4). Said Purchase Order contained the item number,
part number and description. Defendant promised to submit the quantity per unit
he wanted to order on December 28 or 29 (Exh. F).
On October 18, 1982, Plaintiff
again reminded defendant of his order and advised that the case may be endorsed
to its lawyers (Exh. L). Defendant replied
that he did not make any valid Purchase Order and that there was no definite
contract between him and plaintiff (Exh. M). Plaintiff sent a rejoinder
explaining that there is a valid Purchase Order and suggesting that defendant
either proceed with the order and open a letter of credit or cancel the order
and pay the cancellation fee of 30% of F.O.B. value, or plaintiff will endorse
the case to its lawyers (Exh. N).
Issue: whether or not a
contract of sale has been perfected between the parties.
Ruling:
Article
1319 of the Civil Code states: "Consent is manifested by the meeting of
the offer and acceptance upon the thing and the cause which are to constitute
the contract. The offer must be certain and the acceptance absolute. A
qualified acceptance constitutes a counter offer." The facts presented to
us indicate that consent on both sides has been manifested.The offer by
petitioner was manifested on December 17, 1981 when petitioner submitted its
proposal containing the item number, quantity, part number, description, the
unit price and total to private respondent. On December 24, 1981, private
respondent informed petitioner of his desire to avail of the prices of the
parts at that time and simultaneously enclosed its Purchase Order No. 0l01
dated December 14, 1981. At this stage, a meeting of the minds between vendor
and vendee has occurred, the object of the contract: being the spare parts and
the consideration, the price stated in petitioner's offer dated December 17,
1981 and accepted by the respondent on December 24,1981.Although said purchase
order did not contain the quantity he wanted to order, private respondent made
good, his promise to communicate the same on December 29, 1981. At this
juncture, it should be pointed out that private respondent was already in the
process of executing the agreement previously reached between the parties. While
we agree with the trial court's conclusion that indeed a perfection of contract
was reached between the parties, we differ as to the exact date when it
occurred, for perfection took place, not on December 29, 1981. Although the
quantity to be ordered was made determinate only on December 29, 1981, quantity
is immaterial in the perfection of a sales contract. What is of importance is
the meeting of the minds as to the object and cause,
which from the facts disclosed, show that as of December 24, 1981, these
essential elements had already occurred.
On the part of the buyer, the
situation reveals that private respondent failed to open an irrevocable letter
of credit without recourse in favor of Johannes Schuback of Hamburg, Germany.
This omission, however. does not prevent the perfection of the contract between
the parties, for the opening of the letter of credit is not to be deemed a
suspensive condition. The facts herein do not show that petitioner reserved
title to the goods until private respondent had opened a letter of credit.
Petitioner, in the course of its dealings with private respondent, did not
incorporate any provision declaring their contract of sale without effect until
after the fulfillment of the act of opening a letter of credit.
