Geminiano vs CA 1) Whether or not the respondents were builders

in Good faith?
Lessor in good faith and Builders in Good faith 2) Whether Art 448 or 1678 should be applied?
are not synonymous. Article 1678 may apply to
the formers case and Art 448 may apply to the
latters case. If a person knew that his stay would
likely end or that he knew somehow that he is not RULING:
the owner of the land then he is not a BPS in good 1) No, they were not builders in good faith. The
faith. respondents knew that their stay would end after
the lease contract expires. They cant bank on the
FACTS:
promise, which was not in writing, of the
The lot in question was originally owned by the petitioners that the latter will sell the land to them.
mother of the petitioner. Petitioner sold their According to 1403, an agreement for the sale of
unfinished bungalow to the respondents for real property or an interest therein is
P6,000, with a promise to sell the lot to the latter. unenforceable, unless some note or
The property was later leased to the respondents memorandum thereof be produced. Other than
for 7 years starting November 1978 for P40 a the alleged promise by petitioner, respondents
month as evidenced by their written lease had no other evidence to prove their claim.
contract. The respondents built their house and
introduced some improvements in the lot. In 1985
2) They are mere lessees in good faith; therefore
petitioners mother refused receiving monthly
Art 1678 may apply if the lessor chooses to
rentals. It turned out that the lot in question was
appropriate the improvements. But since the
subject to litigation which resulted to its
petitioners refused to exercise that option, the
acquisition by Maria Lee which was sold to
private respondents cant compel them to
Salcedo, who further sold to Dionisio spouses.
reimburse the one-half value of the house and
The property eventually came back to the
improvements. Neither can they retain the
petitioner when the Dinisio spouses executed a
premises until reimbursement is made. The
Deed of Quitclaim over the said property in favor
private respondents sole right then is to remove
of the petitioners. As such, the lot was registered
the improvements without causing any more
in the latters names. (petitioners never lost
impairment upon the property leased than is
possession of the land because Lee and
necessary.
company never issued a writ of possession
against them).

In 1993, petitioners wrote a letter to respondents

demanding them to vacate the premises and
when the latter refused, petitioners filed in court.
Respondents claim that they should be entitled to
buy the land because of the promise of the
petitioners to sell them the land and because they
were builders in Good faith. The courts now are
deciding which one to use: Art. 448 regarding
builders and land owners in good faith or Art.
1678 regarding lessee in good faith who can be
reimbursed half of the expenses of the
improvements if the LO chooses to appropriate
them and that such lessee have the right to retain
in the premises until fully reimbursed.

ISSUES: