PLEASANTVILLE DEVELOPMENT CORPORATION VS.

COURT OF APPEALS

G.R. NO. 79688 253 SCRA 10 FEBRUARY 1, 1996

Doctrine:

Good faith consists in the belief of the builder that he land he is building on is his and hisignorance of
any defect or flaw in his title. The burden of proving bad faith belongs to the one asserting it.

Facts:

Edith Robillo purchased from Pleasantville Development Corporation, herein petitioner a parcel
of land at Pleasantville Subdivision, Bacolod City. The property was designated as Lot 9, Phase II. In 1975,
herein respondent Eldred Jardinico bought the said subject lot from the former purchaser. Eldred later
discovered that the property he purchased had improvements introduced therein by respondent Wilson
Kee.

Kee on the other hand bought on installments Lot 8 of the same subdivision from C.T. Torres
Enterprises, Inc. (CTTEI) which is the exclusive real estate agent of the petitioner. Under the contract Kee
was allowed to take possession of the property even before full payment of the price. CTTEI through an
employee, Zenaida Octaviano accompanied Kees wife Donabelle to inspect Lot No. 8. Octaviano
however mistakenly pointed towards Lot 9. Hence spouses Kee had their residence, an auto repair shop,
a store and other improvements constructed on the wrong lot. Upon discovery of the blunder both Kee
and Jardinico tried to reach an amicable settlement but they failed. Jardinico demanded that the
improvements be removed but as Kee refused, Jardinico filed a complaint for ejectment with damages
against Kee at the Municipal Trial Court in Cities (MTCC) of Bacolod City. Kee filed a third-party
complaint against herein petitioner and CTTEI.

The MTCC found that the error was attributable to CTTEI also since at present the contract with
Kee has rescinded for Kees failure to pay installments. Kee no longer had any right over the subject
property and must pay rentals for its use. The Regional Trial Court (RTC) of Bacolod City ruled that
petitioner and CTTEI were not at fault or were not negligent. It argued that Kee was a builder in bad
faith. Even if assuming that he was in good faith, he was no longer so and must pay rentals from the
time that he was given notice to vacate the lot. The Court of Appeals ruled that Kee was a builder in
good faith as he was unaware of the mix-up when he constructed the improvements. It was in fact due
to the negligence and wrongful delivery of CTTEI which included its principal the herein petitioner. It
further ruled that the award of rental was without basis.

Pending the resolution of the case at the Court of Appeals Jardinico and Kee entered into a deed
of sale, wherein Lot 9 was sold to Kee. In the said deed a provision stating that regardless of the
outcome of the decision, such shall not be pursued by the parties and shall be considered dismissed and
without effect. The appellate court was not informed of this deal.

Issue:

Whether or not a lot buyer who constructs improvements on the wrong property erroneously delivered
by the owners agent, a builder in good faith?

Held:
 Yes. Article 527 of the Civil Code provides the presumption that petitioner has the burden of
proving that Kee was a builder in bad faith. Kee may be made liable for the violation of the contract with
CTTEI but this may not be used as a basis of bad faith and as a sufficient ground to negate the
presumption of good faith. Jardinico is presently only allowed to file a complaint for unlawful detainer.

Good faith consists in the belief of the builder that the land he is building on is his and his
ignorance of any defect or flaw in his title. And as good faith is presumed, petitioner has the burden of
proving bad faith on the part of Kee. At the time he built improvements on Lot 8, Kee believed that said
lot was what he bought from petitioner. He was not aware that the lot delivered to him was not Lot 8.
Thus, Kees good faith. Petitioner failed to prove otherwise.

G.R. No. L-39044 January 3, 1985

MANOTOK REALTY, INC., petitioner,

vs.
THE HON. COURT OF APPEALS and FELIPE CARILLO, respondents.

Facts:

Manotok Realty is the owner of a registered land in Manila. After having acquired said property, the
appellee subdivided it, but could not take possession thereof because the whole area is occupied by
several houses among which is the one belonging to the herein appellant Felipe Carillo. Demands to
vacate and to surrender possession of the property were made by the appellee verbally and by
publication and by circulars served to the appellant. In spite of such demands but the appellant refused.

After the petitioner failed in its attempts to take possession of the lot, it filed the reivindicatory action
against the respondent. Appellant's evidence tends to show that he acquired the lot in dispute from a
certain Delfin Dayrit on September 25, 1962, pursuant to a deed of assignment. On the other hand, the
petitioner maintains that the appellate court erred in considering the respondent a possessor and
builder in good faith. It argues that at the time of the execution of the deed of assignment in favor of the
respondent, the land was already registered in its name; and that if the respondent were really acting in
good faith, he should have verified from the Register of Deeds of Manila who was the registered owner
of the land in question.

Issue: WON respondent Felipe Carillo a builder in good faith with the right to remain in the questioned
premises, free of rent, until reimbursed by the petitioner for the necessary and useful expenses
introduced on the land.

Held:

We agree.

A possessor in good faith is one who is not aware that there exists in his title or mode of acquisition any
flaw which invalidates it. (Caram v. Laureta, 103 SCRA 7, Art. 526, Civil Code). One who acquires real
estate with knowledge of a defect or lack of title in his vendor cannot claim that he has acquired title
thereto in good faith as against the true owner of the land or of an interest therein; and the same rule
must be applied to one who has knowledge of facts which should put a reasonable man upon his guard,
and then claims that he acted in good faith under the belief that there was no defect in the title of the
vendor. (See Leung Yee v. FL Strong Machinery Co., 37 Phil. 644).

The records show that when Dayrit executed the deed of' assignment in favor of the respondent, the
disputed lot was already registered and titled in the name of the petitioner. Such an act of registration
served as a constructive notice to the whole world and the title issued in favor of petitioner made his
ownership conclusive upon and against all persons including Dayrit and. herein respondent, although no
personal notice was served on either of the latter. (See Garcia v. Bello, 13 SCRA 769; Demontano v.
Court of Appeals, 81 SCRA 286). Therefore, the presumption of good faith in favor of the respondent
cannot apply because as far as the law is concerned, he had notice of the ownership by the petitioner
over said lot.

G.R. No. L-32974 July 30, 1979

BARTOLOME ORTIZ, petitioner,

vs.
HON. UNION C. KAYANAN, in his capacity as Judge of the Court of First Instance of Quezon, Branch IV;
ELEUTERIO ZAMORA, QUIRINO COMINTAN, VICENTE FERRO, AND GREGORIO
PAMISARAN, respondents.

Facts:

Plaintiff, Bartolome Ortiz used to be the legal guardian of Martin Dolorico II. When his ward
died, plaintiff continued to cultivate and possess the latters property, which was formerly a subject of
homestead application. In the said application, the wards uncle, Martin Dolorico I, was named as his
heir and successor in interest. Thus, the uncle executed an affidavit relinquishing his rights over the
property in favor of Comintan and Zamora, his grandson and son-in-law and requested the Director of
Lands to cancel the homestead application. The homestead application was cancelled to the protest of
Ortiz saying that he should be given preference to purchase the lot inasmuch as he is the actual
occupant and has been in continuous possession of the same. Still, the lot in question was sold at a
public auction wherein defendant Comintan was the only bidder.

The plaintiffs protest was investigated upon but his claim was not given due course. On appeal,
respondent court rules that half of the portion of land should be given to the defendant, being the
successful bidder. The other half should be awarded to Zamora without prejudice to the right of Ortiz to
participate in the public bidding of the lot. If Ortiz is to be not declared the successful bidder, defendants
should reimburse jointly said plaintiff for the improvements introduced on the land, with him, having
the right to retain the property until after he has been paid for.

Plaintiff appealed the judgment. It was later found out that Ortiz collected tolls on a portion of
the property wherein he has not introduced any improvement. The judgment became final and
executory. Private respondents filed a motion for its execution requesting that they file a bond in lieu of
the amount that should be paid to Ortiz, on the condition that after the accounting of the tolls collected
by plaintiff, there is still and amount due and payable to the said plaintiff, the bond shall be held
answerable.

Petitioner thus filed the instant petition, contending since said judgment declared the petitioner
a possessor in good faith, he is entitled to the payment of the value of the improvements introduced by
him on the whole property, with right to retain the land until he has been fully paid such value. He
likewise averred that no payment for improvements has been made and, instead, a bond therefor had
been filed by defendants (private respondents), which, according to petitioner, is not the payment
envisaged in the decision which would entitle private respondents to the possession of the property.
Furthermore, with respect to portion "B", petitioner alleges that, under the decision, he has the right to
retain the same until after he has participated and lost in the public bidding of the land to be conducted
by the Bureau of Lands. It is claimed that it is only in the event that he loses in the bidding that he can be
legally dispossessed thereof.

It is the position of petitioner that all the fruits of the property, including the tolls collected by
him from the passing vehicles, which according to the trial court amounts to P25,000.00, belongs to
petitioner and not to defendant/private respondent Quirino Comintan, in accordance with the decision
itself, which decreed that the fruits of the property shall be in lieu of interest on the amount to be paid
to petitioner as reimbursement for improvements. Any contrary opinion, in his view, would be
tantamount to an amendment of a decision which has long become final and executory and, therefore,
cannot be lawfully done.

Issue: whether or not petitioner is still entitled to retain for his own exclusive benefit all the fruits of the
property, such as the tolls collected by him from March 1967 to December 1968, and September 1969
to March 31, 1970, amounting to about P25,000.00.

RULING:

Negative. No contention that the possessor in good faith is entitled to the fruits received before the
possession is legally interrupted. Possession in good faith ceases or is legally interrupted from the
moment defects in the title are made known to the possessor, by extreneous evidence or by the filing of
an action in court by the true owner for the recovery of the property. Hence, all the fruits that the
possessor may receive from the time he is summoned in court, or when he answers the complaint, must
be delivered and paid by him to the owner or lawful possessor.

However, even after his good faith ceases, the possessor in fact can still retain the property, pursuant to
Article 546 of the New Civil Code, until he has been fully reimbursed for all the necessary and useful
expenses made by him on the property. This right of retention has been considered as one of the
conglomerate of measures devised by the law for the protection of the possessor in good faith. Its object
is to guarantee the reimbursement of the expenses, such as those for the preservation of the property, or
for the enhancement of its utility or productivity. It permits the actual possessor to remain in possession
while he has not been reimbursed by the person who defeated him in the possession for those necessary
expenses and useful improvements made by him on the thing possessed. The principal characteristic of
the right of retention is its accessory character. It is accessory to a principal obligation. Considering that
the right of the possessor to receive the fruits terminates when his good faith ceases, it is necessary in
order that this right to retain may be useful, to concede to the creditor the right to secure reimbursement
from the fruits of the property by utilizing its proceeds for the payment of the interest as well as the
principal of the debt while he remains in possession. This right of retention of the property by the
creditor, according to Scaevola, in the light of the provisions of Article 502 of the Spanish Civil Code, is
considered not a coercive measure to oblige the debtor to pay, depriving him temporarily of the
enjoyment of the fruits of his property, but as a means of obtaining compensation for the debt.

Note: With respect to the amount of reimbursement to be paid by Comintan, it appears that the
dispositive portion of the decision was lacking in specificity, as it merely provided that Comintan and
Zamora are jointly liable therefor. When two persons are liable under a contract or under a judgment,
and no words appear in the contract or judgment to make each liable for the entire obligation, the
presumption is that their obligation is joint or mancomunada, and each debtor is liable only for a
proportionate part of the obligation. The judgment debt of P13,632.00 should, therefore, be pro-rated in
equal shares to Comintan and Zamora.

JOSE L. CHUA and CO SIO ENG, petitioners, vs. THE HONORABLE COURT OF APPEALS and RAMON
IBARRA, respondents.

DECISION

MENDOZA, J.:

This is a petition for review on certiorari of the decision,[1] dated October 8, 1992, of the Court of
Appeals affirming the decision of the Regional Trial Court, Branch 59 of Makati, Metro Manila, ordering
the ejectment of petitioners from the premises owned by private respondent.

Petitioners were lessees of a commercial unit at No. 3086 Redemptorist Street in Baclaran, Paraaque,
Metro Manila. The lease was for a period of five (5) years, from January 1, 1985 to December 31, 1989.
The contract expressly provided for the renewal of the lease at the option of the lessees in accordance
with the terms of agreement and conditions set by the lessor. Prior to the expiration of the lease, the
parties discussed the possibility of renewing it. They exchanged proposal and counterproposal, but they
failed to reach agreement. The dispute was referred to the barangay captain for conciliation but still no
settlement was reached by the parties.

On July 24, 1990, private respondent filed a complaint for unlawful detainer against petitioners in the
Metropolitan Trial Court of Paraaque, Metro Manila, which on February 4, 1992 rendered a decision, the
dispositive portion of which reads:[2]

WHEREFORE, premises considered, judgment is hereby rendered as follows:

1. The defendants (herein petitioners) are hereby given a period of two (2) years extension of occupancy
of the subject premises starting the date of the filing of the instant complaint;

2. The defendants are hereby ordered to pay the plaintiff (herein private respondent) the sum
of P188,806.00 representing back rentals as of the year 1991 and a monthly rental of P10,000.00
thereafter until the expiration of the aforesaid extension of their occupancy or until the subject
premises is actually vacated.
3. Defendants are hereby ordered to pay the plaintiff the amount of P15,000.00 as attorneys fees; and

4. Defendants are hereby ordered to pay the cost of suit.

SO ORDERED.

On appeal by both parties, the Regional Trial Court, Branch 59 of Makati ruled that the lease was for a
fixed period of five (5) years and that, upon its expiration on January 1, 1990, petitioners continued stay
in the premises became illegal. As provided in Art. 1687 of the Civil Code, the power of the courts to fix
the period of lease is limited only to cases where the period has not been fixed by the parties
themselves. The dispositive portion of the decision[3] states:

Premises considered, judgment is hereby rendered modifying the appealed decision, as follows:

1. Ordering the defendants (herein petitioners) and all persons claiming and/or acting for and in their
behalf to vacate the premises known as door No. 3086 Redemptorist, corner G.C. Cruz Streets, Baclaran,
Paraaque, Metro Manila and turn over possession thereof to the plaintiff (herein private respondent);

2. Ordering the defendants to pay the plaintiff the following:

a) the amount of P42,306.00 representing accrued or back rentals from January 1, 1987 to December
31, 1989;

b) a monthly rental of P7,320.50 for the use or occupancy of the premises starting January 1, 1990 until
July 24, 1990 and at Ten Thousand (P10,000.00) Pesos from July 24, 1990 until the defendants shall have
vacated the same;

c) the amount of P10,000.00 representing reasonable attorneys fees;

3. Dismissing defendants counterclaim for lack of merit; and

4. With costs against the defendants.

Petitioners appealed to the Court of Appeals which affirmed the decision. In its decision, dated October
8, 1992, the Court of Appeals ordered:

WHEREFORE, except for the modification that the monthly rental that petitioners should pay private
respondent from July 24, 1990 until the latter finally vacate the premises in question is reduced
to P7,320.00, the decision of the respondent court in this case is AFFIRMED in all other respects, with
costs against petitioners Jose L. Chua and Ko Sio Eng.[4]

Petitioners motion for reconsideration was likewise denied. Hence, this petition for review
on certiorari. Petitioners assign several errors as having been allegedly committed by the Court of
Appeals.

First. Petitioners allege that the Court of Appeals erred in affirming the lower courts finding that they
owe private respondent the amount of P42,306.00 as unpaid rentals from January 1, 1987 to December
31, 1989 because neither the letter of demand nor the complaint for unlawful detainer alleged a claim
for unpaid rentals. As the Court of Appeals pointed out, however, the issue of arrearages was raised at
the pre-trial by private respondent and evidence on this question was presented without objection
from petitioners:[5]
First of all, while it is true that there was no express demand in private respondents complaint for
unlawful detainer against petitioners for the latters payment of rental arrearages, private respondent in
a pleading dated December 17, 1990 filed with the MTC (by way of comment to petitioners motion to
admit amended answer) stated:

That moreover the unpaid rentals from January 1987 to December 31, 1989 amounts to FORTY TWO
THOUSAND THREE HUNDRED SIX PESOS (P42,306.00), exclusive of rentals from January 1 to December
31, 1990 which would be one hundred eighty thousand pesos (P180,000.00) or a total of TWO
HUNDRED TWENTY TWO THOUSAND THREE HUNDRED SIX PESOS (222,306.00)

(p. 75, Orig. Rec).

Then, at the pre-trial of December 17, 1990, among the issues proposed by counsel for plaintiff (now
private respondent) was whether:

3. defendants are in arrears for the rentals from Dec. 31, 1987 to January 1989, in accordance with the
contract;

(p. 8, tsn Dec. 17, 1990;

p. 87, id.)

Counsel for defendants (herein petitioners) did not object to the statement of issues made by plaintiffs
counsel and instead simply stated as their own main issue whether plaintiff had a valid cause of action
for ejectment against them as he is not the sole owner of the leased premises, and then averred that
based on this premise, the other issues raised by plaintiff could be dependent on the resolution of the
stated issues (id., p. 88, Orig. Rec.). Later, at the hearing of February 12, 1990, plaintiff Ramon Ibarra
testified that although his lease contract (Exh. A) with petitioners stipulated an annual ten percent (10%)
additional rental starting in 1986 (i.e., the monthly rental in 1986 was P5,500, in 1987, it was P6,050; in
1988, it was P6,655.00; and in 1989, it was P7,320.50), petitioners continued to pay only the original
monthly rental of P5,000 stipulated in their contract (Exh. A), so that petitioners had incurred total
rental arrearages at the end of 1989 of P42,306.00 (pp. 6-8, tsn, op. cit.; pp. 113-115, Orig. Rec.). . . .

Obviously, then, petitioners rental arrearages from 1986 to 1989 was an issue raised at the pre-trial and
on which issue private respondent presented evidence without any objection from petitioners. And
considering that the petitioners incurred said rental arrearages because they did not pay private
respondent the automatic 10% increase in their monthly rental every year for the years 1986 to 1989 as
agreed upon and stipulated in their lease contract (Exh. A,) which contract is the law between the
parties, justice and good faith demand that petitioners should pay said rental arrearages. As correctly
ruled by the respondent court, to absolve the defendants from paying rentals in arrears while they
continue occupying and enjoying the premises would be allowing the defendants to enrich themselves
at the expense of the plaintiff. (p. 55, Rollo).

Indeed, any objection to the admissibility of evidence should be made at the time such evidence is
offered or as soon thereafter as the objection to its admissibility becomes apparent,[6] otherwise the
objection will be considered waived and such evidence will form part of the records of the case as
competent and admissible evidence.[7] Rule 10, 5[8] of the Rules of Civil Procedure allows the
amendment of the pleadings in order to make them conform to the evidence in the record.
Second. Petitioners claim that they are entitled to an extension of time to occupy the premises in
question. This, too, is without merit. After the lease terminated on January 1, 1990 and without the
parties thereafter reaching any agreement for its renewal, petitioners became deforciants subject to
ejectment from the premises.[9]

Neither did the Court of Appeals err in ruling that petitioners are not entitled to a reasonable extension
of time to occupy the premises on account of the fact that the lease contract between the parties has
already expired. As there was no longer any lease to speak of which could be extended, the
Metropolitan Trial Court was in effect making a contract for the parties which it obviously did not have
the power to do.[10] The potestative authority of the courts to fix a longer term for a lease under Art.
1687 of the Civil Code[11] applies only to cases where there is no period fixed by the parties. To the
contrary, in this case, the contract of lease provided for a fixed period of five (5) years from January 1,
1985 to December 31, 1989. As the Court held in Bacolod-Murcia Milling Co., Inc. v. Banco Nacional
Filipino:[12]

It is not the province of the court to alter a contract by construction or to make a new contract for the
parties; its duty is confined to the interpretation of the one which they have made for themselves,
without regard to its wisdom or folly, as the court cannot supply material stipulations or read into
contract words which it does not contain.

Indeed, Art. 1675 of the Civil Code excludes cases falling under Art. 1673 (which provides among others,
that the lessor may judicially eject the lessee when the period agreed upon or that which is fixed has
expired) from the cases wherein, pursuant to Art. 1687, courts may fix a longer period of lease. For
these reasons, we hold that the Court of Appeals did not err in ruling that petitioners were not entitled
to an extension of the lease upon its expiration.

Third. The appellate court found petitioners guilty of bad faith in refusing to leave the premises. But
petitioners contend that they acted in good faith under the belief that they were entitled to an
extension of the lease because they had made repairs and improvements on the premises.

This contention is devoid of merit. The fact that petitioners allegedly made repairs on the premises in
question is not a reason for them to retain the possession of the premises. There is no provision of law
which grants the lessee a right of retention over the leased premises on that ground. Art. 448 of the Civil
Code, in relation to Art. 546, which provides for full reimbursement of useful improvements and
retention of the premises until reimbursement is made, applies only to a possessor in good faith, i.e.,
one who builds on a land in the belief that he is the owner thereof. In a number of cases, the Court has
held that this right does not apply to a mere lessee, like the petitioners, otherwise, it would always be in
his power to improve his landlord out of the latters property.[13] Art. 1678 merely grants to such a lessee
making in good faith useful improvements the right to be reimbursed one-half of the value of the
improvements upon the termination of the lease, or, in the alternative, to remove the improvements if
the lessor refuses to make reimbursement.

Petitioners were thus correctly ordered to pay attorneys fees considering that private respondent had to
go to court to protect his interest.[14] The award of P10,000.00 is reasonable in view of the time it has
taken this rather simple case for ejectment to be decided.
Fourth. Petitioners contend that the Court of Appeals erred in affirming the denial of their counterclaim
for damages for their failure to enjoy the peaceful possession of the premises because private
respondent allowed vendors to ply their trade at the front portion of the leased premises. Petitioners
claim that, as a result, they suffered business losses and moral injuries. As both the Metropolitan Trial
Court and Regional Trial Court held, however, there is no evidence to support this claim. As the Court of
Appeals said, petitioners never complained before about the sidewalk vendors occupying a portion of
the leased property. It was only after negotiations for renewal of the lease had failed and private
respondent had filed a complaint for unlawful detainer against them did they complain about the
vendors.

WHEREFORE, the decision of the Court of Appeals, dated October 8, 1992, is AFFIRMED.

Costs against petitioners.

Held:

There is no provision of law which grants the lessee a right of retention over the leased premises on the
ground that he made repairs on the premisesArticle 448 of the Civil Code, in relation to Article 546,
which provides for full reimbursement of useful improvements and retention of the premises until
reimbursement is made, applies only to a possessor in good faith, i.e., one who builds on a land in the
belief that he is the owner thereof

G.R. No. L-11166 April 17, 1959

THE PEOPLE OF THE PHILIPPINES, plaintiff-appellee,

vs.
EUGENIO OLAES, accused-appellant.

Acting Solicitor General Guillermo Torres and Solicitor Antonio M. Consing for appellee.
Pedro Magsalin for appellant.

MONTEMAYOR, J.:

Defendant-appellant Eugenio Olaes, together with Cosme Isip and Bienvenido Dayuta, who where then
at large and five other men, unidentified and also at large, were accused of the crime of attempted
robbery with homicide and frustrated homicide before the Court of First Instance of Rizal. Olaes was the
only one who stood trial, after which he was found guilty of robbery with homicide and frustrated
homicide and sentenced as follows:

WHEREFORE, the accused Eugenio Olaes is hereby declared guilty of robbery with homicide and
frustrated homicide defined and penalized in Article 294, Case No. 1, Revised Penal Code. Although the
crime was attended by the aggravating circumstances of nocturnity and in band, in view of the attitude
of the Chief Executive on death penalty, the accused is hereby sentenced to life imprisonment, to
indemnify the heirs of Maria Argame in the sum P6,000 without subsidiary imprisonment in case of
insolvency, and to pay the costs. In the service of his sentence, the accused should be credited with one-
half of the period of preventive imprisonment suffered by him January 24, 1955.

Because of the penalty imposed, the appeal of Olaes was taken directly to this Court.

The facts in this case as established by the evidence and found by the trial court are the following;
Between 4:00 and 4:30 a. m. of November 9, 1954, Bus No. 64 of the Laguna Transportation Company,
driven by one Feliciano Limosnero, with one conductor, left the town plaza of Bian Laguna, bound for
Manila. Among the passengers were Mariano Inobio, a resident of Bo. Almanza, Las Pias, Rizal, Maria
Argame and Elena Loyola. When the bus reached the curve in Bo. Almanza, Las Pias, a man later
identified by passenger Inobio as Cosme Isip, holding a rifle or carbine, suddenly appeared on the right
side of the road and signalled the bus to stop. Limosnero, taking him for a prospective passenger,
applied his brakes and slowed down, but before the vehicle could come to a complete stop, seven other
men, also carrying guns, such as, garands or carbines, emerged from the left side of the road. Isip
shouted, "Para, pasok!" The appearance of these armed men on both sides of the road must have
affected the equanimity of Limosnero on the wheel, and he must have forgotten to press the clutch with
his foot, resulting in the engine stalling or stopping. Probably convinced that the eight men were not
passengers but were bent on holding-up the bus and robbing the passengers, Limosnero started the
engine and sped away from the place despite the shouts of the men on both sides of the road for him to
stop. Those men immediately commenced firing at the bus which was riddled with bullets.

One of the shots grazed the head of Limosnero. Another shot hit the passenger Maria Argame on the
back, the slug penetrating the abdominal wall and entering the abdominal cavity. Still another shot
struck passenger Elena Loyola on the shoulder, fracturing her right clavicle. When the bus was out of
range of the guns of the eight men on the road and they had ceased firing, passenger Inobio on rising
from his prone position in the bus, saw driver Limosnero's wound on the head, which was bleeding
profusely, the blood dimming his vision, and so he took over the wheel. On reaching Zapote, an
inspector of the Laguna Transportation Company took over the wheel from Inobio and drove the bus
straight to the Las Pias Municipal Building where the incident and shooting was reported to the police.
Thereafter, the same bus, with a police officer, drove straight to Manila and to the Philippine General
Hospital. Maria Argame was pronounced dead on arrival. The fracture of the right clavicle of Elena
Loyola necessitated an operation, which was performed, and she was confined in the hospital for about
twenty days, after which she was discharged, though she was not completely recovered, to continue
treatment at home. The expert testimony on her condition is that if she had not been given prompt
medical attention, she would have died from her wound. Driver Limosnero was treated at the same
hospital for his head would and was released, but treatment was continued by the bus company for
about a month.

During the trial, passenger Inobio, star witness for the Government, told the court that he clearly
identified the person standing on the right side of the road, who signalled the bus to stop and who cried
out "Para, pasok!" as Cosme Isip. Inobio also said that among the seven armed men who emerged from
the left side of the road and who fired at the bus when it sped away, he saw and clearly identified
defendant-appellant Olaes, because he is a barriomate, both of them being residents of Barrio Almanza,
Las Pias, and that Olaes was then carrying a gun, either a garand or a carbine.

Appellant Olaes at the trial insisted that he was not in the group of men that supposedly tried to hold up
the bus, much less was he seen by Inobio because in the course of the investigation made by the
municipal police and the Philippine Constabulary, on two occasions when he was present, and while
Inobio was making statements to the authorities, Inobio never mentioned his name much less pointed
to him. The evidence, however, shows that the failure of Inobio to point to appellant as one of the
supposed hold-uppers and who stopped the bus was because of fear of reprisal, believing that Olaes
was a dangerous character. Appellant also tried to establish a motive or reason for Inobio's accusing
him. We quote with favor the pertinent portions of the decision of the trial court on this point:

He (Olaes) further averred that a policeman from Las Pias investigated the holdup at 7:30 o'clock in the
morning of November 9; that during the questioning of Inobio, Inobio never implicated him, although he
was present for some twenty minutes; that at around 1:00 p.m. while on his way home, he met a PC
team investigating the crime headed by then Lt. Ver, whom he led to the house of Mariano Inobio; that
in the course of the questioning of Inobio which lasted for about half an hour, Inobio never maid
mention of his (accused's) name and told the PC that he did not recognize the persons who attempted
to waylay the bus and hold-up its passengers. When asked for a possible motive why Inobio should
testify against him the way he did, the accused narrated that in May, 1954, he tried to pacify and
separate Inobio and Dayuta who were quarreling; that as Inobio struggled against him, he encircled
Inobio's neck with the arm; that Inobio resented this and accused him for siding with Dayuta; that
shortly, Inobio left muttering, "Your day reckoning will come; you will pay for this"; that from that time
on, he and Inobio had strained relations.

xxx xxx xxx

Much stress is laid on Inobio's failure to pinpoint Olaes during the investigation conducted by Lt. Ver of
the PC at 2:00 p.m., November 9, 1954. But as explained by Inobio, he did not point to Olaes who was
there present as he was afraid of reprisal against himself and members of his family. Indeed, two hours
later, and feeling secure in the municipal building, he revealed the names of Eugenio Olaes, Bienvenido
Dayuta and Cosme Isip to the chief of police of Las Pias.

Moreover, PC Capt. Ver testifying on rebuttal declared that when he questioned Inobio in his house, in
the presence of Olaes, Inobio appeared nervous; that he took him upstairs and during the interrogation,
a PC detachment commander investigating the same offense came and advised him (Ver) that Inobio
already revealed to him that morning that Olaes was among the hold-uppers; that at this juncture,
Inobio informed him (Ver) that the man was his guide and companion who remained downstairs; that
when they looked at the place where they had left Olaes, the latter was nowhere to be found, having
slipped away unnoticed.

Defendant-appellant also interposed the defense of alibi. We also reproduce that portion of the decision
of the trial court on this point.

The defense of alibi must be clearly and satisfactorily proven (People vs. Limbo, 49 Phil., 94). The
testimony of the accused that he slept in the house of his father or brother on the night of November 8
does not preclude the possibility that he woke up at, say 3:00 or 4:00 o'clock in the early morning of the
next day and joined the band of armed men who at 4:30 were frustrated in there nefarious plan to
waylay the bus and rob its passengers, considering the fact that the houses of his father and brother are
situated in the same barrio where the crime was committed (See People vs. Palamos, 49 Phil., 601).
Moreover, the father and/or brother of the accused were available to him at all times to testify in his
behalf and corroborate his alibi that he slept in his house that night. This was not done and no plausible
explanation given why these corroborative witnesses were not presented (People vs. Pili, 52 Phil., 965).

After a careful study of the case, we fully agree with the trial court that defendant Eugenio Olaes is
guilty. However, it will be remembered that the charge against him was for attempted robbery with
homicide and frustrated homicide. Under this charge, as the Solicitor General well said, he may not
convicted of consummated robbery with homicide as the trial court did. Moreover, we agree with the
prosecution that inasmuch as no overt acts pointing to robbery or even an attempt thereof have been
established, the killing of one passenger and the wounding of two others should be considered as plain
murder, frustrated murder, and physical injuries respectively.

The trial court found that the aggravating circumstances of nocturnity and in band, there being more
than three armed men in the group of malefactors, attended the commission of the crimes. The
aggravating circumstance of in band may be considered to qualify the act of killing of Maria as murder,
and the wounding of Elena as frustrated murder. The evidence for the defense was to the effect that
appellant surrendered to the authorities when he found out that he was wanted by the constabulary.
This was not refuted by the prosecution and so, it can be regarded as a fact. This mitigating
circumstance will compensate the other aggravating circumstance of nocturnity. The penalty for murder
which is reclusion temporal in its maximum degree to death, should therefore be imposed in its medium
period, namely reclusion perpetua, so that in the result, we agree with the trial court as to the penalty
imposed by it.

However, we disagree with the lower court as to the reason given by it in imposing the penalty in its
medium degree, namely, that "although the crime was attended by the aggravating circumstances of
nocturnity and in band, in view of the attitude of the Chief Executive on death penalty", the accused was
sentenced only to life imprisonment. Without attempting, even desiring to ascertain the veracity or
trueness of the alleged attitude of the Chief Executive on the application of the death penalty, the
courts of the land will interpret and apply the laws as they find them on the statute books, regardless of
the manner their judgments are executed and implemented by the executive department. By doing so,
the courts will have complied with their solemn duty to administer justice. Until the Legislature sees fit
to repeal or modify the imposition of the extreme penalty, the courts will continue to impose the same
when the facts and circumstances in a case so warrant.

For the crime of frustrated murder, appellant is hereby sentenced to not less than six (6) years of prision
correccional and not more than fourteen (14) years of reclusion temporal, with the accessories of the
law.

As to the physical injuries, the evidence shows that the period within which the injuries on the head of
Limosnero were treated was less than 30 days, for which reason, the offense as to him should be
considered as less serious physical injuries. For this, appellant is hereby sentenced to three (3) months
of arresto mayor.

In view of the foregoing, with the modifications above indicated, the appealed decision is hereby
affirmed, with costs.

Paras, C.J., Padilla, Reyes, A., Bautista Angelo, Labrador, Concepcion and Endencia, JJ., concur.
Dizon vs Suntay

An owner of a movable unlawfully pledged by another is not estopped from recovering possession.
Where the owner delivered the diamond ring solely for sale on commission but the seller instead pawned
it without authority, the owner is not stopped form pursuing an action against the pawnshop.

FACTS:

Lourdes Suntay is the owner of a 3-carat diamond ring valued at P5,500. She and Clarita Sison
entered into a transaction wherein the ring would be sold on commission. Clarita received the ring and
issued a receipt. After some time, Lourdes made demands for the return of the ring but the latter
refused to comply. When Lourdes insisted on the return, Clarita gave her the pawnshop ticket which is
the receipt of the pledge and she found out that 3 days after the ring was received by Clarita, it was
pledged by Melia Sison, the niece of Claritas husband in connivance with Clarita with the pawnshop of
Dominador Dizon for P2,600. Lourdes then filed an estafa case. She then asked Dominador Dizon for the
return of the ring pledged but refused to return the ring thus the case filed by Lourdes.

The CFI issued a writ of replevin so Lourdes was able to have possession of the ring during the
pendency of the case. The CFI also ruled in her favor which was affirmed by the CA on appeal. Thus the
case at bar.

ISSUE:W/N the CA erred in ruling that Lourdes has a right to possession of the ring

HELD:

NO. It reiterated the ruling in de Garcia v. CA, that the controlling provision is Art. 559 of the CC
which states that the possession ofmovable property acquired in good faith is equivalent to a title.
Nevertheless, one who has lost any movable or has been unlawfully deprived thereof may recover it
from the person in possession of the same. If the possessor of a movable lost of which the owner has
been unlawfully deprived, has acquired it in good faith at a public sale, the owner cannot obtain its
return without reimbursing the price paid therefor.

Lourdes, being unlawfully deprived of her ring thus she has a right to recover it from the current
possessor. Dizon is engaged in a business where presumably ordinary prudence would require him to
inquire whether or not an individual who is offering the jewelry by pledge is entitled to do so. The
principle of estoppel cannot help him at all. Since there was no precaution availed of, perhaps because
of the difficulty of resisting opportunity for profit, he only has himself to blame and should be the last to
complain if the right of the true owner of the jewelry should be recognized.

Other issues raised:

Principle of estoppel = has its roots in equity, moral right and natural justice.
> For estoppel to exist, there must be a declaration, act or omission by the party who is sought to be
bound.
> A party should not be permitted to go against his own acts to the prejudice of another.
Concurring opinion by J. Teehankee:

> Interpretation of the unlawfully deprived in Art. 559 of the CC. It is understood to include all cases
where there has been no valid transmission of ownership. If our legislature intended interpretation to
be that of the French Code, it certainly would have adopted and used a narrower term than the broad
language of Art. 559 (formerly 464) and the accepted meaning in accordance with our jurisprudence.

G.R. NO. 144635 JUNE 26, 2006

PROGRAMME INCORPORATED, Vs PROVINCEOF BATAAN

FACTS:

BASECO is the owner of Piazza Hotel and Mariveles Lodge, both located in Mariveles, Bataan. In
1986, BASECO granted petitioner a contract of lease over Piazza Hotel at a monthly rental of 6,500 pesos
for three years, 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 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, 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.

BASECOs Transfer Certificate of Title was cancelled and a new one, was issued to the Province
of Bataan. The trial court rendered judgment in favor of respondent.CA affirmed the trial courts ruling.

ISSUE: WON the petitioner is a possessor in good faith of the Piazza Hotel and Mariveles Lodge

HELD:

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 ones 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. Petitioners 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 petitioners 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.

USUFRUCT

HEMEDES vs CA

316 SCRA 347

FACTS:

The instant controversy involves a question of ownership over an unregistered parcel of land,
situated in Sala, Cabuyao, Laguna. It was originally owned by the late Jose Hemedes, father of Maxima
Hemedes and Enrique D. Hemedes. Jose Hemedes executed a document entitled Donation Inter Vivos
With Resolutory Condition whereby he conveyed ownership over the subject land, together with all its
improvements, in favor of his third wife, Justa Kauapin, subject to the following resolutory conditions:

(a) Upon the death or remarriage of the DONEE, the title to the property donated shall revert to any of
the children, or their heirs, of the DONOR expressly designated by the DONEE in a public document
conveying the property to the latter; or
(b) In absence of such an express designation made by the DONEE before her death or remarriage
contained in a public instrument as above provided, the title to the property shall automatically revert
to the legal heirs of the DONOR in common.

Pursuant to the first condition abovementioned, Justa Kausapin executed a Deed of Conveyance of
Unregistered Real Property by Reversion conveying to Maxima Hemedes the subject property except the
possession and enjoyment of the said property which shall remain vested in Justa Kausapin during her
lifetime, or widowhood and which upon her death or remarriage shall also automatically revert to, and
be transferred to Maxima Hemedes.

Maxima Hemedes and her husband Raul Rodriguez constituted a real estate mortgage over the subject
property in its favor to serve as security for a loan which they obtained in the amount of P6,000.00., R &
B Insurance extrajudicially foreclosed the mortgage since Maxima Hemedes failed to pay the loan even
after it became due. The land was sold at a public auction with R & B Insurance as the highest bidder
and a certificate of sale was issued by the sheriff in its favor. Since Maxima Hemedes failed to redeem
the property within the redemption period, R & B Insurance executed an Affidavit of Consolidation. The
annotation of usufruct in favor of Justa Kausapin was maintained in the new title.

Despite the earlier conveyance of the subject land in favor of Maxima Hemedes, Justa Kausapin
executed whereby she transferred the same land to her stepson Enrique D. Hemedes, pursuant to the
resolutory condition in the deed of donation executed in her favor by her late husband Jose Hemedes.
Enriques D. Hemedes sold the property to Dominium Realty and Construction Corporation (Dominium).
Dominium leased the property to its sister corporation Asia Brewery, Inc. (Asia Brewery) who, even
before the signing of the contract of lease, constructed two warehouses made of steel and asbestos
costing about P10,000,000.00 each. Upon learning of Asia Brewerys constructions upon the subject
property, R & B Insurance sent it a letter informing the former of its ownership of the property as
evidenced by TCT No. 41985 issued in its favor and of its right to appropriate the constructions since
Asia Brewery is a builder in bad faith.

Dominium and Enrique D. Hemedes filed a complaint with the Court of First Instance of Binan, Laguna
for the annulment of TCT No. 41985 issued in favor of R & B Insurance and/or the reconveyance to
Dominium of the subject property. Specifically, the complaint alleged that Dominium was the absolute
owner of the subject property by virtue of the deed of sale executed by Enrique D. Hemedes, who in
turn obtained ownership of the land from Justa Kausapin, as evidenced by the Kasunduan. The plaintiffs
asserted that Justa Kausapin never transferred the land to Maxima Hemedes and that Enrique D.
Hemedes had no knowledge of the registration proceedings initiated by Maxima Hemedes.

The trial court rendered judgment in favor of plaintiffs Dominium and Enrique D. Hemedes, The Court of
Appeals affirmed the assailed decision in toto.

ISSUE:
1. Which of the two conveyances by Justa Kausapin, the first in favor of Maxima Hemedes and the
second in favor of Enrique D. Hemedes, effectively transferred ownership over the subject land?

2. Whether or not R&B Insurance is a purchaser in good faith

HELD:
1. Public respondents finding that the Deed of Conveyance of Unregistered Real Property By Reversion
executed by Justa Kausapin in favor of Maxima Hemedes is spurious is not supported by the factual
findings in this case. In upholding the deed of conveyance in favor of Maxima Hemedes, we must
concomitantly rule that Enrique D. Hemedes and his transferee, Dominium, did not acquire any rights
over the subject property. Justa Kausapin sought to transfer to her stepson exactly what she had earlier
transferred to Maxima Hemedes the ownership of the subject property pursuant to the first condition
stipulated in the deed of donation executed by her husband. Thus, the donation in favor of Enrique D.
Hemedes is null and void for the purported object thereof did not exist at the time of the transfer,
having already been transferred to his sister. Similarly, the sale of the subject property by Enrique D.
Hemedes to Dominium is also a nullity for the latter cannot acquire more rights than its predecessor-in-
interest and is definitely not an innocent purchaser for value since Enrique D. Hemedes did not present
any certificate of title upon which it relied.

2. R & B Insurance alleges that, contrary to public respondents ruling, the presence of an encumbrance
on the certificate of title is not reason for the purchaser or a prospective mortgagee to look beyond the
face of the certificate of title. We sustain petitioner R & B Insurances claim that it is entitled to the
protection of a mortgagee in good faith.

The annotation of usufructuary rights in favor of Justa Kausapin upon Maxima Hemedes OCT does not
impose upon R & B Insurance the obligation to investigate the validity of its mortgagors title. Usufruct
gives a right to enjoy the property of another with the obligation of preserving its form and substance.
The usufructuary is entitled to all the natural, industrial and civil fruits of the property and may
personally enjoy the thing in usufruct, lease it to another, or alienate his right of usufruct, even by a
gratuitous title, but all the contracts he may enter into as such usufructuary shall terminate upon the
expiration of the usufruct.

Clearly, only the jus utendi and jus fruendi over the property is transferred to the usufructuary. The
owner of the property maintains the jus disponendi or the power to alienate, encumber, transform, and
even destroy the same. This right is embodied in the Civil Code, which provides that the owner of
property the usufruct of which is held by another, may alienate it, although he cannot alter the
propertys form or substance, or do anything which may be prejudicial to the usufructuary.

There is no doubt that the owner may validly mortgage the property in favor of a third person and the
law provides that, in such a case, the usufructuary shall not be obliged to pay the debt of the mortgagor,
and should the immovable be attached or sold judicially for the payment of the debt, the owner shall be
liable to the usufructuary for whatever the latter may lose by reason thereof.