A) MERCADO VS CA GR No. L-44001 June 10, 1988B) BALLATAN VS MARTINEZ GR No. 125683 March 2, 1999C) SARMIENTO V AGANA GR No. L-57288 April 30, 1984D) TECHNOGAS V CA GR No. 108894 February 10,1997E) DEPRA V DUMLAO GR No. L-57348, May 6, 1985F) VIRGILIO V PATRICIA GR No. 134651, September 18, 2000G) GUZMAN et al. VS FUENTE et al., GR 32433, December 29, 1930H) ALBURU V VILLANUEVA GR. No. 3003. January 2, 1907I) TUASON V. LUMANLAN GR. No. L-23497 April 26, 1968J) PLEASANTVILLE V CA GR. NO. 79688 February 1, 1996

A) MERCADO VS CAG.R. No. L-44001 June 10, 1988PAZ MERCADO, CAROLINA S. CHICO, LUCIANA CABRERA, JOAQUIN IGNACIO, ELMER FLORES, AVELINA C. NUCOM, et al.,petitioners,vs.HON. COURT OF APPEALS, HON. BENIGNO PUNO, LOLITA C. BULAONG, FLORENTINO AGULTO, SEVERINO SALAYSAY, SUSANA BERNARDINO, et al.,respondents.

Facts:The private respondentsBulaong Group, had for many years been individual lessees of stalls in the public market of Baliuag, Bulacan; from 1956 to 1972. The market was destroyed by fire on February 17, 1956; the members of the Bulaong Group constructed new stalls therein at their expense; and they thereafter paid rentals thereon to the Municipality of Baliuag.In 1972, the members of the group sub-leased their individual stalls to other persons, referred to as theMercado Group.After the Mercado Group had been in possession of the market stalls for some months,as sub-lessees of the Bulaong Group,the municipal officials of Baliuag cancelled the long standing leases of the Bulaong Group and declared the persons comprising the Mercado Group as the rightful lessees of the stalls in question, in substitution of the former.The members of the Bulaong Group sued. They filed several individual complaints with the Court of First Instance seeking recovery of their stalls from the Mercado Group as well as damages.1Their theory was anchored on their claimed ownership of the stalls constructed by them at their own expense, and their resulting right, as such owners, to sub-lease the stalls, and necessarily, to recover them from any person withholding possession thereof from them.On October 24,1975, respondent Judge rendered a summary judgment in all the cases.3It rejected the claim of the Municipality of Baliuag that it had automatically acquired ownership of the new stalls constructed after the old stalls had been razed by fire, declaring the members of the Bulaong Group to bebuilders in good faith,entitled to retain possession of the stalls respectively put up by them until and unless indemnified for the value thereof. The decision also declared that the Bulaong and Mercado Groups had executed the sub-letting agreements with full awareness that they were thereby violating Ordinance No. 14; they were thus inpari delicto,and hence had no cause of action one against the other and no right to recover whatever had been given or demand performance of anything undertaken. The judgment therefore decreed (1) the annulment of the leases between the Municipality and the individuals comprising the Mercado Group (the defendants who had taken over the original leases of the Bulaong Group); and (2) the payment to the individual members of the Bulaong Group (the plaintiffs) of the stated, adjudicated value of the stalls, with interest IF The members of the Mercado Group are now before this Court on an appeal bycertiorari,this time timely taken, assailing the above rulings of the Court of Appeals. Their appeal must fail for lack of merit. No error can be ascribed to the judgment of the Court of Appeals which is hereby affirmedintoto.Held:It was held that to be deemed a builder in good faith, it is essential that a person assert title to the land on which he builds; i.e., that he be a possessor in concept of owner, and that he be unaware that there exists in his title or mode of acquisition any flaw which invalidates it.Lessees cannot be considered builders in good faith (taken from Haystacks, by Berne Guerrero)The members of the Bulaong group were admittedly lessees of space in the public market; they therefore could not, and in truth never did make the claim, that they were owners of any part of the land occupied by the market so that in respect of any new structure put up by them thereon, they could be deemed builders in good faith (in accordance with Article 526 of the Civil Code). To be deemed a builder in good faith, it is essential that a person assert title to the land on which he builds; i.e., that he be a possessor in concept of owner, and that he be unaware that there exists in his title or mode of acquisition any flaw which invalidates it. It is such a builder in good faith who is given the right to retain the thing, even as against the real owner, until he has been reimbursed in full not only for the necessary expenses but also for useful expenses. On the other hand, unlike the builder in good faith, a lessee who 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, can only claim payment of one-half of the value of the improvements or, should the lessor refuse to reimburse said amount, remove the improvements, even though the principal thing may suffer damage thereby.

B) BALLATAN VS MARTINEZ G.R. No. 125683 March 2, 1999EDEN BALLATAN and SPS. BETTY MARTINEZ and CHONG CHY LING,petitioners,vs.COURT OF APPEALS, GONZALO GO, WINSTON GO, LI CHING YAO, ARANETA INSTITUTE OF AGRICULTURE and JOSE N. QUEDDING,respondents.

C) SARMIENTO V AGANA

G.R. No. L-57288 April 30, 1984LEONILA SARMINETO,petitioner,vs.HON. ENRIQUE A. AGANA, District Judge, Court of First Instance of Rizal, Seventh Judicial District, Branch XXVIII, Pasay City, and SPOUSES ERNESTO VALENTINO and REBECCA LORENZO-VALENTINO,respondents.This Petition for certiorari questions a March 29, 1979 Decision rendered by the then Court of First Instance of Pasay City. The Decision was one made on memoranda, pursuant to the provisions of RA 6031, and it modified, on October 17, 1977, a judgment of the then Municipal Court of Paranaque, Rizal, in an Ejectment suit instituted by herein petitioner Leonila SARMIENTO against private respondents, the spouses ERNESTO Valentino and Rebecca Lorenzo. For the facts, therefore, we have to look to the evidence presented by the parties at the original level.It appears that while ERNESTO was still courting his wife, the latter's mother had told him the couple could build a RESIDENTIAL HOUSEona lot of 145 sq. ms., being Lot D of a subdivision in Paranaque (the LAND, for short). In 1967, ERNESTO did construct a RESIDENTIAL HOUSE on the LAND at a cost of P8,000.00 to P10,000.00. It was probably assumed that the wife's mother was the owner of the LAND and that, eventually, it would somehow be transferred to the spouses.It subsequently turned out that the LAND had been titled in the name of Mr. & Mrs. Jose C. Santo, Jr. who, on September 7,1974, sold the same to petitioner SARMIENTO. The following January 6, 1975, SARMIENTO asked ERNESTO and wife to vacate and, on April 21, 1975, filed an Ejectment suit against them. In the evidentiary hearings before the Municipal Court, SARMIENTO submitted the deed of sale of the LAND in her favor, which showed the price to be P15,000.00. On the other hand, ERNESTO testified that the then cost of the RESIDENTIAL HOUSE would be from P30,000.00 to P40,000.00. The figures were not questioned by SARMIENTO.The Municipal Court found that private respondents had built the RESIDENTIAL HOUSE in good faith, and, disregarding the testimony of ERNESTO, that it had a value of P20,000.00. It then ordered ERNESTO and wife to vacate the LAND after SARMIENTO has paid them the mentioned sum of P20,000.00.The Ejectment suit was elevated to the Court of First Instance of Pasay where, after the submission of memoranda, said Court rendered a modifying Decision under Article 448 of the Civil Code. SARMIENTO was required, within 60 days, to exercise the option to reimburse ERNESTO and wife the sum of 40,000.00 as the value of the RESIDENTIAL HOUSE, or the option to allow them to purchase the LAND for P25,000.00. SARMIENTO did not exercise any of the two options within the indicated period, and ERNESTO was then allowed to deposit the sum of P25,000.00 with the Court as the purchase price for the LAND. This is the hub of the controversy. SARMIENTO then instituted the instant certiorari proceedings.We agree that ERNESTO and wife were builders in good faith in view of the peculiar circumstances under which they had constructed the RESIDENTIAL HOUSE. As far as they knew, the LAND was owned by ERNESTO's mother-in-law who, having stated they could build on the property, could reasonably be expected to later on give them the LAND.In regards to builders in good faith, Article 448 of the Code provides:t.hqwART. 448. The owner of the land on which anything has been built, sown or planted in good faith,shall have the rightto appropriate as his own the works, sowing or planting, after payment of the indemnity provided for in articles 546 and 548, orto 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. (Paragraphing supplied)The value of the LAND, purchased for P15,000.00 on September 7, 1974, could not have been very much more than that amount during the following January when ERNESTO and wife were asked to vacate. However, ERNESTO and wife have not questioned the P25,000.00 valuation determined by the Court of First Instance.In regards to the valuation of the RESIDENTIAL HOUSE, the only evidence presented was the testimony of ERNESTO that its worth at the time of the trial should be from P30,000.00 to P40,000.00. The Municipal Court chose to assess its value at P20,000.00, or below the minimum testified by ERNESTO, while the Court of First Instance chose the maximum of P40,000.00. In the latter case, it cannot be said that the Court of First Instance had abused its discretion.The challenged decision of respondent Court, based on valuations of P25,000.00 for the LAND and P40,000.00 for the RESIDENTIAL HOUSE, cannot be viewed as not supported by the evidence. The provision for the exercise by petitioner SARMIENTO of either the option to indemnify private respondents in the amount of P40,000.00, or the option to allow private respondents to purchase the LAND at P25,000.00, in our opinion, was a correct decision.t.hqwThe owner of the building erected in good faith on a land owned by another, is entitled to retain the possession of the land until he is paid the value of his building, under article 453 (now Article 546). The owner, of the land. upon, the other hand, has the option, under article 361 (now Article 448), either to pay for the building or to sell his land to the owner of the building.But he cannot,as respondents here did,refuse both to pay for the building and to sell the landand compel the owner of the building to remove it from the land where it is erected. He is entitled to such remotion only when, after having chosen to sell his land, the other party fails to pay for the same. (Emphasis ours)We hold, therefore, that the order of Judge Natividad compelling defendants-petitioners to remove their buildings from the land belonging to plaintiffs-respondents only because the latter chose neither to pay for such buildings nor to sell the land, is null and void, for it amends substantially the judgment sought to be executed and is, furthermore, offensive to articles 361 (now Article 448) and 453 (now Article 546) of the Civil Code. (Ignacio vs. Hilario, 76 Phil. 605, 608 [1946]).WHEREFORE, the Petition for Certiorari is hereby ordered dismissed, without pronouncement as to costs.SO ORDERED.1wph1.tTeehankee (Chairman), Plana, Relova, Gutierrez, Jr. and De la Fuente, JJ., concur.

D) TECHNOGAS V CAG.R. No. 108894 February 10, 1997TECNOGAS PHILIPPINES MANUFACTURING CORPORATION,petitioner,vs.COURT OF APPEALS (FORMER SPECIAL SEVENTEENTH DIVISION) and EDUARDO UY,respondents.PANGANIBAN,J.:The parties in this case are owners of adjoining lots in Paraaque, Metro Manila. It was discovered in a survey, that a portion of a building of petitioner, which was presumably constructed by its predecessor-in-interest, encroached on a portion of the lot owned by private respondent. What are the rights and obligations of the parties? Is petitioner considered a builder in bad faith because, as held by respondent Court, he is "presumed to know the metes and bounds of his property as described in his certificate of title"? Does petitioner succeed into the good faith or bad faith of his predecessor-in-interest which presumably constructed the building?These are the questions raised in the petition for review of the Decision1dated August 28, 1992, in CA-G.R. CV No. 28293 of respondent Court2where the disposition reads:3WHEREFORE, premises considered, the Decision of the Regional Trial Court is hereby reversed and set aside and another one entered 1. Dismissing the complaint for lack of cause of action;2. Ordering Tecnogas to pay the sum of P2,000.00 per month as reasonable rental from October 4, 1979 until appellee vacates the land;3. To remove the structures and surrounding walls on the encroached area;4. Ordering appellee to pay the value of the land occupied by the two-storey building;5. Ordering appellee to pay the sum of P20,000.00 for and as attorney's fees;6. Costs against appellee.Acting on the motions for reconsideration of both petitioner and private respondent, respondent Court ordered the deletion of paragraph 4 ofthe dispositive portion in an Amended Decision dated February 9, 1993, as follows:4WHEREFORE, premises considered, our decision of August 28, 1992 is hereby modified deleting paragraph 4 of the dispositive portion of our decision which reads:4. Ordering appellee to pay the value of the land occupied by the two-storey building.The motion for reconsideration of appellee is hereby DENIED for lack of merit.The foregoing Amended Decision is also challenged in the instant petition.The FactsThe facts are not disputed. Respondent Court merely reproduced the factual findings of the trial court, as follows:5That plaintiff (herein petitioner) which is a corporation duly organized and existing under and by virtue of Philippine laws is the registered owner of a parcel of land situated in Barrio San Dionisio, Paraaque, Metro Manila known as Lot 4331-A (should be 4531-A) of Lot 4531 of the Cadastral Survey of Paraaque, Metro Manila, covered by Transfer Certificate of Title No. 409316 of the Registry of Deeds of the Province of Rizal; that said land was purchased by plaintiff from Pariz Industries, Inc. in 1970, together with all the buildings and improvements including the wall existing thereon; that the defendant (herein private respondent) is the registered owner of a parcel of land known as Lot No. 4531-B of Lot 4531 of the Cadastral Survey of Paraaque, LRC (GLRO) Rec. No. 19645 covered by Transfer Certificate of Title No. 279838, of the Registry of Deeds for the Province of Rizal; that said land which adjoins plaintiff's land was purchased by defendant from a certain Enrile Antonio also in 1970; that in 1971, defendant purchased another lot also adjoining plaintiffs land from a certain Miguel Rodriguez and the same was registered in defendant's name under Transfer Certificate of Title No. 31390, of the Registry of Deeds for the Province of Rizal; that portions of the buildings and wall bought by plaintiff together with the land from Pariz Industries are occupying a portion of defendant's adjoining land; that upon learning of the encroachment or occupation by its buildings and wall of a portion of defendant's land, plaintiff offered to buy from defendant that particular portion of defendant's land occupied by portions of its buildings and wall with an area of 770 square meters, more or less, but defendant, however, refused the offer. In 1973, the parties entered into a private agreement before a certain Col. Rosales in Malacaang, wherein plaintiff agreed to demolish the wall at the back portion of its land thus giving to defendant possession of a portion of his land previously enclosed by plaintiff's wall; that defendant later filed a complaint before the office of Municipal Engineer of Paraaque, Metro Manila as well as before the Office of the Provincial Fiscal of Rizal against plaintiff in connection with the encroachment or occupation by plaintiff's buildings and walls of a portion of its land but said complaint did not prosper; that defendant dug or caused to be dug a canal along plaintiff's wall, a portion of which collapsed in June, 1980, and led to the filing by plaintiff of the supplemental complaint in the above-entitled case and a separate criminal complaint for malicious mischief against defendant and his wife which ultimately resulted into the conviction in court of defendant's wife for the crime of malicious mischief; that while trial of the case was in progress, plaintiff filed in Court a formal proposal for settlement of the case but said proposal, however, was ignored by defendant.After trial on the merits, the Regional Trial Court6of Pasay City, Branch 117, in Civil Case No. PQ-7631-P, rendered a decision dated December 4, 1989 in favor of petitioner who was the plaintiff therein. The dispositive portionreads:7WHEREFORE, judgment is hereby rendered in favor of plaintiff and against defendant and ordering the latter to sell to plaintiff that portion of land owned by him and occupied by portions of plaintiff's buildings and wall at the price of P2,000.00 per square meter and to pay the former:1. The sum of P44,000.00 to compensate for the losses in materials and properties incurred by plaintiff through thievery as a result of the destruction of its wall;2. The sum of P7,500.00 as and by way of attorney's fees; and3. The costs of this suit.Appeal was duly interposed with respondent Court, which as previously stated, reversed and set aside the decision of the Regional Trial Court and rendered the assailed Decision and Amended Decision. Hence, this recourse under Rule 45 of the Rules of Court.The IssuesThe petition raises the following issues:8(A)Whether or not the respondent Court of Appeals erred in holding the petitioner a builder in bad faith because it is "presumed to know the metes and bounds of his property."(B)Whether or not the respondent Court of Appeals erred when it used the amicable settlement between the petitioner and the private respondent, where both parties agreed to the demolition of the rear portion of the fence, as estoppel amounting to recognition by petitioner of respondent's right over his property including the portions of the land where the other structures and the building stand, which were not included in the settlement.(C)Whether or not the respondent Court of Appeals erred in ordering the removal of the "structures and surrounding walls on the encroached area" and in withdrawing its earlier ruling in its August 28, 1992 decision for the petitioner "to pay for the value of the land occupied" by the building,only becausethe private respondent has "manifested its choice to demolish" it despite the absence of compulsory sale where the builder fails to pay for the land, and which "choice" private respondent deliberately deleted from its September 1, 1980 answer to the supplemental complaint in the Regional Trial Court.In its Memorandum, petitioner poses the following issues:A.The time when to determine the good faith of the builder under Article 448 of the New Civil Code, is reckonedduringthe period when it was actually being built; and in a case wherenoevidence was presentednorintroduced as to the good faith or bad faith of the builder at that time, as in this case, he must bepresumedto be a "builder in good faith," since "bad faithcannotbe presumed."9B.In a specific "boundary overlap situation" which involves a builder in good faith,as in this case, it is now well settled that the lot owner, who builds on the adjacent lot isnotcharged with "constructive notice" of the technical metes and bounds contained in their torrens titles to determine the exact and precise extent of his boundary perimeter.10C.The respondent court's citation of the twin cases ofTuason & Co.v.LumanlanandTuason & Co.v.Macalindongisnotthe "judicial authority" for a boundary dispute situation between adjacent torrens titled lot owners, as the facts of the present case donotfall withinnorsquare with the involved principle of a dissimilar case.11D.Quite contrary to respondent Uy's reasoning, petitioner Tecnogas continues to be a builder in good faith, even if it subsequently built/repaired the walls/other permanent structures thereon while the casea quowas pending and even while respondent sent the petitioner many letters/filed cases thereon.12D.(E.)The amicable settlement between the parties should be interpreted as a contract and enforced only in accordance with its explicit terms, andnotover and beyond that agreed upon; because the courts donothave the power to create a contractnorexpand its scope.13E.(F.)As ageneral rule, although the landowner has the option to choose between: (1) "buyingthe building built in good faith", or (2) "sellingthe portion of his land on which stands the building" under Article 448 of the Civil Code; thefirstoption is not absolute, because anexceptionthereto, once it would be impractical for the landowner to choose to exercise the first alternative,i.e. buy that portion of the house standing on his land, for the whole building might be rendered useless. The workable solution is for him to select the second alternative, namely, to sell to the builder that part of his land on which was constructed a portion of the house.14Private respondent, on the other hand, argues that the petition is "suffering from the following flaws:151. It did not give the exact citations of cases decided by the Honorable Supreme Court that allegedly contradicts the ruling of the Hon. Court of Appeals based on the doctrine laid down inTuason vs.Lumanlancase citing alsoTuason vs.Macalindongcase (Supra).2. Assuming that the doctrine in the allegedCo Tao vs.Chicocase is contradictory to the doctrine inTuason vs.LumanlanandTuason vs.Macalindong, the two cases being more current, the same should prevail.Further, private respondent contends that the following "unmistakably" point to the bad faith of petitioner: (1) private respondent's purchase of the two lots, "was ahead of the purchase by petitioner of the building and lot from Pariz Industries"; (2) the declaration of the General Manager of Tecnogas that the sale between petitioner and Pariz Industries "was not registered" because of some problems with China Banking Corporation; and (3) the Deed of Sale in favor of petitioner was registered in its name only in "the month of May 1973."16The Court's Ru1ingThe petition should be granted.Good Faith or Bad FaithRespondent Court, citing the cases ofJ.M.Tuason & Co.,Inc.vs.Vda.de Lumanlan17andJ.M.Tuason & Co.,Inc.vs.Macalindong,18ruled that petitioner "cannot be considered in good faith" because as a land owner, it is "presumed to know the metes and bounds of his own property, specially if the same are reflected in a properly issued certificate of title. One who erroneously builds on the adjoining lot should be considered a builder in(b)ad (f)aith, there being presumptive knowledge of the Torrens title, the area, and the extent of the boundaries."19We disagree with respondent Court. The two cases it relied upon do not support its main pronouncement that a registered owner of land has presumptive knowledge of the metes and bounds of its own land, and is therefore in bad faith if he mistakenly builds on an adjoining land. Aside from the fact that those cases had factual moorings radically different from those obtaining here, there is nothing in those cases which would suggest, however remotely, that bad faith is imputable to a registered owner of land when a part of his building encroaches upon a neighbor's land, simply because he is supposedly presumed to know the boundaries of his land as described in his certificate of title. No such doctrinal statement could have been made in those cases because such issue was not before the Supreme Court. Quite the contrary, we have rejected such a theory inCo Tao vs.Chico,20where we held that unless one is versed in the science of surveying, "no one can determine the precise extent or location of his property by merely examining his paper title."There is no question that when petitioner purchased the land from Pariz Industries, the buildings and other structures were already in existence. The record is not clear as to who actually built those structures, but it may well be assumed that petitioner's predecessor-in-interest, Pariz Industries, did so. Article 527 of the Civil Code presumes good faith, and since no proof exists to show that the encroachment over a narrow, needle-shaped portion of private respondent's land was done in bad faith by the builder of the encroaching structures, the latter should be presumed to have built them in good faith.21It is presumed that possession continues to be enjoyed in the same character in which it was acquired, until the contrary is proved.22Good 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.23Hence, such good faith, by law, passed on to Pariz's successor, petitioner in this case. Further, "(w)here one derives title to property from another, the act, declaration, or omission of the latter, while holding the title, in relation to the property, is evidence against the former."24And possession acquired in good faith does not lose this character except in case and from the moment facts exist which show that the possessor is not unaware that he possesses the thing improperly or wrongfully.25The good faith ceases from the moment defects in the title are made known to the possessor, by extraneous evidence or by suit for recovery of the property by the true owner.26Recall that the encroachment in the present case was caused by a very slight deviation of the erected wall (as fence) which was supposed to run in a straight line from point 9 to point 1 of petitioner's lot. It was an error which, in the context of the attendant facts, was consistent with good faith. Consequently, the builder, if sued by the aggrieved landowner for recovery of possession, could have invoked the provisions of Art. 448 of the Civil Code, which reads: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.The obvious benefit to the builder under this article is that, instead of being outrightly ejected from the land, he can compel the landowner to make a choice between the two options: (1) to appropriate the building by paying the indemnity required by law, or (2) sell the land to the builder. The landowner cannot refuse to exercise either option and compel instead the owner of the building to remove it from the land.27The question, however, is whether the same benefit can be invoked by petitioner who, as earlier stated, is not the builder of the offending structures but possesses them as buyer.We answer such question in the affirmative.In the first place, there is no sufficient showing that petitioner was aware of the encroachment at the time it acquired the property from Pariz Industries. We agree with the trial court that various factors in evidence adequately show petitioner's lack of awareness thereof. In any case, contrary proof has not overthrown the presumption of good faith under Article 527 of the Civil Code, as already stated, taken together with the disputable presumptions of the law on evidence. These presumptions state, under Section 3 (a) of Rule 131 of the Rules of Court, that the person is innocent of a crime or wrong; and under Section 3 (ff) of Rule 131, that the law has been obeyed. In fact, private respondent Eduardo Uy himself was unaware of such intrusion into his property until after 1971 when he hired a surveyor, following his purchase of another adjoining lot, to survey all his newly acquired lots. Upon being apprised of the encroachment, petitioner immediately offered to buy the area occupied by its building a species of conduct consistent with good faith.In the second place, upon delivery of the property by Pariz Industries, as seller, to the petitioner, as buyer, the latter acquired ownership of the property. Consequently and as earlier discussed, petitioner is deemed to have stepped into the shoes of the seller in regard to all rights of ownership over the immovable sold, including the right to compel the private respondent to exercise either of the two options provided under Article 448 of the Civil Code.EstoppelRespondent Court ruled that the amicable settlement entered into between petitioner and private respondent estops the former from questioning the private respondent's "right" over the disputed property. It held that by undertaking to demolish the fence under said settlement, petitioner recognized private respondent's right over the property, and "cannot later on compel" private respondent "to sell to it the land since" private respondent "is under no obligation to sell."28We do not agree. Petitioner cannot be held in estoppel for entering into the amicable settlement, the pertinent portions of which read:29That the parties hereto have agreed that the rear portion of the fence that separates the property of the complainant and respondent shall be demolished up to the back of the building housing the machineries which demolision (sic) shall be undertaken by the complainant at anytime.That the fence which serve(s) as a wall housing the electroplating machineries shall not be demolished in the mean time which portion shall be subject to negotiation by herein parties.From the foregoing, it is clear that petitioner agreed only to the demolition of a portion of the wall separating the adjoining properties of the parties i.e. "up to the back of the building housing the machineries." But that portion of the fence which served as the wall housing the electroplating machineries was not to be demolished. Rather, it was to "be subject to negotiation by herein parties." The settlement may have recognized the ownership of private respondent but such admission cannot be equated with bad faith. Petitioner was only trying to avoid a litigation, one reason for entering into an amicable settlement.As was ruled inOsmea vs.Commission on Audit,30A compromise is a bilateral act or transaction that is expressly acknowledged as a juridical agreement by the Civil Code and is therein dealt with in some detail. "A compromise," declares Article 2208 of said Code, "is a contract whereby the parties, by making reciprocal concessions, avoid a litigation or put an end to one already commenced."xxx xxx xxxThe Civil Code not only defines and authorizes compromises, it in fact encourages them in civil actions. Art. 2029 states that "The Court shall endeavor to persuade the litigants in a civil case to agree upon some fair compromise." . . .In the context of the established facts, we hold that petitioner did not lose its rights under Article 448 of the Civil Code on the basis merely of the fact that some years after acquiring the property in good faith, it learned about and aptly recognized the right of private respondent to a portion of the land occupied by its building. The supervening awareness of the encroachment by petitioner does not militate against its right to claim the status of a builder in good faith. In fact, a judicious reading of said Article 448 will readily show that the landowner's exercise of his option can only take place after the builder shall have come to know of the intrusion in short, when both parties shall have become aware of it. Only then will the occasion for exercising the option arise, for it is only then that both parties will have been aware that a problem exists in regard to their property rights.Options of Private RespondentWhat then is the applicable provision in this case which private respondent may invoke as his remedy: Article 448 or Article 45031of the Civil Code?In view of the good faith ofbothpetitioner and private respondent, their rights and obligations are to be governed by Art. 448. The essential fairness of this codal provision has been pointed out by Mme. Justice Ameurfina Melencio-Herrera, citing Manresa and applicable precedents, in the case ofDepra vs.Dumlao,32to wit:Where the builder, planter or sower has acted in good faith, a conflict of rights arises between the owners, and it becomes necessary to protect the owner of the improvements without causing injustice to the owner of the land. In view of the impracticality of creating a state of forced co-ownership, the law has provided a just solution by giving the owner of the land the option to acquire the improvements after payment of the proper indemnity, or to oblige the builder or planter to pay for the land and the sower to pay the proper rent. It is the owner of the land who is authorized to exercise the option, because his right is older, and because, by the principle of accession, he is entitled to the ownership of the accessory thing. (3 Manresa 213; Bernardo vs. Bataclan, 37 Off. Gaz. 1382; Co Tao vs. Chan Chico, G.R. No. 49167, April 30, 1949; Article applied; see Cabral, et al. vs. Ibanez [S.C.] 52 Off. Gaz. 217; Marfori vs. Velasco, [C.A.] 52 Off. Gaz. 2050).The private respondent's insistence on the removal of the encroaching structures as the proper remedy, which respondent Court sustained in its assailed Decisions, is thus legally flawed. This is not one of the remedies bestowed upon him by law. It would be available only if and when he chooses to compel the petitioner to buy the land at a reasonable price but the latter fails to pay such price.33This has not taken place. Hence, his options are limited to: (1) appropriating the encroaching portion of petitioner's building after payment of proper indemnity, or (2) obliging the latter to buy the lot occupied by the structure. He cannot exercise a remedy of his own liking.Neither is petitioner's prayer that private respondent be ordered to sell the land34the proper remedy. While that was dubbed as the "more workable solution" inGrana and Torralba vs.The Court of Appeals,etal.,35it was not the relief granted in that case as the landowners were directed to exercise "within 30 days from this decision their option to either buy the portion of the petitioners' house on their land or sell to said petitioners the portion of their land on which it stands."36Moreover, inGrana and Torralba, the area involved was only 87 square meters while this case involves 520 square meters37. In line with the case ofDepra vs.Dumlao,38this case will have to be remanded to the trial court for further proceedings to fully implement the mandate of Art. 448. It is a rule of procedure for the Supreme Court to strive to settle the entire controversy in a single proceeding leaving no root or branch to bear the seeds of futurelitigation.39Petitioner, however, must also pay the rent for the property occupied by its building as prescribed by respondent Court from October 4, 1979, but only up to the date private respondent serves notice of its option upon petitioner and the trial court; that is, if such option is for private respondent to appropriate the encroaching structure. In such event, petitioner would have a right of retention which negates the obligation to pay rent.40The rent should however continue if the option chosen is compulsory sale, but only up to the actual transfer of ownership.The award of attorney's fees by respondent Court against petitioner is unwarranted since the action appears to have been filed in good faith. Besides, there should be no penalty on the right to litigate.41WHEREFORE, premises considered, the petition is hereby GRANTED and the assailed Decision and the Amended Decision are REVERSED and SET ASIDE. In accordance with the case ofDepra vs.Dumlao,42this case is REMANDED to the Regional Trial Court of Pasay City, Branch 117, for further proceedings consistent with Articles 448 and 54643of the Civil Code, as follows:The trial court shall determine:a) the present fair price of private respondent's 520 square-meter area of land;b) the increase in value ("plus value") which the said area of 520 square meters may have acquired by reason of the existence of the portion of the building on the area;c) the fair market value of the encroaching portion of the building; andd) whether the value of said area of land is considerably more than the fair market value of the portion of the building thereon.2. After said amounts shall have been determined by competent evidence, the regional trial court shall render judgment as follows:a) The private respondent shall be granted a period of fifteen (15) days within which to exercise his option under the law (Article 448, Civil Code),whetherto appropriate the portion of the building as his own by paying to petitioner its fair market value,orto oblige petitioner to pay the price of said area. The amounts to be respectively paid by petitioner and private respondent, in accordance with the option thus exercised by written notice of the other party and to the court, shall be paid by the obligor within fifteen (15) days from such notice of the option by tendering the amount to the trial court in favor of the party entitled to receive it;b) If private respondent exercises the option to oblige petitioner to pay the price of the land but the latter rejects such purchase because, as found by the trial court, the value of the land is considerably more than that of the portion of the building, petitioner shall give written notice of such rejection to private respondent and to the trial court within fifteen (15) days from notice of private respondent's option to sell the land. In that event, the parties shall be given a period of fifteen (15) days from such notice of rejection within which to agree upon the terms of the lease, and give the trial court formal written notice of the agreement and its provisos. If no agreement is reached by the parties, the trial court, within fifteen (15) days from and after the termination of the said period fixed for negotiation, shall then fix the terms of the lease provided that the monthly rental to be fixed by the Court shall not be less than two thousand pesos (P2,000.00) per month, payable within the first five (5) days of each calendar month. The period for the forced lease shall not be more than two (2) years, counted from the finality of the judgment, considering the long period of time since 1970 that petitioner has occupied the subject area. The rental thus fixed shall be increased by ten percent (10%) for the second year of the forced lease. Petitioner shall not make any further constructions or improvements on the building. Upon expiration of the two-year period, or upon default by petitioner in the payment of rentals for two (2) consecutive months, private respondent shall be entitled to terminate the forced lease, to recover his land, and to have the portion of the building removed by petitioner or at latter's expense. The rentals herein provided shall be tendered by petitioner to the trial court for payment to private respondent, and such tender shall constitute evidence of whether or not compliance was made within the period fixed by the said court.c) In any event, petitioner shall pay private respondent an amount computed at two thousand pesos (P2,000.00) per month as reasonable compensation for the occupancy of private respondent's land for the period counted from October 4, 1979, up to the date private respondent serves notice of its option to appropriate the encroaching structures, otherwise up to the actual transfer of ownership to petitioner or, in case a forced lease has to be imposed, up to the commencement date of the forced lease referred to in the preceding paragraph;d) The periods to be fixed by the trial court in its decision shall be non-extendible, and upon failure of the party obliged to tender to the trial court the amount due to the obligee, the party entitled to such payment shall be entitled to an order of execution for the enforcement of payment of the amount due and for compliance with such other acts as may be required by the prestation due the obligee.No costs.SO ORDERED

E) DEPRA VS DUMLAOG.R. No. L-57348 May 16, 1985FRANCISCO DEPRA,plaintiff-appellee,vs.AGUSTIN DUMLAO,defendant-appellant.Roberto D. Dineros for plaintiff-appellee.Veil D. Hechanova for defendant-appellant.MELENCIO-HERRERA,J.:This is an appeal from the Order of the former Court of First Instance of Iloilo to the then Court of Appeals, which the latter certified to this instance as involving pure questions of lawPlaintiff-appellee, Francisco Depra, is the owner of a parcel of land registered under Transfer Certificate of Title No. T3087, known as Lot No. 685, situated in the municipality of Dumangas, Iloilo, with an area of approximately 8,870 square meters. Agustin Dumlao, defendant-appellant, owns an adjoining lot, designated as Lot No. 683, with an approximate area of 231 sq. ms.Sometime in 1972, when DUMLAO constructed his house on his lot, the kitchen thereof had encroached on an area of thirty four (34) square meters of DEPRA's property, After the encroachment was discovered in a relocation survey of DEPRA's lot made on November 2,1972, his mother, Beatriz Depra after writing a demand letter asking DUMLAO to move back from his encroachment, filed an action for Unlawful Detainer on February 6,1973 against DUMLAO in the Municipal Court of of Dumangas, docketed as Civil Case No 1, Said complaint was later amended to include DEPRA as a party plain. plaintiff.After trial, the Municipal Court found that DUMLAO was a builder in good faith, and applying Article 448 of the Civil Code, rendered judgment on September 29, 1973, the dispositive portion of which reads:Ordering that a forced lease is created between the parties with the plaintiffs, as lessors, and the defendants as lessees, over the disputed portion with an area of thirty four (34) square meters, the rent to be paid is five (P5.00) pesos a month, payable by the lessee to the lessors within the first five (5) days of the month the rent is due; and the lease shall commence on the day that this decision shall have become final.From the foregoing judgment, neither party appeal so that, ff it were a valid judgment, it would have ordinarily lapsed into finality, but even then, DEPRA did not accept payment of rentals so that DUMLAO deposited such rentals with the Municipal Court.On July 15,1974, DEPRA filed a Complaint for Quieting of Title against DUMLAO before the then Court of First Instance of Iloilo, Branch IV (Trial Court), involving the very same 34 square meters, which was the bone of contention in the Municipal Court. DUMLAO, in his Answer, admitted the encroachment but alleged, in the main, that the present suit is barred byres judicataby virtue of the Decision of the Municipal Court, which had become final and executory.After the case had been set for pre-trial, the parties submitted a Joint Motion for Judgment based on the Stipulation of Facts attached thereto. Premised thereon, the Trial Court on October 31, 1974, issued the assailed Order, decreeing:WHEREFORE, the Court finds and so holds that the thirty four (34) square meters subject of this litigation is part and parcel of Lot 685 of the Cadastral Survey of Dumangas of which the plaintiff is owner as evidenced by Transfer Certificate of Title No. 3087 and such plaintiff is entitled to possess the same.Without pronouncement as to costs.SO ORDERED.Rebutting the argument ofres judicatarelied upon by DUMLAO, DEPRA claims that the Decision of the Municipal Court was null and voidab initiobecause its jurisdiction is limited to the sole issue of possession, whereas decisions affecting lease, which is an encumbrance on real property, may only be rendered by Courts of First Instance.Addressing out selves to the issue of validity of the Decision of the Municipal Court, we hold the same to be null and void. The judgment in a detainer case is effective in respect of possession only (Sec. 7, Rule 70, Rules of Court).1The Municipal Court over-stepped its bounds when it imposed upon the parties a situation of "forced lease", which like "forced co-ownership" is not favored in law. Furthermore, a lease is an interest in real property, jurisdiction over which belongs to Courts of First Instance (now Regional Trial Courts) (Sec. 44(b), Judiciary Act of 1948;2Sec. 19 (2) Batas Pambansa Blg. 129).3Since the Municipal Court, acted without jurisdiction, its Decision was null and void and cannot operate asres judicatato the subject complaint for Queting of Title. Besides, even if the Decision were valid, the rule onres judicatawould not apply due to difference in cause of action. In the Municipal Court, the cause of action was the deprivation of possession, while in the action to quiet title, the cause of action was based on ownership. Furthermore, Sec. 7, Rule 70 of the Rules of Court explicitly provides that judgment in a detainer case "shall not bar an action between the same parties respecting title to the land. "4Conceded in the Stipulation of Facts between the parties is that DUMLAO was a builder in good faith. Thus,8. That the subject matter in the unlawful detainer case, Civil Case No. 1, before the Municipal Court of Dumangas, Iloilo involves the same subject matter in the present case, the Thirty-four (34) square meters portion of land and built thereon in good faith is a portion of defendant's kitchen and has been in the possession of the defendant since 1952 continuously up to the present; ... (Emphasis ours)Consistent with the principle that our Court system, like any other, must be a dispute resolving mechanism, we accord legal effect to the agreement of the parties, within the context of their mutual concession and stipulation. They have, thereby, chosen alegal formulato resolve their dispute to appeal ply to DUMLAO the rights of a "builder in good faith" and to DEPRA those of a "landowner in good faith" as prescribed in Article 448. Hence, we shall refrain from further examining whether the factual situations of DUMLAO and DEPRA conform to the juridical positions respectively defined by law, for a "builder in good faith" under Article 448, a "possessor in good faith" under Article 526 and a "landowner in good faith' under Article 448.In regards to builders in good faith, Article 448 of the Civil Code provides:ART. 448. The owner of the land on which anything has been built sown or planted in good faith,shall have the rightto appropriate as his own the works, sowing or planting, after payment of the indemnity provided for in articles 546 and 548, orto 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 (Paragraphing supplied)Pursuant to the foregoing provision, DEPRA has the option either to pay for the encroaching part of DUMLAO's kitchen, or to sell the encroached 34 square meters of his lot to DUMLAO. He cannot refuse to pay for the encroaching part of the building, and to sell the encroached part of his land,5as he had manifested before the Municipal Court. But that manifestation is not binding because it was made in a void proceeding.However, the good faith of DUMLAO is part of the Stipulation of Facts in the Court of First Instance. It was thus error for the Trial Court to have ruled that DEPRA is "entitled to possession," without more, of the disputed portion implying thereby that he is entitled to have the kitchen removed. He is entitled to such removal only when, after having chosen to sell his encroached land, DUMLAO fails to pay for the same.6In this case, DUMLAO had expressed his willingness to pay for the land, but DEPRA refused to sell.The owner of the building erected in good faith on a land owned by another, is entitled to retain the possession of the land until he is paid the value of his building, under article 453 (now Article 546). The owner of the land, upon the other hand, has the option, under article 361 (now Article 448), either to pay for the building or to sell his land to the owner of the building.But he cannotas respondents here didrefuse both to pay for the building and to sell the landand compel the owner of the building to remove it from the land where it erected. He is entitled to such remotion only when, after having chosen to sell his land. the other party fails to pay for the same (italics ours).We hold, therefore, that the order of Judge Natividad compelling defendants-petitioners to remove their buildings from the land belonging to plaintiffs-respondents only because the latter chose neither to pay for such buildings nor to sell the land, is null and void, for it amends substantially the judgment sought to be executed and is. furthermore, offensive to articles 361 (now Article 448) and 453 (now Article 546) of the Civil Code. (Ignacio vs. Hilario, 76 Phil. 605, 608[1946]).A word anent the philosophy behind Article 448 of the Civil rode.The original provision was found in Article 361 of the Spanish Civil Code; which provided:ART. 361. The owner of land on which anything has been built, sown or planted in good faith, shall have the right to appropriate as his own the work, sowing or planting, after the payment of the indemnity stated in Articles 453 and 454, or to oblige the one who built or planted to pay the price of the land, and the one who sowed, the proper rent.As will be seen, the Article favors the owner of the land, by giving him one of the two options mentioned in the Article. Some commentators have questioned the preference in favor of the owner of the land, but Manresa's opinion is that the Article is just and fair.. . . es justa la facultad que el codigo da al dueno del suelo en el articulo 361, en el caso de edificacion o plantacion? Algunos comentaristas la conceptuan injusta, y como un extraordinario privilegio en favor de la propiedad territorial. Entienden que impone el Codigo una pena al poseedor de buena fe y como advierte uno de los comentaristas aludidos 'no se ve claro el por que de tal pena . . . al obligar al que obro de buena fe a quedarse con el edificio o plantacion, previo el pago del terreno que ocupa, porque si bien es verdad que cuando edifico o planto demostro con este hecho, que queria para si el edificio o plantio tambien lo es que el que edifico o planto de buena fe lo hizo en la erronea inteligencia de creerse dueno del terreno Posible es que, de saber lo contrario, y de tener noticia de que habia que comprar y pagar el terreno, no se hubiera decidido a plantar ni a edificar. La ley obligandole a hacerlo fuerza su voluntad, y la fuerza por un hecho inocente de que no debe ser responsable'. Asi podra suceder pero la realidad es que con ese hecho voluntario, aunque sea inocente, se ha enriquecido torticeramente con perjuicio de otro a quien es justo indemnizarle,En nuestra opinion, el Codigo ha resuelto el conflicto de la manera mas justa y equitativa y respetando en lo possible el principio que para la accesion se establece en el art. 358.7Our own Code Commission must have taken account of the objections to Article 361 of the Spanish Civil Code. Hence, the Commission provided a modification thereof, and Article 448 of our Code has been made to 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 the lease and in case of disagreement, the court shall fix the terms thereof.Additional benefits were extended to the builder but the landowner retained his options.The fairness of the rules in Article 448 has also been explained as follows:Where the builder, planter or sower has acted in good faith, a conflict of rights arises between the owners, and it becomes necessary to protect the owner of the improvements without causing injustice to the owner of the land. In view of the impracticability of creating a state of forced co-ownership, the law has provided a just solution by giving the owner of the land the option to acquire the improvements after payment of the proper indemnity, or to oblige the builder or planter to pay for the land and the sower to pay for the proper rent. It is the owner of the land who is authorized to exercise the option, because his right is older, and because, by the principle of accession, he is entitled to the ownership of the accessory thing. (3 Manresa 213; Bernardo vs. Bataclan, 37 Off. Gaz. 1382; Co Tao vs. Chan Chico, G.R. No. 49167, April 30, 1949; Article applied: see Cabral, et al vs. Ibanez [S.C.] 52 Off. Gaz. 217; Marfori vs. Velasco, [C.A.] 52 Off. Gaz. 2050).8WHEREFORE, the judgment of the trial Court is hereby set aside, and this case is hereby ordered remanded to the Regional Trial Court of Iloilo for further proceedings consistent with Articles 448 and 546 of the Civil Code, as follows:1. The trial Court shall determinea) the present fair price of DEPRA's 34 square meter area of land;b) the amount of the expenses spent by DUMLAO for the building of the kitchen;c) the increase in value ("plus value") which the said area of 34 square meters may have acquired by reason thereof, andd) whether the value of said area of land is considerably more than that of the kitchen built thereon.2. After said amounts shall have been determined by competent evidence, the Regional, Trial Court shall render judgment, as follows:a) The trial Court shall grant DEPRA a period of fifteen (15) days within which to exercise his option under the law (Article 448, Civil Code), whether to appropriate the kitchen as his own by paying to DUMLAO either the amount of tile expenses spent by DUMLAO f or the building of the kitchen, or the increase in value ("plus value") which the said area of 34 square meters may have acquired by reason thereof, or to oblige DUMLAO to pay the price of said area. The amounts to be respectively paid by DUMLAO and DEPRA, in accordance with the option thus exercised by written notice of the other party and to the Court, shall be paid by the obligor within fifteen (15) days from such notice of the option by tendering the amount to the Court in favor of the party entitled to receive it;b) The trial Court shall further order that if DEPRA exercises the option to oblige DUMLAO to pay the price of the land but the latter rejects such purchase because, as found by the trial Court, the value of the land is considerably more than that of the kitchen, DUMLAO shall give written notice of such rejection to DEPRA and to the Court within fifteen (15) days from notice of DEPRA's option to sell the land. In that event, the parties shall be given a period of fifteen (15) days from such notice of rejection within which to agree upon the terms of the lease, and give the Court formal written notice of such agreement and its provisos. If no agreement is reached by the parties, the trial Court, within fifteen (15) days from and after the termination of the said period fixed for negotiation, shall then fix the terms of the lease, provided that the monthly rental to be fixed by the Court shall not be less than Ten Pesos (P10.00) per month, payable within the first five (5) days of each calendar month. The period for the forced lease shall not be more than two (2) years, counted from the finality of the judgment, considering the long period of time since 1952 that DUMLAO has occupied the subject area. The rental thus fixed shall be increased by ten percent (10%) for the second year of the forced lease. DUMLAO shall not make any further constructions or improvements on the kitchen. Upon expiration of the two-year period, or upon default by DUMLAO in the payment of rentals for two (2) consecutive months, DEPRA shall be entitled to terminate the forced lease, to recover his land, and to have the kitchen removed by DUMLAO or at the latter's expense. The rentals herein provided shall be tendered by DUMLAO to the Court for payment to DEPRA, and such tender shall constitute evidence of whether or not compliance was made within the period fixed by the Court.c) In any event, DUMLAO shall pay DEPRA an amount computed at Ten Pesos (P10.00) per month as reasonable compensation for the occupancy of DEPRA's land for the period counted from 1952, the year DUMLAO occupied the subject area, up to the commencement date of the forced lease referred to in the preceding paragraph;d) The periods to be fixed by the trial Court in its Precision shall be inextendible, and upon failure of the party obliged to tender to the trial Court the amount due to the obligee, the party entitled to such payment shall be entitled to an order of execution for the enforcement of payment of the amount due and for compliance with such other acts as may be required by the prestation due the obligee.No costs,SO ORDERED.

F) VIRGILIO VS PATRICIASPOUSES VIRGILIO and JOSIE JIMENEZ,petitioners, vs.PATRICIA, INC.,respondent.D E C I S I O NBELLOSILLO,J.:The Joint Decision of the Court of Appeals[1](dismissing the petition for review filed by spouses Virgilio and Josie Jimenez in CA-G.R. SP No. 43185 and giving due course to the petition for review filed by Patricia, Inc., in CA-G.R. SP No. 43179), in effect reversing the decision of the Regional Trial Court and reinstating that of the Metropolitan Trial Court, is assailed in the instant petition.Petitioners Virgilio and Josie Jimenez, spouses, are sublessees of alot and buildinglocatedat2853Juan Luna Street, Tondo, Manila, owned by respondent Patricia Inc. (PATRICIA for brevity), a domestic corporation duly organized and existing under Philippine laws.The Jimenez spouses subleased the property in 1980 from a certain Purisima Salazar who had been leasing the property from PATRICIA since 1970.Sometime in 1995 Purisima Salazar abandoned the property thus incurring back rentals dating back to January 1992.Hence, by reason of her non-payment of the monthly rentals, her contract of lease with PATRICIA was terminated.On 29 March 1995 PATRICIA sent a letter to the Jimenez spouses informing them of the termination of the lease and demanding that they vacate the premises within fifteen (15) days from notice since they had no existing lease contract with it.[2]But the spouses refused to leave.Thus, on 5 May 1995 PATRICIA filed a complaint[3]for unlawful detainer against the Jimenez spouses alleging, among others, that the lessee Purisima Salazar subleased the premises to the Jimenezes; that Purisima Salazar no longer occupied the premises; that this notwithstanding, the Jimenez spouses continued to occupy the premises without any contract with PATRICIA, its owner, hence, their stay was merely being tolerated by the latter; and, that despite demands made upon them, they refused to vacate the premises thereby unlawfully and illegally withholding the property to the damage and prejudice of PATRICIA.In their Answer, the Jimenez spouses claimed that they occupied the premises as sublessees of Purisima Salazar with theknowledge of PATRICIA; that the building originally found on the lot was owned by Purisima Salazar which she sold to them in 1984 with notice and without any objection from PATRICIA; that, when the building was gutted by fire in 1987 they constructed a newhouseonthelotworthP1,500,000.00 with the knowledge and without any objection from PATRICIA; and, that PATRICIA never collected any rental for the land but they nevertheless voluntarilypaid theamount ofP23,537.25 as rent corresponding to the period of September 1979 to 31 December 1991.[4]The MeTC ruled in favor of PATRICIA and ordered the Jimenez spouses to vacate the premises, to pay PATRICIA the sum ofP3,000.00 a month as reasonable rental and/or compensation for the use of the premises beginning April 1995 until they finally vacated thepremises, and to pay PATRICIA the sum ofP5,000.00 as reasonable attorney's fees, plus costs of suit.[5]The Jimenez spouses appealed the MeTC decision to the RTC.[6]On 2 January 1997 the RTC modified the decision in favor of the spouses holding that an implied new lease contract existed between the Jimenez spouses and PATRICIA in view of the latter's acceptance of rentals from the former.Thus the RTC extended the term of the lease between the parties for a period of one (1) year from date of decision, and ordered PATRICIA to reimburse the Jimenez spouses the expenses incurred in the construction of the house built on the property and/or for the Jimenez spouses to remove the improvements thereon.[7]On 20 January 1997 PATRICIA filed aMotion for Clarificatory Judgmentand later added aSupplement to the Motion for Clarificatory Judgment.On 27 January 1997 PATRICIA, without waiting for the resolution of itsMotion for Clarificatory Judgmentas well as its supplement thereto, filed aPetition for Reviewof the RTC decision with the Court of Appeals, docketed as CA-G.R. SP No. 43179.On 13 February 1997 the Jimenez spouses filed their ownPetition for Review, docketed as CA-G.R. SP No. 43185.Subsequently, this petition was consolidated with PATRICIA'sPetition for Reviewsince it involved the same parties, facts, and issues.The Court of Appeals in due course rendered aJoint Decisiondismissing thePetition for Reviewfiled by the Jimenez spouses while giving due course to the petition of PATRICIA.The Court of Appeals held that there was no implied renewal of the lease contract between the parties since, to begin with, there was no lease contract between them; hence, the Jimenez spouses could not have tendered payment of rentals to PATRICIA.Instead, it declared the status of the Jimenez spouses as being analogous to that of a lessee or tenant whose lease has expired but whose occupancy has been continued by mere tolerance of the owner, and hence, bound by an implied promise that he would vacate the premises upondemand.Thus,theappellate court reversed and set aside the decision of the RTC and reinstated the decision of the MeTC which, among others, ordered the Jimenez spouses to vacate the premises.Petitioners now assail the jurisdiction of the MeTC contending that the failure of the complaint to allege the character of the sublease or entry of the Jimenez spouses into the property, whether legal or illegal, automatically classified it into anaccion publiciana or reinvindicatoriacognizable by the RTC and not by the MeTC;[8]thus, the action should have been dismissed.The rule is settled that a question of jurisdiction may be raised at any time, even on appeal, provided that its application does not result in a mockery of the tenets of fair play.In the instant case, the jurisdictional issue was raised by petitioners for the first time only in the instantPetition for Review.However, it should be noted that they did so only after an adverse decision was rendered by the Court of Appeals.Despite several opportunities in the RTC, which ruled in their favor, and in the Court of Appeals, petitioners never advanced the question of jurisdiction of the MeTC.Additionally, petitioners participated actively in the proceedings before the MeTC[9]and invoked its jurisdiction with the filing of their answer, in seeking affirmative relief from it, insubsequentlyfilinganoticeofappeal before the RTC, and later, aPetition for Reviewwith the Court of Appeals.Upon these premises, petitioners cannot now be allowed belatedly to adopt an inconsistent posture by attacking the jurisdiction of the court to which they had submitted themselves voluntarily.Laches now bars them from doing so.Be that as it may, we find no error in the MeTC assuming jurisdiction over the subject matter.A complaint for unlawful detainer is sufficient if it alleges that the withholding of possession or the refusal to vacate is unlawful without necessarily employing the terminology of the law.[10]As correctly found by the appellate court, to which we agree, the allegations in the complaint sufficiently established a cause of action for unlawful detainer.The complaint clearly stated how entry was effected and how and when dispossession started - petitioners were able to enter the subject premises as sublessees of Purisima Salazar who, despite the termination of her lease with respondent, continued to occupy the subject premises without any contract with it; thus, their stay was by tolerance of respondent.The fact that the complaint failed to state that respondent was in prior possession of the property before it was unlawfully withheld by petitioner spouses is of no moment.Prior physical possession is indispensable only in actions for forcible entry but not in unlawful detainer.[11]Petitioner spouses, as mere sublessees of Purisima Salazar, derive their right from the sublessor whose termination of contract with the lessor necessarily also ends the sublease contract.Thus, when the contract of lease of Purisima Salazar with respondent was terminated the contract of sublease ofpetitioners with the former also necessarily ended and petitioners cannot insist on staying on the premises.Petitioners can invoke no right superior to that of their sublessor.[12]It is not correct to say that petitioners could not have occupied the property by tolerance of respondent as their entry into the premises was inceptively illegal, the sublease being entered into without the consent of the owner.[13]Petitioners argue that tolerance is only available in cases where entry was lawful from the start and cannot be asserted where entry was illegal from the start.It appears however that respondent did not expressly and equivocally prohibit the subleasing of the property.Although the attached contracts of lease state that the lessee cannot sublease the property, none of those contracts pertain to the contract of lease between Purisima Salazar and respondent PATRICIA.[14]In any event, the fact that PATRICIA sent a letter to the Jimenez spouses informing them of the termination of the lease of Purisima Salazar shows that they recognize and acknowledge their stay in the premises as sublessees of Salazar.However, after the termination of the contractofleaseofPurisima Salazarwith PATRICIA, any right of the Jimenez spouses to stay in the premises, although previously recognized, then and there ended.After the termination of the contract of lease of Salazar the continued stay of the Jimenez spouses thereat was merely by tolerance of PATRICIA and it became unlawful after they ignored the lessor's demand to leave.The status of petitioner spouses is akin to that of a lessee or a tenant whose term of lease has expired but whose occupancy has continued by tolerance of the owner.A person who occupies the land of another at the latter's forbearance or permission without any contract between them is necessarily bound by an implied promise that he will vacate upon demand failing which a summary action for ejectment is the proper remedy against him.[15]The present action being for unlawful detainer, it is well within the exclusive original jurisdiction of the metropolitan trial courts.Petitioners contend that respondent has no cause of action against them since, as proved by Transfer Certificate of Title No. T-44247, the property is in the name of the City of Manila and not of respondent PATRICIA.Records however show that this issue has not been raised in the proceedings below, hence, will not be ruled upon by this Court.Any issue raised for the first time on appeal and not timely raised in the proceedings in the lower court is barred by estoppel.Moreover, being mere sublessees of the property in question, petitioners cannot in an action involving possession of the leased premisescontrovert the title of PATRICIA, or assert any right adverse to its title.It is the Manila City Government, not the Jimenez spouses, that is the proper party to dispute the ownership of PATRICIA.Petitioners argue that thePetition for Reviewof respondent should have been dismissed for being premature in view of the pendency of itsMotion for Clarificatory JudgmentandSupplement to the Motion for Clarificatory Judgmentwhich remained unresolved by the RTC.They assert that because of the pendency of its motion, there was no final judgment or decision that could properly be the subject of a petition for review before the Court of Appeals.We do not agree.ThePetition for Reviewfiled by respondent with the Court of Appeals was not prematurely filed.It should be borne in mind that aMotion for Clarificatory Judgmentnot being in the character of a motion for reconsideration does not toll the reglementary period for filing a petition for review with the Court of Appeals.Its filing will not bar the judgment from attaining finality, nor will its resolution amend the decision to be reviewed.Thus, when respondent filed aPetition for Reviewbefore the Court of Appeals, there was already a final judgment that could properly be the subject of a petition for review.Moreover, under theRules on Summary Procedure, the decision of the RTC in civil cases governed by this Rule, including forcible entry and unlawful detainer, is immediately executory without prejudice to a further appeal that may be taken therefrom.The judgment of the RTC being final and executory the filing of thePetition for Reviewwas proper.As to the house built by petitioners on the property, this Court has previously ruled that lessees, much less, sublessees, are not possessors or builders in good faith[16]over rented land because they know that their occupancyofthepremisescontinuesonlyduring the life of the lease, or sublease as the case may be; and, they cannotas a matter of right recover the value of their improvements from the lessor, much less retain the premises until they are reimbursed.[17]Instead, their rights are governed by Art. 1678 of the Civil Code which allows reimbursement of lessees up to one-half (1/2) of the value of their improvements if the lessor so elects: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 the 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 (New Civil Code).Thus, applying the above rule, petitioners cannot recover full reimbursement of the value spent for the construction of the house, but is limited only to one-half (1/2) of its value at the election of the lessor.However, as PATRICIA has manifested its lack of intention to do so, the Jimenez spouses have no recourse but to remove the house at their own expense.WHEREFORE, the assailedJoint Decisionof the Court of Appeals reversing and setting aside the decision of the Regional TrialCourtandreinstatingthedecisionoftheMetropolitanTrial Court isAFFIRMED,with theMODIFICATIONthat petitioner spouses Virgilio and Josie Jimenez should also remove the house they have constructed on the lot at their own expense.Thus, petitioner spouses and all persons claiming title under them are ordered:(a)to vacate the premises described in the complaint located at 2853 Juan Luna Street, Tondo, Manila; (b) to remove attheir own expense within sixty (60) days from finality of this Decision the house they have constructed thereon; (c) to pay respondent Patricia, Inc., the sum ofP3,000.00 a month as reasonable rental/compensation for the use of the premises beginning April 1995 until they finally vacate the premises; and, (d) to pay respondent Patricia, Inc., the sum ofP5,000.00 as attorney's fees, plus costs of suit.SO ORDERED

G) GUZMAN ET AL VS FUENTE ET ALG.R. No. L-32433December 29, 1930FRANCISCO DE GUZMAN, ET. AL.,plaintiffs-appellants,vs.CRISANTO DE LA FUENTE, ET AL.,defendants-appellants.Mariano Sta. Romana for plaintiffs-appellants.Hermogenes Concepcion for defendants-appellants.ROMUALDEZ,J.:The dispositive part of the lower court's judgment reads as follows:Wherefore, the court hereby orders the defendants to vacate the premises set forth in the complaint, restoring them to the plaintiffs herein. For lack of evidence, no judgment can be rendered against the defendants Crisanto de la Fuente and Agapita Payumo to pay the plaintiffs the sum of P697.50 claimed by the latter as damages, from October 1, 1926, to January 15, 1928, nor against the aforementioned defendants and Taw Pe Chan to pay the plaintiffs jointly and severally damages in the amount of P120 per month from January 15, 1928, until they vacate the premises. The counterclaim and the cross-complaint filed by the defendants are hereby dismissed as against the plaintiffs. Without costs.Both plaintiffs and defendants appealed from this judgment, and the former made the following assignments of error:1. In not ordering and compelling the defendants to pay damages for their illegal occupation of the land now in question to the plaintiffs.2. In denying our motion for new trial.The following assignments of error were made by the defendants:1. In ordering the defendant to vacate the premises.2. In absolving plaintiff Francisco de Guzman from the counterclaim and the cross-complaint.3. In not holding the defendants to be the owners of the land in question.4. In not sentencing plaintiff Francisco de Guzman to .convey the land in question to the defendants, plaintiffs in the cross-complaint.5. In not cancelling the original certificate of title No. 1921 (Exhibit A) with respect to the land in question, and in not ordering the issuance of another certificate of title in the name of the defendants.6. In not sentencing the plaintiff to indemnify the defendants for the value of said land, that is, P4 a square meter.7. in holding that the defendants' possession in good faith became a possession in bad faith upon receipt of the letter of notification (Exhibit C) from the plaintiff's lawyer, Mr. Mariano Santa Romana.8. In not sentencing the plaintiff, defendant in the cross-complaint, to indemnify the defendants, plaintiffs in the cross-complaint, for the improvements made by the latter in good faith, worth P15,000.Plaintiff Francisco de Guzman and defendant De la Fuente, being close friends and compadres, the former having been the recipient of considerable attention and favors from the latter, agreed verbally that the said defendant should occupy, in addition to a house he intended to build, the land here in question, belonging to the plaintiffs.In 1912 said defendant De la Fuente built his house upon said land, which house was repaired in 1928. The court below has appraised the house, after the repairs, at P7,504, which finding is supported by the record.The plaintiffs contend in this instance that said defendant occupies their land by mere tolerance, having been required to pay rent at the rate of P45 a month from October 1,.1926, to December 31, 1927, and at P120 a month from January 1, 1928, when the house was repaired, and from which date the house, besides being occupied by said defendant, yielded him a monthly rented of P40. But the defendant claims that the land belongs to him.The evidence does not support this claim of the defendant De La Fuente. The record shows that the owners of the land were Francisco de Guzman and his deceased wife, and it now belongs to said Francisco de Guzman and his children, the plaintiffs herein.Defendant De la Fuente's possession of the land commenced and continues in good faith, inasmuch as, on the one hand, the extra-judicial notice given by the defendant about November, 1927 did not by itself destroy said good faith, and will continue to exist as long as there is no final judgment to the contrary, which to date has not been redered; and, on the other hand, the necessity for the repairs of the house has been sufficiently proved.lawphi1>netWe find not merits in the assignments of error made by either party, incompatible with the conclusions just stated.This is therefore a case where on party is the owner of the land, and the other is the owner, in good faith, of the building thereon, provided for in article 361 of the Civil Code; and the present value of the house, as stated, is P7,504.The evidence does not justify the award of damages claimed by either the defendants or the plaintiffs.Wherefore, the judgment appealed from is modified, and it is held that the land in question belongs not to the defendant De la Fuente, but to the plaintiffs, who are entitled to acquire said defendant's house built thereon, by paying its owner the sum of P7,504, or to compel him to pay them the price of the land agreed upon by the interested parties; and in default thereof, the price as fixed by the competent court; and should the plaintiff choose to acquire the house, the defendant shall have be the right to retain the same until the above-mentioned amount is satisfied.The remainder of the judgment appealed from is hereby affirmed in so far as it is not incompatible with this decision. Without express pronouncement of costs. So ordered.

H) ALBURU VS VILLANUEVAG.R. No. 3003 January 2, 1907LORENZA ALBURO,plaintiff-appellee,vs.CATALINA VILLANUEVA,defendant-appellant.Ledesma, Sumulong & Quintos for appellant.Hipolito Magsalin for appellee.CARSON,J.:In this case no motion for a new trial was filed on the ground that the findings of fact of the trial judge were manifestly contrary to the weight of the evidence, and the facts found must be accepted as set out in the opinion of the lower court.It appears that the plaintiff is the owner, by inheritance from her grandfather, of a certain lot of land in the city of Manila, which, by written contract, was rented on the 23d of January, 1892, to one Antonio Susano Goenco, for a term of six years, with the privilege of renewal for a second term of six years; that the defendant, who is the wife of the said Goenco, came into possession by virtue of this rental contract; that the defendant had her husband expended a considerable sum of money filling in and leveling the lot and that they built a house of hard materials thereon; and that the rental contract, while it expressly permitted the tenant to build upon the lot, is silent as to the disposition of the house at the expiration of the rental term and makes no express provision as to improvements to be made upon the land by way of leveling or otherwise.The defendant having refused to surrender the lot in question of the expiration of the rental term, this action was brought to recover possession thereof and judgment was rendered for the plaintiff, reserving to the defendant the right to remove the house from the lot.Counsel for the defendant contends that she is entitled to a renewal of the rental contract for a third term of six years; or if this be denied, to be reimbursed for expenditures in filling in and leveling the lot, and to have the benefits of the provisions of article 361 of the Civil Code, wherein it is provided that The owner of the land on which building, sowing, or planting is done in good faith shall have a right to appropriate as his own work, sowing, or planting, having previously paid the indemnity mentioned in articles four hundred and fifty-three and four hundred and fifty-four, or to oblige the person who has built or planted to pay him the value of the land.It is said that this rental contract should be construed in accordance with the provisions of articles 1281, 1282, 1288, and 1289 of the Civil Code so as to give the defendant the right to renew the contract for a third term of six years, and so on indefinitely so long as she faithfully paid the rent, but we are of the opinion that there is no room for interpretation in accordance with the provisions of these articles since the contract expressly provides for a term of a definite number of years, with a privilege of renewal for a second term of definite number of years. This is a very usual form of rental contract and its terms are so clear and explicit that they do not justify an attempt to read into it any alleged intention of the parties other than that which appears upon its face.In support of her claim for reimbursement for expenses in filling in and leveling the lot, defendant relies on the provisions of paragraph 2 of article 1554 of the Civil Code, wherein it is provided that the landlord is obliged "during the lease to make all necessary repairs in order topreservethe thing rented in condition to serve for the purpose to which it was destined." But, as Manresa points out, this article is strictly limited in its effect to repairs necessary to preserve the thing rented in a condition suitable to the use agreed upon (para el uso pactado). A repair implies the putting of something back into the condition in which it was originally and not an improvement in the condition thereof by adding something new thereto, unless the new thing be in substitution of something formerly in existence and is added to preserve the original status of the subject-matter of the repairs; the filling in of a vacant lot can not be regarded as a repair as the word is used in this article; and even though it could be so considered, the remedy of the tenant under the provisions of article 1556, when the landlord fails to make necessary repairs, is by demand for the annulment of the contract and indemnity by way of damages or without demanding annulment of the contract by demand for damages for negligence on the part of the landlord; and the tenant is not authorized to make such repairs at the expense of the landlord, except when it is a matter of the most urgent necessity (reparacion urgentisima) "where the slightest delay would involve grave damages," when the tenant may take the absolutely necessary means to avoid the loss, at the cost of the owner, doing only that which is required by the force of circumstances and no more, but this on the ground that "he had acted by virtue of the social duty of mutual aid and assistance." (Manresa, vol. 10, p. 473.)It has been suggested that the claim of the defendant for compensation for the filling in and leveling of the lot may be based upon article 453 of the Civil Code which provides that "necessary expenditures will be repaid to all persons in possession (los gastos necesarios se abonan a todo poseedor)." It may be doubted, however, whether the "possessor" referred to in this provision can be said to include one who stands in relation of tenant to his landlord, for the above-cited article 1554 of the Civil Code, and the chapter wherein it occurs, seem to provide for such cases; and in any event we do not think that the filling in and improvement of a lot can be brought under the head of necessary expenses (gastos necesarios) as used in this connection. Manresa in his commentaries upon this article says that gastos necesarios are no others than those made for the preservation of the thing upon which they have been expended.The contention that the defendant is entitled to the benefits of the provisions of article 361 of the Civil Code can not be maintained because the right to indemnification secured in that article is manifestly intended to apply only to a case where one builds or sows or plants an land in which he believes himself to have a claim of title and not to lands wherein one's only interest is that of tenant under a rental contract; otherwise it would always be in the power of the tenant to improve his landlord out of his property. The right of a tenant in regard to improvements (mejoras) is expressly provided for in article 1573 read in connection with article 487, wherein it is provided that the tenant may make such improvements, either useful or convenient, as he considers advantageous, provided he does not alter the form and substance of the thing rented, but that he will have no right for indemnification therefor, though he can take away such improvements if it is possible to do so without injury or damage to the thing rented.The trial court authorized the removal of the house, apparently relying on the provisions of this article, but since no objection was made by the plaintiff in the court below, we are not authorized to review his action in this connection.The judgment appealed from is affirmed, with the costs of this instance against the appellant. After the expiration of twenty days let judgment be entered in accordance herewith and ten days thereafter let the record in this case be remanded to the court of its origin for execution.Arellano, C.J. Torres, Willard and Tracey, JJ.,concur

I) TUASON VS LUMANLAN

G.R. No. L-23497 April 26, 1968J.M. TUASON and CO., INC.,petitioner,vs.ESTRELLA VDA. DE LUMANLAN and the COURT OF APPEALS (FIFTH DIVISION),respondents.Tuason and Sison for petitioner.Jose Chuico and Wilfredo E. Dizon for respondents.REYES, J.B.L.,Actg. C.J.:J. M. Tuason & Co., Inc. petitioned for a review bycertiorariof the decision issued by the Court of Appeals (Fifth Division) in its case CA-G.R. No. 27259-R, reversing the judgment rendered by the Court of First Instance of Rizal (Civil Case No. Q-4243) that ordered defendant (now respondent) Estrella Vda. de Lumanlan to vacate the lot occupied by her in Sta. Mesa Heights Subdivision, barrio Tatalon, Quezon City, and to remove therefrom the house and other structures constructed thereon, paying P240.00 a month until restoration of the premises to plaintiff.The facts are stated in the decision of the Court of Appeals (accepted by both parties) in this wise:1wph1.t. . . That in the complaint filed in this case by plaintiff, J. M. Tuason & Co., Inc., hereinafter called Tuason, on 30 April, 1969, the basis is that it being the registered owner of the property known as Santa Mesa Heights Subdivision, situated at Barrio North Tatalon, Quezon City, herein defendant sometime in April, 1949 unlawfully entered into possession of 800 square meters, and therein constructed his house so that plaintiff prayed for ejectment and damages for the occupancy; and defendant in her answer set forthaffirmative defensethat on 12 March, 1949, she had bought the property she was occupying from one Pedro Deudor, and that in a compromise agreement between Pedro and Tuason on 16 March 1953, approved by the Court of First Instance of Quezon City, she was one of the buyers therein recognized, so that she asked that her rights be recognized and the complaint dismissed; but on the basis of the evidence presented by both parties in the trial, Lower Court sustained plaintiff, holding that Tuason being the registered owner, and the question being purely one of possession, therefore, defendant's said evidence was "completely immaterial". . . . (Page 2 of Decision, Annex "A" of Petition.)Upon the facts thus stated, the Fifth Division of the Court of Appeals held that, pursuant to this Supreme Court's ruling inEvangelista vs. Deudor, L-12826, September 10, 1959, the Compromise Agreement (Exh. 2) between the petitioner Tuason & Co. and the Deudors constituted a valid defense against the possessory action filed by Tuason & Co.; that under paragraph 7 of said Compromise Agreement, petitioner bound and committed itself to sell to respondent Lumanlan the lot occupied by her at a reasonable price; that said respondent had a right to compel petitioner to accept payment for the lot in question; and that the compromise agreement legalized the possession of respon