Case Digest (G.R. No. L-33422)
Facts:
The case involves Rosendo Balucanag as the petitioner and Hon. Judge Alberto J. Francisco and Richard Stohner as the respondents. The events leading to this case began on August 31, 1952, when Cecilia dela Cruz Charvet, the owner of a 177.50 square meter lot located on Zamora Street, Pandacan, Manila, leased the property to Richard Stohner for a period of five years at a monthly rental of P40.00, payable in advance within the first ten days of each month. The lease contract included a provision allowing Stohner to erect buildings and make improvements on the leased land, stipulating that such improvements would remain his property and could be removed at any time, provided they were taken down within two months after the lease's expiration. Stohner constructed a house on the property, with the improvements valued at P35,000.00.
On March 8, 1966, Mrs. Charvet sold the lot to Rosendo Balucanag. Following Stohner's failure to pay rent, Balucanag, through counsel, dema...
Case Digest (G.R. No. L-33422)
Facts:
Ownership and Lease Agreement:
- Cecilia dela Cruz Charvet owned a 177.50 square meter lot in Zamora Street, Pandacan, Manila, covered by Transfer Certificate of Title No. 25664.
- On August 31, 1952, Charvet leased the lot to Richard Stohner for five years at a monthly rental of P40.00, payable in advance within the first ten days of each month.
- The lease contract stipulated that Stohner could erect buildings and make improvements on the land, which would remain his property. He could remove these improvements at any time, but if he failed to do so within two months after the lease expired, the lessor could remove them at Stohner's expense.
Improvements and Sale of Property:
- During the lease, Stohner made fillings on the land and constructed a house, allegedly valued at P35,000.00.
- On March 8, 1966, Charvet sold the lot to Rosendo Balucanag.
Dispute Over Rent and Possession:
- Stohner failed to pay rent, prompting Balucanag to demand that he vacate the premises.
- Stohner claimed to be a builder in good faith and proposed either purchasing the lot or being reimbursed P35,000.00 for the improvements.
- No agreement was reached, leading Balucanag to file an ejectment suit against Stohner in the City Court of Manila.
Lower Court Decisions:
- The City Court ruled in favor of Balucanag, ordering Stohner to pay back rentals and vacate the premises.
- On appeal, the Court of First Instance of Manila reversed the decision, holding that Stohner was a builder in good faith and could not be ejected without reimbursement for the improvements.
Issue:
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Ruling:
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Ratio:
- Builder in Good Faith: A lessee cannot claim to be a builder in good faith under Article 448 of the Civil Code because a lessee knows they are not the owner of the leased property. Good faith applies only to those who believe they are the owners of the land.
- Lease Contract Stipulations: The terms of the lease contract, particularly Paragraph IV, are binding and take precedence over the general provisions of Article 1678 of the Civil Code. The contract explicitly allowed Stohner to remove the improvements and provided consequences for failing to do so.
- Implied New Lease: Stohner's continued possession of the premises after the lease expired created an implied new lease (tacita reconduccion) under Article 1687 of the Civil Code. However, his failure to pay rent and the lessor's right to terminate the lease after due notice rendered his possession unlawful.
- Lessee's Rights and Obligations: A lessee who introduces improvements in the leased premises does so at their own risk and cannot compel the lessor to reimburse the value of the improvements. The lessee's right is limited to removing the improvements, provided no unnecessary damage is caused to the property.
Conclusion:
The Supreme Court ordered Stohner to vacate the premises and pay Balucanag the back rentals from March 1969 until he surrenders the property. The Court emphasized that the lease contract's stipulations governed the rights and obligations of the parties, and Stohner's status as a lessee precluded him from claiming the rights of a builder in good faith.