Republic of the Philippines

SUPREME COURT
Manila
EN BANC
G.R. No. L-12812 September 29, 1959
FILIPINAS COLLEGES, INC., plaintiff-appellee,
vs.
MARIA GARCIA TIMANG, ET AL., defendants.
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G.R. No. L-1281! September 29, 1959
MARIA GARCIA TIMANG, ET AL., plaintiffs.
MARIA GARICA TIMANG, plaintiff-appellant,
vs.
MARIA GER"ACIO LAS, defendant-appellee.
De Guzman and Fernandez for appellee Filipinas Colleges, Inc.
San Huan, Africa and Benedicto for appellant Maria Garcia Timang.
!icanor S. Sison for appellee Maria Ger"acio Blas.
ARRERA, J.:
This is an appeal taken fro an order of the Court of !irst "nstance of Manila dated
Ma# $%, $&'( )a* declarin+ the ,heriff-s certificate of sale coverin+ a school buildin+
sold at public auction null and void unless .ithin $' da#s fro notice of said order the
successful bidders, defendants-appellants spouses Maria /arcia Tiban+ and
Marcelino Tiban+, shall pa# to, appellee Maria /ervacio Blas directl# or throu+h the
,heriff of Manila the su of P',('%.%% that the spouses Tiban+ had bid for the
buildin+ at the ,heriff-s sale0 )b* declarin+ the other appellee !ilipinas Colle+es, "nc.
o.ner of 12,'%%34,15',&42 undivided interest in 6ot No. 1-a covered b# certificate of
tile No 2'&(%, on .hich the buildin+ sold in the auction sale is situated0 and )c*
orderin+ the sale in public auction of the said undivided interest of the !ilipinas
Colle+es, "nc., in lot No. 1-a aforeentioned to satisf# the unpaid portion of the
7ud+ent in favor of appellee Blas and a+ainst !ilipinas Colle+es, "nc. in the aount of
P5,1%%.%% inus the su of P',('%.%% entioned in )a* above.
The order appealed fro is the result of three otions filed in the court a #uo in the
course of the e8ecution of a final 7ud+ent of the Court of Appeals rendered in 1 cases
appealed to it in .hich the spouses Tiban+, the !ilipinas Colle+es, "nc., and Maria
/ervacio Blas .ere the parties. "N that 7ud+ent of the Court of Appeals, the
respective ri+hts of the liti+ants have been ad7udicated as follo.s9$%&p'(l.n)t
)$* !ilipinas Colle+es, "nc. .as declared to have ac:uired the ri+hts of the
spouses Tiban+ in and to lot No. 1-a entioned above and in consideration
thereof, !ilipinas Colle+es, "nc., .as ordered to pa# the spouses Tiban+ the
aount of P$',5%(.&% plus such other aounts .hich said spouses i+ht
have paid or had to pa# after !ebruar#, $&'4, to ;oskins and Co. "nc., a+ent
of the <rban Estates, "nc., ori+inal vendor of the lot. !ilipinas Colle+es, "nc.
ori+inal vendor of the total aount .ith the court .ithin &% da#s after the
decision shall have becoe final.
)1* Maria /ervacio Blas .as declared to be a builder in +ood faith of the
school buildin+ constructed on the lot in :uestion and entitled to be paid the
aount of P$&,%%%.%% for the sae. !ilipinas Colle+es, "nc., purchaser of the
said buildin+ .as ordered to deliver to Blas stock certificate )E8h. C* for $%5
shares of !ilipinas Colle+es, "nc. .ith a par value of P$%,5%%.%% and to pa#
Blas the su of P5,1%%.%% of the house.
)4* "n case !ilipinas Colle+es, "nc. failed to deposit the value of the land,
.hich after li:uidation .as fi8ed at P41,5'&.42, .ithin the &%-da# period set
b# the court, !ilipinas Colle+es .ould lose all its ri+hts to the land and the
spouses Tiban+ .ould then becoe the o.ners thereof. "n that eventualit#,
the Tiban+s .ould ake kno.n to the court their option under Art. 225 of
the Civil Code .hether the# .ould appropriate the buildin+ in :uestion, in
.hich even the# .ould have to pa# !ilipinas Colle+es, "nc. the su of
P$&,%%%.%%, or .ould copel the latter to ac:uire the land and pa# the price
thereof.
!ilipinas Colle+es, "nc. havin+ failed to pa# or deposit the su of P41,5'&.42 .ithin the
tie prescribed, the spouses Tiban+, in copliance .ith the 7ud+ent of the Court of
Appeals, on ,epteber 15, $&'=, ade kno.n to the court their decision that the# had
chosen not of appropriate the buildin+ but to copel !ilipinas Colle+es, "nc., for the
pa#ent of the su of P41,5'&,42. The otion havin+ been +ranted, a .rit of
e8ecution .as issued on >anuar# 5, $&'(.
?n >anuar# $=, $&'(, appellee Blas in turn filed a otion for e8ecution of her 7ud+ent
of P5,1%%.%% representin+ the unpaid portion of the price of the house sold to !ilipinas
Colle+es, "nc. ?ver the ob7ect of the Tiban+s, the court +rated the otion and the
correspondin+ .rit of e8ecution .as issued on >anuar# 4%, $&'(, date of the +rantin+
of the otion for e8ecution, Blas throu+h counsel, sent a letter to the ,heriff of Manila
advisin+ hi of her preferential clai or lien on the house to satisf# the unpaid balance
of the purchase price thereof under Article 1121 of the Civil Code, and to .ithhold fro
the proceed of the auction sale the su of P5,1%%.%%. 6ev# havin+ been ade on the
house in virtue of the .rits of e8ecution, the ,heriff of Manila on March ', $&'(, sold
the buildin+ in public auction in favor of the spouses Tiban+, as the hi+hest bidders,
in the aount of P',('%.%%. Personal properties of !ilipinas Colle+es, "nc. .ere also
auctioned for P12'.%% in favor of the spouses Tiban+.
As a result of these actuation, three otion .ere subse:uentl# filed before the lo.er
court9
1
)$* B# appellee Blas, pra#in+ that the ,heriff of Manila and3or the Tiban+
spouses be ordered to pa# and deliver to her the su of P',('%.%%
representin+ the proceeds of the auction sale of the buildin+ of !ilipinas
Colle+es, "nc. over .hich she has a lien of P5,1%%.%% for the unpaid balance
of the purchase price thereof0.
)1* Also b# the appellee Bals, pra#in+ that there bein+ still t.o unsatisfied
e8ecutions, one for the su of P41,5'&.42 in favor the land involved, 6ot No.
1-a, be sold at public auction0 and )4* B# !ilipinas Colle+es, "nc. pra#in+ that
because its properties, the house and soe personal properties, have been
auctioned for P',('%.%% and P12'.%% respectivel# in favor of the Tiban+
spouses .ho applied the proceeds to the partial pa#ent of the su of
P41,5'&.42 value of the land, 6ot No. 1-a, it )!ilipinas Colle+es, "nc.* be
declared part o.ner of said lot to the e8tent of the total aount reali@ed fro
the e8ecution sale of its properties.$%&p'(l.n)t
The Tiban+ spouses presented their opposition to each and all of these otion. After
due hearin+ the lo.er court rendered its resolution in the anner indicated at the
be+innin+ of this decision, fro .hich the Tiban+s alone have appealed.
"n assailin+ the order of the court a :uo directin+ the appellants to pa# appellee Blas
the aount of their bid )P',('%.%%* ade at the public auction, appellants- counsel has
presented a novel, albeit in+enious, ar+uent. "t is contended that because the builder
in +ood faith has failed to pa# the price of the land after the o.ners thereof e8ercised
their option under Article 225 of the Civil Code, the builder lost his ri+ht of retention
provided in Article '2= and b# operation of Article 22', the appellants as o.ners of the
land autoaticall# becae the o.ners ipso facto, the e8ecution sale of the house in
their favor .as superfluous. Conse:uentl#, the# are not bound to ake +ood their bid
of P',('%.%% as that .ould be to ake +oods to pa# for their o.n propert#. B# the
sae token, Blas clai for preference on account of the unpaid balance of the
purchase price of the house does not appl# because preference applies onl# .ith
respect to the propert# of the debtor, and the Tiban+s, o.ners of the house, are not
the debtors of Blas.
This Court cannot accept this oversiplification of appellants- position. Article 225 and
'2= of the Civil Code definin+ the ri+ht of the parties in case a person in +ood faith
builds, so.s or plants on the land of another, respectivel# provides9
ART. 225. The o.ner of the land on .hich an#thin+ has been built, so.n or
plated in +ood faith shall have the ri+ht to appropriate as his o.n the .orks,
so.in+ or plantin+, after pa#ent of the indenif# provided for in article '2=
and '25, or to obli+ate the one .ho built or planted to pa# the price of the
land, and the one .ho so.ed, the proper rent. ;o.ever, the builder or planter
cannot be obli+ed to bu# the land if its value is considerabl# ore than that of
the buildin+ or trees. "n such case, he shall pa# reasonable rent, if the o.ner
of the land does not choose to appropriate the buildin+ or trees after proper
indenit#. The parties shall a+ree upon the ters of the lease and in case of
disa+reeent, the court shall fi8 the ters thereof.
ART. '2=. Necessar# e8penses shall be refunded to ever# possessor0 but
onl# the possessor in +ood faith a# retain the thin+ until he has reibursed
therefor.
<seful e8penses shall be refunded onl# to the possessor in +ood faith .ith
the sae ri+ht of retention the person .ho has defeated hi in the
possession havin+ to option of refundin+ the aount of e8penses or of pa#in+
the case in value .hich thin+ a# have ac:uired b# reason thereof.
<nder the ters of these article, it is true that the o.ner of the land has the ri+ht to
choose bet.een appropriatin+ the buildin+ b# reibursin+ the builder of the value
thereof or copellin+ the builder in +ood faith to pa# for his land. Even this second
ri+ht cannot be e8ercised if the value of the land is considerabl# ore than that of the
buildin+. "n addition to the ri+ht of the builder to be paid the value of his iproveent,
Article '2= +ives hi the corollar# ri+ht of retention of the propert# until he is
indenified b# the o.ner of the land. There is nothin+ in the lan+ua+e of these t.o
article, 225 and '2=, .hich .ould 7ustif# the conclusion of appellants that, upon the
failure of the builder to pa# the value of the land, .hen such is deanded b# the land-
o.ner, the latter becoes autoaticall# the o.ner of the iproveent under Article
22'. The case of Bernardo "s. Bataclan, == Phil., '&% cited b# appellants is no
authorit# for this conclusion. Althou+h it is true it .as declared therein that in the event
of the failure of the builder to pa# the land after the o.ner thereof has chosen this
alternative, the builder-s ri+ht of retention provided in Article '2= is lost, nevertheless
there .as nothin+ said that as a conse:uence thereof, the builder loses entirel# all
ri+hts over his o.n buildin+. The :uestion is0 .hat is the recourse or reed# left to the
parties in such eventualit# .here the builder fails to pa# the value of the landA Bhile
the Code is silent on this Court in the cases of Miranda "s. Fadullon, et al., &( Phil.,
5%$0 '$ ?ff. /a@., C$1D =11=0 Ignacio "s. Hilario, (= Phil., =%' and the cited case
of Bernardo "s. Bataclan, supra.
"n the first case, this Court has said9
A builder in +ood faith not be re:uired to pa# rentals. he has ri+ht to retain the
land on .hich he has built in +ood faith until he is reibursed the e8penses
incurred b# hi. *ossil+ 'e mig't e made to pa+ rental onl+ &'en t'e
o&ner of t'e land c'ooses not to appropriate t'e impro"ement and re#uires
t'e uilder in good fait' to pa+ for t'e land ut t'at t'e uilder is un&illing or
unale to pa+ t'e land, and t'en t'e+ decide to lea"e t'ings as t'e+ are and
assume t'e relation of lessor and lessee, and s'ould t'e+ disagree as to t'e
amount of rental t'en t'e+ can go to t'e court to fi, t'at amount. )Ephasis
supplied*
,hould the parties not a+ree to leave thin+s as the# are and to assue the relation of
lessor and lessee, another reed# is su++ested in the case of Ignacio "s. Hilario,
supra, .herein the court has ruled that the o.ner of the land in entitled to have the
iproveent reoved .hen after havin+ chosen to sell his land to the other part#, i.e.,
the builder in +ood faith fails to pa# for the sae.
2
A further reed# is indicated in the case of Bernardo "s. Bataclan, supra, .here this
Court approved the sale of the land and the iproveent in a public auction appl#in+
the proceeds thereof first to the pa#ent of the value of the land and the e8cess, if
an#, to be delivered to the o.ner of the house in pa#ent thereof.
The appellants herein, o.ners o the land, instead of electin+ an# of the alternative
above indicated chose to seek recover# of the value of their land b# askin+ for a .rit of
e8ecution0 lev#in+ on the house of the builder0 and sellin+ the sae in public auction.
,and because the# are the hi+hest bidder in their o.n auction sale, the# no. clai
the# ac:uired title to the buildin+ .ithout necessit# of pa#in+ in cash on account of
their bid. "n other .ords, the# in effect pretend to retain their land and ac:uire the
house .ithout pa#in+ a cent therefor.
This contention is .ithout erit. This Court has alread# held in Matias "s. T'e
*ro"incial S'eriff of !ue"a -ci.a )(2 Phil., 41=* that .hile it is the inveriable practice,
dictated b# coon sense, that .here the successful bidder is the e8ecution creditor
hiself, he need not pa# do.n the aount of the bid if it does not e8ceed the aount
of his 7ud+eent, nevertheless, .hen their is a clai b# a third-part#, to the proceeds
of the sale superior to his 7ud+ent credit, the e8ecution creditor, as successful bidder,
ust pa# in cash the aount of his bid as a condition precedent to the issuance to hi
of the certificate of sale. "n the instant case, the Court of Appeals has alread# ad7ud+ed
that appellee Blas is entitled to the pa#ent of the unpaid balance of the purchase
price of the school buildin+. Blas is actuall# a lien on the school buildin+ are
concerned. The order of the lo.er court directin+ the Tiban+ spouses, as successful
bidders, to pa# in cash the aount of their bid in the su of P',('%.%% is therefore
correct.
Bith respect to the order of the court declarin+ appellee !ilipinas Colle+es, "nc. part
o.ner of the land to the e8tent of the value of its personal properties sold at public
auction in favor of the Tiban+, this Court 6ike.ise finds the sae as 7ustified, for
such aount represents, in effect, a partial pa#ent of the value of the land. "f this
resulted in the continuation of the so-called involuntar# partnership :uestioned b# the
difference bet.een P5,1%%.%% E the unpaid balance of the purchase price of the
buildin+ and the su of P',('%.%% E aount to be paid b# the Tiban+s, the order of
the court directin+ the sale of such undivided interest of the !ilipinas Colle+es, "nc. is
like.ise 7ustified to satisf# the clai of the appellee Blas.
Considerin+ that the appellant spouses Marcelino Tiban+ and Maria /arcia Tiban+
a# not voluntaril# pa# the su of P',('%.%% as ordered, thereb# further dela#in+ the
final terination of this case, the first part of the dispositive portion of the order
appealed fro is odified in the sense that upon failure of the Tiban+ spouses to pa#
to the ,heriff or to Manila /ervacio Blas said su of P',('%.%% .ithin fifteen )$'* da#s
fro notice of the final 7ud+ent, an order of e8ecution shall issue in favor of Maria
/ervasio Blas to be levied upon all properties of the Tiban+ spouses not e8ept
fro e8ecution for the satisfaction of the said aount.
"n all other respects, the appealed order of the court a #uo is hereb# affired, .ith
costs a+ainst the appellants.
"t is so ordered.
3