795 Phil. 794
LEONEN, J.:
The Computation of the value of the propertyOn January 30, 2009, Spouses Padilla, exercising their option to sell the land to Malicsi, et al. under Article 448 of the Civil Code in the amount of P5,000.00 per square meter, filed a Motion and Manifestation with Offer to Sell. In their Comment, Malicsi, et al. stated that by filing the Motion and Manifestation, Spouses Padilla had, in effect, recognized Malicsi, et al.'s standing as builders in good faith. They did not accept the offer to sell.[21]
The appraised value of the property subject of this case were [sic] computed using the straightline method of depreciation with the formula:
Appraised Value = Market value x Remaining Life (building)/Life of the building
- The 2-level residential house occupied by Sps. Angelito & Carmelita Casino:
Appraised Value = P183,040 x 22/25 = P161,075.20- The 2-level residential building house occupied by Sps. Larry & Candida Marcelo:
Appraised Value = P199,280 x 22/25 = P175,366.40- The bungalow type residential building occupied by Mr. Diosdado dela Cruz:
Appraised Value = P68,000 x 22/25 = P59,840- The 2-level residential house occupied by Sps. Leopoldo Malicsi
Appraised Value = P183,040 x 22/25 = P161,075.20- [T]he 2-level residential house occupied by Sps. Agri[f]ino & Aida Guane[s]:
Appraised Value = P208,000 x 22/25 = 183,040[20] (Emphasis in the original)
WHEREFORE, premises considered, judgment is hereby rendered in favor of the [Spouses Padilla] and against [Malicsi, et al.] ordering the latter:Malicsi, et al. appealed to the Court of Appeals. On March 19, 2012, the Court of Appeals reversed and set aside the Regional Trial Court Decision.[25]SO ORDERED.[24] (Emphasis in the original)
- To vacate the property covered by TCT-T-45565 of the Registry of Deeds of Cabanatuan City and surrender possession of the same to [Spouses Padilla];
- To pay [Spouses Padilla] jointly and severally attorney's fees in the amount of P20,000.00 and litigation expenses in the amount of P10,000.00.
WHEREFORE, premises considered, the decision appealed from is hereby REVERSED and SET ASIDE. In lieu thereof, another is entered as follows:Petitioners Spouses Pablo M. Padilla, Jr. and Maria Luisa P. Padilla elevated the case to this Court. In their Petition for Review on Certiorari,[28] they point out that respondents Leopoldo Malicsi, Lito Casino, and Agrifino Guanes failed to substantiate their claim of being builders in good faith:SO ORDERED.[27] (Emphasis in the original)
- Declaring [respondents] as builders in good faith.
- Ordering [respondents] to purchase the subject land unless the fair market value of the land is considerably more than the fair market value of the improvements thereon, in which case, a forced lease shall be created between the parties on terms to be mutually agreed upon by them or, in case of disagreement, to be fixed by the court.
- Deleting the award of attorney's fees and litigation expenses for lack of basis.
While the law says, that presumption of good faith leans in favor of the respondents and the burden rests upon the petitioners, yet from the surroundings [sic] circumstances and the evidenced [sic] adduced before the Regional Trial Court, it appears that respondents' declaration that Toribia Vda. De Mossessgeld permitted them to stay in the premises in question is not an evidence at all to prove them to be builders in good faith. Mossessgeld was never presented as a witness nor there was an evidence [sic], that Mossessgeld is the owner thereof. Is that sufficient evidence to support the claim of the respondents that they are builders in good faith?[29]In their Comment,[30] respondents maintain that the question of whether they were builders in good faith has already been settled by the Court of Appeals, and that there is no reason to deviate from its findings.[31]
(1) When the conclusion is a finding grounded entirely on speculation, surmises or conjectures; (2) When the inference made is manifestly mistaken, absurd or impossible; (3) Where there is a grave abuse of discretion; (4) When: the judgment is based on a misapprehension of facts; (5) When the findings of fact are conflicting; (6) When the Court of Appeals, in making its findings, went beyond the issues of the case and the same is contrary to the admissions of both appellant and appellee; (7) The findings of the Court of Appeals are contrary to those of the trial court; (8) When the findings of fact are conclusions without citation of specific evidence on which they are based; (9) When the facts set forth in the petition as well as in the petitioner's main and reply briefs are not disputed by the respondents; and (10) The finding of fact of the Court of Appeals is premised on the supposed absence of evidence and is contradicted by the evidence on record.[36]Pascual v. Burgos[37] instructs that parties must demonstrate by convincing evidence that the case clearly falls under the exceptions to the rule:
Parties praying that this court review the factual findings of the Court of Appeals must demonstrate and prove that the case clearly falls under the exceptions to the rule. They have the burden of proving to this court that a review of the factual findings is necessary. Mere assertion and claim that the case falls under the exceptions do not suffice.[38] (Citation omitted)Petitioners claim that the Court of Appeals erred in reversing the trial court's finding that respondents were not builders in good faith. However, that the findings of the Court of Appeals and of the trial court are opposite does not warrant this Court's automatic review of factual findings.[39] This only presents a prima facie basis for recourse to this Court. Fernan v. Court of Appeals[40] cautions that this Court's review of the factual findings of the lower courts "must be invoked and applied only with great circumspection and upon a clear showing that manifestly correct findings have been unwarrantedly rejected or reversed."[41]
Good faith, here understood, is an intangible and abstract quality with no technical meaning or statutory definition, and it encompasses, among other things, an honest belief, the absence of malice and the absence of design to defraud or to seek an unconscionable advantage. An individual's personal good faith is a concept of his own mind and, therefore, may not conclusively be determined by his protestations alone. It implies honesty of intention, and freedom from knowledge of circumstances which ought to put the holder upon inquiry. The essence of good faith lies in an honest belief in the validity of one's right, ignorance of a superior claim, and absence of intention to overreach another[.][46] (Citations omitted)The following provisions of the Civil Code are relevant as regards the remedies available to a landowner and builder in good faith:
Article 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.Article 448 of the1 Civil Code gives a builder in good faith the right to compel the landowner to choose between two (2) options: (1) to appropriate the building by paying the indemnity required by law; or (2) to sell the land to the builder. Ignacio v. Hilario[47] summarized the respective rights of the landowner and builder in good faith as follows:
. . . .
Article 546. Necessary expenses shall be refunded to every possessor; but only the possessor in good faith may retain the thing until he has been reimbursed therefor.
Useful expenses shall be refunded only to the possessor in good faith with the same right of retention, the person who has defeated him in the possession having the option of refunding the amount of the expenses or of paying the increase in value which the thing may have acquired by reason thereof.
. . . .
Article 548. Expense for pure luxury or mere pleasure shall not be refunded to the possessor in good faith; but he may remove the ornaments with which he has embellished the principal thing if it suffers no injury thereby, and if his successors in the possession do not prefer to refund the amount expended.
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 [546]. The owner of the land, upon the other hand, has the option, under 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 land and 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.[48]Rosales v. Castelltort[49] has emphasized that the choice belongs to the landowner, but the landowner must choose from the two (2) available options:
The choice belongs to the owner of the land, a rule that accords with the principle of accession, i.e., that the accessory follows the principal and not the other way around. Even as the option lies with the landowner, the grant to him, nevertheless, is preclusive. The landowner cannot refuse to exercise either option and compel instead the owner of the building to remove it from the land.[50] (Citations omitted)Even before the Regional Trial Court rendered its Decision, petitioners had already intimated their willingness to sell the property to respondents at P5,000.00 per square meter, which was the valuation recommended in the Commissioner's Report. However, respondents refused to accept the offer to sell.[51]
Undoubtedly, [Malicsi, et al.] can not claim that they were builders in good faith because they relied on the promise of one Mrs. Toribia Vda. De Mossessgeld who will sell the same to them but such allegations are contrary to the actual circumstances obtaining in this case.Upon appeal, the Court of Appeals reversed the findings of the Regional Trial Court and found respondents to be builders in good faith:
A check with the Office of the Register of Deeds will show that the property in question had already been registered in the name of the mother of [Pablo M. Padilla, Jr.] way back in 1963 under TCT-T-8303 such that [Malicsi, et al.] "can not claim good faith when they constructed their residential houses thereon in 1980 and 1983. Said Mrs. Mossessgeld had never been an owner thereof to sell the same to them.
[Pablo M. Padilla, Jr.] is merely giving [Malicsi, et al.] some liberalities by allowing them to buy the lots they occupy but the latter adamantly refused as can be gleaned from their written Comment dated March 27, 2009.[54]
Here, [Malicsi, et al] constructed their houses on the subject parcel of land on their mistaken belief that it was owned by Toribia vda de Mossessgeld. It was the latter who gave them permission to build their houses thereat. This situation is no different from that in Sarmiento vs. Agana where the private respondents who constructed their residential house on a property they had mistakenly believed to be owned by their mother but later turned out to belong to another, were considered as builders in good faith.We do not agree with the Court of Appeals.
This ruling was reiterated in the case of Spouses Ismael and Teresita Macasaet vs. Spouses Vicente and Rosario Macasaet[.][55] (Emphasis in the original, citations omitted)
Article 449. He who builds, plants or sows in bad faith on the land of another, loses what is built, planted or sown without right to indemnity.Under Article 452[67] of the Civil Code, a builder in bad faith is entitled to recoup the necessary expenses incurred for the preservation of the land. However, respondents neither alleged nor presented evidence to show that they introduced improvements for the preservation of the land.
Article 450. The owner of the land on which anything has been built, planted or sown in bad faith may demand the demolition of the work, or that the planting or sowing be removed, in order to replace things in their former condition at the expense of the person who built, planted or sowed; or he may compel the builder or planter to pay the price of the land, and the sower the proper rent.Whether petitioners choose to appropriate the improvements, compel their demolition, or compel respondents to pay the price of the land, they are entitled to damages under Article 451[69] of the Civil Code.
The Civil Code provides:Considering that petitioners pray for the reinstatement of the Regional Trial Court Decision ordering respondents to vacate the lot and surrender its possession to them, petitioners are deemed to have chosen to appropriate the improvements built on their lot without any obligation to pay indemnity to respondents.Art. 449. He who builds, plants or sows in bad faith on the land of another, loses what is built, planted or sown without right of indemnity.Based on, these provisions, the owner of the land has three alternative rights: (1) to appropriate what has been built without any obligation to pay indemnity therefor, or (2) to demand that the builder remove what he had built, or (3) to compel the-builder to pay the value of the land. In any case, the landowner is entitled to damages under Article 451, abovecited.[71] (Citations omitted)
Art. 450. The owner of the land on which anything has been built, planted or sown in bad faith may demand the demolition of the work, or that the planting or sowing be removed, in order to replace things in their former condition at the expense of the person who built, planted or sowed; or he may compel the builder or planter to pay the price of the land, and the sower the proper rent.
Art. 451. In the cases of the two preceding articles, the landowner is entitled to damages from the builder, planter or sower.