VOL.

439, 625 that those who occupy the land of another at the latter’s tolerance or
SEPTEMBER 30, 2004 permission, without any contract between them, are necessarily
Macasaet vs. Macasaet _______________
G.R. Nos. 154391-92. September 30, 2004. *

Spouses ISMAEL and TERESITA MACASAET,  THIRD DIVISION.

*

626
petitioners, vs. Spouses VICENTE and ROSARIO
62 SUPREME
MACASAET, respondents.
Ejectment; Unlawful Detainer; In actions for unlawful 6 COURT REPORTS
detainer, possession that was originally lawful becomes unlawful ANNOTATED
upon the expiration or termination of the defendant’s right to Macasaet vs. Macasaet
possess, arising from an express or implied contract.—In actions for bound by an implied promise that the occupants will vacate the
unlawful detainer, possession that was originally lawful becomes property upon demand. A summary action for ejectment is the proper
unlawful upon the expiration or termination of the defendant’s right remedy to enforce this implied obligation. The unlawful deprivation
to possess, arising from an express or implied contract. In other or withholding of possession is to be counted from the date of the
words, the plaintiff’s cause of action comes from the expiration or demand to vacate.
termination of the defendant’s right to continue possession. The case Same; Same; Unless inconsistent with Rule 70, the provisions
resulting therefrom must be filed within one year from the date of the of Rule 18 on pre-trial applies to the preliminary conference. Under
last demand. section 4 of this Rule, the nonappearance of a party may be excused
Same; Same; To show a cause of action in an unlawful by the showing of a valid cause.—Unless inconsistent with Rule 70,
detainer, an allegation that the defendant is illegally withholding the provisions of Rule 18 on pretrial applies to the preliminary
possession from the plaintiff is sufficient.—To show a cause of action conference. Under Section 4 of this Rule, the nonappearance of a
in an unlawful detainer, an allegation that the defendant is illegally party may be excused by the showing of a valid cause; or by the
withholding possession from the plaintiff is sufficient. The complaint appearance of a representative, who has been fully authorized in
may lie even if it does not employ the terminology of the law, writing to enter into an amicable settlement, to submit to alternative
provided the said pleading is couched in a language adequately modes of dispute resolution, and to enter into stipulations or
stating that the withholding of possession or the refusal to vacate has admissions of facts and of documents.
become unlawful. It is equally settled that the jurisdiction of the Same; Same; Respondents have the right to appropriate—as
court, as well as the nature of the action, is determined from the their own—the building and other improvements on the subject lots,
averments of the complaint. but only after (1) refunding the expenses of petitioners or (2) paying
Same; Same; This court has consistently held that those who the increase in value acquired by the properties by reason thereof.
occupy the land of another at the latter’s tolerance or permission, They have the option to oblige petitioners to pay the price of the
without any contract between them, are necessarily bound by an land, unless its value is considerably more than that of the structures
implied promise that the occupants will vacate the property upon —in which case, the petitioners shall pay reasonable rent.—
demand. A summary action for ejectment is the proper remedy to Respondents have the right to appropriate—as their own—the
enforce this implied obligation.—This Court has consistently held building and other improvements on the subject lots, but only after

1|Page
(1) refunding the expenses of petitioners or (2) paying the increase in SP Nos. 56205 & 56467. The challenged Decision disposed as
value acquired by the properties by reason thereof. They have the follows:
option to oblige petitioners to pay the price of the land, unless its “WHEREFORE, the assailed Decision is AFFIRMED with the
value is considerably more than that of the structures—in which following MODIFICATIONS:
case, petitioners shall pay reasonable rent.
1. ‘1.Vicente and Rosario should reimburse Ismael and Teresita
PETITION for review on certiorari of the decision and one-half of the value of the useful improvements
resolution of the Court of Appeals. introduced in the premises prior to demand, which is
equivalent to P475,000.00. In case the former refuse to
The facts are stated in the opinion of the Court. reimburse the said amount, the latter may remove the
     Ismael H. Macasaet for petitioners. improvements, even though the land may suffer damage
     De Jesus, Linatoc, Mendoza & Associates for thereby. They shall not, however, cause any more
respondents. impairment upon the property leased than is necessary.
627 2. ‘2.The award of attorney’s fees is DELETED.
VOL. 439, 627
_______________
SEPTEMBER 30, 2004
Macasaet vs. Macasaet  Rollo, pp. 35-76.
1

 Id., pp. 209-229. Ninth Division. Penned by Justice Mariano C. del

2

PANGANIBAN, J.: Castillo, with the concurrence of Justices Ruben T. Reyes (Division chairman)
and Renato C. Dacudao (member).
 Id., pp. 264-265.
3

The present case involves a dispute between parents and 628

children. The children were invited by the parents to occupy 62 SUPREME COURT
the latter’s two lots, out of parental love and a desire to foster
8 REPORTS
family solidarity. Unfortunately, an unresolved conflict
terminated this situation. Out of pique, the parents asked them
ANNOTATED
to vacate the premises. Thus, the children lost their right to Macasaet vs. Macasaet
remain on the property. They have the right, however, to be
indemnified for the useful improvements that they constructed 1. ‘3.The records of these consolidated cases
thereon in good faith and with the consent of the parents. In are REMANDED to the Court of origin for further
proceedings to determine the option to be taken by Vicente
short, Article 448 of the Civil Code applies.
and Rosario and to implement the same with dispatch.’ ” 4

The Case
Before us is a Petition for Review  under Rule 45 of the Rules
1

The assailed Resolution denied petitioners’ Motion for

of Court, assailing the March 22, 2002 Decision  and the June
2

Reconsideration.
26, 2002 Resolution  of the Court of Appeals (CA) in CA-G.R.
3

2|Page
The Facts spondents to allot the land they owned as an advance grant of
Petitioners Ismael and Teresita  Macasaet and Respondents
5 inheritance in favor of their children. Thus, they contended that
Vicente and Rosario Macasaet are first-degree relatives. Ismael the lot covered by TCT No. T-103141 had been allotted to
is the son of respondents, and Teresita is his wife. 6 Ismael as advance inheritance. On the other hand, the lot
On December 10, 1997, the parents filed with the Municipal covered by TCT No. T-78521 was allegedly given to
Trial Court in Cities (MTCC) of Lipa City an ejectment suit petitioners as payment for construction materials used in the
against the children.  Respondents alleged that they were the
7 renovation of respondents’ house. 10

owners of two (2) parcels of land covered by Transfer The MTCC  ruled in favor of respondents and ordered
11

Certificate of Title (TCT) Nos. T-78521 and T-103141, petitioners to vacate the premises. It opined that Ismael and
situated at Banay-banay, Lipa City; that by way of a verbal Teresita had occupied the lots, not by virtue of a verbal lease
lease agreement, Ismael and Teresita occupied these lots in agreement, but by tolerance of Vicente and Rosario.  As their12

March 1992 and used them as their residence and the situs of stay was by mere tolerance, petitioners were necessarily bound
their construction business; and that despite repeated demands, by an implied promise to vacate the lots upon demand.  The 13

petitioners failed to pay the agreed rental of P500 per week. 8 MTCC dismissed their contention that one lot had been allotted
Ismael and Teresita denied the existence of any verbal lease as an advance inheritance, on the ground that successional
agreement. They claimed that respondents had invited them to rights were inchoate. Moreover, it disbelieved petitioners’
construct their residence and business on the subject lots in allegation that the other parcel had been given as payment for
order that they could all live near one other, employ Marivic construction materials. 14

(the sister of Ismael), and help in resolving the problems of the On appeal, the regional trial court  (RTC) upheld the
15

family.  They added that it was the policy of re-

9 findings of the MTCC. However, the RTC allowed respondents
to appropriate the building and other improvements introduced
_______________ by petitioners, after payment of the indemnity provided for by
4
 Assailed Decision, p. 20; Rollo, p. 228.
Article 448 in relation to Articles 546 and 548 of the Civil
5
 Also referred to as “Rosita” in some parts of the records. Code.  It added that respondents could oblige petitioners to
16

6
 Id., pp. 2 & 210. purchase the land, unless its value was considerably more than
7
 Respondents’ Complaint; Rollo, pp. 85-88. the building. In the latter situation, petitioners should
8
 Assailed Decision, pp. 2-3; Rollo, pp. 210-211. Respondents’ Complaint,
pp. 1-2; Rollo, pp. 85-86. _______________
9
 Id., pp. 3-4 & 211-212. Petitioners’ Answer with Compulsory
Counterclaim, p. 4; Rollo, p. 94.
 Ibid.
10

629
 Presided by Assisting Judge Norberto P. Mercado.
11

VOL. 439, 629  Assailed Decision, pp. 5-6; Rollo, pp. 213-214. MTCC Decision dated
12

SEPTEMBER 30, 2004 August 27, 1998, pp. 3-4; Rollo, pp. 167-168.
 Ibid.
13

Macasaet vs. Macasaet  Ibid.

14

3|Page
  Presided by Judge Jane Aurora C. Lantion.
15 18
 Assailed Decision, p. 9; Rollo, p. 217.
 RTC Decision dated July 15, 1999, pp. 4-5; Rollo, pp. 173-174.
16 19
 Id., pp. 10 & 218.
630 20
 Id., pp. 11 & 219.
63 SUPREME COURT 21
 128 Phil. 160; 21 SCRA 146, September 18, 1967.
22
 Ibid.
0 REPORTS 23
 Assailed Decision, p. 13; Rollo, p. 221.
ANNOTATED 24
 The CA computed the total value of the improvements at P950,000, which
represented the cost of constructing a one-storey structure (P700,000), the
Macasaet vs. Macasaet equipment necessary for the construction business (P130,000), and the cost of
pay rent if respondents would not choose to appropriate the filling materials (P120,000). See Assailed Decision, p. 15; Rollo, p. 223.
building. 17 631
Upon denial of their individual Motions for VOL. 439, 631
Reconsideration, the parties filed with the CA separate SEPTEMBER 30, 2004
Petitions for Review, which were later consolidated. 18
Macasaet vs. Macasaet
Ruling of the Court of Appeals Not satisfied with the CA’s ruling, petitioners brought this
The CA sustained the finding of the two lower courts that recourse to this Court. 25

Ismael and Teresita had been occupying the subject lots only The Issues
by the tolerance of Vicente and Rosario.  Thus, possession of
19
Petitioners raise the following issues for our consideration:
the subject lots by petitioners became illegal upon their receipt
of respondents’ letter to vacate it. 20
1. “1.a) Whether or not Section 17[,] Rule 70 of the Rules of
Citing Calubayan v. Pascual,  the CA further ruled that
21
Court on Judgment should apply in the rendition of the
petitioners’ status was analogous to that of a lessee or a tenant decision in this case;
whose term of lease had expired, but whose occupancy b) Whether or not the Complaint should have been
continued by tolerance of the owner.  Consequently, in 22 dismissed;
ascertaining the right of petitioners to be reimbursed for the c) Whether or not damages including attorney’s fees should
improvements they had introduced on respondents’ have been awarded to herein petitioners;
properties,  the appellate court applied the Civil Code’s
23
2. “2.a) Whether or not the rule on appearance of parties during
the Pretrial should apply on appearance of parties during
provisions on lease. The CA modified the RTC Decision by
Preliminary Conference in an unlawful detainer suit;
declaring that Article 448 of the Civil Code was inapplicable. b) Whether or not the case of Philippine Pryce Assurance
The CA opined that under Article 1678 of the same Code, Corporation vs. Court of Appeals (230 SCRA 164) is
Ismael and Teresita had the right to be reimbursed for one half applicable to appearance of parties in an unlawful detainer
of the value of the improvements made. 24
suit;
3. “3.Whether or not Article 1678 of the Civil Code should
_______________ apply to the case on the matters of improvements, or is it
Article 447 of the Civil Code in relation to the Article 453
 Ibid.
17

4|Page
 and 454 thereof that should apply, if ever to apply the Civil Allegations of the Complaint
Code; Petitioners allege that they cannot be ejected from the lots,
4. “4.Whether or not the [D]ecision of the Court of Appeals is because respondents based their Complaint regarding the
supported by evidence, appropriate laws, rules and nonpayment of rentals on a verbal lease agreement, which the
jurisprudence; “5. Whether or not Assisting Judge Norberto
latter failed to prove.  Petitioners contend that the lower courts
29

Mercado of the MTCC Lipa City should be held

accountable in rendering the MTCC [D]ecision; erred in using another ground (tolerance of possession) to eject
5. “6.Whether or not Atty. Glenn Mendoza and Atty. Andrew them.
Linatoc of the same [l]aw office should be held accountable In actions for unlawful detainer, possession that was
for pursuing the [e]jectment case[.]”26 originally lawful becomes unlawful upon the expiration or
termination of the defendant’s right to possess, arising from an
_______________ express or implied contract.  In other words, the plaintiff’s
30

25
 This case was deemed submitted for resolution on May 13, 2003, upon _______________
this Court’s receipt of respondents’ Memorandum signed by Atty. Glenn P.
Mendoza. Petitioners’ Memorandum, signed by Atty. Ismael H. Macasaet, was  Rivera v. Rivera, 405 SCRA 466, 471, July 8, 2003; Balanon-Anicete v.
27

filed on April 14, 2003. Balanon, 402 SCRA 514, 518, April 30, 2003; De Luna v. Court of
26
 Petitioners’ Memorandum, p. 15; Rollo, p. 432. Appeals, 212 SCRA 276, 278, August 6, 1992.
632  Co v. Militar, G.R. No. 149912, January 29, 2004, 421 SCRA 455.
28

SUPREME COURT 632  Petitioners’ Memorandum, p. 16; Rollo, p. 433.

29

 Varona v. Court of Appeals, G.R. No. 124148, May 20, 2004, 428 SCRA

30

REPORTS 577; Sarmiento v. Court of Appeals, 320 Phil. 146, 153; 250 SCRA 108, 115,
ANNOTATED November 16, 1995; Sumulong v. Court of Appeals, 232 SCRA 372, May 10,
Macasaet vs. Macasaet 1994.
633
The Court’s Ruling 63 VOL. 439,
The Petition is partly meritorious.
3 SEPTEMBER 30, 2004
First Issue:
Ejectment Macasaet vs. Macasaet
Who is entitled to the physical or material possession of the cause of action comes from the expiration or termination of the
premises? At the outset, we stress that this is the main issue in defendant’s right to continue possession.  The case resulting
31

ejectment proceedings.  In the present case, petitioners failed to

27
therefrom must be filed within one year from the date of the
justify their right to retain possession of the subject lots, which last demand.
respondents own. Since possession is one of the attributes of To show a cause of action in an unlawful detainer, an
ownership,  respondents clearly are entitled to physical or
28
allegation that the defendant is illegally withholding possession
material possession. from the plaintiff is sufficient. The complaint may lie even if it
does not employ the terminology of the law, provided the said
pleading is couched in a language adequately stating that the
5|Page
withholding of possession or the refusal to vacate has become subject lots was by mere tolerance of respondents. Basing its
unlawful.  It is equally settled that the jurisdiction of the court,
32
conclusion on the fact that the parties were close relatives, the
as well as the nature of the action, is determined from the MTCC ruled thus:
averments of the complaint. 33 “x x x [T]he parties herein are first degree relatives. Because of this
In the present case, the Complaint alleged that despite relationship, this Court takes judicial notice of the love, care, concern
demands, petitioners “refused to pay the accrued rentals and and protection imbued upon the parents towards their [children], i.e.,
[to] vacate the leased premises.”  It prayed that judgment be
34
in the instant case, the love, care, concern and protection of the
[respondents] to the [petitioners]. With this in mind, this Court is
rendered “[o]rdering [petitioners] and all those claiming rights
inclined to believe the position of the [petitioners] that there was no
under them to vacate the properties x x x and remove the such verbal lease agreement between the parties herein that took
structures x x x constructed thereon.”  Effectively then,
35

place in 1992. x x x.
respondents averred that petitioners’ original lawful occupation “From the allegations of the [petitioners], this Court is convinced
of the subject lots had become unlawful. that their stay and occupancy of the subject premises was by mere
The MTCC found sufficient cause to eject petitioners. tolerance of the [respondents], and not by virtue of a verbal lease
While it disbelieved the existence of a verbal lease agreement, agreement between them.” 36

it nevertheless concluded that petitioners’ occupation of the Having found a cause of action for unlawful detainer, the
MTCC (as well as the RTC and the CA) did not err in ordering
_______________ the ejectment of petitioners as prayed for by respondents. There
 Sarmiento v. Court of Appeals, supra; Sumulong v. Court of Appeals,
31
was no violation of Section 17 of Rule 70  of the Rules of 37

supra. Court. As earlier explained, unlawful detainer was sufficiently

 Varona v. Court of Appeals, supra; Cañiza v. Court of Appeals, 335 Phil.
32
alleged in the Complaint and duly proven during the trial.
1107, 1115; 268 SCRA 640, 650, February 24, 1997; Sumulong v. Court of Significantly, the issue of whether there was enough
Appeals, supra, p. 386.
 Lopez v. David, Jr., G.R. No. 152145, March 30, 2004, 426 SCRA
33

_______________
535; Arcal v. Court of Appeals, 348 Phil. 813, 823; 285 SCRA 34, 41, January
26, 1998; Hilario v. Court of Appeals, 329 Phil. 202, 210; 260 SCRA 420,
 MTCC Decision dated August 27, 1998, pp. 3-4; Rollo, pp. 167-168.
36
August 7, 1996; Sarmiento v. Court of Appeals, supra; Sumulong v. Court of
 “Section 17. Judgment.—If after the trial the court finds that the
37
Appeals, supra, p. 385.
allegations of the complaint are true, it shall render judgment in favor of the
 Respondents’ Complaint, p. 2; Rollo, p. 86.
34

plaintiff for the restitution of the premises, the sum justly due as arrears of rent
 Id., pp. 3 & 87.
35

or as reasonable compensation for the use and occupation of the premises,

634
attorney’s fees and costs. If it finds that said allegations are not true, it shall
63 SUPREME COURT render judgment for the defendant to recover his costs. If a counterclaim is
4 REPORTS established, the court shall render judgment for the sum found in arrears from
either party and award costs as justice requires.”
ANNOTATED 635
Macasaet vs. Macasaet VOL. 439, 635
SEPTEMBER 30, 2004
6|Page
 Macasaet vs. Macasaet 63 SUPREME COURT
ground to eject petitioners was raised during the preliminary 6 REPORTS
conference. 38
ANNOTATED
Not Merely Tolerated Possession Macasaet vs. Macasaet
Petitioners dispute the lower courts’ finding that they occupied Villegas  described what tolerated acts means, in this language:
44

the subject lots on the basis of mere tolerance. They argue that “Professor Arturo M. Tolentino states that acts merely tolerated are
their occupation was not under such condition, since ‘those which by reason of neighborliness or familiarity, the owner of
respondents had invited, offered and persuaded them to use property allows his neighbor or another person to do on the property;
those properties. 39 they are generally those particular services or benefits which one’s
This Court has consistently held that those who occupy the property can give to another without material injury or prejudice to
land of another at the latter’s tolerance or permission, without the owner, who permits them out of friendship or courtesy.’ x x x.
any contract between them, are necessarily bound by an And, Tolentino continues, even though ‘this is continued for a long
time, no right will be acquired by prescription.” x x x. Further
implied promise that the occupants will vacate the property
expounding on the concept, Tolentino writes: ‘There is tacit consent
upon demand.  A summary action for ejectment is the proper
40

of the possessor to the acts which are merely tolerated. Thus, not

remedy to enforce this implied obligation.  The unlawful 41
every case of knowledge and silence on the part of the possessor can
deprivation or withholding of possession is to be counted from be considered mere tolerance. By virtue of tolerance that is
the date of the demand to vacate. 42
considered as an authorization, permission or license, acts of
Toleration is defined as “the act or practice of permitting or possession are realized or performed. The question reduces itself to
enduring something not wholly approved of.”  Sarona v.43
the existence or non-existence of the permission.”
45

We hold that the facts of the present case rule out the finding of
_______________ possession by mere tolerance. Petitioners were able to establish
38
 MTCC Order on the Preliminary Conference dated July 30, 1998; Rollo,
that respondents had invited them to occupy the subject lots in
p. 108. order that they could all live near one other and help in
39
 Petitioners’ Memorandum, p. 22; Rollo, p. 439. resolving family problems.  By occupying those lots,
46

40
 Rivera v. Rivera, 405 SCRA 466, 471, July 8, 2003; Pengson v. Ocampo, petitioners demonstrated their acceptance of the invitation.
Jr., 412 Phil. 860, 866; 360 SCRA 420, 425, June 29, 2001; Arcal v. Court of
Appeals, supra, p. 825; 43; Refugia v. Court of Appeals, 327 Phil. 982,
Hence, there was a meeting of minds, and an agreement
1010; 258 SCRA 347, 370, July 5, 1996; Dakudao v. Consolacion, 207 Phil. regarding possession of the lots impliedly arose between the
750, 756; 122 SCRA 877, 883, June 24, 1983. parties.
41
 Ibid. The occupancy of the subject lots by petitioners was not
42
 Lopez v. David, supra; Arcal v. Court of Appeals, supra, p. 825; p.
43; Villaluz v. Court of Appeals, 344 Phil. 77, 89; 278 SCRA 540, 550, merely “something not wholly approved of” by respondents.
September 5, 1997. Neither did it arise from what Tolentino refers to as
43
 Black’s Law Dictionary (8th ed., 1999), p. 1525. “neighborliness or familiarity.” In point of fact, their
636

7|Page
possession was upon the invitation of and with the complete intended by the parties. Their mere failure to fix the duration of
approval of respondents, who desired that their children would their agreement does not necessarily justify or authorize the
courts to do so. 47

_______________ Based on respondents’ reasons for gratuitously allowing

 131 Phil. 365; 22 SCRA 1257, March 27, 1968.
44
petitioners to use the lots, it can be safely concluded that the
 Id., pp. 372-373, per Sanchez, J.
45 agreement subsisted as long as the parents and the children
 MTCC Decision, dated August 27, 1998, p. 3 (Rollo, p. 167); RTC
46
mutually benefited from the arrangement. Effectively, there
Decision, dated July 15, 1999, p. 2 (Rollo, p. 171).
637 _______________
VOL. 439, 637
SEPTEMBER 30, 2004  Id., p. 198. The term “may” in Article 1197 connotes discretion on the part
47

of the courts to exercise this power.

Macasaet vs. Macasaet 638
occupy the premises. It arose from familial love and a desire 63 SUPREME COURT
for family solidarity, which are basic Filipino traits. 8 REPORTS
Right to Use the Lots Terminated ANNOTATED
That Ismael and Teresita had a right to occupy the lots is Macasaet vs. Macasaet
therefore clear. The issue is the duration of possession. In the
is a resolutory condition in such an agreement.  Thus, when a 48

absence of a stipulation on this point, Article 1197 of the Civil

change in the condition existing between the parties occurs—
Code allows the courts to fix the duration or the period.
like a change of ownership, necessity, death of either party or
“Article 1197. If the obligation does not fix a period, but from its
nature and the circumstances it can be inferred that a period was unresolved conflict or animosity—the agreement may be
intended, the courts may fix the duration thereof. deemed terminated. Having been based on parental love, the
“The courts shall also fix the duration of the period when it agreement would end upon the dissipation of the affection.
depends upon the will of the debtor. When persistent conflict and animosity overtook the love
“In every case the courts shall determine such period as may and solidarity between the parents and the children, the purpose
under the circumstances have been probably contemplated by the of the agreement ceased.  Thus, petitioners no longer had any
49

parties. Once fixed by the courts, the period cannot be changed by cause for continued possession of the lots. Their right to use the
them.” properties became untenable. It ceased upon their receipt of the
Article 1197, however, applies to a situation in which the notice to vacate. And because they refused to heed the demand,
parties intended a period. Such qualification cannot be inferred ejectment was the proper remedy against them. Their
from the facts of the present case. possession, which was originally lawful, became unlawful
To repeat, when Vicente and Rosario invited their children when the reason therefor—love and solidarity—ceased to exist
to use the lots, they did so out of parental love and a desire for between them.
solidarity expected from Filipino parents. No period was

8|Page
No Right to Retain Possession 78521 had been transferred to the latter as payment for
Petitioners have not given this Court adequate reasons to respondents’ debts.  The evidence presented by petitioners
52

reverse the lower courts’ dismissal of their contention that Lots related only to the alleged indebtedness of the parents arising
T-78521 and T-103141, respectively, were allegedly allotted to from the latter’s purported purchases and advances.  There was 53

them as part of their inheritance and given in consideration for no sufficient proof that respondents had entered into a contract
past debts. of dation to settle the alleged debt. Petitioners even stated that
there was a disagreement in the accounting of the purported
_______________ debt,  a fact that disproves a meeting of the minds with the
54

48
 In an obligation with a resolutory condition, the extinguishment of the
parents.
right acquired depends upon the occurrence of the event that constitutes the
condition (Article 1181 of the Civil Code). _______________
49
 The records do not disclose the exact date when the conflict between
petitioners and respondents arose. It can be readily assumed to have transpired  Art. 777 of the Civil Code.
50

not later than June 6, 1996, the date of petitioners’ demand letter, which became  Cañiza v. Court of Appeals, supra, p. 1118.
51

the subject of Civil Case No. 0594-96 (Demand Letter; Rollo, p. 145). At any  Petitioners’ Memorandum, pp. 43-44; Rollo, pp. 460-461. In a dation in
52

rate, an animosity between the parties was confirmed by respondents’ demand payment, property is alienated to the creditor in satisfaction of a debt. Such
letter dated August 13, 1997, asking petitioners to vacate the subject lots (Rollo, contract is governed by the law on sales. Art. 1245 of the Civil Code.
p. 89), and the subsequent filing of this case.  Ibid.
53

639  In the Affidavits submitted with their Position Paper, petitioners alleged
54

that the execution of the Deed of Assignment did not occur, because their father
VOL. 439, 639 had refused to agree to the accounting of the materials supplied. Petitioners’
SEPTEMBER 30, 2004 Memorandum, pp. 45-46; Rollo, pp. 462-463.
Macasaet vs. Macasaet 640
The right of petitioners to inherit from their parents is merely 64 SUPREME COURT
inchoate and is vested only upon the latters’ demise. 0 REPORTS
Indisputably, rights of succession are transmitted only from the ANNOTATED
moment of death of the decedent.  Assuming that there was an
50
Macasaet vs. Macasaet
“allotment” of inheritance, ownership nonetheless remained Petitioners also admitted that a portion of the alleged debt is
with respondents. Moreover, an intention to confer title to the subject matter of a collection case against respondents
certain persons in the future is not inconsistent with the (Civil Case No. 0594-96).  Thus, the former’s allegation that
55

owners’ taking back possession in the meantime for any reason the indebtedness has been paid through a dation cannot be
deemed sufficient.  Other than their self-serving testimonies
51
given credence, inconsistent as it is with their action to recover
and their affidavits, petitioners offered no credible evidence to the same debt.
support their outlandish claim of inheritance “allocation.” Despite their protestations, petitioners recognized the right
We also agree with the lower courts that petitioners failed to of the parents to recover the premises when they admitted in
prove the allegation that, through a dation in payment, Lot T-

9|Page
their Position Paper filed with the MTCC that respondents had Unless inconsistent with Rule 70, the provisions of Rule 18
a title to the lots. on pretrial applies to the preliminary conference.  Under 58

“The [respondents] want to get their property because the title is Section 4 of this Rule, the nonappearance of a party may be
theirs, the [petitioners] do not object but what is due the [petitioners] excused by the showing of a valid cause; or by the appearance
including the reparation for the tarnish of their dignity and honor of a representative, who has been fully authorized in writing to
must be given the [petitioners] for the benefits of their children enter into an amicable settlement, to submit to alternative
before the premises will be turned over.” modes of dispute resolution, and to enter into stipulations or
56

As a rule, the right of ownership carries with it the right of admissions of facts and of documents. 59

possession. Section 4 of Rule 18 may supplement Section 8 of Rule 70.

Second Issue: Thus, the spirit behind the exception to personal appearance
Appearance at the Preliminary Conference under the rules on pretrial is applicable to the preliminary
Section 8 of Rule 70 of the Rules of Court requires the conference. If there are valid reasons or if a representative has
appearance of the plaintiff and the defendant during the a “special authority,” a party’s appearance may be waived. As
preliminary conference. On the basis of this provision, petitioners are challenging only the applicability of the rules on
petitioners claim that the MTCC should have dismissed the pretrial to the rule on preliminary conference, the written
case upon the failure of respondents to attend the conference. authorization from respondents can indeed be readily
However, petitioners do not dispute that an attorney-in-fact considered as a “special authorization.”
with a written authorization from respondents appeared during
the preliminary conference.  The issue then is whether the rules
57
_______________

_______________ Court of Appeals (230 SCRA 164, 170, February 21, 1994 per Nocon, J.),
in which this Court reiterated the rule that “where a party may not himself be
55
 Petitioners’ Memorandum, p. 44; Rollo, p. 461. The recovery of present at the pre-trial, and another person substitutes for him, or his lawyer
P235,908, which forms a significant part of respondents’ alleged P391,338 debt, undertakes to appear not only as an attorney but in substitution of the client’s
is the subject matter of Civil Case No. 0594-96. person, it is imperative for that representative or the lawyer to have ‘special
56
 Petitioners’ Position Paper, p. 3; Rollo, p. 111. authority’ to enter into agreements which otherwise only the client has the
57
 Petitioners’ Memorandum, p. 31; Rollo, p. 448. Petitioner challenges the capacity to make.”
applicability of Philippine Pryce Assurance Corp. v. 58
 §8 of Rule 70 of the Rules of Court.
641 59
 This rule on substitution of a party through a “special authority” can be
traced to jurisprudential pronouncements. See Home Insurance Co. v. United
VOL. 439, 641 States Lines Co., 129 Phil. 106, 109; 21 SCRA 863, November 15, 1967, in
SEPTEMBER 30, 2004 which this Court held that attorneys needed a “special authority” to compromise
Macasaet vs. Macasaet litigation. See also Development Bank of the Phils. v. Court of Appeals, 169
SCRA 409, 413, January 26, 1989, in which we noted that a special authority is
on ejectment allow a representative to substitute for a party’s imperative to make substantive agreements that, otherwise, only the client has
personal appearance. capacity to make.
642

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64 SUPREME COURT _______________

2 REPORTS 60
 Jose C. Vitug, Civil Law Annotated (2003), Vol. II, p. 23.
ANNOTATED 61
 Petitioners’ Memorandum, pp. 33-37; Rollo, pp. 450-454.
62
 Supra.
Macasaet vs. Macasaet 643
Third Issue: VOL. 439, 643
Rights of a Builder in Good Faith SEPTEMBER 30, 2004
As applied to the present case, accession refers to the right of
Macasaet vs. Macasaet
the owner to everything that is incorporated or attached to the
pired but whose occupancy continued by tolerance of the owner. In
property.  Accession industrial—building, planting and sowing
60

such a case, the unlawful deprivation or withholding of possession is

on an immovable—is governed by Articles 445 to 456 of the to be counted from the date of the demand to vacate.”  (Emphasis in 63

Civil Code. the original.)

Articles 447 and 1678 of the Civil Code Inapplicable As explained earlier, Ismael and Teresita’s possession of the
To buttress their claim of reimbursement for the improvements two lots was not by mere tolerance, a circumstance that negates
introduced on the property, petitioners cite Article 447.  They
61
the applicability of Calubayan.
allege that the CA erred in applying Article 1678, since they Article 448 Applicable
had no lease agreement with respondents. On the other hand, when a person builds in good faith on the
We clarify. Article 447 is not applicable, because it relates land of another, the applicable provision is Article 448, which
to the rules that apply when the owner of the property uses the reads: 64

materials of another. It does not refer to the instance when a “Article 448. The owner of the land on which anything has been
possessor builds on the property of another, which is the built, sown or planted in good faith, shall have the right to
factual milieu here. appropriate as his own the works, sowing or planting, after payment
In view of the unique factual setting of the instant case, the of the indemnity provided for in Articles 546 and 548, or to oblige
contention of petitioners regarding the inapplicability of Article the one who built or planted to pay the price of the land, and the one
1678 deserves attention. The CA applied the provisions on who sowed, the proper rent. However, the builder or planter cannot
lease, because it found their possession by mere tolerance 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
comparable with that of a lessee, per the pronouncement
the owner of the land does not choose to appropriate the building or
in Calubayan v. Pascual,  from which we quote:
62

trees after proper indemnity. The parties shall agree upon the terms
“x x x. It has been held that a person who occupies the land of of the lease and in case of disagreement, the court shall fix the terms
another at the latter’s tolerance or permission, without any contract thereof.”
between them, is necessarily bound by an implied promise that he
This Court has ruled that this provision covers only cases in
will vacate upon demand, failing which a summary action for
ejectment is the proper remedy against them. The status of defendant which the builders, sowers or planters believe themselves to be
is analogous to that of a lessee or tenant whose term of lease has ex- owners of the land or, at least, to have a claim of title
thereto.  It does not apply when the interest is merely that of
65

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_______________ per Davide, J.), this Court also ruled that “Article 448 does not apply to a case
where the owner of the land is the builder, sower, or planter who then later loses
 Id., p. 163, per Angeles, J.
63 ownership of the land by sale or donation.”
 See Depra v. Dumlao, 136 SCRA 475, 481, May 16, 1985, in which this
64 67
 Arturo M. Tolentino, Commentaries and Jurisprudence on the Civil Code
Court explained the philosophy behind this provision. of the Philippines (1992), Vol. 2, p. 111.
 Pada-Kilario v. Court of Appeals, 379 Phil. 515, 530; 322 SCRA 481,
65 68
 160 SCRA 379, 383, April 15, 1988.
January 19, 2000; Chua v. Court of Appeals, 361 Phil. 308, 318; 301 SCRA 69
 Id., pp. 382-383. Article 448 does not apply where a co-owner builds,
356, January 21, 1999; Balucanag v. Francisco, 207 Phil. 433, 438; 122 SCRA plants, or sows on land owned in common, since such co-owner does not do so
498 [1983]; Floreza v. Evangelista, 96 on land that he or she does not own. See also Arturo M.
644 Tolentino, Commentaries and Jurisprudence on the Civil Code of the
Philippines (1992), Vol. 2, p. 117.
64 SUPREME COURT 70
 De Guzman v. Fuente, 55 Phil. 501, 503, December 29, 1930; Aringo v.
4 REPORTS Arena, 14 Phil. 263, 268-269; Javier v. Javier, 7 Phil. 261, 267, January 2,
ANNOTATED 1907. [Cited in Edgardo L. Paras, Civil Code of the Philippines Annotated (14th
ed., 1999), Vol. 2, p. 211]; See also Boyer-Roxas v. Court of Appeals, 211
Macasaet vs. Macasaet SCRA 470, 488, July 15, 1992.
a holder, such as a mere tenant, agent or usufructuary.  From 66 71
 129 SCRA 122, April 30, 1984.
these pronouncements, good faith is identified by the belief that 645
the land is owned; or that—by some title—one has the right to VOL. 439, 645
build, plant, or sow thereon. 67
SEPTEMBER 30, 2004
However, in some special cases, this Court has used Article Macasaet vs. Macasaet
448 by recognizing good faith beyond this limited definition. in good faith despite their reliance on the consent of another,
Thus, in Del Campo v. Abesia,  this provision was applied to
68
whom they had mistakenly believed to be the owner of the
one whose house—despite having been built at the time he was land. 72

still co-owner—overlapped with the land of another.  This 69

Based on the aforecited special cases, Article 448 applies to
article was also applied to cases wherein a builder had the present factual milieu. The established facts of this case
constructed improvements with the consent of the owner. The show that respondents fully consented to the improvements
Court ruled that the law deemed the builder to be in good introduced by petitioners. In fact, because the children
faith.  In Sarmiento v. Agana,  the builders were found to be
70 71
occupied the lots upon their invitation, the parents certainly
knew and approved of the construction of the improvements
_______________
introduced thereon.  Thus, petitioners may be deemed to have
73

SCRA 130, 136, February 21, 1980; Quemuel v. Olaes, 111 Phil. 797; 1 been in good faith when they built the structures on those lots.
SCRA 1159, April 29, 1961; Alburo v. Villanueva, 7 Phil. 277, 280, January 2, The instant case is factually similar to Javier v. Javier.  In 74

1907. that case, this Court deemed the son to be in good faith for
 Chua v. Court of Appeals, supra; Balucanag v. Francisco,
66

supra; Quemuel v. Olaes, supra; Alburo v. Villanueva, supra. See also Edgardo

building the improvement (the house) with the knowledge and
L. Paras, Civil Code of the Philippines Annotated (14th ed., 1999), Vol. 2, p. consent of his father, to whom belonged the land upon which it
212. In Pecson v. Court of Appeals (314 Phil. 313, 322; 244 SCRA 407 [1995] was built. Thus, Article 448  was applied.
75

12 | P a g e
Rule on Useful Expenses than that of the structures—in which case, petitioners shall pay
The structures built by petitioners were “useful” improvements, reasonable rent.
because they augmented the value or income of the bare In accordance with Depra v. Dumlao,  this case must be
77

lots.  Thus, the indemnity to be paid by respondents under

76 remanded to the trial court to determine matters necessary for
Article 448 is provided for by Article 546, which we quote: the proper application of Article 448 in relation to Article 546.
Such matters include the option that respondents would take
_______________ and the amount of indemnity that they would pay, should they
 Id., p. 125.
72
decide to appropriate the improvements on the lots. We
 The RTC observed that petitioners had merely been invited by the parents
73 disagree with the CA’s computation of useful expenses, which
(respondents) to transfer to the premises. Considering that the parties were were based only on petitioners’ bare allegations in their
living near one other, it was readily assumed that respondents had known of the Answer. 78

structures built and had not opposed their construction. RTC Decision dated
July 15, 1999, p. 4; Rollo, p. 173. _______________
 Supra, note 70.
74

 Then Art. 361 of the Civil Code.

75
77
 Supra. Also cited in National Housing Authority v. Grace Baptist
 Cabangis v. Court of Appeals, 200 SCRA 414, 420, August 9, 1991.
76

Church, G.R. No. 156437, March 1, 2004, 424 SCRA 147; and Technogas

646
Philippines Manufacturing v. Court of Appeals, 335 Phil. 471, 485; 268 SCRA
64 SUPREME COURT 5, February 10, 1997.
6 REPORTS 78
 Assailed Decision, p. 15; Rollo, p. 223. This Court also notes that
petitioners merely submitted a list of expenses with their corresponding costs,
ANNOTATED without showing any proof (e.g., actual receipts) that these costs had been
Macasaet vs. Macasaet incurred. Petitioner’s Position Paper, p. 15, rollo, p. 123; Itemized List of
“Art. 546. Necessary expenses shall be refunded to every possessor; Materials, Rollo, p. 588.
but only the possessor in good faith may retain the thing until he has 647
been reimbursed therefor. VOL. 439, 647
“Useful expenses shall be refunded only to the possessor in good SEPTEMBER 30, 2004
faith with the same right of retention, the person who has defeated Macasaet vs. Macasaet
him in the possession having the option of refunding the amount of Ruling on Improvement Justified
the expenses or of paying the increase in value which the thing may
While, ordinarily, the jurisdiction of the MTCC on ejectment
have acquired by reason thereof.”
Consequently, respondents have the right to appropriate—as proceedings is limited to the issue of physical or material
their own—the building and other improvements on the subject possession of the property in question, this Court finds it
lots, but only after (1) refunding the expenses of petitioners or necessary to abbreviate the issue on the improvements in
(2) paying the increase in value acquired by the properties by relation to Article 448. First, the determination of the parties’
reason thereof. They have the option to oblige petitioners to right to those improvements is intimately connected with the
pay the price of the land, unless its value is considerably more MTCC proceedings in the light of the ejectment of
petitioners. Second, there is no dispute that while they
13 | P a g e
constructed the improvements, respondents owned the WHEREFORE, the assailed Decision and Resolution of the
land. Third, both parties raised no objection when the RTC and Court of Appeals are AFFIRMED with the
the CA ruled accordingly on this matter. following MODIFICATIONS:
Equitable considerations compel us to settle this point
immediately, pro hoc vice, to avoid needless delay. Both 1. 1.The portion requiring Spouses Vicente and Rosario
parties have already been heard on this issue; to dillydally or Macasaet to reimburse one half of the value of the useful
equivocate would not serve the cause of substantial justice. improvements, amounting to P475,000, and the right of
Other Issues Raised Spouses Ismael and Rosita Macasaet to remove those
improvements (if the former refuses to reimburse)
Given the foregoing rulings, it is no longer necessary to
is DELETED.
address petitioners’ allegation that the MTCC judge and 2. 2.The case is REMANDED to the court of origin for further
respondents’ lawyers should be respectively held personally proceedings to determine the facts essential to the proper
accountable for the Decision and for filing the case.  The 79
application of Articles 448 and 546 of the Civil Code,
insinuation of petitioners that the lawyers manipulated the specifically to the following matters:
issuance of a false barangay certification is unavailing.  Their 80

contention that respondents did not attend the barangay 1. a.Spouses Vicente and Rosario Macasaet’s option to
conciliation proceedings was based solely on hearsay, which appropriate—as their own—the improvements on the lots,
has little or no probative value. 81 after paying the indemnity, as provided under Article 546
in relation to Article 448 of the Civil Code; or in requiring
_______________ Spouses Ismael and Rosita Macasaet to pay for the value of
the lots, unless it is considerably more than that of the
 Petitioners’ Memorandum, pp. 49-51; Rollo, pp. 466-468.
79
improvements, in which case petitioners shall pay
 Id., pp. 51 & 468.
80
reasonable rent based upon the terms provided under the
 This contention was based on information from an alleged barangay
81

councilor of Banay-banay that no conciliation had transpired on October 14, Civil Code
1997, the scheduled date. Petitioner Teresita Macasaet’s Affidavit; Rollo, p. 77. 2. b.The value of the useful expenses incurred by Spouses
In a letter dated October 14, 1997, addressed to the barangay captain, it appears Ismael and Rosita Macasaet in the construction of the
that petitioners waived their presence at the conciliation proceedings. Rollo, p. improvements on the lots
103. 3. c.The increase in value acquired by the lots by reason of the
648 useful improvements
64 SUPREME COURT 4. d.Spouses Vicente and Rosario Macasaet’s choice of type of
8 REPORTS indemnity to be paid (whether b or c)
ANNOTATED 5. e.Whether the value of the lots is considerably more than
that of the improvements built thereon
Macasaet vs. Macasaet
No pronouncement as to costs.
SO ORDERED.

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      Sandoval-Gutierrez, Corona and Carpio-Morales,
JJ., concur.
649
VOL. 439, 649
SEPTEMBER 30, 2004
Abalos vs. Macatangay, Jr.
Judgment affirmed with modifications.
Note.—An unlawful detainer suit involves solely the issue
of physical or material possession over the property or
possession de facto, that is, who between the plaintiff and the
defendant has a better right to possess the property in question.
(Arcal vs. Court of Appeals, 285 SCRA 34 [1998])

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