Tuatis v. Sps.

Escol o Tuatis chose the second option as the value of

GR 175399 | Oct. 27, 2009 | Chico-Nazario, J. the land was only P27k where the building was
valued at P502,073
FACTS - During the pendency of the motion, the writ of execution
- Visminda Escol sold a portion of his property to Ophelia was enforced. Tuatis filed with CA a petition for certiorari,
Tuatis by a Deed of Sale by Installment. Under their prohibition and mandamus but the same was denied
contract, if Tuatis failed to pay the remaining balance - Hence, this petition for certiorari and mandamus. Tuatis
within the period stipulated, she shall return the property principally argued that Art. 448 must be applied to the
to Escol and the latter shall return former’s money situation between her and Escol
- The purchase price was P10k. Tuatis alleged that she
already paid the full purchase price (P3k down payment, ISSUE
P3k and P1k installments (on diff dates)) and she also gave WON Tuatis is entitled to exercise the options granted in Art.
P3k for the remaining balance. She also took possession of 448 of the Civil Code. – NO. Such right was given to Escol
the property and constructed a residential building - Under Art. 448, landowner can choose between (1)
therein appropriating the building by paying the proper indemnity
- Tuatis then requested Escol to sign a prepared absolute for the same, as provided for in Arts. 546 and 548; or (2)
deed of sale, but the latter refused, contending that the obliging the builder to pay the price of the land, unless its
purchase price had not yet been fully paid (she only value is considerably more than that of the structures, in
received P4k) which case the builder in good faith shall pay reasonable
- Parties tried to amicably settle before Lupon Barangay but rent
to no avail - Under the first option, Escol may appropriate for herself
- Thus, Tuatis filed a Complaint for Specific Performance the building on the subject property after indemnifying
with damages against Escol before the RTC. She prayed Tuatis for the necessary and useful expenses the latter
that RTC order Escol to do all acts for the consummation incurred for said building, as provided in Art. 546. Until
of contract, particularly the signing of deed of sale Escol appropriately indemnifies Tuatis for the building
- In her answer, Escol stated that Tuatis failed to comply constructed by the latter, Tuatis may retain possession of
with conditions in the contract and asked RTC to dismiss the building and the subject property.
Tuatis’ complaint, or in the alternative, order Tuatis to - Under the second option, Escol may choose not to
return subject property after being reimbursed of her appropriate the building and, instead, oblige Tuatis to pay
payments the present or current fair value of the land.
- RTC dismissed Tuatis’ Complaint and ordered her to return - The P10k price of the subject property, as stated in the
physical possession of subject property to Escol and Deed of Sale on Installment shall no longer apply, since
ordered the latter to return to Tuatis P4k. Tuatis was not Escol will be obliging Tuatis to pay for the price of the land
able to provide sufficient evidence to prove her claim of in the exercise of Visminda’s rights under Art. 448 CC, and
full payment. In determining the rights of the parties: not under the said Deed
o Tuatis, in constructing the building, was in bad - Tuatis’ obligation will then be statutory, and not
faith for she knew that Escol was still the absolute contractual, arising only when Escol has chosen her option
owner of the subject land under Art. 448
o There was also bad faith on Escol’s part in - Still under the second option, if the present or current
accordance with Art. 454 since she allowed Tuatis value of the land turns out to be considerably more than
to construct the building without any opposition that of the building built thereon, Tuatis cannot be obliged
on her part to pay for the subject property, but she must pay Escol
o The rights of the parties must be determined as reasonable rent for the same. Escol and Tuatis must agree
if they both acted in bad faith, in accordance on the terms of the lease; otherwise, the court will fix the
with Art. 448 terms
- CA dismissed Tuatis’ appeal and the decision became final - The Court highlights that the options under Art. 448 are
and executory. Thereafter, Escol filed a Motion for available to Escol, as the owner of the subject property.
Issuance of a Writ of Execution which was granted by RTC There is no basis for Tuatis’ demand that, since the value
- Tuatis filed before RTC a Motion to Exercise Right under of the building she constructed is considerably higher than
Art. 448 and asked the Court to allow her to buy the the subject property, she may choose between buying the
property. She alleged that she had the right to choose subject property from Escol and selling the building to
between being indemnified for the value of residential Escol for P502,073
building or buying the land from Escol - Again, the choice of options is for Escol, not Tuatis, to
make. And, depending on Escol’s choice, Tuatis’ rights as
 a builder under Art. 448 are limited to the following: (a) OR), and completely turning a blind eye to the merits of
under the first option, a right to retain the building and the same
subject property until Escol pays proper indemnity; and (b)  SC also noted that RTC, in its decision failed to make an
under the second option, a right not to be obliged to pay adjudication of the rights of the parties under Art. 448.
for the price of the subject property, if it is considerably Decretal part was only limited to implementing deed of
higher than the value of the building, in which case, she sale
can only be obliged to pay reasonable rent for the same  Although RTC decision had already became final and
- The rule that the choice under Art. 448 belongs to the executory, when there is ambiguity caused by omission or
owner of the land is in accord with the principle of mistake in dispositive portion of decision, SC may clarify
accession, i.e., that the accessory follows the principal and such ambiguity by amendment even after judgment has
not the other way around. Even as the option lies with the become final (body of decision v. fallo). Also, if the Court
landowner, the grant to him, nevertheless, is preclusive. does not act upon the petition, Tuatis loses ownership
The landowner cannot refuse to exercise either option over building she constructed without any recompense,
and compel instead the owner of the building to remove while Escol, by returning P4k does not only recover
it from the land property but also gains entire building without paying for
- Purpose of this provision: Where the builder, planter or the same – thus, SC’s decision to give due course to
sower has acted in good faith, a conflict of rights arises petition should not be viewed as a denigration of doctrine
between the owners, and it becomes necessary to protect of immutability of final jugdment but a recognition of the
the owner of the improvements without causing injustice equally sacrosanct doctrine that a person should not be
to the owner of the land. In view of the impracticability of allowed to profit or enrich himself inequitably at
creating a state of forced co-ownership, the law has another's expense
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 the proper rent. He
cannot refuse to exercise either option. 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.
- Escol’s Motion for Issuance of Writ of Execution cannot be
deemed as an expression of her choice to recover
possession of the subject property under the first option,
since the options under Art. 448 and their respective
consequences were also not clearly presented to her by
Decision of the RTC. She must then be given the
opportunity to make a choice between the options
available to her after being duly informed herein of her
rights and obligations under both.

RULING: RTC decision ordering issuance of writ of execution is

ANNULLED and SET ASIDE. SC directed RTC to conduct further
proceedings to determine (a) facts essential to the proper
application of Art. 448 CC and (b) Escol’s choice of option under
the same provision, and for RTC to further implement such
choice of option.

NOTES
 SC found that CA committed grave abuse of discretion ins
focusing on the procedural deficiencies of Tuatis’ petition
(failed to (i) completely pay docket fees; (ii) attach
certified true or authenticated copy of RTC order; (iii)
indicate the place of issue of her counsel’s IBP and PTR