Robles v. Hermanos

ROMUALDEZ, J.:

Owing to the character of the facts in the three above entitled cases and the intimate connection existing between them, they were, by agreement of the parties, tried together in the court below, and on appeal this court was requested to try them at the same time, which was done, and these three cases are jointly adjudged in the present decision. The following facts are undisputed: Anastasia de la Rama died on the 17th of October, 1916, leaving six children, to wit, Magdalena, Jose, Evarista, Zacarias, Felix, and Purificacion, surnamed Robles, and some properties, among which is house No. 4 on Iznart Street in the city of Iloilo, concerning which a controversy arose which developed into the three cases now under consideration. The children and heirs of Anastasia de la Rama entered into partnership with Lizarraga Hermanos in liquidation and settlement of their accounts, by virtue of which the competent court awarded to said partnership the properties left by the deceased, including the aforesaid house No. 4 on Iznart Street.

Evarista Robles, one of the aforesaid heirs, since before the death of her mother Anastasia de la Rama, has been with her husband occupying the aforesaid house No. 4 on Iznart Street, at the beginning, by permission of her mother, later on by the consent of her coheirs, and lastly by agreement with the partnership, Lizarraga Hermanos, to whom it had been awarded, having made some improvements on the house, the value of which is fixed at four thousand five hundred pesos (P4,500), and paying to said partnership forty pesos (P40) monthly as rent of the upper story. On March 18, 1918, Lizarraga Hermanos notified Evarista Robles (Exhibit J) that beginning April next the rent of the upper story of the house would be raised to sixty pesos (P60) a month, and that, if she did not agree to the new rate of rent, she might vacate the house. Evarista Robles refused to pay such a new rate of rent and to vacate the house, and Lizarraga Hermanos brought suit against her for ejectment.

Evarista Robles sued Lizarraga Hermanos afterwards to recover the value of the improvements, and demanded, in another action, that said value be noted on the certificate of title as an encumbrance Evarista Robles contends that the understanding with Lizarraga Hermanos by virtue of which she continued to occupy the house and made the improvements, was a contract whereby it was agreed to sell her the said building on Iznart Street, the deed of sale to be executed as soon as the title deeds of the property were transferred to the name of said partnership; that by virtue of this contract she remained in the occupation of the building and made the improvements; that, as one of the stipulations in the contract of sale of the estate, Evarista Robles assumed the liability of an encumbrance of fourteen thousand pesos (P14,000)on the estate and another one in favor of the Agricultural Bank and its successor, the National Bank, paying the interest thereon as well as the land tax and the premiums of the five insurance, all of which payments were made through the same firm of Lizarraga Hermanos who, as a result of the liquidation of accounts, held funds in their possession belonging to Exhibit A, B, C, F, H, and I. It should here be noted that Evarista Robles does not seek the execution of the proper instrument of evidence this contract of sale, nor the performance thereof.

She only claims the cost of the improvements made at her expense and that this be recorded in the corresponding certificate of title. While the firm of Lizarraga Hermanos does not question that fact that said improvements have been made and that their value amounts to four thousand five hundred pesos (P4,500), it denies, however, having entered into any agreement with Evarista Robles for the sale of the building in question. In deciding the case No. 16736 of this court, the court a quo found such a verbal contract of sale to have been proven not only by Exhibit A, which leads to such a conclusion, but by the oral evidence, which, in its opinion, had a preponderance in favor thereof, and by the corroborative evidence consisting in the fact of Lizarraga Hermanos having executed the deed of sale of the warehouse mentioned in the said Exhibit A. This firm questions the right of Evarista Robles to the improvements under consideration.

The fundamental questions upon which hinges the controversy in these three cases are: First, whether Evarista Robles is the owner of the aforesaid improvements and has the right to demand payment of their value (case No. 16736); second, whether she has any right to retain the building until the said value is paid to her (case No. 16661); and third, whether a note for the four thousand five hundred pesos (P4,500), the value of the above-mentioned improvements, as an encumbrance on this estate (case No. 16662), should be made on the title deeds thereof. Regarding the controversy in the case No. 16736, attention is called to article 453 of the Civil Code which reads: Necessary expenditures shall be refunded to every possessor, but only the possessor in good faith may retain the thing until they are repaid to him. Useful expenditures shall be paid the possessor in good faith with the same right to retention, the person who has defeated him in his possession having the opinion of refunding the amount of such expenditures or paying him the increase in value which the thing has acquired by reason thereof.

This provision of law is in force and applies to personal as well as real property. The expenditures incurred in these improvements were not necessary inasmuch as without them the house would have continued to stand just as before, but were useful, inasmuch as with them the house better serves the purpose for which it was intended, being used as a residence, and the improvements consisting of the addition of a dining room, kitchen, closet, and bathroom in the lower and upper stories of the house, and a stable, suitable as a coach house and dwelling, it is beyond doubt that such improvements are useful to the building. One of the chiefs of the firm of Lizarraga Hermanos, on the occasion of a luncheon in the house, on noting the improvements, could not refrain from expressing that such improvements added much to the value of the building (folio 25, stenographic notes).

Now then, was Evarista Robles a possessor in good faith when she made those improvements? Article 434 provides that "good faith is always presumed and the burden of proving bad faith on the part of the possessor rests upon the person alleging it." Lizarraga Hermanos did not allege, nor prove in the first instance the bad faith characterizing Evarista Robles' possession, who, as shown in the records and heretofore stated, began to occupy the house by permission of the former owner, her mother Anastasia de la Rama, and continued later in the occupation by the consent of her coheirs, and afterwards by considering herself the future owner of the building by virtue of the contract with the present owner, Lizarraga Hermanos.

The evidence shows that said improvements were begun about the end of December, 1916, after the agreement with Lizarraga Hermanos for the sale thereof to Evarista Robles. (Folios 23, 24, 25, stenographic notes.) We find that in the court below the presumption of good faith in favor of Evarista Robles' possession at the time she made the improvements on the property was neither disputed nor discussed, but on the contrary, there is positive evidence sufficient to support the conclusion that when she made the improvements on the aforesaid building she was possessing it in good faith. If the improvements are useful and Evarista Robles' possession was in good faith, the conclusion set out in article 453 of the Civil Code, supra , is inevitable; Evarista Robles is the owner of such improvements, and entitled to reimbursement therefor, and to retain the building until the same is made.

One of the proofs establishing the fact that Evarista Robles' possession was in good faith is found in Exhibit A, which textually is as follows: Value of house For }Evarista P16,500.00 Value of Warehouse Evarista pays them in this way - Balance in h/f owning from L. Hnos P1,424.35 Legacy to Evarista 500.00 Legacy to J. Robles 500.00 Legacy to Ambrosio 100.00 Credit Agricultural Bank 14,000.00 Paid by Zacarias 16,524.35 Cash balance carried forward 24.35 Liquidation