Macasaet vs. Macasaet

A builder who constructs improvements on the land of another with the owner's consent is deemed a builder in good faith entitled to the rights under Article 448 of the Civil Code, even absent a claim of ownership over the land.

Vicente and Rosario Macasaet owned two parcels of land in Lipa City. Out of parental love and a desire for family solidarity, they invited their son Ismael and his wife Teresita to occupy the lots, where the latter constructed their residence and established a construction business. An unresolved conflict subsequently arose between the parents and the children, prompting the parents to demand that the children vacate the premises.

• The Invitation: Respondents invited petitioners to occupy their lots in March 1992 to foster family solidarity and mutual assistance.
• The Improvements: Petitioners constructed their residence and the situs of their construction business on the lots with the knowledge and approval of respondents.
• The Conflict: An unresolved conflict arose between the parties, dissipating the familial affection that had prompted the invitation.
• Demand to Vacate: On August 13, 1997, respondents demanded that petitioners vacate the premises, which the latter refused.
• Petitioners' Defenses: Petitioners denied a verbal lease, claiming one lot was allotted as advance inheritance and the other was given as dation in payment for construction materials used in respondents' house renovation.

• Ground for Ejectment: Petitioners argued that the complaint should be dismissed because it was based on a verbal lease agreement that respondents failed to prove; the lower courts erred in relying on tolerance to justify ejectment.
• Nature of Possession: Petitioners maintained that their occupation was not by mere tolerance, as respondents had invited, offered, and persuaded them to use the properties.
• Applicable Law on Improvements: Petitioners contended that Article 1678 of the Civil Code is inapplicable absent a lease agreement, asserting that Article 447 or Article 448 should govern the reimbursement for improvements.
• Procedural Irregularity: Petitioners argued that the case should have been dismissed due to respondents' failure to personally attend the preliminary conference.

• Verbal Lease: Respondents alleged that a verbal lease agreement existed, with petitioners failing to pay the agreed rental of ₱500 per week.
• Alternative Basis for Possession: Respondents countered that, alternatively, petitioners' stay was by mere tolerance.
• Right to Possess: Respondents asserted that as owners of the lots, they are entitled to physical or material possession.

• Unlawful Detainer: Whether petitioners may be ejected despite the failure to prove the verbal lease alleged in the complaint.
• Nature of Possession: Whether petitioners' possession was by mere tolerance or by an implied agreement.
• Preliminary Conference: Whether a representative with written authorization may substitute for a party's personal appearance at the preliminary conference.
• Builder in Good Faith: Whether Article 448 or Article 1678 of the Civil Code governs the reimbursement of useful improvements.

• Unlawful Detainer: Ejectment was properly decreed. Jurisdiction in unlawful detainer is determined by the averments of the complaint. The complaint sufficiently stated that petitioners' withholding of possession had become unlawful upon demand, satisfying the cause of action even if the verbal lease was disproven.
• Nature of Possession: Possession was by an implied agreement with a resolutory condition, not mere tolerance. Tolerance implies acts permitted but not wholly approved, typically out of neighborliness. Here, occupation was upon express invitation and with complete approval, rooted in familial love. The agreement was subject to a resolutory condition—its continuation depended on mutual benefit and affection. When conflict dissipated this affection, the right to possess terminated upon demand.
• Preliminary Conference: A representative with written authorization may validly substitute for a party's personal appearance. Section 4 of Rule 18, which allows representation by a person with special authority, supplements Section 8 of Rule 70.
• Builder in Good Faith: Article 448, in relation to Article 546, applies. Petitioners built the improvements with the full consent and knowledge of the respondents, thereby qualifying as builders in good faith. Article 1678 is inapplicable because the possession was not by tolerance analogous to a lessee. Article 447 is also inapplicable as it pertains to an owner using another's materials. The case was remanded to determine the options and indemnity under Articles 448 and 546.

• Implied Agreement with a Resolutory Condition — When owners gratuitously allow family members to occupy property out of familial love without a fixed period, an implied agreement arises. The agreement subsists as long as mutual benefit and affection exist; the cessation of these conditions operates as a resolutory condition, terminating the right of possession upon demand.
• Builder in Good Faith by Consent of the Owner — Good faith under Article 448 is not strictly limited to those who believe themselves owners of the land. A builder who constructs improvements with the consent of the owner is likewise deemed a builder in good faith entitled to the rights and indemnity provided under Articles 448 and 546 of the Civil Code.

• "The occupancy of the subject lots by petitioners was not merely ‘something not wholly approved of’ by respondents. Neither did it arise from what Tolentino refers to as ‘neighborliness or familiarity.’ In point of fact, their possession was upon the invitation of and with the complete approval of respondents, who desired that their children would occupy the premises. It arose from familial love and a desire for family solidarity, which are basic Filipino traits."
• "Based on the aforecited special cases, Article 448 applies to the present factual milieu. The established facts of this case show that respondents fully consented to the improvements introduced by petitioners. In fact, because the children 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 been in good faith when they built the structures on those lots."

• Calubayan v. Pascual, 128 Phil. 160 (1967) — Distinguished. Held that possession by tolerance is analogous to a lessee. Inapplicable here because possession was by invitation, not mere tolerance.
• Javier v. Javier, 7 Phil. 261 (1907) — Followed. Applied Art. 448 to a son who built a house with the knowledge and consent of his father.
• Depra v. Dumlao, 136 SCRA 475 (1985) — Followed. Remanded the case to the trial court to determine matters necessary for the proper application of Article 448.

• Article 448, Civil Code — Governs the rights of the owner of the land on which anything has been built, sown, or planted in good faith. Applied to grant respondents the option to appropriate the improvements after indemnity or oblige petitioners to pay the price of the land.
• Article 546, Civil Code — Governs useful expenses, allowing a possessor in good faith to be refunded or paid the increase in value acquired by the thing. Applied to determine the indemnity for the useful improvements.
• Article 1197, Civil Code — Allows courts to fix the duration of an obligation when no period is stipulated. Discussed but held inapplicable because no period was intended by the parties; the agreement was subject to a resolutory condition.
• Section 17, Rule 70, Rules of Court — Prescribes the judgment in ejectment cases. Interpreted to allow ejectment where unlawful detainer is sufficiently alleged and proven, even if the specific ground (lease) was disproven.
• Section 8, Rule 70 & Section 4, Rule 18, Rules of Court — Govern preliminary conference appearance. Applied to allow a representative with written authorization to substitute for a party's personal appearance.

Sandoval-Gutierrez, Corona, and Carpio Morales, JJ.