Mina vs. Pascual

A sale of property by one who is not its owner is null and void, and when a building is erected on another's land with the owner's consent but without a fixed period of use, the arrangement is not a commodatum but is governed by the rules on accessions under Article 361 of the Civil Code, which grants the landowner the right to appropriate the building after indemnity or to oblige the builder to pay the value of the land.

Francisco Fontanilla and Andres Fontanilla were brothers. Francisco acquired a lot in the center of Laoag, the capital of Ilocos Norte, on March 12, 1874, through purchase at a public auction held by the alcalde mayor of the province. The lot had a frontage of 120 meters and a depth of 15 meters. With Francisco's consent, Andres erected a warehouse of rubble stone on a portion of the lot, embracing 14 meters of frontage by 11 meters of depth. After both brothers died, Francisco's heirs (the plaintiffs, Alejandra Mina et al.) were recognized as owners of the lot, while Andres's heirs (the defendants, the minor children of Ruperta Pascual) were recognized as co-owners of the warehouse. The plaintiffs owned the lot exclusively; the defendants had only use of the lot occupied by the building.

Francisco Fontanilla and Andres Fontanilla were brothers. On March 12, 1874, Francisco acquired a lot in the center of Laoag, the capital of Ilocos Norte, through purchase at a public auction conducted by the alcalde mayor of the province. The lot had a frontage of 120 meters and a depth of 15 meters. With Francisco's consent, Andres erected a warehouse of rubble stone on a portion of the lot, covering 14 meters of frontage by 11 meters of depth. No consideration or price was paid by Andres or his successors for the use of the lot occupied by the building.

After both brothers died, Francisco's heirs—the plaintiffs Alejandra Mina et al.—were recognized without discussion as owners of the lot. Andres's heirs—the minor children of Ruperta Pascual—were recognized as co-owners of the warehouse. The parties' respective shares in the warehouse were complex: the defendants were entitled to six-sevenths of one-half of the building, the plaintiffs to the other half, and the remaining one-seventh of the first half to the children of one of the plaintiffs, Elena de Villanueva. The plaintiffs, however, were undoubtedly the owners of the part of the lot occupied by the warehouse as well as the remainder of the lot.

On May 6, 1909, Ruperta Pascual, as guardian of her minor children, petitioned the Court of First Instance of Ilocos Norte for authorization to sell "the six-sevenths of the one-half of the warehouse, of 14 by 11 meters, together with its lot." The plaintiffs opposed the petition on the ground that Pascual had included the lot, which they claimed as their exclusive property. The plaintiffs further moved for the court to decide the question of ownership of the lot before ruling on the petition for sale. The court, however, ordered the sale at public auction of the warehouse together with the lot on which it stood, at a minimum price of ₱2,890. Cu Joco purchased the property at that price. The court subsequently decided the ownership question, holding that the lot belonged to the owner of the warehouse, which had been built thereon thirty years before.

The plaintiffs appealed to the Supreme Court, which reversed the lower court's judgment and held that the plaintiffs were the owners of the lot. When the judgment became final and executory, a writ of execution issued and the plaintiffs were given possession of the lot. The trial court, however, annulled this possession because it affected Cu Joco, who had not been a party to the prior suit. The plaintiffs then commenced the present action to have the sale of the lot declared null and void and to recover possession from Cu Joco. The complaint was subsequently amended to include both annulment of the sale and recovery of possession. The trial court held that there were no grounds for annulment and that the plaintiffs were entitled to the ₱600 deposited with the clerk as the value of the lot, absolving the defendants from the complaint.

• Ownership of the Lot: Petitioner argued that the lot was their exclusive property and that the defendants, having only use of the lot, could not validly sell it.
• Nullity of the Sale: Petitioner maintained that the sale of the lot by Ruperta Pascual to Cu Joco was null and void because the defendants never owned the lot and could not convey what they did not have.
• Recovery of Possession: Petitioner sought amendment of the complaint to include a claim for recovery of possession of the lot from Cu Joco, in addition to annulment of the sale.
• Rent: Petitioner contended that Cu Joco, now in possession of the lot, should pay rent at the rate of ₱5 per month.

• Admission of Ownership: Respondent agreed that the plaintiffs had ownership of the lot and that the defendants had only the use thereof.
• Commodatum: Respondent characterized the use of the lot as a commodatum, as reflected in the stipulated agreement of facts.
• Opposition to Amendment: Respondent's attorney opposed the plaintiffs' motion to amend the complaint to include recovery of possession.

• Validity of the Sale: Whether the sale of the lot by Ruperta Pascual, as guardian of her minor children, to Cu Joco was valid.
• Nature of the Arrangement: Whether the use of the lot granted by Francisco Fontanilla to his brother Andres constituted a commodatum.
• Rights of the Landowner: What rights the plaintiffs, as owners of the lot, are entitled to with respect to the building erected thereon.

• Validity of the Sale: No. The sale of the lot was null and void because the defendants never owned the lot and could not transfer its ownership; one cannot convey to another what he has never had himself.
• Nature of the Arrangement: No. The arrangement was not a commodatum because no definite period was fixed for the use of the lot, which is an essential feature of commodatum under Article 1740 of the Civil Code.
• Rights of the Landowner: The plaintiffs are entitled to the rights granted by Article 361 of the Civil Code: to appropriate the building after paying the indemnity prescribed in Articles 453 and 454, or to oblige the builder to pay the value of the land.

• Validity of the Sale: The defendants agreed that the plaintiffs had ownership of the lot and that they themselves had only the use. On this premise, the nullity of the sale of the lot is evident. He who has only the use of a thing cannot validly sell the thing itself, because the effect of sale is the transfer of ownership, and one who has only mere use cannot transfer ownership. The sale of a thing effected by one who is not its owner is null and void. The defendants never were the owners of the lot sold; the sale is necessarily null and void. At the judicial auction, the purchaser Cu Joco could acquire only what the minor children of Ruperta Pascual had in their possession: the ownership of six-sevenths of one-half of the warehouse and the use of the lot. He could not acquire ownership of the lot, nor the other half or the remaining one-seventh of the first half of the warehouse. The sale of those portions was likewise null and void. The purchaser could and should have known what was offered for sale and what he purchased; nothing justified his acquisition of ownership of the lot, since the minors never were or were considered to be its owners. The plaintiffs could not be compelled to acquiesce in the sale or accept the appraised price of the lot, because they did not give their consent (Article 1261, Civil Code), and only contracting parties who have given consent are obliged to comply (Article 1091, idem).

• Nature of the Arrangement: Although both parties agreed in calling the use a commodatum, contracts are not to be interpreted in conformity with the name the parties give them but must be construed according to their constitutive elements as defined and denominated by law. Under Article 1740 of the Civil Code, it is an essential feature of commodatum that the use of the thing belonging to another shall be for a certain period. Francisco Fontanilla did not fix any definite period during which Andres could use the lot whereon Andres was to erect a stone warehouse of considerable value, and the lot has been used for thirty years by Andres and his successors. The plaintiffs' own contention that Cu Joco should pay rent at ₱5 per month would destroy the theory of commodatum, since commodatum is essentially gratuitous under the second paragraph of Article 1740. Moreover, it appeared that Francisco expected the warehouse would eventually fall to his son Fructuoso, which did not come to pass because Fructuoso died before Andres. With that expectation, it was more likely that Francisco intended to allow Andres a surface right, but that right supposes payment of annual rent, and Andres had gratuitous use. The arrangement thus fits neither commodatum (no fixed period, and gratuitous use inconsistent with rent claim) nor surface right (no rent paid). The facts show only that a building was erected on another's ground.

• Rights of the Landowner: Because the facts show only that a building was erected on another's ground, the question should be decided under the statutes governing accessions to real estate. Thirty years ago, the governing laws were Laws 41 and 42, title 28, of the Third Partida, nearly identical with Articles 361 and 362 of the Civil Code. Pursuant to Article 361, the owner of the land on which a building is erected in good faith has the right to appropriate the edifice to himself, after payment of the indemnity prescribed in Articles 453 and 454, or to oblige the builder to pay the value of the land. Such, and no other, is the right to which the plaintiffs are entitled. The defendants do not hold lawful possession of the lot, but the sentencing of the defendants to deliver the lot does not follow as a necessary corollary of the declaration of ownership or the nullity of the sale. Instead, Cu Joco is to be maintained in the use of the lot until the plaintiffs choose one or the other of the two rights granted by Article 361.

• Nemo dat quod non habet — One cannot convey to another what he has never had himself. The sale of a thing by one who is not its owner is null and void. The Court applied this principle to hold that Ruperta Pascual, who had only use (not ownership) of the lot on behalf of her minor children, could not validly sell the lot to Cu Joco. The purchaser at the judicial auction could acquire only what the vendor had: ownership of the fractional share of the warehouse and mere use of the lot—not ownership of the lot itself.

• Accession rights of the landowner (Article 361, Civil Code) — When a building is erected in good faith on another's land, the landowner has two options: (1) to appropriate the edifice to himself after paying the indemnity prescribed in Articles 453 and 454, or (2) to oblige the builder to pay the value of the land. The Court held that this, and no other, is the right to which the plaintiffs are entitled, because the arrangement between the brothers was neither a commodatum (no fixed period) nor a surface right (no rent paid), but simply a building erected on another's ground.

• Essential elements of commodatum (Article 1740, Civil Code) — Commodatum is a loan for use whereby one party delivers to another anything not perishable so the latter may use it for a certain period and return it. Two essential features: (1) the use must be for a certain or definite period, and (2) commodatum is essentially gratuitous. The Court held the arrangement was not a commodatum because Francisco did not fix any definite period for Andres's use of the lot, and the plaintiffs' own claim for rent contradicted the gratuitous nature of commodatum.

• Contract interpretation by constitutive elements, not by name — Contracts are not to be interpreted in conformity with the name the parties agree to give them but must be construed by duly considering their constitutive elements as defined and denominated by law. The parties' agreement to call the arrangement a commodatum did not control; the Court examined the legal elements and held it was not a commodatum.

• "He who has only the use of a thing cannot validly sell the thing itself. The effect of the sale being a transfer of the ownership of the thing, it is evident that he who has only the mere use of the thing cannot transfer its ownership." — This passage articulates the ratio decidendi for nullifying the sale of the lot: a person with only usufructuary or possessory rights cannot convey ownership, and any such sale is void.

• "Contracts are not to be interpreted in conformity with the name that the parties thereto agree to give them, but must be construed, duly considering their constitutive elements, as they are defined and denominated by law." — This statement establishes the principle that the legal nature of a contract is determined by its essential elements as defined by law, not by the label the parties assign to it.

• "Such, and no other, is the right to which the plaintiff are entitled." — Referring to the rights under Article 361 of the Civil Code (to appropriate the building after indemnity or to oblige the builder to pay the land's value), this passage defines the controlling remedy available to the landowner when a building is erected on his land under circumstances that are neither commodatum nor surface right.

• Pascual vs. Mina, 20 Phil. Rep., 202 — The prior decision of the Supreme Court in the antecedent suit, which held that the plaintiffs were the owners of the lot in question. This ruling established the ownership predicate upon which the present action for annulment of sale and recovery of possession was based. The Court relied on it to confirm that the defendants never had ownership of the lot and therefore could not validly sell it.

• Article 361, Civil Code — Provides that the owner of land on which a building is erected in good faith has the right to appropriate the edifice after payment of indemnity under Articles 453 and 454, or to oblige the builder to pay the value of the land. Applied as the controlling provision because the arrangement was neither commodatum nor surface right, and the facts showed only a building erected on another's ground.
• Article 1740, Civil Code — Defines commodatum as a loan for use, requiring a certain period for use and being essentially gratuitous. Applied to determine that the arrangement between the brothers was not a commodatum because no definite period was fixed and the plaintiffs' claim for rent contradicted the gratuitous nature of the contract.
• Articles 453 and 454, Civil Code — Prescribe the indemnity to be paid when the landowner chooses to appropriate the building erected on his land. Referenced as the measure of indemnity under Article 361.
• Article 1261, Civil Code — Provides that consent is necessary for the validity of contracts. Applied to hold that the plaintiffs could not be compelled to acquiesce in the sale because they did not give their consent.
• Article 1091, Civil Code — Provides that only contracting parties who have given consent are obliged to comply with the contract. Applied to reinforce that the plaintiffs, not being parties to the sale, could not be bound by it.
• Laws 41 and 42, title 28, Third Partida — The historical statutes governing accessions to real estate in force thirty years prior, nearly identical to Articles 361 and 362 of the Civil Code. Referenced to confirm the applicable legal framework at the time the warehouse was erected.

Torres, Johnson, Carson, Moreland, and Trent, JJ., concurred.