Mores vs. Yu-Go

Name: Keisha Rojas
Case: Mores vs. Yu-Go

Subject: Civil Law
Topic: Property
G.R. NO. 172292; July 23, 2010
Principle:
Indeed, full reimbursement of useful improvements and retention of the
premises until reimbursement is made applies only to a possessor in good
faith, i.e., one who builds on land with the belief that he is the owner thereof.
It does not apply where ones only interest is that of a lessee under a rental
contract; otherwise, it would always be in the power of the tenant to
"improve" his landlord out of his property.
Case digest:
FACTS:
This case stemmed from an injunction suit filed by plaintiff-appellants Yu-go
et.al, alleging that, sometime in March 1983, appellees Mores, pleaded to
appellants that they be allowed to stay in the subject property in the
meantime that they did not own a house yet. Said property was co-owned by
plaintiff-appellants. They readily agreed without asking for any rental but
subject only to the condition that the said stay would last until anyone of
appellants would need the subject property. Forthwith, appellees and their
children occupied the same as agreed upon.
In November 1997, appellants made known to appellees that they were
already in need of the subject property. However, appellees begged that they
be given more time. Extensions of time were repeatedly given to appellee
but, instead of heeding such demand, appellees hired some laborers and
started demolishing the improvements on the subject property on January
20, 1999.
Consequently, appellants instituted the said action for injunction where they
also prayed for the reimbursement of the value of the residential building
illegally demolished. Appellees filed their Answer where they denied the
material averments of the complaint. They claimed that appellees were the
ones who caused its renovation consisting of a 3-bedroom annex, a covered
veranda and a concrete hollow block fence, at their own expense, and with
appellants consent, which renovation was made without altering the form
and substance of the subject property. Also, appellees argued that what they
removed was merely the improvements made on the subject property, which
removal had not caused any substantial damage thereto as, in fact, it
remained intact. By way of counterclaims, they demanded payment of actual

damages, attorneys fees and litigation expenses.
The trial court promulgated its Decision in favor of the spouses Mores ruling
that Defendants, who are possessors in good faith, were able to prove by
preponderance of evidence that they removed only the improvements they
introduced without destroying the principal building, after the plaintiffs
refused to pay them the reasonable value of the improvements. x x x
However, the appellate court disagreed that spouses Mores were in good
faith, believing that the relationship between the Yu siblings and the spouses
Mores is one between a lessor and a lessee, making Article 1678 of the Civil
Code applicable to the present case. The options given by Article 1678, the
right of appropriating the useful improvements after reimbursing 50% of its
value or the right of removal of the useful improvements, are given by law to
the lessor - the Yu siblings. Hence the appellate court ordered the spouses
Mores to pay the Yu siblings moral damages worthP100,000 and denied
Mores Motion for Reconsideration for want of merit.
ISSUE:
Whether or not the appellate court awarding the Yu siblings moral damages
in the amount of P100,000 is rendered with grave abuse of discretion and is
not in accord with the decisions of this Court.
RULING:
The petition has merit.
The good faith referred to by Alida Mores was about the building of the
improvements on the leased subject property. However, tenants like the
spouses Mores cannot be said to be builders in good faith as they have no
pretension to be owners of the property. Indeed, full reimbursement of useful
improvements and retention of the premises until reimbursement is made
applies only to a possessor in good faith, i.e., one who builds on land with the
belief that he is the owner thereof. It does not apply where ones only
interest is that of a lessee under a rental contract; otherwise, it would always
be in the power of the tenant to "improve" his landlord out of his property.
The appellate court is correct in ruling that Article 1678 of the Civil Code
should apply in the present case. Article 1678 reads:
If the lessee makes, in good faith, useful improvements which are suitable to
the use for which the lease is intended, without altering the form or
substance of the property leased, the lessor upon the termination of the
lease shall pay the lessee one-half of the value of the improvements at that
time. Should the lessor refuse to reimburse said amount, the lessee may
remove the improvements, even though the principal thing may suffer
damage thereby. He shall not, however, cause any more impairment upon
the property leased than is necessary.
With regard to the ornamental expenses, the lessee shall not be entitled to
any reimbursement, but he may remove the ornamental objects, provided no
damage is caused to the principal thing, and the lessor does not choose to
retain them by paying their value at the time the lease is extinguished.
There is thus no reason for the appellate courts award of moral damages to
the Yu siblings. We agree with the trial courts finding that the spouses Mores
"removed only the improvements they introduced without destroying the
principal building, after the [Yu siblings] refused to pay them the reasonable
value of the improvements."
When the spouses Mores demanded
reimbursement, the Yu siblings should have offered to pay the spouses Mores
one-half of the value of the improvements. Since the Yu siblings failed to
make such offer, the spouses Mores had the right to remove the
improvements.
Petition is Granted with Modification as to damages awarded to the Yu
siblings.
Bar Question Type:
Problem:
A asked B to allow him to use his land for the meantime while he has still no
home. B agreed without asking for any rental but subject only to the
condition that the said stay would last until anyone of his family would need
the subject property. Consequently, B demanded A to return the subject
property but the latter pleaded for an extension of time to which B agreed.
However, instead of heeding such demand, appellees hired some laborers
and started demolishing the improvements on the subject property. B then
filed an injunction suit and prayed for the reimbursement of the value of the
residential building illegally demolished. A argued he was the one who
caused its renovation consisting of a 3-bedroom annex, a covered veranda
and a concrete hollow block fence, at his own expense, and with appellants
consent, which renovation was made without altering the form and
substance of the subject property and that what they removed was merely
the improvements made on the subject property, which removal had not
caused any substantial damage thereto as, in fact, it remained intact. The
trial court ruled in favor of A for being a possessor in good faith. The
appellate court disagreed believing that the relationship between the B and
A is one between a lessor and a lessee, making Article 1678 of the Civil Code
applicable to the present case. The options given by Article 1678, the right of
appropriating the useful improvements after reimbursing 50% of its value or
the right of removal of the useful improvements, are given by law to the
lessor B. Did the Appellate Court appropriately ruled in this case? Decide
with reasons.
Suggested Answer:
Yes, the Appellate Court is correct.
The good faith referred to by A was about the building of the improvements
on the leased subject property. However, tenants like the A cannot be said to
be builders in good faith as they have no pretension to be owners of the
property. Indeed, full reimbursement of useful improvements and retention of
the premises until reimbursement is made applies only to a possessor in
good faith, i.e., one who builds on land with the belief that he is the owner
thereof. It does not apply where ones only interest is that of a lessee under a
rental contract; otherwise, it would always be in the power of the tenant to
"improve" his landlord out of his property.
The appellate court is correct in ruling that Article 1678 of the Civil Code
should apply in the present case. Article 1678 reads:
If the lessee makes, in good faith, useful improvements which are suitable to
the use for which the lease is intended, without altering the form or
substance of the property leased, the lessor upon the termination of the
lease shall pay the lessee one-half of the value of the improvements at that
time. Should the lessor refuse to reimburse said amount, the lessee may
remove the improvements, even though the principal thing may suffer
damage thereby. He shall not, however, cause any more impairment upon
the property leased than is necessary.
With regard to the ornamental expenses, the lessee shall not be entitled to
any reimbursement, but he may remove the ornamental objects, provided no
damage is caused to the principal thing, and the lessor does not choose to
retain them by paying their value at the time the lease is extinguished.
Hence, the Court of Appeals is correct in applying Article 1678 of the Civil
Code.

Mores vs. Yu-Go

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Mores vs. Yu-Go

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Name: Keisha Rojas

Case: Mores vs. Yu-Go

G.R. NO. 172292; July 23, 2010

remained intact. By way of counterclaims, they demanded payment of actual

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