CASE DIGEST: Sps. Narvaez v. Sps. Alciso

 

SPS. DOMINADOR R. NARVAEZ and LILIA W. NARVAEZ, petitioners, vs. SPS. ROSE OGAS ALCISO and ANTONIO ALCISO, respondents
G.R. No. 165907                    |          July 27, 2009

FACTS:

Larry A. Ogas (Ogas) owned a 1,329-square meter parcel of land situated in Pico, La Trinidad, Benguet, a portion of which was subject to a 30-year lease agreement with Esso Standard Eastern, Inc. Ogas sold this property to his daughter Rose O. Alciso.

Alciso entered into a Deed of Sale with right to repurchase with Jaime Sansano. Alciso later repurchase the property from Sansano and, on March 28, 1980, she entered into another Deed of Absolute Sale with Celso S. Bate.

On August 14, 1981, Bate entered into a Deed of Sale of Realty, selling the property to spouses Dominador R. Narvaez and Lilia W. Narvaez. In 1982, the Spouses Narvaez built a commercial building on the property.

Alciso demanded that a stipulation be included in the 14 August 1981 Deed of Sale of Realty allowing her to repurchase the property from the Spouses Narvaez. In compliance with Alciso’s demand, the Deed stated that, “The SELLER (Bate) carries over the manifested intent of the original SELLER of the property (Alciso) to buy back the same at a price under such conditions as the present BUYERS (Spouses Narvaez) may impose.”

Alciso alleged that she informed the Spouses Narvaez that she wanted to repurchase the property. The Spouses Narvaez demanded P300,000, but Alciso was willing to pay only P150,000. Alciso and the Spouses Narvaez failed to reach an agreement on the repurchase price.

In its 29 October 2004 Decision, the Court of Appeals held that Bate and the Spouses Narvaez entered into a sale with right of repurchase and that, applying Article 448 of the Civil Code, Alciso could either appropriate the commercial building after payment of the indemnity or oblige the Spouses Narvaez to pay the price of the land, unless the price was considerably more than that of the building.

ISSUE:

Whether or not Art. 448 of the NCC is applicable in this case

RULING:

Article 448 is inapplicable in cases involving contracts of sale with right of repurchase — it is inapplicable when the owner of the land is the builder, sower, or planter. In Pecson v. Court of Appeals, the Court held that:

“Article 448 does not apply to a case where the owner of the land is the builder, sower, or planter who then later loses ownership of the land by sale or donation. This Court said so in Coleongco v. Regalado:

Article 361 of the old Civil Code is not applicable in this case, for Regalado constructed the house on his own land before he sold said land to Coleongco. Article 361 applies only in cases where a person constructs a building on the land of another in good or in bad faith, as the case may be. It does not apply to a case where a person constructs a building on his own land, for then there can be no question as to good or bad faith on the part of the builder. Elsewise stated, where the true owner himself is the builder of the works on his own land, the issue of good faith or bad faith is entirely irrelevant.

Article 448 is inapplicable in the present case because the Spouses Narvaez built the commercial building on the land that they own. Besides, to compel them to buy the land, which they own, would be absurd.