GR 172292; (July, 2010) (Digest)
G.R. No. 172292; July 23, 2010
ALIDA MORES, Petitioner, vs. SHIRLEY M. YU-GO, MA. VICTORIA M. YU-LIM, and MA. ESTRELLA M. YU, Respondents.
FACTS
The respondents, the Yu siblings, owned a parcel of land with a building in Camarines Sur. In 1983, they allowed the spouses Antonio and Alida Mores to occupy the property without rent, on the condition that the Mores would vacate when needed. By 1997, the Yu siblings demanded vacation as petitioner Shirley Yu-Go needed the property, noting the Mores already owned another house. The Mores requested extensions until the end of 1998.
When the Yu siblings issued a final demand in January 1999, the Mores, instead of vacating, hired laborers and demolished the improvements on the property, such as roofing and trusses, which they had constructed, and appropriated the materials. The Yu siblings filed a Complaint for Injunction and Damages. The Regional Trial Court dismissed both the complaint and the Mores’ counterclaim, finding both parties acted in good faith. The Court of Appeals reversed, applying Article 1678 of the Civil Code on lease, ordering the Mores to pay the Yu siblings moral damages of ₱100,000.
ISSUE
Whether the Court of Appeals erred in awarding moral damages to the Yu siblings.
RULING
The Supreme Court granted the petition, deleting the award of moral damages. The legal logic centered on the proper application of Article 1678 of the Civil Code, which governs the rights of a lessee who introduces useful improvements in good faith. The Court found the relationship between the parties was one of commodatum (loan for use) initially, which later transformed into a lease when the Mores, with the owners’ consent, introduced permanent improvements at their own expense. Consequently, Article 1678 applies, not the general rules on builders in good faith.
Under Article 1678, upon termination of the lease, the lessor must pay the lessee one-half the value of the useful improvements if the lessor refuses to reimburse the lessee. The record showed the Mores demanded reimbursement from the Yu siblings, who refused. Since the Yu siblings failed to offer payment of one-half the value, the Mores had the right to remove the improvements they introduced, provided they did not destroy the principal building. The trial court correctly found the Mores removed only their own improvements without damaging the original structure. Therefore, their act of removal was lawful and exercised pursuant to a right under Article 1678. An act done in the lawful exercise of one’s rights does not constitute a legal injury warranting an award of moral damages. No bad faith or wanton conduct was proven to justify such damages.