G.R. No. L-11084; April 29, 1961
ALEJANDRO QUEMUEL and RUPERTA SOLIS, plaintiffs-appellants, vs. ANGEL S. OLAES and JULIANA PRUDENTE, defendants-appellees.

FACTS

In a prior case (Civil Case No. 5442), the Olaes spouses, as registered owners of Lot 1095, successfully sued the Quemuel spouses for recovery of possession and payment of monthly rentals. The court ordered the Quemuels to vacate the lot and pay P20.00 monthly from January 1954. This decision became final as the Quemuels did not appeal. To forestall the execution of this judgment, the Quemuels filed the present complaint (Civil Case No. 5518). They sought to reduce the monthly rental to P5.60 and to compel the Olaes spouses to sell to them the portion of the lot where their house stood, claiming a right to purchase as builders in good faith. The Olaes spouses moved to dismiss the complaint on grounds of lack of cause of action, res judicata, prescription, and failure to set up the claim as a compulsory counterclaim in the prior case. The trial court granted the motion to dismiss.

ISSUE

Whether the trial court correctly dismissed the complaint on the grounds stated in the motion to dismiss.

RULING

Yes, the dismissal was proper. The Supreme Court affirmed the order, analyzing each ground for dismissal. On the first cause of action for rental reduction, the complaint stated no cause of action. The right to fix the rental was determined by the final judgment in Civil Case No. 5442. Plaintiffs had no legal right to unilaterally impose a different rental rate; their remedy was to vacate if they found the court-ordered rental excessive. On the second cause of action to compel a sale of the land, the legal logic is clear. Article 448 of the Civil Code grants the landowner, not the builder, the option to appropriate the improvement or sell the land. A builder in good faith cannot compel the owner to sell. Furthermore, the Quemuels were not builders in good faith. Their verified answer in the prior case admitted the Olaes’ ownership, and their occupation was merely by tolerance, precluding any claim of good faith. The defense of res judicata also barred the action. The parties and subject matter were identical to the prior case, and the rental issue had been conclusively settled. The claim of ownership or right to purchase, if any, was also barred by prescription, having accrued at the latest upon the issuance of the Torrens title in 1933, and by their failure to plead it as a compulsory counterclaim in the very suit where their possession was contested. The Court distinguished the cited De Jesus case, as the dismissal here considered evidence beyond the complaint’s allegations, including the prior case’s record.