GR L 35648; (May, 1983) (Digest)
G.R. No. L-35648 May 16, 1983
PERSHING TAN QUETO, petitioner, vs. COURT OF APPEALS, JUAN POMBUENA and RESTITUTA TACALINAR, GUANGCO DE POMBUENA, respondents.
FACTS
Restituta T. Guangco filed an action for reconveyance, annulment of barter, and recovery of property against her husband, Juan Pombuena, and Pershing Tan Queto. She claimed that Lot No. 304-B was her paraphernal property, inherited from her mother through an oral bequest in 1927. Although a deed of sale was later executed in favor of her and her husband, it was simulated, and the lot was ultimately registered solely in Juan Pombuena’s name in 1962. Restituta alleged that while she was the lessor, Tan Queto, the lessee, employed deceit by entrapping her husband in debt and, without her knowledge or consent, influenced Juan to execute a barter contract in 1962, transferring the lot to Tan Queto in exchange for the cancellation of debts.
ISSUE
The core issues were: (1) whether Lot No. 304-B was the paraphernal property of Restituta or part of the conjugal partnership; and (2) whether Tan Queto, as a builder on the land, was entitled to reimbursement for the improvements he constructed.
RULING
The Supreme Court affirmed the Court of Appeals’ decision. On the first issue, the Court upheld the factual finding that the lot was Restituta’s paraphernal property, acquired through a lucrative title from her mother. This factual conclusion is binding on the Supreme Court. Since the property was paraphernal, Juan Pombuena had no authority to alienate it without Restituta’s consent. Consequently, the barter agreement was annulled for failure of consideration, and mutual restitution of the bartered objects was ordered.
On the second issue, the Court sustained the finding that Tan Queto was a builder in bad faith. He was aware the land was Restituta’s paraphernal property and that Juan could not validly barter it. Applying Article 449 of the Civil Code, a builder in bad faith loses what is built without right to indemnity. Therefore, Tan Queto forfeited the building he constructed and was not entitled to a refund of its value. The petition was dismissed for lack of merit.