G.R. No. L-5028
JUANA VALENCIA, plaintiff-appellant, vs. CARMEN AYALA DE ROXAS, defendant-appellee.
February 20, 1909

FACTS:
In a prior case (Carmen Ayala de Roxas vs. Juana Valencia, 9 Phil Rep., 322), Carmen Ayala de Roxas was declared the owner of a property, and Juana Valencia was found to be occupying it by mere tolerance, not as an owner. Following this judgment, an execution was issued to put Roxas in possession of the property.

Valencia then filed the present action seeking to prevent her eviction until Roxas paid her for improvements she made on the property, which included filling the lot and erecting a house, valued at P8,000. She claimed these were “useful expenses” made in good faith. A preliminary injunction was granted to restrain the eviction.

Roxas, in her answer, filed a counterclaim for the use and occupation of the premises from September 1, 1901. The lower court acquitted Roxas of Valencia’s complaint (denied reimbursement for improvements) and ordered Valencia to pay Roxas P15 a month as rent on the counterclaim. Valencia appealed this judgment.

ISSUE:
1. Whether Juana Valencia, as an occupant by mere tolerance, is entitled to reimbursement for improvements (filling of lot and construction of a house) under Article 453 of the Civil Code and to retain possession until such payment.
2. Whether there was sufficient evidence to support the lower court’s award of P15 per month for the use and occupation of the premises.

RULING:
1. The Supreme Court AFFIRMED the lower court’s decision denying Valencia’s claim for reimbursement for improvements.
The improvements Valencia made (filling the lot and building a house) are not considered “necessary expenses” as defined by the Civil Code (Article 453) and previous jurisprudence, which are for the preservation of the thing.
For “useful expenses,” Article 453 grants the right to reimbursement and retention only to a possessor in good faith.
The prior case (Carmen Ayala de Roxas vs. Juana Valencia, 9 Phil Rep., 322) conclusively established that Valencia occupied the land “by the mere tolerance of the plaintiff” and not as owner. An occupant by mere tolerance is considered a possessor in bad faith and thus not entitled to the benefits of Article 453. The Court cited De Guzman vs. Rivera (4 Phil. Rep., 620), which held that an occupant by mere tolerance acts in bad faith and cannot avail herself of the provisions for improvements.

2. The Supreme Court REVERSED the lower court’s judgment on the counterclaim for rent, thereby acquitting Valencia of the counterclaim.
The only evidence presented to establish the value of use and occupation was an agreement that an adjacent lot, larger in area, paid P237 a month in rent.
* The Court found this evidence insufficient. There was no showing that the adjacent lot was similarly situated, had comparable natural features, or possessed the same value for leasing purposes as the lot occupied by Valencia. A single, isolated rental amount of an adjoining property is not adequate proof of the value of use for another property without further comparative evidence.