Case Digest: Tan Queto vs Court of Appeals, G.R. No. 35648

Tan Queto vs Court of Appeals, GR No. 35648, May 16, 1983

Subject: Obligations and Contracts

FACTS

on September 22, 1949 a contract of lease over the lot was entered into between Pershing Tan Queto (TAN QUETO, for short, the herein petitioner) and RESTITUTA (with the consent of her husband JUAN) for a period of ten (10) years;

on December 27, 1960 RESTITUTA sued TAN QUETO for unlawful detainer (the lease contract having expired) before the Municipal Court of Ozamis City;

on April 22, 1962; that the unlawful detainer case was won by the spouses in the Municipal Court; but on appeal in the Court of First Instance, the entire case was DISMISSED because of an understanding (barter) whereby TAN QUETO became the owner of the disputed lot, and the spouses RESTITUTA and JUAN in turn became the owners of a parcel of land (with the house constructed thereon) previously owned (that is, before the barter) by TAN QUETO; that after the barter agreement dated October 10, 1962 between JUAN and TAN QUETO, the latter constructed on the disputed land a concrete building, without any objection on the part of RESTITUTA; that later, RESTITUTA sued both JUAN and TAN QUETO for reconveyance of the title over the registered but disputed lot, for annulment of the barter, and for recovery of the land with damages.

ISSUE

WHETHER OR NOT TAN QUETO be regarded as a builder in good

RULING

The Supreme Court ruled that Certainly Tan Queto is not merely a possessor or builder in good faith (this phrase presupposes ownership in another); much less is he a builder in bad faith. He is a builder-possessor jus possidendi because he is the OWNER himself.

The difference between a builder (or possessor) in good faith and one in bad faith is that the former is NOT AWARE of the defect or flaw in his title or mode of acquisition while the latter is AWARE of such defect or flaw (Art. 526, Civil Code). But in either case there is a flaw or defect. In the case of TAN QUETO there is no such flaw or defect because it is he himself (not somebody else) who is the owner of the property.