Berrocal Ferrer v. District Court of Puerto Rico

76 P.R. 35

• Court: Supreme Court of Puerto Rico
• Decided: February 18, 1954
• Docket: No. 1962
• Status: Published

Opinions

Mr. Justice Belaval

delivered the opinion of the Court.

On June 9, 1945, petitioners herein, Carlos Berrocal Ferrer and his wife Daniela Sánchez, leased a lot of 275 square meters in Santiago Veve Boulevard of the city of Mayagiiez, Puerto Rico, to intervener herein, Frank Four-nier, married to Monserrate Rodríguez. The essential, clauses of this first written contract between the parties are the following:

“D. The parties hereto wish to state that if prior to the' expiration of the contract, that is, before the five-year period,' Mr. Fournier should decide not to continue the lease, the latter shall be obliged to remove any construction he may have erected on the leased lot, leaving the said lot in the same condition in which he finds it at the beginning of the contract.

“E. The parties hereto likewise state that if after the five-year period the lessees (read lessors) should decide to construct any commercial building on this lot, they shall be obliged to give Mr. Fournier the opportunity to rent the construction which may have been erected.

“F. Finally, the parties appearing herein state that Mr. Fournier is free to erect and introduce any improvements on the leased lot provided they are in keeping with the progress and needs of the business.

“G. The parties hereto further state that if the lessees (read lessor) wished to sell the lot which is the object of this lease contract, the lessor (read lessee) Mr. Fournier shall be given 'preference upon payment of a reasonable price.”

This was the contract existing between the parties when the lessee, intervener herein, Mr. Fournier, began constructing a building with money belonging to the conjugal partnership established with his wife Monserrate Rodriguez. Does clause F which authorizes Mr. Fournier “to erect and introduce any improvements on the leased lot,” make the conjugal partnership a builder in good faith? Bear in mind that the permission granted is (1) to erect and (2) to improve.

There seems to be some confusion as to whether a lessee who builds upon a leased lot, may be considered a builder in good faith. Undoubtedly, a lessee who builds on a leased lot, without the owner’s permission to do so is a builder in bad faith: Judgment of January 15, 1904 of the Supreme Court of Spain; Judgment of June 30, 1903 of the Supreme Court of Spain. Therefore a lessee without authority to build, who erects a building on the leased lot, is not' entitled to indemnity for materials and labor as established by § 297 of the Civil Code of Puerto Rico. But there is no doubt either, that a person who builds on a leased lot with the consent of the owner is a builder in good faith: Palermo v. Court, 58 P.R.R. 191, (Travieso), (1941); People v. Carrasquillo, 58 P.R.R. 178, 182, (Todd, Jr.), (1941) p. 182; Berrocal v. Registrar, 54 P.R.R. 501, 505, 506, (De Jesús), (1939). Therefore, if a lessee who is authorized to build on the leased lot, does so, he is entitled to indemnity for materials and labor as established by § 297 of the Civil Code of Puerto Rico. As may be seen, the question deals strictly with the contract in order to determine whether or not the lessee was authorized to build. In the instant case there is no doubt that it is not a question of an ordinary lease period, but of a lease which contains an express permission to build on or improve the leased lot. Therefore, the conjugal partnership is, without doubt and by the very terms of the contract, a builder in good faith..

When the lessors realized that the construction which the lessee had commenced was of a stable nature, they requested him on July 2, 1945 to modify the original contract, which he did, in the following terms:

“H — If at the expiration of the term fixed for this lease, that is, at the end of the five-year period previously stipulated, no agreement is reached as to a new lease, the lessee shall be obliged to withdraw, on his own account and with his own money, whatever buildings he may have constructed on the leased lot within half a year after the date of the expiration of the lease and the lessee shall be obliged to continue paying the same rent stipulated for the said lease, and this condition shall not be understood as an extension or renewal of the said contract.

“1 — The lessors state that they have no intention of either selling the lot involved in this lease or of 'purchasing the buildings tvhich the lessee may construct thereon and that this contract has been made so as to make the lot available to the lessee in order that he can build thereon, but subject-to the obligation of removing whatever buildings he may erect af the expiration of the contract entered into on June 9 or on any other date which may subsequently be entered between them.

“J — This explanatory clause has been deemed necessary because the lessors have noticed that the lessee is making a concrete structure on the leased lot and the lessee' should' be ' specifically warned of this fact in order that he protect'his'. interest as he may deem best.

“K — Upon delivering the lot, the lessee shall leave it completely free of any buildings he may have erected thereon, the ground must be levelled as it was when delivered to him, and free of any rubbish and materials, and he is hereby notified that should he fail to do so the lessors shall then undertake to do it and the lessee shall reimburse them the total cost of whatever work may be necessary in order to accomplish said purpose.”

As may be seen, it is not a question of adding explanatory statements' to former clauses, but of substantial amendments.' As the law sees it there are two different contracts, which do not complement each other, but rather alter decidedly the real property rights which they contain. For example: clause F of the first contract, which gave to the conjugal partnership authority to erect and introduce any improvements on the leased lot, with the corresponding indemnity to the builders in good faith and the compensation- for necessary expenses granted by § 382 of the Civil Code of Puerto Rico, becomes by virtue of clauses H and K of the second contract an actual lien and liability for the conjugal partnership, because by imposing on the lessee the obligation to withdraw the constructions after the contract expires, the conjugal partnership could no longer obtain compensation for materials and labor to which every builder in good faith on another’s land is entitled before he can be evicted.Likewise, as a result of the obligation to deliver the ground; levelled in the same condition as when it was leased, the conjugal partnership could not receive compensation for necessary expenses such as refill, drainage, house connections and paving.

This second contract was signed by the husband without intervention on the part of his wife. The original opinion delivered by this Court in the instant case was to the effect that since the demolition of the building agreed to in the second contract was a mere “act of administration,” this second contract could be signed by the husband without the intervention of his wife. A more intensive study of the issue raised has convinced us that we must abandon such a ruling.

Acts of administration include “leasing, collecting rent, issuing receipts and performing everything which involves acts .of administration” properly speaking, 2 Manresa 752, (.Instituto Editorial Reus, 1944 Edition.) That is why our former jurisprudence always confronted with great caution those so-called “acts of administration”: Agrait et al. v. The Registrar of San Juan, 31 P.R.R. 205, 206 (Del Toro), (1922) ; Heirs of José Hernáiz v. Romero, 26 P.R.R. 363, (Hutchison), (1918) ; Fajardo Sugar Co. v. The Registrar, 25 P.R.R. 176, 177 (Del Toro) (1917).

Notwithstanding our freedom of action before precedents which do not stem from our own case law, a judicial decision is not merely a reconciliation, more or less scientific, of adjudged cases. A judicial decision is, in addition, the creation of a juridical rule which must conform to the way of living of a people, and by way of living we mean the system of individual strivings which little by little are integrated into the collective ethos of a community.

Since 1902, Puerto Rico abandoned the civil doctrine of submitting the married woman to the juridical will of her husband as something out of harmony with the American spirit. Sections 91 and 1313 of the Civil Code of Puerto' Rico of 1930 are an exact counterpart of § § 159 and 1328 of the Revised Civil Code of Puerto Rico, 1902 edition — the inadequacy of calling it “revised” originated from the need to differentiate it from the Spanish Civil Code. From that day the married woman freed herself from her former Romanic condition of being “in manus mariti.”

Already in 1903 — Amadeo v. Registrar, 3 P.R.R. 134, 137 — the Chief Justice of this Court, Mr. José Severo Qui-ñones, stated: “Moreover, inasmuch as aforesaid section 1328 of the new Civil Code is in the nature of a prohibitory law to safeguard good morals and public order, since its object is to protect married women against such frauds and abuses to the prejudice of their interests as may be committed by their husbands, thereby contributing to maintain peace and morality in the family home, the application of said law cannot be omitted, notwithstanding contrary provisions by other foreign laws.”

To consider the married woman as a subject of law of equal juridical stature as her husband for the disposition of conjugal property has been, since the beginning of this century, not only an institution of our civil law, but part of the way of living of our people. A series of former decisions of this Court holding that the interest of the wife in the conjugal partnership while it exists, “is a mere expectancy or hope to receive one moiety of the liquid assets that might exist when the partnership is dissolved,” National City Bank v. De la Torre et al., 54 P.R.R. 219, 223 (De Jesús), (1939) ; De la Torre v. National City Bank of New York, 110 P. 2d 976, 983 (Magruder) (1940), second paragraph, should not prevail locally because that doctrine is strongly impregnated with the classic Spanish doctrine, and has no reason to survive in our Puerto Rican way of living. If we should decide to continue enlarging the so-called “acts of administration” of the husband, the time would come when the shrewdness of a notarial clerk might devise a series of fraudulent acts which would leave the married woman defenseless within an institution which is allegedly created for her protection.

The act of administration may not be taken to mean expressly or implicitly the disposition of real property rights within an immovable, without giving rise to what Justice Magruder called a retrogression within the modern tendency of development, De la Torre v. National City Bank of New York, 110 F. 2d 976, (Magruder), (1940), p. 983, second paragraph, and which in our own words we would term a reversion to the Romanic doctrine, and by inference, a series of legalistic actions which are actual alienations, encumbrances or obligations for a valuable consideration would be sanctioned for the future.

Assuming without deciding, that the lessee, intervener herein, could have executed the first contract by himself, as administrator of the conjugal partnership, it is beyond any question that the lessee, intervener herein, as administrator of the conjugal partnership, could not execute by himself the second contract because the amended rights are all real property rights created in favor of the conjugal partnership: Bonillerse v. González et al., 17 P.R.R. 1084 (McLeary) (1911).

The law is always the major premise of any juridical conclusion. Section 262 of the Civil Code of Puerto Rico provides that “things may be immovable either by their own nature or by their destination or the object to which they are applicable”; § 263, paragraph 1 of the same Code establishes that “the following are immovables: 1 — Lands, buildings, roads and structures of every kind adherent to the soil”; § 264 of the same Code provides: ■ “the following incorporeal things are considered as immovable from the object to which they apply: 1. . . . , 2. Any right or obligation established on any immovable.” Therefore, the right to receive compensation for materials and labor to which every builder in good faith is entitled, is a real property right because it is constituted on real property, and any waiver thereof is equivalent to an alienation of. the real property, since to alienate means “the act . . . which extinguishes, creates and modifies rights . . . which requires from the person who alienates as well as from the acquirer the conditions of legal capacity essential for consent” —13 Enciclopedia Jurídica Española 566 — 1910 Edition.

It is likewise clear that the lessee, intervener herein, had. no power, as administrator of the conjugal partnership, to-alienate any real property right of his wife. Section 91 of the Civil Code of Puerto Rico provides that “the husband shall be the administrator of the conjugal property, except when stipulated otherwise; . . . nevertheless the real property belonging to the conjugal community may not be alienated or burdened, such a transaction being null, except when effected with the mutual consent of both parties to the marriage.” Santiago v. Rodríguez, 72 P.R.R. 253, 262 (Snyder), (1951) ; Encarnación v. Salim, 69 P.R.R. 715, 722 (Negron Fernández) (1949) ; Pérez v. Hawayeck, 69 P.R.R. 46, 49 (Marrero), (1948) ; Robles v. Guzmán, .67 P.R.R. 671, 679 (Marrero), (1947) ; Martínez v. Registrar, 62 P.R.R. 832, 834 (Todd), (1944) ; Fuster v. Paonesa, 43 P.R.R. 729, 732 (Hutchison), (1932); G. Llinás & Co. v. The Registrar, 23 P.R.R. 705 (Hutchison), (1916); Després v. Registrar of Property, 14 P.R.R. 603, 608 (Quiñones), (1908); Caballero v. Registrar of Property, 12 P.R.R. 214, 216 (Quiñones), (1907); Moscoso v. Registrar of Property, 12 P.R.R. 378 (Quiñones), (1907).

Section 1313 of the same Code again repeats the limitation on the conjugal administration: “notwithstanding the power which the husband has as administrator he shall not have the power to give, to sell and to bind for a consideration the real estate of the conjugal partnership, without the express consent of the wife; every sale or agreement which the husband may make in respect to the said property in violation of this Section and the other provisions of this Code, or in fraud of the wife shall be null and shall not prejudice her or her heirs.”

Neither did he have power to encumber their property. An encumbrance — 17 Enciclopedia Jurídica Española 252, (1910 Edition) —means “a burden, an obligation of a person to perform or to agree to a thing; a burden imposed on a property as well as the act'of imposing that same burden; in the second of the meanings set forth, every encumbrance constitutes a limitation of the ownership or of any real property right imposed on immovable property and the same real property rights constitute in turn an encumbrance with respect to the property encumbered.” Robles v. Guzmán, 67 P.R.R. 671, 675 (Marrero), (1947); Caballero v. Registrar, 32 P.R.R. 702, (Franco Soto), (1924) ; Fajardo Sugar Co. v. Registrar, 25 P.R.R. 176, 178 (Del Toro), (1917) ; G. Llinás & Co. v. Registrar, 23 P.R.R. 705 (Hutchison), (1916) ; Després v. Registrar, 14 P.R.R. 603, 605 (Quiñones), (1908); Boscio et al. v. The Registrar of Property, 14 P.R.R. 605, 607 (Quiñones), (1908). The phrase “for a valuable consideration” appearing in the afore-cited § 1313, means — 30 Enciclopedia Jurídica Española 29, (1910 Edition.) — “the cause by virtue of which a thing is acquired by paying its value or worth in money, in something else, in services, or through certain liens and conditions to which the acquirer binds himself such as sale, exchange, leases and dowry.” Agrait et at. v. Registrar, 31 P.R.R. 205, (Del Toro), (1922); Gautier v. Registrar of Humacao, 24 P.R.R. 658 (Wolf), (1917), p. 660; Estate of García v. The Registrar of Property, 16 P.R.R. 747, (Wolf), (1910), p. 748; Vidal v. The Registrar of Property, 12 P.R.R. 198, (Quiñones), (1907).

Undoubtedly, when the administrator of the conjugal partnership in the instant case bound himself by virtue of the second contract to demolish a building belonging to the conjugal partnership which was already under construction, he was performing an act of alienation of a real property right, disposing of the encumbrance of a real property right imposed on an immovable property, and imposing a valuable consideration on the real property right which belonged to the conjugal partnership. After the real property right became a property of the conjugal partnership by virtue of the first contract, the husband by himself, could not alienate, encumber, or impose on it an onerous condition, without the consent of his wife and he did so when he executed the second contract.

In our original opinion we also concluded that, although the building constructed on plaintiff’s lot was a building in good faith for which the cost of the materials and labor had to be reimbursed through the corresponding-action of accession, the eviction lies, because there is an agreement regulating the rights of the parties over the building at the expiration of the lease contract. Considering the question anew, we now conclude that the latter statement can not be successfully reconciled with the principles of juridical analysis. It is precisely the nullity or validity of the agreement regulating the rights of the parties which is the true question in litigation in the instant case. To uphold the right of the lessors to the surrender of the leased lot and to the demolition of the building constructed thereon by the lessees we originally had to conclude, as if it were a declarative proceeding, that the second contract executed by the parties could be signed by the lessee exclusively, as administrator of the conjugal partnership because the future agreement of demolition was a clear “act of administration.” As a matter of discipline, we would now have to hold, as if it were a declarative proceeding, that because the future agreement of demolition constituted a clear alienation of a real property right of the conjugal partnership, the husband could not alienate the rights of a builder in good faith which the conjugal partnership possessed, without the consent of his wife. Without doubt, eviction would not be the proper remedy to determine neither the validity nor the nullity of the agreement of demolition. In the first case the possessory action of a summary character would become an ordinary action for the specific performance of a contract. In the second case the possessory action of a summary character would become a declaratory action on the rights of the lessees to recover the amount of the materials and labor of the building constructed, and the amount of expenses incurred in the preparation of the land.

The action of unlawful detainer is a possessory action: Escudero v. Mulero, 63 P.R.R. 551, (Travieso), (1944), of a speedy and summary nature; Colón v. Santiago, 64 P.R.R. 298, (Travieso), (1944), p. 316. It presupposes the existence of a lease contract where, through the violation of its clauses, the lessor may recover the property leased, or the nonexistence of a contract between the owner and the tenant at sufferance. In those cases where the ordinary landlord-tenant relation or the relation between the owner and tenant at sufferance becomes a different juridical relation, unlawful detainer does not lie, for any claim of another nature is supposed to affect the title of the thing possessed or the right to the possession, requiring a declarative proceeding. The rights issuing from permanent structure built in good faith can not be settled in an action of unlawful detainer: Colón v. Rotary Club of Arecibo, 60 P.R.R. 734, 737 (Todd, Jr.), (1942).

We have discussed subsequently in this case, the nature of the right to indemnity granted by § 297 of our Civil Code to the builders in good faith. The probability that the “right to indemnity” of a builder in good faith does not have real property as an objective, nor that it be constituted on real property has been analyzed, and it has been found that its true object is the reimbursement of an amount of money which constitutes, therefore, a personal obligation of the owner of the land. In other words it deals with a movable according to § 268 of our Civil Code which provides in part that movables are “the obligations and actions, the object of which is to recover money due.”

The time has come for the judges of Puerto Rico to come to an agreement as to a possible methodology for studying questions in litigation connected with the civil law. The Italian Code, the Code Napoleon, the German Code, the Spanish Code as well as the American Codes which have followed the patrimonial models of the European civil law, are arranged within a system of institutions of law which do not allow isolation of a single provision from the other provisions comprised in the corresponding institution of law, or to isolate one institution of law from the other. Codes stand on fundamental bases, on a law of bases, which are given to the code-making bodies as general rules from which a system of juridical principles is created, in full harmony with each other, which can produce the doctrinal unity essential in every institution of law to make it valid. It is precisely this harmony among the different doctrinary aspects, all directed towards the same juridical principle, which makes the task of the civilian so pleasant. Thus, for example, in every case where a lease contract contains, expressly or implicitly, the right of the lessee to build, the legal relation between the parties is covered as to every particular concerning the lease, by the sections governing the institution of law unknown as lease and as to every particular concerning the authority to build, by the sections governing the institution of law known as accession. To hold otherwise is to take shelter in a blind alley which leads to absurdity.

The assertion that the right to indemnity of a builder in good faith is a personal property, could be offered as a model of senselessness which may sometimes be caused by the isolation of any provision within an institution of the civil law, without giving due regard to its other provisions, or to the other institutions of law connected with it.

To deal with this senselessness, we shall have to analyze thoroughly the rights of the owner of the land as well as the rights of the builder in good faith, over the thing constructed. Who is the owner of the building? Who has the title of ownership over the thing built? We shall begin by studying the presumption established by our Code in favor of the owner of the land, which seems to be the implied theory by virtue of which the title of ownership on the thing constructed is placed in the owner of the land and the builder in good faith is reduced to a simple owner of a personal •right, which does not rest on the thing built.

It is true that § 295 of our Civil Code provides that “all works, sown lands and plantings are presumed to have been made by the owner, and at his expense, unless the contrary be proven.” The very conceptual anatomy of this provision shows that it deals with a presumption, that is, with the creation of certain artificial facts which support the right set forth, until the juridical facts which may establish the exception are proved. In the case at bar the juridical facts show that we are concerned with the construction of a building by a lessee with the consent of the owner of the land, as stipulated in the lease contract.

Manresa, with his characteristic severity of extreme simplicity, discusses this presumption establishing the different juridical effects, in the case of buildings made during the lease:

“Are the presumptions of § 359 [ours 295] in favor of the owner of the land when the property is leased? Laurent holds that according to the Code Napoleon, they are. We believe that the doctrine inferred from the Spanish Civil Code (the same which after all should be inferred from the Code Napoleon) is not in the affirmative. It is true that Laurent himself establishes some exceptions. In fact, for the time being it is best to adhere to the clauses stipulated in the lease contract, especially those dealing with buildings. It might seem that the structure, because of its special nature, and even whatever is sown, should belong to the lessor, but if the lease contract impliedly or explicitly provides that the lessee has the right to build, plant or sow, whatever reason the landowner may have to receive the natural or industrial fruits (he shall receive in any case the civil fruits) [rent] disappears and hence the landowner’s interest in building, planting or sowing likewise disappears, such interest being fundamentally the best reason for the capital presumptions of § §59 in his favor.” 3 Manresa 207: (Sixth Edition of Editorial Reus S.A.) (1934).

Then, the ordinary presumption of § 295 of the Code is not enough to make the owner of the land also the owner of the building constructed, if the juridical facts show that the structure built by the lessee was done with the consent of the lessor. Who is the owner, then? May it be inferred without distinction that because an indemnity must be paid to the builder in good faith, the owner of the land is the one having title of ownership on the building constructed on his land? Let us see.

Section 297 of our Code provides:

“The owner of the land which has been built upon, sown, or planted in good faith, has the right to appropriate as his own, the work, sowing or planting, by previously paying the indemnity specified in Sections 382 and 383 of this Code, and to oblige the person who has built or planted to pay him the value of the land, and the person who sowed, to pay the corresponding rent.”

Commenting on § 361 of the Spanish Civil Code which is exactly the same as our § 297, Manresa states at page 205:

“The owner of the land is, according to § 358 [294 of our Code] also the owner of whatever is built, planted or sown thereon even if by a third party, but subject to what is prescribed in the following Sections. Now, among those Sections, § 361 states that the owner of the land on which anything has been built, sown or planted, shall be entitled to appropriate it: then if it does not belong to him immediately, it is not his yet, to whom does it belong? From whom can the owner claim it? From the third person, without doubt, because it belongs to him; and in order that this third party ceases to be an owner, he must be compensated one way or the other, depending on whether he has acted in good or bad faith. Certainly the ownership status of a third party may be doubtful when he acts- in bad faith, for as we shall see he has no right to a ■pertain compensation, but luhen he acts in good faith, it is fb_qyond any question. On the other hand, the same Section .entitles the owner of the land to compel the third person to buy. the land on which he has built whereby the third party becomes the owner.

“Laurent holds that the third person in question can only demand an indemnity and that the evidence which he produces '■can not be directed to shoiving the ownership of the thing -built or planted.” (Italics and brackets ours.)

]" Is this the rule that has prevailed, underlying our genuine ^Puerto Rican civil law, to hold that the right to indemnity 'does not rest on real property? It is well to remember that neither the Code Napoleon, in its § 555, nor the Louisiana ‘Code in its § 508, contains the right of election provided by the Spanish Civil Code and by our Code as to the right of the owner of the land to compel the builder to buy the land. It is likewise well to remember that the third party under the civil law is anyone who is not bound by a contract, which in this' case would be the conjugal partnership, or the wife. .¿Manresa continues at page 205:

“Then, with what title does he claim indemnity? As owner of the materials? But may he never, even if acting in good faith, claim more than the value of the materials or seeds?

“In this specific point, and insofar as the Spanish Civil Code is concerned, we deem more proper the construction given by Mr. Navarro Amandi who states that: ‘the property right of the person who built or planted as well as the property right of the owner of the land must be firmly established. But as it is a question of two property rights in conflict, the law decides in favor of one of the two owners, either by following the rule that the accessory follows the principal, or according to the good or bad faith of the actor or the usefulness or value of the thing, as provided by § 377.’ ” (Italics ours.)

In connection with the applicability of the § 361 of the Spanish Civil Code (our 297) Manresa states that it applies indiscriminately to the owner of the land, or to the owner of the materials employed only, which is one of the ■alternatives of the right of accession. 3 Manresa 217, Sixth Edition; besides it is well settled that “the materials, employed in a construction as well as the plants adhering Tó the land become real property and give form to a new thing of a different nature.” 3 Manresa 211, Sixth Edition. Says Manresa at page 206: The Supreme Court of Spain has ratified this theory in the Judgments of November 27, 1902, January 2, 1928, May 21,1928 and March 18,1948 — 6 Scaevola, pp. 578, 574, (15), Instituto Editorial Reus, 5th ed. Manresa continues:

“The Supreme Court has stated that since the case submitted to the Court of Instance for the weighing of the evidence was included in § 361 of the Civil Code, it may not be considered that whatever is built in good faith on another’s land becomes the property of the oioner of the land if there is no prior indemnity as established by § § 453 and 454, inasmuch as construing the aforesaid Sections, not only in their .liberal sense, but also having in mind the spirit of the law, we must consider, that until said indemnity takes place, the oioner of the land does not acquire the ownership of whatever is built, sown or planted, and he must choose to acquire it by way of indemnity or to compel the person who built it or who is responsible therefor to pay him the price of the land occupied.” (Italics ours.)

“There are no apt terms for assuming that the right of accession implies the lack of knowledge of the separation in ownership relations between different persons of the different ways of using the facilities that the land offers. Thus the adverse evidence of the third party may tend to show that he has sufficient title to possess, either as a mere possessor or as owner of whatever is built.” 3 Manresa 205, 206, Sixth Edition.

Since 1913, when the case of People v. Municipality of San Juan, 19 P.R.R. 625, 637 (Del Toro), was decided, our own jurisprudence established the principle that the owner of the land is not by reason of that fact alone, the lawful and exclusive owner of the building which has been constructed in good faith on his land. Since 1939, when the case of Berrocal v. Registrar, 54 P.R.R. 501 (De Jesús), pp. 505, 506, was decided, the principle was likewise established by our own jurisprudence that in the construction of a building upon another’s land by authority of or by virtue of a contract with the owner of the land, the builder in good faith retains ownership of the construction against the owner of the lot and he can record his building in the Registry of Property.

According to Manresa and to the decisions of the Supreme Court of Spain and of the Supreme Court of Puerto Rico which we have set forth, we are now ready to answer the question which we asked in the beginning: when it is the case of a building constructed in good faith, built on another’s land, who is the owner of the building? Without doubt and' in conformance with the logical structure of our Code, the builder in good faith is the one having the title on the building until the owner of the land makes use of the right of election provided by § 297 of our Code, and pays the owner of the.building for the materials and labor, or compels him to pay the value of the land. Not until this indemnity is paid may the owner of the land assert his title of ownership of the immovable built, and on the contrary, the builder in good faith possesses not only the title of ownership of the building, but also the potential right of becoming the owner of the land. The builder in good faith has two alternatives: (1) either to be paid the materials and labor, or (2) to cause the owner to sell him the land on which he has built, both of which serve as a basis for § 382 of our Code which sanctions the right of the builder in good faith to retain a thing until he is reimbursed for the materials and labor. The owner of the land shall resolve the election provided by the Code in his favor, either retaining the construction built by the builder in good faith, or selling to the builder the land on which the construction is built. So it' appears that affirmative action lies with the owner of the land and not with the owner of the building.

The theory that the right to indemnity of a builder in good faith is personal property or a movable property right is pretended to be based on a citation from professors Planiol and Ripert’s Tratado Práctico de Derecho Civil Francés. That citation altogether lacks the methodological strictness required in the study of a controversial issue concerning comparative civil law. The right of a lessee, a builder in good faith on a leased lot, is not included in that treatise among the credit rights but among the rights of a proprietor to the surface of the land, which is part of the civil institution of common ownership — 3 Planiol and Ripert Tratado Práctico de Derecho Civil Francés (Edición de la Cultural S.A. de la Habana), pp. 286 et seq., % % 330, 331, 332 and especially as to the practical application of surface right to lease contracts where consent to build.is stipulated,

§ 333 at p. 286 (1942).

Surface right ivhich forms part of the study of common ownership is defined as follows in the latter treatise:

“This right consists in the ownership of buildings or plantings located on another’s land. In principle, everything that is on the soil belongs to the owner by accession. Surface right repeals that rule by separating the ownership of the land from what is found on it. It may be complete or incomplete depending on whether it covers all objects which are on the land’s surface or only some of them, such as buildings, plantings or even isolated specific trees.

“Although the Code does not expressly mention surface right, its validity can not be questioned. It appears from § 553 which provides that any building, sowing or planting is presumed to have been made by the owner in the absence of proof to the contrary, thereby admitting that the buildings or plantings standing on the surface of the land may be owned by a person other than the owner of the land; it also finds support in § 664 which authorizes the division of a house into stories . . .

“Very often a businessman without enough money to acquire a vacant lot or who does not wish to take any risks acquires by lease an uncultivated piece of land reserving the right to construct thereon, usually light buildings, such as hangars or workshops. In this case the lease contract regulates the juridical condition of those buildings. It may be agreed that constructions shall belong to the owner pursuant to the rights of accession; in such case the lease does not create a surface right. But it may also be agreed that they shall belong to the lessee who has built them, and such agreement may be either express or inferred from the conditions of the lease contract. We have here a case of a temporal surface right. The lessee may obtain with it an increase in his credit, mortgaging his constructions, but he may not pledge them together with the right of lease because such constructions are real property and the pledge may only refer to personal property.

“A serious question, which ought to be foreseen in the contract, is the destination of those constructions [immovables and the pledge] at the expiration of the lease ... It is frequently said that they shall belong to the owner, either with or without indemnity. At other times, especially ivhen those constructions are of little worth, the lessee binds himself to remove them before leaving, returning the land vacant and leveled.” (Italics and brackets ours.)

When there is no express agreement as to the destination of these buildings, as in the instant case with respect to the first contract, Planiol and Ripert, in the same treatise, refers to § 278 of the afore-cited work at p. 245, which states:

“Contrary to the opinion generally sustained by the authors, the jurisprudence applies § 555 to lessor-lessee relations.” (Italics ours.)

(This refers to § 555 of the Code Napoleon. — See the Code Napoleon p. 142 — Juan Buxó Edition, Havana, 1921; substantially identical with § § 862, 363, and in its final provisions to § 371 and § 453 of the Spanish Code and to § § 298, 299 and in its final provision to § 297 and to § 382 of our Code, all the sections of the three Codes are connected with the right of accession regarding immovables.) Planiol and Ripert continue:

“This notwithstanding, it is necessary to make an essential distinction. Actually, only when the lessee has constructed on the land without the consent of the oioner and violating the stipulations of the lease contract, does § 555 apply directly and imperatively.” (Italics ours.)

(This refers to the first paragraph of § 555 of the Code Napoleon, the first paragraph being equivalent to § § 362 and 363 of the Spanish Civil Code and § 298 and 299 of our Code.) Planiol and Ripert continue:

“Where on the contrary, the constructions were built according to the stipulations of the lease contract, the agreement of the parties must be fulfilled. If the contract has no provision for an indemnity to the lessee by the oioner who retains the construction, the Judge may apply § 555 by analogy. But in such case there is no reason against considering the lessee as a possessor in good faith, the owner having the power to choose either reimbursement of materials and labor or the equivalent of the increase in value of the land.”

(This refers to the final provision of § 555 of the Code Napoleon equivalent in part to § § 361, 453 of the Spanish Civil Code and to § § 297, 382 of our Code.) Planiol and Ripert continue:

. “When does the right by accession of the owner commence over the constructions and plantings made by the lessee? Shall it be from the time the lessee builds or plants or at the expiration of the contract?

“Frequently, the parties make an express agreement in the contract regarding such points: generally they are attributed to the lessee, it being deemed that the lessor waives his right of accession, at other times he is obliged to take said buildings or plantings upon the expiration of the contract under specific conditions.

“When the contract (does not) stipulate it, the authorities are inclined to decide rightfully, that the free exercise of the right of enjoyment of the lessee ... is opposed, while the contract is in force, to the right of accession of the owner, the latter not being able to exercise that right until after the expiration of the contract. In effect, the only way to reconcile the rights of the lessee, according to the lease contract, with the right of accession of the owner, lies in not permitting the exercise of this latter right except in accordance with the state of things existing at the end of the contract. Thus it appears: 1st. that the lessee may sell or mortgage the construction and his creditors may, during the life of the lease exercise their rights over the mortgaged property; 2d. the lessee may remove whatever was built while the contract is in force; 3d. if the constructions were destroyed by fire prior to the expiration of the contract, the lessor can not claim from the insurance company the payment of the indemnity stipulated.” 3 Planiol and Ripert, pp. 245, 246 and 247 of the Sixth Edition.

We believe we have clearly established that until the owner of the land pays the indemnity provided by § 297 of the Civil Code of Puerto Rico, the builder in good faith is the true owner of the construction. His eminently real property right rests as much on the land of the owner, which he may own if the lessor so chooses, as on the building constructed. His right to retain the thing is a logical consequence of its immovable character.

Contrary to the presumption that the right to indemnity of a builder in good faith partakes of the nature of a personal right or is so declared by law, the commentators of the French civil law, as well as the case law of the French Courts, assert that the right to indemnity to which a builder in good faith is entitled, and among the builders in good faith are included lessees with authority to build, is a real property right, which may be sold or mortgaged, which affects the surface right and which may be recorded in the Registry of Property as an ownership right independently of the ownership right of the owner of the land.

There is no substantial difference in this respect from the Spanish legislation and the gloss on the subject, 3 Sán-chez Román, Derecho Civil, 93-95, 150-151; (Second edition of Sucesores de Rivadeneyra), (1900) ; 1 Morell, Legislación Hipotecaria, 689, 690 et seq.; (Editorial Reus S. A. 2d ed., 1928) 2 Morell Legislación Hipotecaria 417, 418, (same edition). There is also no substantial difference from the Puerto Rican legislation and the gloss regarding the same institution of law.

Since 1941, when Palermo. v. District Court, 58 P.R.R. 191, 198 (Travieso) was decided, this Court clearly established the difference between an ordinary lease and the lease with consent to build:

“In the present cases simple lease contracts in which the lessee promised to pay a monthly rental for the use of a house belonging to the lessor are not involved. The situation in these cases which we are considering is different. The owner of the land rented it to the defendants for the express purpose of constructing buildings of a permanent nature as dwellings. The defendants and their predecessors in interest built the houses in good faith; and nothing was agreed upon between the oioner of the land and the builders to regulate the rights of both parties in regard to the buildings.”

See also People v. Carrasquillo, 58 P.R.R. 178, (Todd, Jr.), (1941), Berrocal v. Registrar, 54 P.R.R. 501 (De Jesús), (1939); People v. Municipality of San Juan, 19 P.R.R. 625, (Del Toro), (1913).

It is true that the parties may agree on the extinguishment of said right when the lease contract terminates: Colón v. Rotary Club of Arecibo, 60 P.R.R. 734, 736 (Todd, Jr.), (1942); Aybar v. Jiménez, 60 P.R.R. 729, 732, (Todd, Jr.), (1942); Palermo v. Distinct Court, 58 P.R.R. 191, 197 (Travieso), (1941); Rivera v. Santiago, 56 P.R.R. 361, 370 (De Jesús), (1940). But when no agreement is made on that particular or the contract agreed to is void, the provisions concerning accession are applied as a suppletory contract provided by law.

In brief, the true juridical effect of the first contract signed by the parties is that the conjugal partnership obtained three clear and exact real property rights over the lot leased and over the construction begun: (1) a right of ownership over the building under construction; (2) a right of retention over the thing built; (3) a right of option to buy the land belonging to another. The act of option, the affirmative act which converts these three real property rights into a mere indemnity, is imposed by the statute on the owner of the'land and not on the builder in good faith. Until the owner of the land pays for the materials and labor —Judgment of January 2, 1926 of the Supreme Court of Spain — , he does not acquire the ownership of the thing built, which is the juridical condition terminating with the right of retention as well as with the possibility on the part of builder in good faith, to acquire the land on which he has built.

Although it is true that in the second contract executed between the lessor, owner of the land, and the lessee, as administrator of the conjugal partnership, there is an agreement to demolish the construction at the expiration of the lease contract, that contract is null and void, because without the wife’s consent for the alienation of the three real property rights involved, the husband by himself had no legal capacity to bind the conjugal partnership.

The possibility has been likewise analyzed that if a lessee with consent to build builds on another’s land, he is not entitled to indemnity, because the building is an improvement within the scope of § 1463 of our Civil Code which provides that a lessee shall have, with regard to the useful and voluntary improvements, the same right which is granted to the usufructuary, in connection with § 416 of the Code, which provides that the usufructuary may make, on the property given in usufruct, whatever improvements he deems proper, either for a useful purpose or for pleasure, provided he does not change its form or substance, but he shall have no right to be indemnified therefor. As may be seen it is a question of extending to the lease contracts with permission to construct, the same theory applied to simple contracts, without authority to build. Such a rule can not be favored.

Our own Court has held that when the lessee is entitled to build, the construction can not be considered as a useful improvement or one for pleasure: People v. Carrasquillo, 58 P.R.R. 178, 181 (Todd, Jr.) (1941):

“The building of a house in another’s land in good faith and with the consent of the owner of the land, whether it be under a lease contract or by mere tolerance cannot be considered as the useful or pleasure improvements referred to by Section 416 of the Civil Code as applied in the case of González v. Peña & Balbas, supra, but on the contrary must be regulated by the provisions of Section 297 of the Civil Code (1930 ed.) as has been decided by this Court in the cases of The People v. Municipality of San Juan, 19 P.R.R. 625; Succession of Collado et al. v. Pérez et al., 19 P.R.R. 881; King v. Fernández et al., 30 P.R.R. 550; Ermita de Nuestra Señora, etc. v. Collazo, 41 P.R.R. 594; Berrocal v. Registrar, 54 P.R.R. 501, and Rivera v. Santiago, supra. See also 3 Manresa, Código Civil Español, 203 et seq.”

To consecrate in our case law the principle that the right of indemnity of a builder in good faith on another’s land, is personal property or a useful improvement or one for pleasure, or a right which does not rest on the thing constructed, would be a serious error. It would then be sufficient if the owner of the land would sell, grant or convey to another person the land whereon it has been built in good faith, in order for the alleged personal obligation, from person to person, without any connection with the immovable built, to leave the builder in good faith defenseless before the new acquirer. The impact of this decision on our life as a people would be disastrous. There are whole towns in Puerto Rico where the lands belong to the municipal government and the building constructed thereon to private persons. We have denied the right to anyone who does not possess the land under title of ownership, no matter how long he may have been in possession thereof, to acquire ownership title by prescription: Rivera v. Santiago, 56 P.R.R. 361, (De Jesús), (1940). We have likewise held, that the ownership of lands belonging to the Insular Government can not be acquired by prescription: People v. Municipality of San Juan, 19 P.R.R. 625, (Del Toro), (1913). The “usage,” and we are using the word usage within the meaning that it has in lease law, of leasing small lots in order to construct thereon the dwellings of our poor people, is so widespread in our country, that it includes some of the most populated slums of our capital. The careful study by some of the justices who preceded us, of almost all the points connected with accession, unquestionably, was not aimed at a vacuum.

Therefore, we reconsider our former judgment of June 30, 1953 and the judgment rendered by the former District Court of Puerto Rico, Mayagüez Section, on June 12, 1952 is affirmed.

Mr. Chief Justice Snyder and Mr. Justice Pérez Pimen-tel concur in the result.