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179018 April 17, 2013 PAQLAUM MANAGEMENT & DEVELOPMENT CORP. and HEALTH MARKETING TECHNOLOGIES, INC.,Petitioners, vs. UNION BANK OF THE PHILIPPINES, NOTARY PUBLIC JOHN DOE, and REGISTER OF DEEDS of Cebu City and Cebu Province, Respondents, J. KING & SONS CO., INC., Intervenor. RESOLUTION SERENO, CJ.: Union Bank filed this Motion for Reconsideration from our Decision 1 dated 18 June 2012. For the first time, it raises three new arguments. First, it states that the 11 December 1998 Restructuring Agreement is null and void, because the condition precedent - that the borrower should not be in default- was not complied with. Thus, the nullity of the agreement revived the Real Estate Mortgages, which have a different venue stipulation. 2 Second, assuming arguendo that the Restructuring Agreement is enforceable, it was only between Health Tech and Union Bank. PAGLAUM was a party only to the Real Estate Mortgages dated 11 February 1994 and 22 April 1998, and not to the Restructuring Agreement. Therefore, the venue insofar as it is concerned is exclusively in Cebu City pursuant to the venue stipulation in the mortgage contracts. 3 Third, the Complaint being an accion reivindicatoria, the assessed value of the real property as stated therein determines which court has exclusive jurisdiction over the case. Hence, as the Complaint does not show on its face the assessed value of the parcels of land, the Regional Trial Court's (RTC's) assumption of jurisdiction over the case was without basis.4 Union Bank also reiterates its argument in its Comment 5 that the Restructuring Agreement is entirely separate and distinct from the Real Estate Mortgages. Accordingly, since the Complaint relate exclusively to the mortgaged properties, the venue stipulation in the Real Estate Mortgages should apply.6 We deny the Motion for Reconsideration. Issues raised for the first time in a motion for reconsideration before this Court are deemed waived, because these should have been brought up at the first opportunity. 7 Nevertheless, there is no cogent reason to warrant a reconsideration or modification of our 18 June 2012 Decision. Union Bank raises three new issues that require a factual determination that is not within the province of this Court.8 These questions can be brought to and resolved by the RTC as it is the proper avenue in which to raise factual issues and to present evidence in support of these claims. Anent Union Bank's last contention, there is no need for the Court to discuss and revisit the issue, being a mere rehash of what we have already resolved in our Decision.
WHEREFORE, in view of the foregoing, we DENY the Motion for Reconsideration with FINALITY. SO ORDERED. MARIA LOURDES P. A. SERENO Chief Justice WE CONCUR:
Republic of the Philippines SUPREME COURT Manila SECOND DIVISION G.R. No. 191667 April 17, 2013 THE PHILIPPINES, Petitioner, LAND BANK OF vs. EDUARDO M. CACAYURAN, Respondent. DECISION PERLAS-BERNABE, J.: Assailed in this Petition for Review on Certiorari 1 is the March 26, 2010 Decision2 of the Court of Appeals (CA) in CA-G.R. CV. No. 89732 which affirmed with modification the April 10, 2007 Decision 3 of the Regional Trial Court (RTC) of Agoo, La Union, Branch 31, declaring inter alia the nullity of the loan agreements entered into by petitioner Land Bank of the Philippines (Land Bank) and the Municipality of Agoo, La Union (Municipality). The Facts From 2005 to 2006, the Municipality’s Sangguniang Bayan (SB) passed certain resolutions to implement a multiphased plan (Redevelopment Plan) to redevelop the Agoo Public Plaza (Agoo Plaza) where the Imelda Garden and Jose Rizal Monument were situated. To finance phase 1 of the said plan, the SB initially passed Resolution No. 68-2005 4 on April 19, 2005, authorizing then Mayor Eufranio Eriguel (Mayor Eriguel) to obtain a loan from Land Bank and incidental thereto, mortgage a 2,323.75 square meter lot situated at the southeastern portion of the Agoo Plaza (Plaza Lot) as collateral. To serve as additional security, it further authorized the assignment of a portion of its internal revenue allotment (IRA) and the monthly income from the proposed project in favor of Land Bank. 5 The foregoing terms were confirmed, approved and ratified on October 4, 2005 through Resolution No. 139-2005. 6 Consequently, on November 21, 2005, Land Bank extended a P4,000,000.00 loan in favor of the Municipality (First Loan), 7 the proceeds of which were used to construct ten (10) kiosks at the northern and southern portions of the Imelda Garden. After completion, these kiosks were rented out.8 On March 7, 2006, the SB passed Resolution No. 58-2006, 9 approving the construction of a commercial center on the Plaza Lot as part of phase II of the Redevelopment Plan. To finance the project, Mayor Eriguel was again authorized to obtain a loan from Land Bank, posting as well the same securities as that of the First Loan. All previous representations and warranties of Mayor Eriguel related to the negotiation and obtention of the new loan 10 were ratified on September 5, 2006 through Resolution No. 128-2006. 11 In consequence, Land Bank granted a second loan in favor of the Municipality on October 20, 2006 in the principal amount of P28,000,000.00 (Second Loan).12 Unlike phase 1 of the Redevelopment Plan, the construction of the commercial center at the Agoo Plaza was vehemently objected to by some residents of the Municipality. Led by respondent Eduardo Cacayuran (Cacayuran), these residents claimed that the conversion of the Agoo Plaza into a commercial center, as funded by the proceeds from the First and Second Loans (Subject Loans), were "highly irregular, violative of the law, and detrimental to public interests, and will result to wanton desecration of the said historical and public park." 13 The foregoing was embodied in a Manifesto,14 launched through a signature campaign conducted by the residents and Cacayuran. In addition, Cacayuran wrote a letter15 dated December 8, 2006 addressed to Mayor Eriguel, Vice Mayor Antonio Eslao (Vice Mayor Eslao), and the members of the SB namely, Violeta Laroya-Balbin, Jaime Boado, Jr., Rogelio De Vera, James Dy, Crisogono Colubong, Ricardo Fronda, Josephus Komiya, Erwina Eriguel, Felizardo Villanueva, and Gerard Mamuyac (Implicated Officers), expressing the growing public clamor against the conversion of the Agoo Plaza into a commercial center. He then requested the foregoing officers to furnish him certified copies of various documents related to the aforementioned conversion including, among others, the resolutions approving the Redevelopment Plan as well as the loan agreements for the sake of public information and transparency. Unable to get any response, Cacayuran, invoking his right as a taxpayer, filed a Complaint 16 against the Implicated Officers and Land Bank, assailing, among others, the validity of the Subject Loans on the ground that the Plaza Lot used as collateral thereof is property of public dominion and therefore, beyond the commerce of man. 17
Upon denial of the Motion to Dismiss dated December 27, 2006, 18 the Implicated Officers and Land Bank filed their respective Answers. For its part, Land Bank claimed that it is not privy to the Implicated Officers’ acts of destroying the Agoo Plaza. It further asserted that Cacayuran did not have a cause of action against it since he was not privy to any of the Subject Loans.19 During the pendency of the proceedings, the construction of the commercial center was completed and the said structure later became known as the Agoo’s People Center (APC). On May 8, 2007, the SB passed Municipal Ordinance No. 02-2007, 20 declaring the area where the APC stood as patrimonial property of the Municipality. The Ruling of the RTC In its Decision dated April 10, 2007, 21 the RTC ruled in favor of Cacayuran, declaring the nullity of the Subject Loans.22 It found that the resolutions approving the said loans were passed in a highly irregular manner and thus, ultra vires; as such, the Municipality is not bound by the same. 23 Moreover, it found that the Plaza Lot is proscribed from collateralization given its nature as property for public use.24 Aggrieved, Land Bank filed its Notice of Appeal on April 23, 2007. 25 On the other hand, the Implicated Officers’ appeal was deemed abandoned and dismissed for their failure to file an appellants’ brief despite due notice. 26 In this regard, only Land Bank’s appeal was given due course by the CA. Ruling of the CA In its Decision dated March 26, 2010, 27 the CA affirmed with modification the RTC’s ruling, excluding Vice Mayor Eslao from any personal liability arising from the Subject Loans.28 It held, among others, that: (1) Cacayuran had locus standi to file his complaint, considering that (a) he was born, raised and a bona fide resident of the Municipality; and (b) the issue at hand involved public interest of transcendental importance;29 (2) Resolution Nos. 68-2005, 139-2005, 58-2006, 128-2006 and all other related resolutions (Subject Resolutions) were invalidly passed due to the SB’s non-compliance with certain sections of Republic Act No. 7160, otherwise known as the "Local Government Code of 1991" (LGC); (3) the Plaza Lot, which served as collateral for the Subject Loans, is property of public dominion and thus, cannot be appropriated either by the State or by private persons;30 and (4) the Subject Loans are ultra vires because they were transacted without proper authority and their collateralization constituted improper disbursement of public funds. Dissatisfied, Land Bank filed the instant petition. Issues Before the Court The following issues have been raised for the Court’s resolution: (1) whether Cacayuran has standing to sue; (2) whether the Subject Resolutions were validly passed; and (3) whether the Subject Loans are ultra vires. The Court’s Ruling The petition lacks merit. A. Cacayuran’s standing to sue Land Bank claims that Cacayuran did not have any standing to contest the construction of the APC as it was funded through the proceeds coming from the Subject Loans and not from public funds. Besides, Cacayuran was not even a party to any of the Subject Loans and is thus, precluded from questioning the same. The argument is untenable. It is hornbook principle that a taxpayer is allowed to sue where there is a claim that public funds are illegally disbursed, or that public money is being deflected to any improper purpose, or that there is wastage of public funds through the enforcement of an invalid or unconstitutional law. A person suing as a taxpayer, however, must show that the act complained of directly involves the illegal disbursement of public funds derived from taxation. In other words, for a taxpayer’s suit to prosper, two requisites must be met namely, (1) public funds derived from taxation are disbursed by a political subdivision or instrumentality and in doing so, a law is violated or some irregularity is committed; and (2) the petitioner is directly affected by the alleged act. 31
While ordinances are laws and possess a general and permanent character. Moreover. In Mamba v. Duties. Land Bank cannot rely on the Subject Resolutions as basis to validate the Subject Loans. It posits that Section 444(b)(1)(vi) of the LGC merely requires that the municipal mayor be authorized by the SB concerned and that such authorization need not be embodied in an ordinance. although the construction of the APC would be primarily sourced from the proceeds of the Subject Loans. belongs to the public dominion. however. people have a right to question contracts entered into by the government. The distinction between ordinances and resolutions is well-perceived. Cacayuran had a direct interest in ensuring that the Agoo Plaza would not be exploited for commercial purposes through the APC’s construction. and such other documents made pursuant to law or ordinance. while Mayor Eriguel’s authorization to contract the Subject Loans was not contained – as it need not be contained – in the form of an ordinance. the first requisite has been clearly met. 35 As such. Lara. 38 A careful perusal of Section 444(b)(1)(vi) of the LGC shows that while the authorization of the municipal mayor need not be in the form of an ordinance. effective and economical governance the purpose of which is the general welfare of the municipality and its inhabitants pursuant to Section 16 of this Code. which serves as the local government unit’s just share in the national taxes. contracts. as the above-stated requisites obtain in this case.37 Therefore. viz: Sec. there is no denying that public funds derived from taxation are bound to be expended as the Municipality assigned a portion of its IRA as a security for the foregoing loans. the Municipality’s IRA. the obligation which the said local executive is authorized to enter into must be made pursuant to a law or ordinance. (Emphasis and underscoring supplied) In the present case. it can be used by anybody and no one can exercise over it the rights of a private owner. Cacayuran has standing to file the instant suit. Cacayuran need not be privy to the Subject Loans in order to proffer his objections thereto. that although these funds may be posted as a security. Second. Noticeably. B. such as (1) the SB’s failure to submit the Subject Resolutions to the Sangguniang Panlalawigan of La Union for its review contrary to Section 56 of the LGC. In any event. as a resident-taxpayer of the Municipality. 32 is in the nature of public funds derived from taxation. and obligations. its collateralization should only be deemed effective during the incumbency of the public officers who approved the same." 40 In this accord. Cacayuran is directly affected by the conversion of the Agoo Plaza which was funded by the proceeds of the Subject Loans. 444.41 and (2) the lack of publication and posting in contravention of Section 59 of the LGC. The Court believes. else those who succeed them be effectively deprived of its use. represent the municipality in all its business transactions and sign on its behalf all bonds. as long as taxes are involved. Funds coming from private sources become impressed with the characteristics of public funds when they are under official custody. it has been held that a taxpayer need not be a party to the contract to challenge its validity. It is well-settled that public plazas are properties for public use34 and therefore. xxxx (b) For efficient. resolutions are merely declarations of the sentiment or opinion of a lawmaking body on a specific matter and are temporary in nature. "no rights can be conferred by and be inferred from a resolution. the municipal mayor shall: xxxx (vi) Upon authorization by the sangguniang bayan. Needless to state. Validity of the Subject Resolutions Land Bank avers that the Subject Resolutions provided ample authority for Mayor Eriguel to contract the Subject Loans. 42 In fine.33 Accordingly. the said loans and even the Redevelopment Plan itself were not approved pursuant to any law or ordinance but through mere resolutions. it is observed that the proceeds from the Subject Loans had already been converted into public funds by the Municipality’s receipt thereof. 36 In this light. The Chief Executive: Powers. the passage of the Subject Resolutions was also tainted with other irregularities. it cannot be denied that the SB violated Section 444(b)(1)(vi) of the LGC altogether.39 As opposed to ordinances. Functions and Compensation. First. which Land Bank insists are not taxpayer’s money. .Records reveal that the foregoing requisites are present in the instant case.
C. Ultra vires nature of the Subject Loans Neither can Land Bank claim that the Subject Loans do not constitute ultra vires acts of the officers who approved the same. Generally, an ultra vires act is one committed outside the object for which a corporation is created as defined by the law of its organization and therefore beyond the powers conferred upon it by law. 43 There are two (2) types of ultra vires acts. As held in Middletown Policemen's Benevolent Association v. Township of Middletown: 44 There is a distinction between an act utterly beyond the jurisdiction of a municipal corporation and the irregular exercise of a basic power under the legislative grant in matters not in themselves jurisdictional. The former are ultra vires in the primary sense and void; the latter, ultra vires only in a secondary sense which does not preclude ratification or the application of the doctrine of estoppel in the interest of equity and essential justice. (Emphasis and underscoring supplied) In other words, an act which is outside of the municipality’s jurisdiction is considered as a void ultra vires act, while an act attended only by an irregularity but remains within the municipality’s power is considered as an ultra vires act subject to ratification and/or validation. To the former belongs municipal contracts which (a) are entered into beyond the express, implied or inherent powers of the local government unit; and (b) do not comply with the substantive requirements of law e.g., when expenditure of public funds is to be made, there must be an actual appropriation and certificate of availability of funds; while to the latter belongs those which (a) are entered into by the improper department, board, officer of agent; and (b)do not comply with the formal requirements of a written contract e.g., the Statute of Frauds.45 Applying these principles to the case at bar, it is clear that the Subject Loans belong to the first class of ultra vires acts deemed as void. Records disclose that the said loans were executed by the Municipality for the purpose of funding the conversion of the Agoo Plaza into a commercial center pursuant to the Redevelopment Plan. However, the conversion of the said plaza is beyond the Municipality’s jurisdiction considering the property’s nature as one for public use and thereby, forming part of the public dominion. Accordingly, it cannot be the object of appropriation either by the State or by private persons.46 Nor can it be the subject of lease or any other contractual undertaking. 47 In Villanueva v. Castañeda, Jr.,48 citing Espiritu v. Municipal Council of Pozorrubio,49 the Court pronounced that: x x x Town plazas are properties of public dominion, to be devoted to public use and to be made available to the public in general. They are outside the commerce of man and cannot be disposed of or even leased by the municipality to private parties.
In this relation, Article 1409(1) of the Civil Code provides that a contract whose purpose is contrary to law, morals, good customs, public order or public policy is considered void 50 and as such, creates no rights or obligations or any juridical relations.51 Consequently, given the unlawful purpose behind the Subject Loans which is to fund the commercialization of the Agoo Plaza pursuant to the Redevelopment Plan, they are considered as ultra vires in the primary sense thus, rendering them void and in effect, non-binding on the Municipality. At this juncture, it is equally observed that the land on which the Agoo Plaza is situated cannot be converted into patrimonial property – as the SB tried to when it passed Municipal Ordinance No. 02-2007 52 – absent any express grant by the national government.53 As public land used for public use, the foregoing lot rightfully belongs to and is subject to the administration and control of the Republic of the Philippines. 54 Hence, without the said grant, the Municipality has no right to claim it as patrimonial property. Nevertheless, while the Subject Loans cannot bind the Municipality for being ultra vires, the officers who authorized the passage of the Subject Resolutions are personally liable. Case law states that public officials can be held personally accountable for acts claimed to have been performed in connection with official duties where they have acted ultra vires,55 as in this case. WHEREFORE, the petition is DENIED. Accordingly, the March 26, 2010 Decision of the Court of Appeals in CAG.R. CV. No. 89732 is hereby AFFIRMED. SO ORDERED. ESTELA M. PERLAS-BERNABE
Associate Justice WE CONCUR:
Republic of the Philippines SUPREME COURT Manila SECOND DIVISION G.R. No. 180843 April 17, 2013 APOLONIO GARCIA, in substitution of his deceased mother, Modesta Garcia, and CRISTINA SALAMAT,Petitioners, vs. DOMINGA ROBLES VDA. DE CAPARAS, Respondent. DECISION DEL CASTILLO, J.: Under the Dead Man's Statute Rule, "if one party to the alleged transaction is precluded from testifying by death,
insanity, or other mental disabilities, the other party is not entitled to the undue advantage of giving his own uncontradicted and unexplained account of the transaction." 1 Thus, the alleged admission of the deceased Pedro Caparas (Pedro) that he entered into a sharing of leasehold rights with the petitioners cannot be used as evidence against the herein respondent as the latter would be unable to contradict or disprove the same. This Petition for Review on Certiorari 2 seeks to reverse and set aside the August 31, 2007 Decision 3 of the Court of Appeals (CA) in CA-G.R. SP No. 90403; 4 as well as its December 13, 2007 Resolution 5denying petitioners' Motion for Reconsideration. Factual Antecedents Flora Makapugay (Makapugay) is the owner of a 2.5-hectare farm in Barangay Lugam, Malolos, Bulacan (the land) covered by Transfer Certificate of Title No. (TCT) RT-65932 (T-25198) 6 and being tilled by Eugenio Caparas (Eugenio) as agricultural lessee under a leasehold agreement. Makapugay passed away and was succeeded by her nephews and niece, namely Amanda dela Paz-Perlas (Amanda), Justo dela Paz (Justo) and Augusto dela Paz (Augusto). On the other hand, Eugenio’s children – Modesta Garcia (Garcia), Cristina Salamat (Salamat) and Pedro – succeeded him. Before she passed away, Makapugay appointed Amanda as her attorney-in-fact. After Eugenio died, or in 1974, Amanda and Pedro entered into an agreement entitled "Kasunduan sa Buwisan", 7 followed by an April 19, 1979 Agricultural Leasehold Contract,8 covering the land. In said agreements, Pedro was installed and recognized as the lone agricultural lessee and cultivator of the land. Pedro passed away in 1984, and his wife, herein respondent Dominga Robles Vda. de Caparas (Dominga), took over as agricultural lessee. On July 10, 1996, the landowners Amanda, Justo and Augusto, on the one hand, and Pedro’s sisters Garcia and Salamat on the other, entered into a "Kasunduan sa Buwisan ng Lupa" 9 whereby Garcia and Salamat were acknowledged as Pedro’s co-lessees. On October 24, 1996, herein petitioners Garcia and Salamat filed a Complaint 10 for nullification of leasehold and restoration of rights as agricultural lessees against Pedro’s heirs, represented by his surviving spouse and herein respondent Dominga. Before the office of the Provincial Agrarian Reform Adjudicator (PARAD) of Bulacan, the case was docketed as Department of Agrarian Reform Adjudication Board (DARAB) Case No. R-03-02-3520-96. In their Complaint, Garcia and Salamat claimed that when their father Eugenio died, they entered into an agreement with their brother Pedro that they would alternately farm the land on a "per-season basis"; that the landowner Makapugay knew of this agreement; that when Makapugay passed away, Pedro reneged on their agreement and cultivated the land all by himself, deliberately excluding them and misrepresenting to Amanda that he is Eugenio’s sole heir; that as a result, Amanda was deceived into installing him as sole agricultural lessee in their 1979 Agricultural Leasehold Contract; that when Amanda learned of Pedro’s misrepresentations, she executed on July 10, 1996 an Affidavit11 stating among others that Pedro assured her that he would not deprive Garcia and Salamat of their "cultivatory rights"; that in order to correct matters, Amanda, Justo and Augusto executed in their favor the 1996 "Kasunduan sa Buwisan ng Lupa", recognizing them as Pedro’s co-lessees; that when Pedro passed away, Dominga took over the land and, despite demands, continued to deprive them of their rights as co-lessees; that efforts to settle their controversy proved futile, prompting the Barangay Agrarian Reform Committee to issue the proper certification authorizing the filing of a case; and that they suffered damages as a consequence. Petitioners prayed that the 1979 Agricultural Leasehold Contract between Pedro and Amanda be nullified; that they be recognized as co-lessees and allowed to cultivate the land on an alternate basis as originally agreed; and that they be awarded P50,000.00 attorney’s fees and costs of litigation. In her Answer,12 herein respondent Dominga claimed that when her father-in-law Eugenio died, only her husband Pedro succeeded and cultivated the land, and that petitioners never assisted him in farming the land; that Pedro is the sole agricultural lessee of the land; that Amanda’s July 10, 1996 Affidavit and "Kasunduan sa Buwisan ng Lupa" of even date between her and the petitioners are self-serving and violate the existing 1979 Agricultural Leasehold Contract; that under Section 38 13 of Republic Act No. 384414 (RA 3844), petitioners’ cause of action has prescribed. Dominga further claimed that Pedro has been in possession of the land even while Eugenio lived; that petitioners have never cultivated nor possessed the land even for a single cropping; that Pedro has been the one paying the lease rentals as evidenced by receipts; that when Pedro died in 1984, she succeeded in his rights as lessee by operation of law, and that she had been remitting lease rentals to the landowners since 1985; and that petitioners had no right to institute
de Caparas as the lawful successor-tenant of Pedro Caparas over the subject landholding. Dominga likewise appealed the dismissal of DARAB Case No. ORDERING the dismissal of the case. She prayed that the Complaint be dismissed.16 which decreed as follows: WHEREFORE. premises considered. judgment is hereby rendered in favor of the defendant and against the plaintiffs and Order is hereby issued: 1. to maintain Dominga Robles Vda. which appeal was docketed as DARAB Case No. the case was dismissed. a new judgment is hereby rendered: 1. R-03-02-3520-96 to the DARAB. 2. 1998 PARAD Decision in DARAB Case No. 1998 a Decision.21 . On June 15. No pronouncement as to costs. de Caparas in peaceful possession and cultivation of the subject landholding. the PARAD held that petitioners’ July 10. R-03-02-3520-96. 1996 "Kasunduan sa Buwisan ng Lupa" be nullified. that for failure to timely question Pedro’s leasehold. which has not been cancelled by competent authority.17 The PARAD held that Amanda’s act of executing the July 10. as follows: WHEREFORE. DECLARING defendant Dominga Robles Vda. For this reason. 18 Ruling of the DARAB Petitioners appealed the May 4. the DARAB issued its Decision. Dominga filed DARAB Case No. for maintenance of peaceful possession with injunctive relief. that petitioners’ cause of action has prescribed in accordance with Section 38 of RA 3844. that the July 10. 3. 03-03-10307-99. both appeals were consolidated. 1996 Affidavit and "Kasunduan sa Buwisan ng Lupa" amounted to dispossession of Pedro’s landholding and rights without cause. to execute a new leasehold contract between the landowner and Dominga Robles Vda. 3. 03-03-10307-99. de Caparas as lawful successor-tenant. ORDERING plaintiffs to maintain defendant in her peaceful possession and cultivation of the subject landholding. On petitioners’ motion. and by way of counterclaim. ORDERING the MARO of Malolos. ORDERING for the dismissal of DCN 11155 for being moot and academic. 2005.20 the dispositive portion of which reads. that Amanda’s 1996 disclaimer. against the landowners and petitioners. that moral damages15 and litigation costs be awarded her. ORDERING the MARO of Malolos. 1996 "Kasunduan sa Buwisan ng Lupa" and during the pendency of DARAB Case No. Finally. 11155 (DCN 11155). was belated and unjustified. Ruling of the PARAD After hearing and consideration of the parties’ respective position papers and other submissions. ORDERING the plaintiffs in DCN 9722 and the respondents in DCN 11155 or any person acting in their behalves [sic]. that petitioners have not shown by evidence that they actually cultivated the land. and 4. 9722 19 (DCN 9722). DECLARING Dominga Robles Vda. or that they paid rentals to the landowners. DARAB Case No. by operation of law. 4. 1996 "Kasunduan sa Buwisan ng Lupa" is null and void for being issued against Pedro’s existing 1979 Agricultural Leasehold Contract. premises considered.themselves as her co-lessees. 03-03-10307-99 It appears that sometime after the execution of the July 10. that the execution of a new leasehold agreement between her and the landowners be ordered. petitioners entered the land and began tilling the same. the PARAD issued on May 4. de Caparas. 5. Bulacan to execute a new leasehold contract between the landowner and defendant Dominga Robles Vda. de Caparas. On motion. Bulacan. his rights were transferred. after having installed Pedro as tenant in 1979. 2. SO ORDERED. SO ORDERED. to Dominga upon his death. where the case was docketed as DARAB Case No.
the DARAB held that contrary to petitioners’ claim. In the assailed December 13. 2005 DARAB Decision null and void and a proper subject of certiorari.22 The CA held that the issue raised by petitioners – the cancellation of the survey returns and plans covering TCT RT65932 – was not part of their causes of action in the PARAD or DARAB. 2007. and that without proper legal termination of Pedro’s lease in accordance with RA 3844. WAS "CONVERSION OF THE FARMHOLD INTO A HOUSING-RESIDENTIAL SUBDIVISION" AND THEREFORE. SO ORDERED. 90403. and Pedro’s 1979 Agricultural Leasehold Contract. that Pedro merely shared his harvest with petitioners as an act of generosity. On August 31. and has been actually used as such. Petitioners moved for reconsideration. DARAB CENTRAL OFFICE. R-03-02-3520-96 and claim the status of co-lessees. Ruling of the Court of Appeals Petitioners filed before the CA a Petition for Certiorari.R. ACTUAL PHYSICAL CHANGE IN THE USE OF THE LAND FROM AGRICULTURAL TO . IN THE EARLY ‘90S OR EARLIER. which was docketed as CA-G. 24 the CA denied the Motion for Reconsideration. the petition would fail.classified as residential land. The assailed decision is AFFIRMED in toto. which thus rendered the June 15. the cancellation of the survey returns and plans covering TCT RT-65932 reverts the property to its original classification as agricultural land which thus vindicates the leasehold agreements of the parties. and this new issue changed the theory of their case against Dominga. THE DECISIONS OF THE DARAB PROVINCIAL ADJUDICATOR. SHE IS NOT BEING PUT IN SURPRISE NOR IN UNFAIR SITUATION. that Amanda’s Affidavit and the 1996 "Kasunduan sa Buwisan ng Lupa" between the landowners and petitioners cannot defeat Pedro’s 1979 Agricultural Leasehold Contract and his rights as the sole tenant over the land. seeking to set aside the DARAB Decision. Issues In this petition. and thus petitioners may not claim that they were co-lessees. 2007 Resolution. Malolos Municipal Resolution No. And speaking of leasehold agreements. the CA held that petitioners may not be considered as Pedro’s co-lessees. the following errors are assigned: 1. 2005 Order issued by the Regional Technical Director (Region III) of the Department of Environment and Natural Resources. CONSEQUENTLY. and that petitioners’ 1996 "Kasunduan sa Buwisan ng Lupa" is null and void for being contrary to law. x x x RESPONDENT’S ACT OF HAVING BUILT THREE (3) HOUSES (FOR HERSELF AND TWO OF HER CHILDREN). SHE "LOST HER SECURITY OF TENURE" AS AGRICULTURAL LESSEE. the survey returns and plans covering TCT RT-65932 have been cancelled. The sole basis of their Petition rests on the argument that as a result of a May 9. public policy. which is not allowed. petitioners are now barred by laches from claiming that they are co-lessees. the instant petition is DENIED. SHE IS THE PARTY IN ESTOPPEL. 23 which adopted and approved the zoning ordinance and the Malolos Development Plan prepared jointly by the Housing and Land Use Regulatory Board and the Malolos Sangguniang Bayan. AND THE HONORABLE COURT OF APPEALS. for lack of proof that they actually tilled the land and with petitioners’ own admission in their pleadings that they merely received a share from Pedro’s harvests. SP No. 2. AND FROM THE TIME BY HER ACTS OF SELF-CONVERSION OF THE LAND. morals. that for sleeping on their rights. 41-97. and Dominga’s act of stopping this practice after succeeding Pedro prompted petitioners to file DARAB Case No. arguing that the land has been re. the CA issued the assailed Decision which decreed as follows: IN LIGHT OF ALL THE FOREGOING. which was subsisting and which has not been cancelled by competent authority. there was no alternate farming agreement between the parties. the landowners cannot designate other tenants to the same land in violation of the existing lessee’s rights. that the original 1974 and 1979 leasehold agreements between Makapugay.In upholding the PARAD Decision. 3. The CA added that it could not decide the case on the basis of a question which was not placed in issue during the proceedings below. Amanda and Pedro categorically show that Pedro is the sole designated agricultural lessee. The CA held further that even granting that the issues are resolved on the merits. Petitioners cited a 1997 ordinance. SPEAK OF NO HOMELOT HAVING BEEN AWARDED BY THE DEPARTMENT OF AGRARIAN REFORM TO PRIVATE RESPONDENT.
and which is now the subject matter of the present case and claim against Pedro’s surviving spouse and lawful successor-in-interest Dominga.25 Petitioners’ Arguments In their Petition and Reply." 30 Thus. other than such verbal declaration. has been put forward. and that when she confronted him about this and the alleged alternate farming scheme between him and petitioners. or 17 years after Pedro was installed as tenant in 1979 and long after his death in 1984. Respondent’s Arguments In her Comment. that they came forward to question Pedro’s succession to the leasehold. nor have they shown that they actually cultivated the land even if only for one cropping. 5. 4. Dominga converted the same to residential use. petitioners slept on their rights. or other mental disabilities. WHICH THE HON. She adds that petitioners raised anew issues which further changed the theory of their case. the other party is not entitled to the undue advantage of giving his own uncontradicted and unexplained account of the transaction. AND CONFIRMED BY THE CITY ZONING DIRECTOR. "CONVERSION" (WHICH REQUIRES PRIOR APPROVAL BY THE DAR) HAVING BECOME A "FAIT ACCOMPLI". who is placed in an unfair situation by reason of her being unable to contradict or disprove such declaration as a result of her husband-declarant Pedro’s prior death. the addition of new issues. They add that the new issues were raised as a necessary consequence of supervening events which took place after the Decisions of the PARAD and DARAB were issued."RESIDENTIAL" MAY OCCUR AFTER TRIAL. 26 petitioners this time argue that in building houses upon the land for herself and her children without a homelot award from the Department of Agrarian Reform. IN NOT HAVING CONSIDERED THE TAX DECLARATION AND THE ZONING CERTIFICATION x x x. which was filed in 1996 or long after Pedro’s death in 1984. DARAB Case No. No written memorandum of such agreement exists. If petitioners earnestly believed that they had a right. and are thus precluded from questioning Pedro’s 1979 . COURT OF APPEALS COMMITTED A VERY FUNDAMENTAL ERROR. THE PREVIOUS FARMHOLD HAS BEEN CONVERTED INTO "RESIDENTIAL" LAND. since Pedro is deceased. DARAB and CA failed to consider and realize is that Amanda’s declaration in her Affidavit covering Pedro’s alleged admission and recognition of the alternate farming scheme is inadmissible for being a violation of the Dead Man’s Statute. BUT DURING THE APPEAL. SECTION 220 OF THE REAL ESTATE TAX CODE AND ARTICLE 217 OF THE LOCAL GOVERNMENT CODE OF 1991 AFFIRM THE TRUSTWORTHINESS OF THE TAX DECLARATION THAT IS. then they should have confronted Pedro or sought an audience with Amanda to discuss the possibility of their institution as co-lessees of the land. R-03-02-3520-96. to cultivate the land under an alternate farming scheme." 28 Petitioners have no other evidence. They add that the Malolos zoning ordinance and the tax declaration covering the land effectively converted the property into residential land. and they should have done so soon after the passing away of their father Eugenio. has no leg to stand on other than Amanda’s declaration in her July 10. Our Ruling The Petition is denied. insanity. such declaration cannot be admitted and used against the latter.27 Dominga argues that the Petition raises questions of fact which are not the proper subject of a Petition under Rule 45 of the Rules. 29 which provides that "[i]f one party to the alleged transaction is precluded from testifying by death. stating that the resolution of these issues are necessary in order to arrive at a just decision and resolution of the case in its totality. it was only in 1996. under their supposed mutual agreement with Pedro. What the PARAD. and which issues may not be raised for the first time at this stage of the proceedings. and by this act of conversion. No receipt evidencing payment to the landowners of the latter’s share. Petitioners justify their change of theory. Pedro allegedly told her that "he and his two sisters had an understanding about it and he did not have the intention of depriving them of their cultivatory rights. However. and the raising of factual issues. which proves the existence of such arrangement. and Amanda’s declaration which pertains to the leasehold agreement affects the 1996 "Kasunduan sa Buwisan ng Lupa" which she as assignor entered into with petitioners. COURT OF APPEALS MAY CONSIDER. As correctly held by the PARAD. Dominga violated her own security of tenure and the land was removed from coverage of the land reform laws. or any other documentary evidence. THE HON. 1996 Affidavit that Pedro falsely represented to Makapugay and to her that he is the actual cultivator of the land.
there is no other logical conclusion than that the 1996 "Kasunduan sa Buwisan ng Lupa" between Amanda and petitioners. they allowed 17 years to pass before coming out to reveal this claimed alternate farming agreement and insist on the same. industrial or some other urban purposes. in conducting an inquiry prior to making the choice. such choice shall be exercised at the end of that agricultural year: Provided. the leasehold shall continue between the agricultural lessor and the person who can cultivate the landholding personally. it renders them illegal occupants and sowers in bad faith thereof. That in the event the agricultural lessor fails to exercise his choice within the periods herein provided. which is grounded on Pedro’s inadmissible verbal admission. rights and obligations. when Eugenio died. for under the law. from among the following: (a) the surviving spouse. the priority shall be in accordance with the order herein established. they were excluded. further. they would not be left out. they slept on their rights. only the duly designated lessee -herein respondent . constitutes an undue infringement of Dominga’s rights as Pedro’s successor-in-interest under Section 9. In case of death or permanent incapacity of the agricultural lessor. if there was any such alternate farming agreement between them. 2007 Resolution of the Court of Appeals are AFFIRMED. since from the position they have taken as alleged lessees. (Emphasis supplied) Amanda may not claim ignorance of the above provision. the Petition is DENIED. they are not the owners of the land. she is deemed to have chosen the latter as Eugenio’s successor. they did not.31 Thus.is entitled to disturbance compensation in case of re-classification/conversion of the landholding into residential. more especially so.In case of death or permanent incapacity of the agricultural lessee to work his landholding. The assailed August 31. so that in the process of choosing Eugenio’s successor. Dominga is entitled to sennity of tenure. or (c) the next eldest descendant or descendants in the order of their age: Provided. If it is true that they entered into a unique arrangement with Pedro to alternately till the land. Agricultural Leasehold Relation Not Extinguished by Death or Incapacity of the Parties . within one month from Eugenio’s death. re-classification/conversion can only have deleterious effects upon petitioners' cause. 34 Besides.agricultural leasehold contract. Not being agricultural lessees of the land. 2007 Decision and December 13. on the other hand. Part of her duties as the landowner’s representative or administrator was to know the personal circumstances of the lessee Eugenio. petitioners may not benefit at all. That in case the death or permanent incapacity of the agricultural lessee occurs during the agricultural year. cannot claim that Pedro deceived her into believing that he is the sole successor to the leasehold. Makapugay. Re-classification/conversion changes nothing as between the landowners and Dominga in regard to their agreement. MARIANO DEL CASTILLO Associate Justice WE CONCUR: . On the contrary. Under Section 7 32 of RA 3844. Thus: Section 9. Amanda. and operates to deprive her of such rights and dispossess her of the leasehold against her will. And after Pedro was chosen and installed as Eugenio’s successor. (b) the eldest direct descendant by consanguinity. who would succeed as agricultural lessee. as Makapugay’s representative. This Court shall not delve into the issue of re-classification or conversion of the land. when she executed the 1979 Agricultural Leasehold Contract with Pedro.33 any modification of the lease agreement must be done with the consent of both parties and without prejudicing Dominga's security of tenure. or Amanda – as Makapugay’s duly appointed representative or administrator – was required to make a choice. a valid re-classification of the land not only erases petitioners' supposed leasehold rights. She was duty-bound to make an inquiry as to who survived Eugenio. commercial. chosen by the agricultural lessor within one month from such death or permanent incapacity. 1âwphi1 With the above pronouncements. and true enough. The same holds true for petitioners. the leasehold shall bind his legal heirs. But evidently. SO ORDERED. and is presumed to have diligently performed her duties. Under Section 9 of RA 3844. as ignorance of the law excuses no one from compliance therewith. WHEREFORE. and under Section 16. They should be held to a faithful compliance with Section 9. in order that the landowner – or she as representative – could choose from among them who would succeed to the leasehold. and which agreement was entered into without obtaining Dominga’s consent. they were thus obliged to inform Makapugay or Amanda of their arrangement.
WILFREDO RIVERA. docketed as Civil Case No. T-22290 and T30557. 10 Wilfredo filed with the Municipal Trial Court in Cities (MTCC) of Lipa City a complaint for forcible entry against the petitioners and Star Honda.: We resolve the petition for review on certiorari. 8 On September 23. with a reservation of his usufructuary rights during his lifetime.JR. acquired several parcels of land in Lipa City. 2005 order 5 of the Regional Trial Court (RTC) of Lipa City. 2013 EVANGELINE RIVERA-CALINGASAN and E. Loreto Inciong.Republic of the Philippines SUPREME COURT Manila SECOND DIVISION G. Petitioners. vs. adjudicating all the properties in favor of Evangeline and Brigida Liza. with an annotation of Wilfredo’s usufructuary rights. or on March 29. as her surviving heirs. 2005 Decision 4 and the July 8..R. 2003-0982. RIVERA and WILFREDO S. Batangas cancelled TCT Nos. in Civil Case No. LYDIA S. Batangas. SP No. The Factual Antecedents During their lifetime. or on March 13. Rical Enterprises. DECISION BRION.2 assailing the February 10. FREIDA LEAH S.. substituted by MA. The CA decision affirmed with modification the April 6. T-22290 and T-30557 and issued TCT Nos. the Register of Deeds of Lipa City. RICAL ENTERPRISES.7 About eleven (11) years later. 0019- . T87494 and T-87495 in the names of Evangeline and Brigida Liza.9 Almost a decade later. 2006 decision 3 of the Court of Appeals ( CA) in CA-G. Evangeline and Brigida Liza. No. RIVERA. Respondents. 1 filed by petitioners Evangeline Rivera-Calingasan and E.171555 April 17. Loreto’s heirs executed an extrajudicial settlement of her onehalf share of the conjugal estate. 90717. Wilfredo waived his rights to the properties. respondent Wilfredo Rivera and his wife. Loreto died.6On July 29. 1993. 2003. . leaving Wilfredo and their two daughters. 1993. Branch 85.R. Inc. RlVERA. 1982. J. two of which were covered by Transfer Certificate of Title (TCT) Nos.
The petitioners and Star Honda.18 The Petition The petitioners submit that the CA erred in equating possession with residence since possession in forcible entry cases . The CA Ruling In its February 10. Ma. 11 Both the petitioners and Star Honda. 2006 decision. The RTC Ruling In its November 30. that the petitioners are not residents of the property. In its April 6.000. Inc.03. It noted that Wilfredo admitted that both E. Batangas" as her residence since May 2002.15 the RTC held that Wilfredo’s renunciation of his usufructuary rights could not be the basis of the complaint’s dismissal since it is the subject of litigation pending with the RTC of Lipa City. Freida Leah S. 2006 and has been substituted by his second wife. T-87494 and T-87495. to pay P620. Branch 13 (an action for the annulment of the petition for cancellation of usufructuary rights filed by Wilfredo). Inc. Batangas" as her residence (a place different and distinct from the property) rendered improbable her claim of possession and occupation. The petitioners then filed a Rule 42 petition for review with the CA. namely: (a) Evangeline’s judicial admission of "J. the petitioners and Star Honda. Inc. filed separate motions for reconsideration. Rosario. Batangas. noting that: (a) Evangeline’s admission of "J. Jr. and (d) the petitioners. 2005 decision.14 the RTC affirmed the MTCC’s findings. deleted the award of P20. Inc. Rosario. (respondents). docketed as Civil Case No. with a building used for his furniture business. Branch 13. since Evangeline is the registered owner of the property and Wilfredo had voluntarily renounced his usufructuary rights. Inc.. 2003 decision. Wilfredo appealed to the RTC. Inc. Lipa City where the property is located. The CA. It found no evidence of Wilfredo’s prior possession and subsequent dispossession of the property. in due course. Rical Enterprises and Star Honda. 12 and that another action between the same parties is pending with the RTC of Lipa City. 17 the CA affirmed with modification the RTC’s findings. Rivera. 2005 order. took possession and caused the renovation of the building on the property. Wilfredo sought reconsideration of the RTC’s decision and. It held that Wilfredo lacked a cause of action to evict the petitioners and Star Honda. Recto Avenue. and (b) Evangeline’s entry to the property (on the pretext of repairing the building) during Wilfredo’s hospital confinement had been done without Wilfredo’s prior consent and was done through strategy and stealth. 16 the RTC modified its April 6. occupied the property through lease contracts from Evangeline and her husband Ferdinand. Belen Street. Belen Street. Lydia S.13 the MTCC dismissed the complaint. participated in the dispossession. In its July 8. 2005 decision by absolving Star Honda. attesting to Wilfredo’s prior possession and the petitioners’ entry to the property during Wilfredo’s hospital confinement. Wilfredo claimed that he lawfully possessed and occupied the two (2) parcels of land located along C. with the aid of armed men. Wilfredo died on December 27. Inc. The petitioners then filed the present petition.000. with the aid of armed men. 99-0773. Rivera and Wilfredo S. 2004 decision. Inc. Rivera. barred him from entering the property.M. covered by TCT Nos. the petitioners and Star Honda. from any liability.000. (c) the affidavit of Ricky Briones. Taking advantage of his absence due to his hospital confinement in September 2002. (b) the Lipa City Prosecutor’s findings. The MTCC Ruling In its December 2. Inc. Inc. The RTC found that the MTCC overlooked the evidence proving Wilfredo’s prior possession and subsequent dispossession of the property. It found no evidence that Star Honda.00 as attorney’s fees since the RTC decision did not contain any discussion or justification for the award. Barangay Captain of Barangay 9. destroyed the padlock of the building on the property. The RTC ordered the petitioners and Star Honda. countered that Wilfredo voluntarily renounced his usufructuary rights in a petition for cancellation of usufructuary rights dated March 4.00 as reasonable compensation for the use and occupation of the property. in a criminal case for qualified trespass to dwelling. attained this objective. Lipa City. and their children. the RTC set aside its original decision and entered another. however. andP20. 1996. which ordered the eviction of the petitioners and Star Honda. In December 2002.00 as attorney’s fees.
Branch 13. 30 C. Whatever may be the character of his possession."23 Thus. in the March 11. 990773..M. whether residing or not in a particular place. or terror. Batangas" as his residence. It does not even matter if a party's title to the property is questionable.M. that is.e." 27"The party in peaceable. 99-0773 on the petitioners’ occupation since 1997. 2002. An interlocutory order does not end the task of the court in adjudicating the parties' contentions and determining their rights and liabilities against each other." We note that the order was a mere interlocutory order on Wilfredo’s motion for the issuance of a cease and desist order. Recto Avenue. The only question that the courts resolve in ejectment proceedings is: who is entitled to the physical possession of the premises. had been in prior physical possession of the property.forcible entry and unlawful detainer . Rosario. The petitioners also alleged therein that they are residents of "J. Belen Street. The CA did not err in equating residence with physical possession since residence is a manifestation of possession and occupation. i.. They contend that the pronouncements of the RTC of Lipa City. Lipa City.. to the possession de facto and not to the possession de jure."26 "A party who can prove prior possession can recover such possession even against the owner himself. in Civil Case No. Wilfredo had consistently alleged that he resided on "C. Branch 13. the petitioners failed to rebut the affidavit of Barangay Captain Briones attesting to Wilfredo’s prior possession and the petitioners’ unlawful entry to the property during Wilfredo’s hospital confinement.19 that they have been "occupying the premises since 1997" 20 and Wilfredo’s own admission that he padlocked the doors of the building contradict Wilfredo’s claim of prior possession. and should not prevail over Evangeline’s admission in her answer of "Poblacion. We note that in another proceeding. compared to Wilfredo’s admission in his complaint of "C. he has the security that entitles him to remain on the property until a person with a better right lawfully ejects him. whereas Evangeline has always admitted that she has been a resident of "J. In this case. between the petitioners and Wilfredo. Batangas." 25 In a forcible entry case. Batangas." the location of the property. not legal possession in the sense contemplated in civil law. Branch 13. the Lipa City Prosecutor also observed that the petitioners did not reside on or occupy the property on December 16. possession in ejectment cases "means nothing more than actual physical possession. Rosario. quiet possession shall not be thrown out by a strong hand. Lipa City. "It is basically provisional in its application." 28 The respondents have proven prior physical possession of the property. 2003. Our Ruling The petition lacks merit. Lipa City. such statements had been rendered in an interlocutory order. 29about three (3) months before Wilfredo filed the complaint for forcible entry on March 13. Rosario.means physical possession without qualification as to the nature of possession. we are convinced that Wilfredo had been in prior possession of the property and that the petitioners deprived him of such possession by means of force. Batangas"21 as her residence. even if they have declared their residence in another area.are summary proceedings designed to provide expeditious means to protect actual possession or the right to possession of the property involved. if he has in his favor prior possession in time." The petitioners failed to prove that they have occupied the property through some other person. in Civil Case No. Belen St.22 The Issue The case presents to us the issue of who. 2003 order. "prior physical possession is the primary consideration." 33 It is the nature of an interlocutory order that it is subject to modification or reversal that the result of further proceedings may . strategy and stealth.M. Recto Avenue. Batangas" and not "No."24 Indeed. Recto Ave. The Case for the Respondents The respondents counter that the petitioners mistakenly relied on the statements of the RTC of Lipa City. a criminal complaint for qualified trespass to dwelling. 99-0773 stating that the petitioners "have been occupying the premises since 1997. "an ejectment case will not necessarily be decided in favor of one who has presented proof of ownership of the subject property." 30 Furthermore. "Ejectment cases . 2003 order 32 of the RTC of Lipa City. violence. the exact address of the disputed property. in Civil Case No. 31 The petitioners’ claim of physical possession cannot find support in the March 11. Ejectment cases involve only physical possession or possession de facto.
For purposes of the computation of this additional amount and for the execution of the total amount due under this Decision. we hereby remand the case to the Regional Trial Court. for appropriate action. to be distributed to his heirs pursuant to the applicable law on succession. The heirs of Wilfredo shall succeed to the computed total award under the rules of succession. 90717 with the MODIFICATION that. of any further dispute or litigation. (b) the sum justly due as arrears of rent or as reasonable compensation for the use and occupation of the premises. Thus. a matter that is not within the authority of this Court to determine at this point. that the RTC originally awarded and which the CA and this Court affirmed. This award was computed as of the time of the RTC decision (or roughly about a year before Wilfredo’s death) but will now have to take into account the compensation due for the period between the RTC decision and Wilfredo’s death. the RTC’s pronouncement on the petitioners’ occupation "since 1997" is not res judicata on the issue of actual physical possession. what actually survives under the circumstances is the award of damages. 2005. SP No. Rical Enterprises. and (c) attorney’s fees and costs. to undertake. Costs against petitioners Evangeline RiveraCalingasan and E. Wilfredo’s death did not render moot the forcible entry case. hand in hand with the de facto possession that is subject of the present case. therefore. by way of compensation. WHEREFORE. BRION Associate Justice WE CONCUR: . with the termination. To go back to basics. affirm it. upon his death. The computation is a matter of execution that is for the RTC. although this right to de jure possession was also disputed before his death. the right to the usufruct is now rendered moot by the death of Wilfredo since death extinguishes a usufruct under Article 603(1) of the Civil Code. The judgment in an ejectment case is conclusive between the parties and their successors-in-interest by title subsequent to the commencement of the action. hence. This judgment entitles the winning party to: (a) the restitution of the premises. Without need.00. the monetary award of P620. survives and accrues to the estate of the deceased respondent Wilfredo Rivera. he was holding the property as usufructuary. as court of origin. Thus. 2006 decision of the Court of Appeals in CA-G. we hereby DENY the appeal and accordingly AFFIRM the February 10. as reasonable compensation for the use and occupation of the property up to the time of the Regional Trial Court decision on April 6. This development deprives the heirs of the usufructuary the right to retain or to reacquire possession of the property even if the ejectment judgment directs its restitution. of respondent Wilfredo Rivera’s usufructory over the disputed property. ARTURO D.R. as court of origin. In sum. it is enforceable by or against the heirs of the deceased. the issue of restitution of possession has been rendered moot and academic. we find no reversible error in the decision appealed from and. The death of Wilfredo introduces a seeming complication into the case and on the disposition we shall make. the petition before us involves the recovery of possession of real property and is a real action that is not extinguished by the death of a party. however. Additional compensation accrues and shall be added to the compensation from the time of the Regional Trial Court decision up to respondent Wilfredo Rivera’s death. on the other hand.warrant. 1âwphi1 The complicating factor in the case is the nature and basis of Wilfredo’s possession. SO ORDERED.000.
Thus. it made both verbal and written demands on the occupants to vacate the property. The trial court ordered the occupants to vacate the premises and to pay reasonable rent. Branch 2. 12 Respondents appealed on 15 August 2005.: This is a Petition for Review under Rule 45 assailing the Decision 1 and Resolution2 of the Court of Appeals (CA) in CA-G. but later found that the lot was already occupied by some individuals. CJ. SPOUSES CARLOS AND ELIZABETH ABACAN.R. but their motion for reconsideration was denied for being a prohibited pleading in summary proceedings. The MTCC then ordered the issuance of a writ of execution. and granted respondents' Motion to Quash Alias Writ of Possession and Demolition 4 in Civil Case Nos. because it needed to verify the exact location of the property. Malolos City is registered in the name of Freddie Santiago (Santiago) under Transfer Certificate of Title (TCT) No.9 On 4 November 2003.Petitioner. SP No. 5 On 23 August 1999. 11 Respondents moved to reconsider the decision. HTRDC had to resort to the filing of an ejectment case against them. Despite its final demand on 17 June 2003.R. again including respondent spouses. When the need arose. HTRDC filed a complaint for unlawful detainer and damages with the MTCC of Malolos against the occupants of the subject land. No. 103697. 7 On 30 April 2002. The CA recalled and set aside the Order 3 of the Municipal Trial Court in Cities (MTCC). the occupants’ possession was tolerated. 97862. as the period to appeal had not been stayed . petitioner Holy Trinity Realty Development Corporation (HTRDC) acquired the property from Santiago. Respondents. During the pendency of the DARAB case. however.Republic of the Philippines SUPREME COURT Baguio City FIRST DIVISION G. DECISION SERENO. Proceedings in the MTCC ensued. culminating in a Decision in favor of HTRDC. It withdrew the complaint. among them respondent-spouses Carlos and Elizabeth Abacan. MARQUEZ. 10 Petitioner alleged that from the time it purchased the property in 1999 until the pendency of the DARAB case. but their appeal was denied due course for being filed out of time. HTRDC commenced a complaint with the DARAB for cancellation of emancipation patents against some of the occupants of the land. Malo los City. The Facts of the case are as follows: A parcel of land located in Sumapang. 03-140 to 03-143. it had no immediate need for the subject parcel of land. 183858 April 17. vs. the occupants failed to vacate the property. attorney’s fees and costs of suit. HOLY TRINITY REALTY DEVELOPMENT CORPORATION. 2013 represented by JENNIFER R. the provincial adjudicator ordered the cancellation of the emancipation patents of the occupants of the land.8 The DARAB later affirmed the decision of the provincial adjudicator.6 HTRDC then filed a complaint for forcible entry against respondent-spouses and the other occupants. which the occupants claimed was covered by emancipation patents issued by the Department of Agrarian Reform Adjudication Board (DARAB).
Meanwhile. the instant petition is hereby GRANTED and the Order dated January 17. the CA.23 Respondents moved to quash both writs on the ground that Emancipation Patent Nos. 364-M-2006 for certiorari. 16 In order to prevent the enforcement of the writ of execution and demolition. The MTCC issued an Alias Writ of Execution on 25 October 2006.14Respondents thereafter moved to stay execution on the ground that a supervening event had transpired. 59-M-2007 was dismissed on the ground of finality of judgment. Did the MTCC commit grave abuse of discretion in denying respondents’ motion to quash? We rule in the negative.21 Respondents did not appeal any of the adverse rulings. The CA held that the MTCC had no jurisdiction over the unlawful detainer case. and the RTC have concurrent jurisdiction to issue writs of certiorari¸ the parties to a suit are not given unbridled freedom to choose between court forums. to wit: (1) Civil Case No. and as the MTCC’s denial of their motion was premised on the conclusion that their subsequent acquisition of ownership was not a supervening event. 245-M-2006 for annulment of judgment. 2007 of the Municipal Trial Court in Cities (MTCC). and disposed of the case as follows: IN VIEW OF ALL THE FOREGOING. 59-M-2007 for quieting of title. the Decision became final and executory.31 Since respondents failed to timely appeal the Consolidated Decision. Turning now to the merits of the petition. 245-M-2006 and Special Civil Action No. nor could it be. While this Court. 03140. because a Rule 65 petition for certiorari must be filed not later than 60 days from notice of the judgment. we first deal with a procedural issue. may not be considered as a supervening event. in lieu thereof. 17 (2) Special Civil Action No. SO ORDERED. 19 Civil Case No. the Motion to Quash Alias Writ of Possession [sic] and Demolition of the petitioners in said case is GRANTED.15 The MTCC denied the motion. In doing so. and those against the latter. the provincial agrarian reform officer (PARO) filed an action for annulment of sale against HTRDC. The writ of preliminary injunction earlier issued is thus made permanent. they argued that they had now acquired ownership of relevant portions of the subject property. Before proceeding to the merits of the case. 32 Thus. 24 The MTCC denied their motion on the ground that respondents’ acquisition of ownership is not a supervening event that will bar the execution of the judgment in the unlawful detainer case. they violated the time-honored principle of respect for the hierarchy of courts.18 and (3) Civil Case No. . with the CA. Bulacan.25 From the Order of the MTCC denying their motion to quash. ruling that the mere filing of an action by the PARO did not materially change the situation of the parties. petitioner HTRDC filed the instant petition for review before this Court.by the filing of the motion for reconsideration. respondents’ petition for certiorari was dismissible outright on procedural grounds. 26 The appellate court issued a Writ of Preliminary Injunction 27 and ultimately granted the petition for certiorari in a Decision dated 27 March 2008. Branch 2 of Malolos City. 22 and an Alias Special Order of Demolition on 28 October 2006.13 Thus. The Court’s Ruling We find merit in the instant petition. The petition was not directed at the MTCC’s Consolidated Decision of 25 May 2005. we find that the CA committed reversible error in ruling that the MTCC had no jurisdiction over the unlawful detainer case. respondents filed directly with the CA a Special Civil Action for Certiorari with Prayer for a Temporary Restraining Order and Writ of Preliminary Injunction. As such. 29 Judicial hierarchy indicates that "petitions for the issuance of extraordinary writs against first level ("inferior") courts should be filed with the RTC. is RECALLED and SET ASIDE and. as respondents’ sole argument in their motion to quash was the existence of a material supervening event. and hence. What was before it was a petition for certiorari against the MTCC’s denial of respondents’ motion to quash. 00780489 and 00780490 had been issued in their favor during the pendency of the case. 20 while Civil Case No. it has long attained finality and has become immutable and unalterable pursuant to the doctrine on finality of judgment. No pronouncement as to costs." 30 Therefore. HTRDC correctly argued that respondents erred in filing the special civil action for certiorari directly with the CA instead of the RTC.28 Aggrieved by the decision of the CA. 364-M-2006 were both dismissed by the RTC on the grounds of forum shopping and immutability of final judgment. respondents filed several actions in the Regional Trial Court (RTC). issued in Civil Case No. the resolution of the present case should be limited to that issue.
97862 dated 27 March 2008 and 14 July 2008. The Order dated 17 January 2007 of the Municipal Trial Court in Cities. Court of Appeals (271 SCRA 564). but after the MTCC rendered judgment in the unlawful detainer case. 1997 Rules of Civil Procedure)37 It is well-settled that the sole issue in ejectment cases is physical or material possession of the subject property. and respondents. A. by virtue of a Deed of Sale executed in its favor by the registered land owner. are hereby SET ASIDE and REVERSED. Concina (30 SCRA 897). as where the power is exercised in an arbitrary and despotic manner by reason of passion and personal hostility. in Civil Case Nos. x x x. SP No. As held in the case of Dizon vs. the motion to quash was grounded on the sole argument that the judgment should no longer be enforced because of the occurrence of a material supervening event. Galleon Traders.R. The abuse of discretion must be so patent and gross as to amount to an evasion of positive duty or to a virtual refusal to perform a duty enjoined by law. MARIA LOURDES P. Court of Appeals36 to the effect that the subsequent acquisition of ownership is not a supervening event that will bar the execution of the judgment in the unlawful detainer case. rather than in a motion to stay the execution of the judgment rendered in the instant summary ejectment proceeding. Malolos City.33we explained: 1âwphi1 An act of a court or tribunal may only be considered as committed in grave abuse of discretion when the same was performed in a capricious or whimsical exercise of judgment which is equivalent to lack of jurisdiction. 03-140 to 03-143 is hereby REINSTATED. Rule 70. Court of Appeals 35 and Chua v. 00780489 and 00780490. Respondents alleged that before the alias writs were issued. as unlawful detainer does not deal with the issue of ownership. As the case now stands. wherein it made a categorical pronouncement that the subsequent acquisition of ownership by any person is not a supervening event that will bar the execution of the judgment in the unlawful detainer case. citing our ruling in Oblea v. To reiterate. Such judgment shall not bar an action between the parties respecting title to the land or building. respectively. 34 The MTCC correctly denied their motion. Such issue of physical or material possession was already passed upon by this court during trial. (Sec. the sole issue in the present case is de facto possession of the subject property. independent of any claim of ownership by the parties. We therefore rule that the CA committed reversible error in ruling that the MTCC committed grave abuse of discretion in denying respondents' motion to quash the alias writs of execution and demolition. by subsequently issued emancipation patents in their names. According to the MTCC: This court gives due weight to the ruling of the Supreme Court in the cases of Oblea vs. The assailed Decision and Resolution of the Court of Appeals in CA-G. the instant Petition for Review is GRANTED. Court of Appeals (244 SCRA 101) and Chua vs. (Citation omitted) In this case.The term "grave abuse of discretion" has a specific meaning in jurisprudence. or to act at all in contemplation of law. Chairperson WE CONCUR: Republic of the Philippines SUPREME COURT Manila . SO ORDERED. In Litton Mills v. 38 The argument of respondent-spouses that they subsequently acquired ownership of the subject property cannot be considered as a supervening event that will bar the execution of the questioned judgment. SERENO Chief Justice. both parties are claiming ownership of the subject property: petitioner. they had acquired ownership over the subject property as evidenced by Emancipation Patent Nos. Branch 2. WHEREFORE. This issue would more appropriately be ventilated in a full-blown proceeding. 18. and this was conclusively settled by the MTCC in HTRDC's favor in its final and executory Consolidated Decision of 25 May 2005. True it is that the sole issue in an action for unlawful detainer x x x is physical or material possession. the judgment rendered in an action for forcible entry or detainer shall be effective with respect to the possession only and in no wise bind the title or affect the ownership of the land or building.
SPS. Branch 78. SR. Remedios Silverio.R.FIRST DIVISION G. in Civil Case No.000 per appearance of the latter’s counsel and costs.000 as attorney’s fees plus P3. vacate the 120-square-meter lot on which the house stands and to pay P1. Respondents represented themselves as the lawful owners and possessors of Lot 3976. 2004-271 before the MeTC of Parañaque City. which in turn. The Parañaque MeTC. Branch 78. respondents reiterated their demand for petitioners to demolish the house. respondents spouses Ricardo and Evelyn Marcelo filed a Complaint 11 for unlawful detainer against petitioners spouses Armando Silverio. The factual antecedents of these consolidated petitions are culled from the records. 2008 of the Court of Appeals (CA) in CA-G. Respondents.000 per month from May 20. to peacefully surrender possession of the same to respondents spouses Ricardo and Evelyn Marcelo and to pay P1. 98713. 2006 of the RTC of Parañaque City. in Civil Case No. Petitioners. Respondents agreed on the condition that petitioners will vacate the moment they need the land. 184490 was filed by petitioners spouses Evelyn and Ricardo Marcelo to contest the Decision7 dated March 27. 184079 was filed by petitioners spouses Armando Silverio. Meanwhile. the petition6 in G. ARMANDO SILVERIO. had ordered respondents Armando Silverio. Branch 77. Branch 77. 2004 until they have completely moved out of said property.R. 3976. Sr. Branch 78 in Civil Case No. The CA had reversed and set aside the Decision 9 dated December 29. had ordered petitioners to demolish the improvements they have introduced in Lot No. 2013 REMEDIOS SILVERIO. Parañaque City. . Ext. J. No. 184490 SPS. P10. and Remedios Silverio to assail the Decision2 dated March 18.000 as attorney’s fees and costs. 98105. RICARDO AND EVELYN MARCELO.004 square meters located in Marcelo Compound. 95-253 and Tax Declaration No. 1996 of the Department of Environment and Natural Resources (DENR) in DENR-NCR Case No. 2006 of the MeTC of Parañaque City. affirmed in toto the Decision 10 dated April 25. 2004-271. Branch 257. SP No. 2005 of the Metropolitan Trial Court (MeTC). in Civil Case No. SR. Sr. and Remedios Silverio to vacate the Marcelo Compound in Lot 3976 and to surrender possession thereof to petitioners. affirmed the Decision 5 dated September 6. as amended. G.R.R. 299 (Lot 3976). They claimed ownership over said lot by virtue of a Decision 12 dated December 12. Petitioners.000 per month from May 20. and his mother. x-----------------------x G. 2004-269. 2004. Sr. 184079 On July 12. Philip St.R.000 as rent until they have done so. petitioners sought permission to construct a house within Lot 3976. JR. a residential land with an area of 5. MARCELO. E-00819942. Respondents. 06-0099. SPS. Subsequently. No.. 2008 of the CA in CA-G. The Parañaque MeTC. 06-0237. which in turn. ARMANDO SILVERIO.13 Respondents alleged that sometime in May 1987. 2004. 2004 until they have done so. AND vs.R. EVELYN AND RICARDO vs.R. SP No. No. 2008 and Resolution 8 dated September 1. 2006 of the Regional Trial Court (RTC) of Parañaque City.: Before the Court are twin petitions for review on certiorari under Rule 45 of the 1997 Rules of Civil Procedure. DECISION VILLARAMA. respondents made an oral demand on petitioners to leave the house and return possession of the lot within 15 days from notice.. SPS. Multinational Village.. 184079 April 17. 2008 and Resolution 3 dated August 12. No. The petition1 in G. Branch 258. The court a quo likewise directed petitioners to pay respondents P20. The court a quo likewise directed respondents to pay petitioners P1. No. AND REMEDIOS SILVERIO. Parañaque Cad. In a Letter14 dated May 18. The case was docketed as Civil Case No. The CA had affirmed the Decision 4 dated November 7.
05/04-051. The structure involved in the latter case was "originally occupied by petitioners’ relative and later taken over by them"17 while the house subject of the present case was constructed by petitioners themselves. petitioners insisted on their demand for respondents to demolish the house they built. 2004. Lupon/Pangkat Secretary of Barangay Moonwalk issued a Certification to File Action 15 in said case upon the reasons "Failed or refused to accept/obey summons to appear for hearing" and "Settlement has been repudiated. According to respondents.000 as reasonable compensation for the use and occupation of the premises. the Parañaque RTC. to surrender peaceful possession of the same and to pay P1. Branch 77. Branch 258. Petitioners filed a Motion for Reconsideration21 which the CA denied in a Resolution22 dated August 12. 2004-269. Branch 77. The CA disregarded petitioners’ argument that the subject property is public land in view of their admission in their Answer20 that respondents are the owners and possessors thereof. Coronel. The case was docketed as Barangay Case No. 184490. It found petitioners’ claim of ownership unsubstantiated and their defense of forum shopping without merit since the properties involved in Civil Case Nos. respondents refused to move out and surrender possession of the subject property upon demand. In the assailed Decision dated March 18. 2008. in his capacity as an ostensible co-owner of the contested property. 2004. petitioners spouses Ricardo and Evelyn Marcelo filed a Complaint 23 for unlawful detainer against respondents Armando Silverio. in which they clarified that it was the spouses Florante Marcelo and Marilou Silverio. affirmed the ruling of the MeTC. the RTC sustained respondents’ right to bring action to evict petitioners from the contested property. 2004-271 save for two allegations: (1) respondents requested petitioners’ permission to construct a house in Lot 3976 in May 1986. who sought their consent to build a house and live in Marcelo Compound. docketed as Civil Case No. 2005. The court ordered petitioners to pay respondents P1. 2008. The case was docketed as Civil Case No.000 and P3. Petitioners recounted that it was after Florante Marcelo and Marilou Silverio separated in 1998 and abandoned said house that respondents asked for permission to stay therein. and not the respondents. petitioners submitted an Amended Complaint 26 dated August 14." In their Answer. No.R. petitioners filed a Petition for Review19 under Rule 42 of the Rules with the CA. 2004. rendered judgment in favor of respondents Marcelo."27 However. 2004-269 and 2004-271 are different from each other. In their Answer25 dated August 3. Subsequently. 2004-269. Petitioners agreed upon an understanding that respondents shall "dismantle said house the moment petitioners need the premises. It found no basis to dismiss respondents’ complaint based on either forum shopping or splitting a cause of action.As respondents’ demands remained unheeded. On July 24. In a Decision dated November 7. attorney’s fees of P20. On appeal. the daughter of respondents spouses Silverio. On September 6.16 petitioners sought the dismissal of the complaint on the ground that respondents had filed a similar case against them before the MeTC of Parañaque City.000 per appearance of counsel for respondents. respondents belied petitioners’ claim of exclusive ownership and possession of the subject property. 184490 On July 12. they filed a complaint for unlawful detainer against petitioners before Barangay Moonwalk in Parañaque City. No. 2006. Respondents anchor their right of possession on Florante Marcelo.. Wendell E. the appellate court affirmed in toto the RTC judgment. In a Demand Letter28 dated May 18. and (2) respondents "improved the house and even operated a sari-sari store" 24 in Marcelo Compound. 2004. The latter case is the subject of the petition in G. . petitioner Ricardo Marcelo and Florante Marcelo.000 as rent until they have done so. Atty. 2004. Petitioners’ Complaint bore essentially the same allegations as their Complaint in Civil Case No. the land in dispute was first occupied by Graciano Marcelo along with his sons Armando Marcelo. Florante Marcelo is the husband of Marilou Silverio. G. 2004-269 before the MeTC of Parañaque City. Branch 78. 2007. The MeTC held that petitioners failed to refute the character of their possession as merely tolerated by respondents and they became deforciants upon the latter’s demand for them to vacate the subject premises. vacate the 80-square-meter lot on which it stands. the MeTC of Parañaque City. Petitioners moved for reconsideration but their motion was denied in an Order 18 dated February 5. Thereafter. The court a quo ruled out forum shopping upon finding that the house subject of the present case is different from that in Civil Case No. and Remedios Silverio. Sr.R.
which respondents insist is not part of the parcels that Lumbos sold to Velarde. Branch 257. to give reasonable rent from May 20. 2008. Sr. On February 3. Respondents averred that it was in 1997 when the Marcelos conceived the idea of applying for a sales patent over Lot 3976 with the DENR. The Marcelo siblings appointed petitioner Ricardo Marcelo to file the Miscellaneous Sales Application (MSA) in their behalf.As respondents ignored petitioners’ demands. alone. It observed that the two cases for unlawful detainer filed by petitioners are based on a single claim of ownership over Lot 3976 which embraces the subject properties. it was not until later that the Marcelo siblings learned that Ricardo had filed the application in his name alone. 05/04-070. SERIOUSLY ERRED AND GRAVELY ABUSED ITS DISCRETION IN DISMISSING THE APPEAL INTERPOSED BY PETITIONERS IN THE ABOVE-ENTITLED CASE ON TECHNICALITIES AND HAS DECIDED A QUESTION OF SUBSTANCE. 2006. No.. It brushed aside the alleged procedural infirmities that attended the filing of respondents’ petition for being trivial and insufficient to warrant its dismissal. the sons of Graciano Marcelo. ruled for petitioners Marcelo. petitioner Ricardo Marcelo’s father.R. In a Decision dated April 25. 184079. Graciano Marcelo. affirmed in toto the MeTC ruling. docketed as Civil Case No. did not automatically make him a co-owner of the contested property. Respondents revealed that Ricardo had sold several portions of Lot 3976 even before he could apply for a sales patent thereon. On the tract allotted to Florante. According to respondents. 2004. Branch 77. 2004 until they have moved out and to pay attorney’s fees and costs. Atty. including petitioner Ricardo Marcelo and Florante Marcelo. Subsequently. In the assailed Decision dated March 27. The case was docketed as Barangay Case No. Sr. and Remedios Silverio filed a petition for review on certiorari which was docketed as G. On July 24.33 . respondents filed a Supplemental Answer 31 in which they charged petitioners with forum shopping for filing another ejectment case against them. the latter brought a complaint for unlawful detainer against respondents before Barangay Moonwalk in Parañaque City. 3976 would necessarily mean res judicata in the other case. the MeTC declared petitioners the owners of the subject property. Marilou. Wendell E. Lupon/Pangkat Secretary of Barangay Moonwalk issued a Certification to File Action29 in said case upon the reasons "Failed or refused to accept/obey summons to appear for hearing" and "Settlement has been repudiated. Coronel. 1996 of the DENR. Sr. 2004-271 was built by petitioners whereas the house in this case was only taken over by them. 2008. 2006. The RTC declared petitioners as the lawful possessors of the subject property by virtue of Tax Declaration No.. 2008 and Resolution dated August 12. respondents elevated the case to the CA through a Petition 32 for review under Rule 42. Said petition. Upon the belief that Lot 3976 is still government property. The appellate court found petitioners guilty of forum shopping and splitting of a cause of action. The appellate court noted that the demand letter in both cases was served on respondents on the same day. 98105. 2008 of the CA in CA-G. to surrender peaceful possession thereof to petitioners.R. 1âwphi1 Dissatisfied. Issues/Assignment of Errors On September 29. The court found no evidence to support respondents’ possessory claim and considered their occupation of the subject land as merely tolerated by petitioners. On the basis of the Decision dated December 12. the CA reversed and set aside the RTC judgment. the Parañaque RTC. with concomitant right to possess it. The court a quo ordered respondents to vacate the subject property. The court a quo discounted forum shopping upon finding that the house concerned in Civil Case No. 2004. respondents assailed the DENR Decision dated December 12. NOT THERETOFORE DETERMINED BY THE SUPREME COURT. E-008-19942 in the name of petitioner Ricardo Marcelo. Velarde fenced the subject property. 2004-271 before Branch 78 of the Parañaque MeTC. In a Decision dated December 29. sharing the expenses among themselves. However. The CA explains that an adjudication in either suit that petitioners are entitled to the possession of Lot No. assigns a lone error: THE COURT OF APPEALS. he took in respondent Remedios Silverio to live with him and his wife. 1996 for supposedly awarding ownership of the subject property to petitioners. It explained that Florante Marcelo’s affinity with petitioner Ricardo. spouses Armando Silverio. SP No. the MeTC of Parañaque City. 2005." In an Answer30 dated September 8. AND/OR HAS DECIDED IT IN A WAY PROBABLY NOT IN ACCORD WITH LAW OR WITH THE APPLICABLE DECISIONS OF THE HONORABLE SUPREME COURT. which seeks to reverse and set aside the Decision dated March 18. was a tenant of Fabian Lumbos before the latter sold his land to Mike Velarde. divided the land among themselves and occupied the same. WITH ALL DUE RESPECT.
and Remedios Silverio allege mainly that spouses Ricardo and Evelyn Marcelo engaged in forum shopping and split a common cause of action when they filed separate complaints for unlawful detainer based on a single claim of ownership over Lot No. in turn.A few days later.R. 2004-269 and 2004-271: (1) the house in Civil Case No. independent of any claim of ownership by any of the parties. 2004-271 was built by the Silverios in May 1987 while the house subject of Civil Case No. and (2) the house in Civil Case No. In support thereof. the spouses Ricardo and Evelyn Marcelo brought separate complaints for unlawful detainer against Armando Silverio. the spouses Marcelo anchor their right of possession over the subject properties on Tax Declaration No. 3976. the sole issue for resolution is physical or material possession of the property involved. In their consolidated Memorandum35 for G. and (3) Whether the instant petition was filed seasonably. Where the issue of ownership is raised by any of the parties. 95-253. 3976.one has an area of 80 square meters while the other measures 120 square meters.R. Forum shopping is a deplorable practice of litigants consisting of resort to two different fora for the purpose of obtaining the same relief. Nos. 2008 of the CA in CA-G. two different houses constitutes forum shopping and splitting of a cause of action. 2004-269 and put up a sari-sari store therein. In both Civil Case Nos. 2004-26938 and 2004-271. They assert the following distinctions between the houses involved in Civil Case Nos. 2008 and the Resolution dated September 1. to increase the chances of obtaining a favorable judgment. the spouses Marcelo believe that the refusal by the Silverios to vacate said houses violated at least two rights and gave rise to separate causes of action. 3976 and are actually occupying only 50 square meters of the 5. The Court's Ruling Unlawful detainer is an action to recover possession of real property from one who illegally withholds possession after the expiration or termination of his right to hold possession under any contract. Ultimately. Sr. the Silverios insist that the subject property remains a public land. the Silverios invoke the Decision 34 dated July 11. express or implied. where the Marcelo Compound is situated. contests the Decision dated March 27. on demand. Metropolitan Bank & Trust Company. on October 2. the questions that must be addressed in the consolidated petitions before us are common: (1) Are the spouses Ricardo and Evelyn Marcelo guilty of forum shopping? and (2) Who between the spouses Marcelo and the Silverios have better right to the physical possession of Lot 3976? The Parties’ Arguments Armando Silverio. 2004-269. The DENR gave due course to the MSA filed by the spouses Marcelo over Lot 3976. The adjudication is. spouses Ricardo and Evelyn Marcelo denied the allegations of forum shopping and splitting a single cause of action. 184079 and 184490. 98713. the courts may pass upon the same in order to determine who has the right to possess the property. Essentially.37 Here. 2004-271 has been occupied by the Silverios from the beginning while they merely took over the house referred to in Civil Case No. the portions thereof on which the two houses stand are distinct -. The spouses Marcelo contend that while they claim ownership of Lot No. 2008.R. Said petition. 2004-269 was constructed by Florante Marcelo and Marilou Silverio in May 1986. 1996 of the DENR in DENR-NCR Case No.40 In Chua v. No. E-008-19942 and on the Decision dated December 12. 184490. 39 The grave evil sought to be avoided by the rule against forum shopping is the rendition by two competent tribunals of two separate and contradictory decisions. spouses Evelyn and Ricardo Marcelo filed a Petition for Review on Certiorari which was docketed as G. 36 In an unlawful detainer case. 3976 as a whole. Sr. the Silverios seek the dismissal of both complaints on the grounds of forum shopping and splitting a single cause of action. Condensed. (2) Whether the CA erred in dismissing Civil Case No. merely provisional and would not bar or prejudice an action between the same parties involving title to the property. however. 2007 of the DENR which annulled and canceled the MSA filed by the spouses Marcelo over Lot No. The Silverios maintain that the spouses Marcelo are simply applicants for the issuance of a sales patent over Lot No. The possession of the defendant in unlawful detainer is originally legal but became illegal due to the expiration or termination of the right to possess. and Remedios Silverio based on their refusal to vacate two houses inside the Marcelo Compound. the issues presented by petitioners are as follows: (1) Whether the filing of separate complaints for unlawful detainer against the same lessees who refuse to vacate. 41 the Court enumerated the ways by which forum shopping may be committed: . In view of this.020-square-meter property. SP No. For their part.
46 the Court cited three tests to verify whether there is identity of causes of action for purposes of applying the principle of res judicata. the Silverios claim better right of possession on account of their actual occupation of the subject properties. then the prior judgment is a bar to the subsequent action. the evidence needed to establish better right of possession over the house constructed by Florante Marcelo and Marilou Silverio. Plaintiffs are the lawful owners and possessors of a residential lot containing an area of 5. it becomes apparent that the proof necessary to obtain affirmative relief in Civil Case No. a finding that the spouses Marcelo have better right to possess the subject property could only be premised on their lawful possession of the entire Lot No. m. the rights and duties of the condominium owner and the tenant are defined by the terms of the contract. the right on which both claims are hinged is the same – the purported ownership by the spouses Marcelo of Lot 3976.004 sq. m. the spouses Marcelo assert better right of possession based on their alleged right as "lawful owners and possessors of a residential lot containing an area of 5. 2004-271. No. the cause of action is the alleged unlawful withholding of possession by the Silverios of the house which Florante Marcelo and Marilou Silverio constructed in Lot 3976. E-008-083-77 issued in their name by the City Assessor of Parañaque.42 Common to these types of forum shopping is the identity of the cause of action in the different cases filed. the previous case not having been resolved yet (where the ground for dismissal is litis pendentia). If no inconsistency is shown. In particular. therefore. On the other hand. 299 by virtue of a final and executory decision of the Land Management Bureau (DENR) promulgated on Dec. No. It follows. the previous case having been finally resolved (where the ground for dismissal is res judicata). 2004-269. Indeed. it is not. Since the spouses Marcelo are claiming sole ownership of Lot 3976 in their MSA. 2004-271 for unlawful detainer is the supposed unlawful withholding of possession by the Silverios of the house which they. the cause of action in both cases is the unlawful withholding by the Silverios of Lot 3976. 1996 and Tax Dec. E-008083-77 issued in their name by the City Assessor of Parañaque City. and the one built by the Silverios is the same. Sr. known as Lot 3976 Parañaque Cad. but with different prayers (splitting of causes of action. No. We find no merit in the contention of the spouses Marcelo that Civil Case Nos." whereby the following question serves as a sufficient criterion: "would the same evidence support and establish both the present and former causes of action?" If the answer is in the affirmative. the parties in this case present adverse possessory claims over those portions of Lot 3976 in which the houses concerned are situated." however. In Civil Case No. there exists a lessor-lessee relationship between the owner of the condominium and the tenant. conversely. paragraph 3 of the spouses Marcelo’s Complaint in both cases similarly read: 3. 1996 and Tax Dec. built in Lot 3976. 3976. In the former. Delos Santos. 2004-269 is the same as that in Civil Case No. E-008-19942 is hereto attached as "Annex "A". Cause of action is defined as "the act or omission by which a party violates the right of another. The analogy drawn by the spouses Marcelo between the ejectment of a tenant leasing several units of a condominium project and the unlawful detainer cases they brought against the Silverios is misplaced. The first test is the "absence of inconsistency test" where it is determined whether the judgment sought will be inconsistent with the prior judgment. We have ruled time . 2004. 12. 47 The more common approach in ascertaining identity of causes of action is the "same evidence test. Certified true copy of Tax Dec. where the ground for dismissal is also either litis pendentia or res judicata). 12." 45 For their part. regardless of the fact that they were built on separate portions of said lot." 43 In this case. Hence. By applying the "same evidence test." we have also ruled that a previous judgment operates as a bar to a subsequent one when it had touched on a matter already decided. While the main relief sought in Civil Case No. 48 Aside from the "absence of inconsistency test" and "same evidence test."49 The "absence of inconsistency test" finds no application in this case since it presupposes that a final judgment has been rendered in the first case. 2004-269 appears to be different from that in Civil Case No. 299 by virtue of a final and executory decision of the Land Management Bureau (DENR) promulgated on Dec. 299. 44 Basically.004 sq. In either case. respectively. In contrast. 2004-271. that a final adjudication in favor of the spouses Marcelo in one case would constitute res judicata in the other. 2004-269 and 2004-271 present distinct causes of action since they pertain to separate portions of the Marcelo Compound. known as Lot 3976 Parañaque Cad. or if the parties are in effect "litigating for the same thing. (2) filing multiple cases based on the same cause of action and the same prayer. Parañaque Cad. and (3) filing multiple cases based on the same cause of action. the spouses Marcelo filed two cases for unlawful detainer against Armando Silverio. and Remedios Silverio on July 12. the prior judgment shall not constitute a bar to subsequent actions. In Agustin v. themselves. the cause of action in Civil Case No.Forum shopping can be committed in three ways: (1) filing multiple cases based on the same cause of action and with the same prayer.
the declaration by the DENR-NCR that Lot 3976 is still part of the public domain does not mean that neither of the parties is entitled to the possession of the subject properties. 2006. This is the philosophy at the foundation of all these actions of forcible entry and detainer which are designed to compel the party out of possession to respect and resort to the law alone to obtain what he claims is his. The tract or tracts of land reserved under the provisions of section eighty-three shall be non-alienable and shall not be subject to occupation.000 square meters. 55 we reiterated the policy behind the summary action of forcible entry and unlawful detainer. the party in peaceable quiet possession shall not be turned out by strong hand. 184490 must fail. 1996 gave due course to the application. the Court stressed that the mere declaration of land for taxation purposes does not constitute possession thereof nor is it proof of ownership in the absence of the claimant’s actual possession. the DENR-NCR had canceled the MSA filed by the spouses Marcelo in its Decision 51 dated July 11. which has title or better right over the property was not impleaded in the case. resort to force to gain possession rather than to some appropriate action in the courts to assert their claims. No. It gave weight to the findings in the ocular inspection that the spouses Marcelo are actually occupying only 50 square meters of Lot 3976 while the remaining portions are inhabited by 111 families. which have acquired expertise because of their jurisdiction. In Pajuyo v. are confined to specific matters and are accorded respect. Findings of administrative agencies. Factual considerations relating to lands of the public domain properly rest within the administrative competence of the Director of Lands and the DENR.R. In ruling for the petitioners in said case." 50 Evidently. in the concept of owner. Said act is likewise tantamount to splitting a cause of action which. In any case. We ruled that since the government. by the courts. and the reasonable hope such withdrawal would create that some advantage must accrue to those persons who. sale. not only of the spouses Marcelo. even if we confront the issue as to who between the spouses Marcelo and the Silverios have better right of possession over the subject properties. Urbina. that piece of land remains part of the public domain. is a cause for dismissal on the ground of litis pendentia. the respondents in said case relied on a MSA and tax declarations to substantiate their claim of possession over the contested land therein. the Court cannot. no matter how long. 3976 since Republic Act No. 73052 limits the area of land that may be applied for to 1. and its occupation. As earlier stated. The Department found that the spouses Marcelo failed to satisfy the requirements for the acquisition of Lot 3976 under the Public Land Act. cannot confer ownership or possessory rights. but also those of other applicants. escape the operation of the principle that one and the same cause of action shall not be twice litigated. A case with parallel factual milieu is Modesto v. in this case. the DENR-NCR held that Lot 3976 remains a public land and its dwellers may apply for the purchase of those portions that they are actually occupying. 2007. violence or terror. The DENR-NCR clarified that the Decision dated December 12.53 In conclusion. if not finality. The DENR-NCR adds that the spouses Marcelo cannot claim the entire Lot No. alongside their averments in G. believing themselves entitled to the possession of property. Nos. 56 The parties in Pajuyo were informal settlers on the public land which was the subject of said case. which provides: Section 88. entry. by varying the form of action. thus: It must be stated that the purpose of an action of forcible entry and detainer is that. the former would still not prevail. or adopting a different method of presenting his case. regardless of the actual condition of the title to the property. We recognized better right of possession in favor of the petitioner therein who began occupying the disputed property ahead of the respondents in said case. On this score alone.and again that "a party cannot. In affording this remedy of restitution the object of the statute is to prevent breaches of the peace and criminal disorder which would ensue from the withdrawal of the remedy. In a Certification60 dated June 8. on its own. the spouses Marcelo engaged in forum shopping by filing separate cases for unlawful detainer based on a single claim of ownership over Lot 3976. Samson G. lease. de Leon.R. the Regional Technical Director for Lands of the DENRNCR stated that: . Court of Appeals. 58 We explained that unless a public land is shown to have been reclassified as alienable or actually alienated by the State to a private person. 59 This finds support in Section 88 of the Public Land Act. or other disposition until again declared alienable under the provisions of this Act or by proclamation of the President. the petition for review on certiorari filed by the spouses Marcelo in G.54 Nonetheless. Even if they are not binding to civil courts exercising jurisdiction over ejectment cases. such factual findings deserve great consideration and are accorded much weight. 184079. 57 Like the spouses Marcelo. evict the parties.
Metro Manila. 98713 are AFFIRMED. As regards the portion of Lot 3976 subject of G. however. 184490.R. 2008 of the Court of Appeals in CA-G.long after Lot 3976 was classified as alienable and disposable public land on January 3. also under the name of Ricardo Marcelo. does not preclude the Silverios and the spouses Marcelo from introducing evidence and presenting arguments before the proper administrative agency to establish any right to which they may be entitled under the law.R. Other than said tax declaration. 1968. and with his wife. JR.R SP No.) It is undisputed by the spouses Marcelo that the Silverios presently occupy those portions of Lot 3976 which are the subjects of the consolidated petitions before us. SP No. Said tax declaration. is inadequate to convince the Court that the spouses Marcelo have been in open. however. Parañaque. since January 3. MARTIN S.This is to certify that Lot 3976 Cad 299. No. 98105 are REVERSED and SET ASIDE.00 square meters has been verified based on available records of this Office to be under Project No. E-008-19942 in the name of Ricardo Marcelo. Consequently.R. No. by themselves or through a successor-ininterest. The Decision dated March 18. the spouses Marcelo insist on their better right to possess the contested parcels as holders of Tax Declaration No. x x x x. xxxx This is to further certify that as per Certification dated 15 December 2005 issued by Records Officer II Anita B.61 Considering that the Silverios are in actual possession of the subject portions of Lot 3976. 184490 to Florante Marcelo who appropriated a portion of Lot 3976 for himself. continuous and exclusive possession of the subject portions of Lot 3976. the Silverios have established their dwelling thereon in 1987 . 62 WHEREFORE. Parañaque Cadastre situated at San Dionisio. 184079. and by itself. Map No. classified as Alienable or Disposable Public Land. The ruling in this case. SO ORDERED. (Emphasis supplied.R. they are entitled to remain on the property until a person who has a title or a better right lawfully ejects them. In particular. (2) To DENY the petition in G. E-008-18821. was issued for the year 2005 and canceled Tax Declaration No. Meanwhile. 184079. it is ingrained in our jurisprudence that the mere declaration of a land for taxation purposes does not constitute possession thereof nor is it proof of ownership in the absence of the claimant's actual possession. VILLARAMA. and Remedios Silverio for lack of merit. the Decision dated March 27.027. Ibardolasa which is hereto attached. No. More importantly. We note that Tax Declaration No. 2323. 2008 and Resolution dated September 1. Associate Justice WE CONCUR: . Sr. no land patent has been issued over the same or any portion thereof.C. and (3) To DISMISS the complaints for unlawful detainer filed by the spouses Ricardo and Evelyn Marcelo against Armando Silverio. constructed a house thereon in 1986.R. certified as such on 3 January 1968 per BFD L. the Court RESOLVES: (1) To GRANT the petition in G. which covers Lot 3976. 2008 of the Court of Appeals in CA-G. No. 2008 and Resolution dated August 12. containing an area of 5. No pronouncement as to costs. E-008-19942 was issued fairly recently. 25. 1968. the Silverios tie their possession of the parcel at issue in G. we found nothing in the records of these cases to show that the spouses Marcelo have been consistently paying taxes on Lot 3976.
RT-11603 (383648)6 and having an area of 460 square meters. petitioner filed an Amended Complaint on 24 June 2002. 187677 April 17. HON.R. as the presentation thereof would constitute a collateral attack on private respondents' title. 2013 REPUBLIC OF THE PHILIPPINES. 5Private respondents. as Presiding Judge of the Regional Trial Court. and SPOUSES WILLIAM AND REBECCA GENATO. Patrick B. represented by the DEPARTMENT OF PUBLIC WORKS AND HIGHWAYS (DPWH).8 seeking to limit the coverage of the proceedings to an area conforming to the findings of the DPWH: 4. Quezon City in Civil Case No. including private respondents. Q-01-44595. During the pendency of the proceedings. vs. Branch 105.R. Project Manager IV of the DPWH-NCR. represented by the Department of Public Works and Highways (DPWH). are the registered owners of a piece of land ("subject property") covered by Transfer Certificate of Title (TCT) No. reporting that the subject property was "government land and that the transfer certificate of title of the said claimant respondent x x x is of dubious origin and of fabrication as it encroached or overlapped on a government property.Republic of the Philippines SUPREME COURT Baguio City FIRST DIVISION G. Petitioner. for the expropriation of several parcels of land affected by the construction of the EDSA-Quezon Avenue Flyover. petitioner received a letter dated 14 June 2002 from Engr.A. CJ. Branch 105. Gatan. filed a Complaint against several defendants. To accomplish said project." 7 As a result. petitioner Republic of the Philippines. Quezon City.The RTC barred petitioner from presenting evidence to prove its claim of ownership over the subject property. . ROSA SAMSON-TATAD. G. 93227 which affirmed the Orders 4 of the Regional Trial Court (RTC). Spouses William and Rebecca Genato.: This is an appeal via a Petition for Review on Certiorari 1 dated 19 June 2009 assailing the Decision 2 and Resolution3of the Court of Appeals (CA) in C. No. Respondents. SP No. The antecedent facts are as follows: On 13 July 2001. which is to be undertaken by the Department of Public Works and Highways [DPWH]. DECISION SERENO.
11603 (383648) can only be raised in an action expressly instituted for that purpose and not in this instant proceeding. On 4 August 2005.13 On 4 January 2006.15 The appellate court ruled that since the subject property was covered by a Torrens title.000) deposited in the bank. 17 but the motion was also denied in a Resolution dated 27 April 2009. the Petition for Certiorari is DISMISSED. it held that the RTC rightly applied Sec. 1529). and a Reply 20 thereto by petitioner on 27 January 2010. Genato and Rebecca G. and/or the ownership of which are being claimed by the defendants.400. Presidential Decree No. Upon receipt of the Memoranda. Accordingly. 48 of P. petitioner seasonably filed a Motion for Reconsideration. the trial court issued on 12 July 2005 an Order11 as follows: WHEFEFORE. occupied.16 the dispositive portion of which reads: WHEREFORE. While petitioner was presenting evidence to show that the subject property actually belonged to the Government. deferred the release to respondents the amount of eighteen million four hundred thousand pesos (P18. as it constituted a collateral attack on the validity of their TCT No. The RTC then required the parties to submit their respective Memoranda.000) deposited in the Land Bank–South Harbor Branch as partial payment. 1529. D. the CA issued its 29 September 2008 Decision. On 29 October 2008. – xxxx 5. x x x. petitioner filed a Manifestation and Motion 9 to have the subject property "declared or considered of uncertain ownership or subject to conflicting claims. equivalent to the current zonal valuation of the land. The Court’s Ruling .400. the Court finds that the issue of the validity of the TCT No. plaintiff is barred from presenting evidence as they [sic] constitute collateral attack on the validity of the title to the subject lot in violation of Sec. premises considered.14 This Motion remains pending in the RTC to date. the sole issue submitted for resolution before this Court is whether petitioner may be barred from presenting evidence to assail the validity of respondents’ title under TCT No. 10 the RTC admitted petitioner’s Amended Complaint. or the Property Registration Decree (P. the instant Petition.18 Hence. RT-11603 (383648). The prayer for the issuance of a Writ of Preliminary Injunction is accordingly DENIED. Thus. RT-11603 (383648). necessarily finds significance. ISSUE From the foregoing. On 9 February 2006. A Comment19 on the Petition was filed by private respondents on 1 September 2009. Accordingly. D. 1529. Genato. to wit: xxxx [c] Defendants William O. private respondents filed a Motion for the payment of just compensation amounting to twenty million seven hundred thousand pesos (₱20. consisting of an area of: x x x [c] 460 square meters of the aforedescribed property registered in the name of defendants spouses William and Rebecca Genato. 12 but the motion was denied by the RTC in an Order dated 17 November 2005.700. 48." In an Order dated 10 December 2002. and declared the property as the subject of conflicting claims. petitioner filed with the CA a Petition for Certiorari with Prayer for the Issuance of a Temporary Restraining Order and/or Writ of Preliminary Injunction. possessed.000) and for the release of eighteen million four hundred thousand pesos (₱P18. The portion of the above properties that are affected by the project and shaded green in the sketch plan hereto attached and made integral part hereof as Annex E. private respondents interposed objections saying that petitioner was barred from presenting the evidence.it is necessary and urgent for plaintiff to acquire in fee simple portions of the following parcels of land belonging to. petitioner filed a Motion for Reconsideration. (Emphasis in the original) On 18 July 2002.
in the same expropriation case. or there are conflicting claims to any part thereof. Pasicolan21(Republic) in which the trial court hearing the expropriation proceeding was also allowed to resolve the issue of ownership. Moreover. But the judgment shall require the payment of the sum or sums awarded to either the defendant or the clerk before the plaintiff can enter upon the property. which provides: SEC. Certificate Not Subject to Collateral Attack. But the judgment shall require the payment of the sum or sums awarded to either the defendant or the clerk before the . Indeed. presided formerly by Judge L. or cancelled except in a direct proceeding in accordance with law. is proscribed by the restraints of public use and just compensation. or retain it for the public use or purpose if entry has already been made. the expropriation suit is essentially a direct proceeding. i. the court may order any sum or sums awarded as compensation for the property to be paid to the clerk of the court for the benefit of the persons adjudged in the same proceeding to be entitled thereto. in the nature of compulsory sale to the State. which presents procedural guidelines for the court to ensure that due process is observed and just compensation rightly paid to the private owners. It cannot be altered.. Uncertain Ownership.e. 9. Rule 67 in the case of Republic. Rule 67 Proceeding from the principle of jus regalia. — A certificate of title shall not be subject to collateral attack. or there are conflicting claims to any part thereof." This is the reason why the RTC issued an Order declaring the property subject of conflicting claims. the court may order any sum or sums awarded as compensation for the property to be paid to the clerk of court for the benefit of the persons adjudged in the same proceeding to be entitled thereto."22 Private respondents. this Court first had the occasion to interpret Section 9. are to be considered as mere claimants of one of the properties subject of the expropriation. if the ownership of a property to be expropriated is uncertain. to transfer to plaintiff the titles to said parcels of land together with their improvements free from all liens and encumbrances. It is their contention that by allowing petitioner to present adversarial evidence. this being an in rem proceeding. modified.25 Expropriation. Rule 67 of the Rules of Court. the right to eminent domain has always been considered as a fundamental state power that is inseparable from sovereignty. 1529. "plaintiff Republic of the Philippines seeks the relief. Uncertain ownership. albeit ostensibly appearing as registered owners. Section 9 of Rule 67 reads: SECTION 9. D. must be resolved in the affirmative. the court is in effect allowing respondents’ Torrens title to be collaterally attacked – an action prohibited by P. In addressing the issue of "whether or not the court that hears the expropriation case has also jurisdiction to determine. the issue of ownership of the land sought to be condemned. on the other hand. That the court is empowered to entertain the conflicting claims of ownership of the condemned or sought to be condemned property and adjudge the rightful owner thereof. We rule that petitioner may be allowed to present evidence to assert its ownership over the subject property. I Proper interpretation of Section 9. Conflicting claims. is evident from Section 9 of the Revised Rule 69. private property for public use or purpose. or the exercise of the State’s right to eminent domain. D.24 and as the government's right to appropriate. in the same proceeding. 1529. the issue of ownership of the land sought to be condemned. Petitioner further argues that the original Complaint was amended "precisely to reflect the fact that herein private respondents. in the same proceeding. both in the original and amended complaints. For this particular purpose. whether or not the court that hears the expropriation case has also jurisdiction to determine. 23 It is described as the State’s inherent power that need not be granted even by the Constitution. Conflicting Claims. the court in the same expropriation proceeding is also given authority to make a proper adjudication of the matter. but for the sole purpose of determining who is entitled to just compensation. viz: SECTION 48.26It is governed by Rule 67 of the Rules of Court.Petitioner argues that under Section 9. Court of First Instance of Pampanga. — If the ownership of the property taken is uncertain. invoke Section 48 of P. This view is allegedly supported by Republic v. — If the ownership of the property taken is uncertain." the Court answered in the affirmative: The sole issue in this case.
conflicting claims.. Inc.D.32 II Inapplicability of Section 48. we have considered an Answer praying for the cancellation of the plaintiff's Torrens title as a form of a collateral attack. in an action to obtain a different relief. the court taking cognizance of the expropriation must necessarily determine if the sale to the Punzalan spouses by Antonio Feliciano is valid or not. But the judgment shall require the payment of the sum or sums awarded to either the defendant or the court before the plaintiff can enter upon the property. Block 6. not to prove a right to possession. Under Sec. Lim. Despite the fact that the lot was covered by TCT No. but the defendants-intervenors. an attack on the judgment is nevertheless made as an incident thereof. we deem it proper to remand this case to the trial court for the reception of evidence to establish the present owner of Lot No. By filing an action for expropriation. Section 9 of the 1997 Rules of Court. 27 We arrived at the same conclusion in Republic v. the existence of doubt or obscurity in the title of the person or persons claiming ownership of the properties to be expropriated would not preclude the commencement of the action nor prevent the court from assuming jurisdiction thereof. Rural Bank of Kabacan.36 But a resolution on the issue of ownership in a partition case was deemed neither to be a direct or collateral attack. 9. (Emphases supplied) 1âwphi1 However. but to prove a right to compensation for the taking. There is doubt as to the real owner of Lot No. 3080. which provides thus: SEC. the authority to resolve ownership should be taken in the proper context.34 We have afforded the similar treatment in a petition questioning the validity of a deed of sale for a registered land. or enjoin its enforcement. 9. or retain it for the public use or purpose if entry has already been made. 9.plaintiff can enter upon the property.31 The consequences of Sec. in such eventuality. the attack is indirect or collateral when. this situation is akin to ejectment cases in which a court is temporarily authorized to determine ownership. x x x. thereby challenging the judgment pursuant to which the title was decreed. This is not conclusive. to determine the person who is to be indemnified for the expropriation of Lot 6. the appellate court erred in affirming the trial court’s Order to award payment of just compensation to the defendants-intervenors. but if invalid. however. We have explained the concept in Oño v. On the other hand. In fact. or there are conflicting claims to any part thereof. that the entity exercising the right of eminent domain should state in the complaint that the true ownership of the property cannot be ascertained or specified with accuracy.35 and in a reformation of a deed of sale to include areas registered under the name of another party.29 Thus. or retain it for the public use or purpose if entry has already been made. 28 in which we held thus: The trial court should have been guided by Rule 67. our interpretation of Sec. 3080 who will be entitled to receive the payment of just compensation. it presented no proof as to the conveyance thereof. The discussion in Republic was anchored on the question of who among the respondents claiming ownership of the property must be indemnified by the Government: Now. Uncertain ownership. Rule 67 does not run counter to Section 48 of P. The Rules merely require. 30 If at all. In several instances. 33 to wit: An action or proceeding is deemed an attack on a title when its objective is to nullify the title. it would be premature to effect a partition of the disputed properties."37 . if only to determine who is entitled to possession. 1529 Verily. the Rural Bank of Kabacan manifested that the owner of the lot was no longer the bank. The attack is direct when the objective is to annul or set aside such judgment. Rule 67 cannot be avoided. such findings of ownership in an expropriation proceeding should not be construed as final and binding on the parties. In this regard. and it remains open to challenge through proper actions. collateral attacks on a Torrens title are prohibited. the condemnor (petitioner). the court may order any sum or sums awarded as compensation for the property to be paid to the court for the benefit of the person adjudged in the same proceeding to be entitled thereto. merely serves notice that it is taking title to and possession of the property. Hence. P. for "until and unless this issue of co-ownership is definitely and finally resolved. 48. For if valid. said spouses must be the ones to be paid by the condemnor. Psd-2017. and that the defendant is asserting title to or interest in the property. the money will be paid to someone else. 1529. T-61963 and was registered under its name. — If the ownership of the property taken is uncertain. as they are due to the intimate relationship of the issue of ownership with the claim for the expropriation payment. D.
the attempt of petitioner to present evidence cannot be characterized as an "attack. Chairperson WE CONCUR: ." It must be emphasized that the objective of the case is to appropriate private property.Here. The RTC's Order declaring the property as subject of conflicting claims is a recognition that there are varying claimants to the sums to be awarded as just compensation. Contrary to petitioner's allegations. the Complaint and Amended Complaint cannot also be considered as a direct attack. The amendment merely limited the coverage of the expropriation proceedings to the uncontested portion of the subject property. A. Branch 105. are hereby REVERSED and SET ASIDE. This case is REMANDED to the RTC to hear the issue of ownership for the purpose of just compensation. Q-01-44595. SERENO Chief Justice. as well as the Decision of the Regional Trial Court. Quezon City in Civil Case No. WHEREFORE. the Court GRANTS the Petition for Review on Certiorari and the prayer for a Writ of Preliminary Injunction. SO ORDERED. 93227. The assailed Decision and Resolution of the Court of Appeals in CA-G. and the contest on private respondents' title arose only as an incident to the issue of whom should be rightly compensated. MARIA LOURDES P. This serves as an authority for the court to conduct a limited inquiry on the property's ownership. SP No.R.
Petitioner Zenaida D.Republic of the Philippines SUPREME COURT Baguio City FIRST DIVISION G. LUISA B. Art Labasan (Labasan) and Jojit de la Cruz (de la Cruz). Beta Motor Trading Incorporated (Beta Motor) and Jianshe Cycle World (Jianshe).000 as payment for the external auditor she had contracted to examine the books of the HMS Group. BETA MOTOR TRADING INCORPORATED and/or FELIPE DIEGO. JIANSHE CYCLE WORLD IN CORPORATED and/or JOSE B. 82653. Petitioner. 16 Thus. DIEGO. 2013 ZENAIDA D. but the guard on duty told her that respondents had issued a memorandum barring her from entering the building. Mendoza filed with the National Labor Relations Commission (NLRC) a Complaint for Illegal Dismissal and Non-payment of Salaries/Wages.5 Mendoza avers that on 11 April 2002. and . she allegedly told them that if they had lost their trust in her. vs. they supposedly confronted her about these matters. HONDA MOTOR SPORTS CORPORATION and/or FELIPE R. 13 On 30 April 2002. the stationed security guard stopped her and notified her of the instruction of Felipe and Luisa to prohibit her from entering the premises. on 12 April 2002. Felipe summoned Mendoza to advise her of her termination from service. and their subsequent transfer to a competitor company.15 On 28 January 2003.10 which turned out to be a misrepresentation. MENDOZA. DIEGO. 12 Accordingly.R. the Labor Arbiter held respondents jointly and severally liable for the payment of separation pay.R. they allegedly handed her P30. she returned to the office to pick up her personal mail and to settle her food bills at the canteen.2 During her employment. Diego (Felipe) was the company officer to whom Mendoza directly reported. DIEGO.7 Mendoza also contends that when she went back to the office building on 13 April 2012. Beta Motor. backwages. CJ. DECISION SERENO. moral and exemplary damages. No. 3 namely. 13th Month Pay and Mid-Year Bonus. while respondent Felipe R. they purportedly asked her to propose an amount representing her entitlement to separation benefits. 00-04-02576-2002. the Labor Arbiter rendered a Decision ruling that Mendoza had been illegally dismissed. respondents maintain that Mendoza was hired on the basis of her qualification as a Certified Public Accountant (CPA). Thus. 6 She claims that she was even told to leave the premises without being given the opportunity to collect her personal belongings. DIEGO. 11 They likewise contend that not only did she fail to disclose knowledge of the resignations of two HMS Group officers. 187232 April 17. all part of the Honda Motor Sports Group (HMS Group). and Jianshe. LUISA B. MA. assailing the Decision dated 14 November 20081 issued by the Court of Appeals (CA) in CA G.: Before this Court is a Petition for Review on Certiorari under Rule 45 of the Rules of Court. DIEGO. 4 Respondent Luisa B. Mendoza (Mendoza) was the Chief Accountant of respondent HMS Credit Corporation (HMS Credit) beginning 1 August 1999. Honda Motor Sports Corporation (Honda Motors). Before she left that night. MA. after she submitted to Luisa the audited financial statements of Honda Motors. 8 Later that month. but she also had a hand in pirating them. Respondents. Diego (Luisa) was the Managing Director of HMS Credit. she simultaneously serviced three other respondent companies. 9 On the other hand. LUISA B. and that the dismissal had been effected in violation of due process requirements. it would be best for them to part ways. In turn. 14 The case was docketed as NLRC-NCR North Sector Case No. SP No. DIEGO. HMS CREDIT CORPORATION and/or FELIPE R. MA.
21 On 30 September 2008. and that she had the intention to resign.82. First issue: Timely filing of the appeal before the NLRC The relevant portion of Article 223 of the Labor Code on appeals of decisions. involved in this case. and (b) whether Mendoza was illegally dismissed. 26 prompting her to file a Petition for Certiorari with the CA. this was an attempt on the part of respondents to effectively renege on its commitment to pay separation benefits to petitioner. The CA erred in concluding that respondents had timely filed their appeal with the NLRC. in disposing of the instant case. since there was no dismissal. respondents and petitioner had already agreed on an amicable settlement with petitioner voluntarily resigning her employment and respondents paying her separation benefits. this case involves neither dismissal on the part of the employer nor abandonment on the part of the employee. and (c) her admission that respondents allowed her to take a leave of absence subsequent to their confrontation also belied her claim that she was dismissed.30 Thus. which constituted a just cause for termination. It is an accepted practice for parties to adjust their difficulties by mutual consent and.801. Clearly. however.19 In its Order dated 30 May 2003.attorney’s fees in the total amount of P1. the following issues must be discussed: (a) whether the appeal of respondents to the NLRC was timely filed. with respondents entrusting to petitioner the P30.29 Mendoza consequently filed the present Petition for Review. the non-observance of the notice requirements is of no relevance. Instead. an arrangement whereby the employee would receive separation pay despite having resigned voluntarily constitutes a contract which is freely entered into and which must be performed in good faith. an appeal by the employer may be perfected only . it also ruled that her misrepresentation as to her qualifications.23 Further. Thus. through the execution of a compromise agreement. valid or otherwise. the NLRC correctly sustained the prior commitment of respondents to pay separation benefits to petitioner. an employee who voluntarily resigns from employment is not entitled to separation pay. prevent or to put an end to a lawsuit. 2002 she was already prevented from entering the office premises per strict instructions from respondents. as the parties had entered into a compromise agreement whereby respondents offered to pay Mendoza separation benefits in exchange for her voluntary resignation.000. her concealment of her meeting with a rival motorcycle dealership.17 Respondents filed an Appeal dated 14 March 2003 18 and a Motion to Reduce Appeal Bond dated 21 March 2003 with the National Labor Relations Commission (NLRC). This is evident from the amiable manner with which the parties ended their meeting. (b) the same act demonstrated that the parties parted amicably. 27 The CA ruled that that there was no dismissal. the NLRC denied the request for the reduction of the appeal bond.025.25 The NLRC denied the Motion for Reconsideration filed by Mendoza.081. it ordered respondents to pay her separation pay equivalent to one month for every year of service. which rendered a Decision affirming that of the lower tribunal. 22 In declaring that Mendoza had not been summarily dismissed. 2002 because when the latter returned on April 13.20 Respondents complied with the Order.00 payment for the external auditor and the petitioner considering her absence the following day as a previously approved leave from work. that respondents had a sudden change of heart while petitioner was away on leave on April 12. the NLRC held as follows: (a) her claim that she was terminated was incompatible with respondents’ act of entrusting the amount of P30. raising the following grounds: a. awards or orders of the Labor Arbiter as follows: Art. generally. especially of managerial employees like her. It appears. For although loss of trust and confidence could have been a valid ground available to respondents. 28 It further explained: On the merits. 223.000 on the ground of purported business losses. While. x x x In case of a judgment involving a monetary award. And. and directed respondents to put up the additional amount of P122. On the evening of April 11. 2002.000 to her as payment for the external auditor. the NLRC rendered a Decision reversing the ruling of the Labor Arbiter. and her non-disclosure of her meeting with the officers and mechanics of HMS Group amounted to a breach of trust.66 representing the differential between the judgment award – not including the moral and exemplary damages and attorney’s fees – and the sum previously tendered by them. they opted to enter into a compromise agreement with an offer to pay separation benefits in exchange for the latter’s voluntary resignation. 24 Nevertheless. they did not institute the appropriate dismissal procedures against petitioner. tendering the amount of only P650. The CA erred in ruling that there was no illegal dismissal. b.
Termination by employer. Thus. and 4. Other causes analogous to any of the foregoing. tendering the sum of P650." However. 282. which had been computed without including the award of moral and exemplary damages and attorney’s fees. Rollo. Serious insult by the employer or his representative on the honor and person of the employee. c. Petitioners’ reasons for their filing of the reduced appeal bond — the downscaling of their operations coupled with the amount of the monetary award appealed — are not unreasonable.82 award stated in the Decision of the Labor Arbiter – because it was allegedly what respondents could afford. Inhuman and unbearable treatment accorded the employee by the employer or his representative.801. 33 Upon the denial by the NLRC of this Motion. to wit: Art. An employee may put an end to the relationship without serving any notice on the employer for any of the following just causes: 1. Commission of a crime or offense by the employee against the person of his employer or any immediate member of his family or his duly authorized representatives. Second issue: Illegal dismissal of Mendoza The Labor Code provides for instances when employment may be legally terminated by either the employer or the employee. Article 223 of the Labor Code requires the filing of appeal bond "in the amount equivalent to the monetary award in the judgment appealed from. 2.000 (accompanied by the corresponding motion) in its appeal of an arbiter’s ruling in an illegal termination case awarding P789. The employer upon whom no such notice was served may hold the employee liable for damages. An employer may terminate an employment for any of the following causes: a.32 In the case at bar.39 to the private respondents. respondents promptly complied with its directive to post the differential in the amount of P122. Gross and habitual neglect by the employee of his duties. respondents filed a Motion to Reduce Appeal Bond. Inc. given the business losses they had suffered at that time. True. a distinction must be xxx xxx . b. a. Termination by employee. An employee may terminate without just cause the employee-employer relationship by serving a written notice on the employer at least one (1) month in advance. 34Following the pronouncement in Pasig Cylinder. d. 285. In instances in which the termination of employment by the employer is based on breach of trust.31 this Court explained that the required posting of a bond equivalent to the monetary award in the appealed judgment may be liberally interpreted as follows: x x x. In Pasig Cylinder v. 3.upon the posting of a cash or surety bond issued by a reputable bonding company duly accredited by the Commission in the amount equivalent to the monetary award in the judgment appealed from. Other causes analogous to the foregoing. the CA was correct in holding that the appeal was timely filed on account of respondents’ substantial compliance with the requirement under Article 223. NLRC.66.025.000 – instead of the P1. b. Fraud or willful breach by the employee of the trust reposed in him by his employer or duly authorized representative. and e. v. Commission of a crime or offense by the employer or his representative against the person of the employee or any of the immediate members of his family. Serious misconduct or willful disobedience by the employee of the lawful orders of his employer or representative in connection with his work. xxx Art.154. where we allowed the appellant to file a reduced bond of P50.081. the recourse petitioners adopted constitutes substantial compliance with Article 223 consistent with our ruling in Rosewood Processing. both the Labor Code and this Court’s jurisprudence abhor rigid application of procedural rules at the expense of delivering just settlement of labor cases.
in the case of termination by the employer. Aside from their self-serving allegation that she had offered to . and (b) the employer must inform the employee of the decision to terminate employment after affording the latter the opportunity to be heard. Respondents could have validly dismissed her for just cause because she had forfeited her employment by having incurred breach of trust that they had reposed in her. which argument the NLRC and the CA sustained. on the morning of that date. Based on the records. at the very least. Gucaban: 37 Resignation — the formal pronouncement or relinquishment of a position or office — is the voluntary act of an employee who is in a situation where he believes that personal reasons cannot be sacrificed in favor of the exigency of the service. as held in San Miguel Properties v. insofar as the application of the doctrine of loss of trust and confidence is concerned. the termination of her employment was not on that basis. thus: The degree of proof required in labor cases is not as stringent as in other types of cases. the notice she had given was that. it is not enough that there exists a just cause therefor. And she gave the appearance of giving aid and support to respondents’ competitor. She had concealed from them the fact that she was going to visit a rival motorcycle dealership in Tarlac. the commission finds that Mendoza was not illegally dismissed. she never controverted this imputation of dishonesty or. called Honda Mar. and that mere uncorroborated assertions and accusations by the employer will not be sufficient. both tribunals held that the parties parted amicably. In addition. despite the existence of a just cause for termination. 2002. if the termination of employment is by the employee. Respondents were unable to discharge their burden to prove the contemporaneous existence of an intention on the part of Mendoza to resign and an overt act of resignation. This Court is not persuaded. Gatus and Mejis. this deceitful action alone was sufficient basis for respondents’ loss of confidence in her as a managerial employee. to the prejudice of their business standing and goodwill. it being sufficient that there is some basis for such loss of confidence. she fraudulently misrepresented her professional qualifications by stating in her Personal Information Sheet that she was a CPA. 42 what is certain is that she was a managerial employee. fundamental is the rule that when an employer interposes the defense of resignation. But as regards a managerial employee. with respect to rank-and-file personnel. Hence. 36 On the other hand.35 (Emphasis supplied) Further. In securing this position. Whether Mendoza was a Chief Accountant of HMS Credit. on him necessarily rests the burden to prove that the employee indeed voluntarily resigned. In illegal dismissal cases. she would get her child’s report card from her school. 43 1âwphi1 However. as respondents failed to observe the two-notice requirement. hence. as claimed by respondents. 38(Emphases supplied) In this case. loss of trust and confidence as ground for valid dismissal requires proof of involvement in the alleged events in question. and respondents’ mechanics. These were acts of disloyalty for which [they] would have been justified in terminating her service on the ground of loss of confidence. provided any explanation therefor. Mendoza was nevertheless dismissed from service in violation of procedural due process. the resignation must show the concurrence of the intent to relinquish and the overt act of relinquishment. this Court finds no reason to deviate from the factual findings of the NLRC and the CA as regards the existence of other circumstances that demonstrated Mendoza’s breach of trust.made between rank-and-file employees and managerial employees. Instead.40 This Court does not agree with these findings in their entirety. the NLRC and the CA were in agreement that although Mendoza committed acts that amounted to breach of trust. and the nature of his participation therein renders him unworthy of the trust and confidence demanded by his position. Thus. She also failed to disclose to them the fact that she saw in that store Labasan and De la Cruz. The NLRC held in this wise: In sum. proof beyond reasonable doubt is not required. with Mendoza evincing her voluntary intention to resign and respondents’ proposed settlement to pay her separation benefits. in the case of managerial employees. and he has then no other choice but to disassociate himself from employment. The intent to relinquish must concur with the overt act of relinquishment. however. the acts of the employee before and after the alleged resignation must be considered in determining whether he in fact intended to terminate his employment. It must be noted. as procedural due process dictates compliance with the two-notice rule in effecting a dismissal: (a) the employer must inform the employee of the specific acts or omissions for which the dismissal is sought. as stated in her appointment letter. that recent decisions of this Court have distinguished the treatment of managerial employees from that of rank-and-file personnel. Thus. such as when the employer has reasonable ground to believe that the employee concerned is responsible for the purported misconduct. on the afternoon of April 5. who cleaned and painted the same. respondents insisted that she voluntarily resigned. 41 or a Finance Officer of all the corporations under the HMS Group. 39 Instead. in the company of its owner. the mere existence of a basis for believing that such employee has breached the trust of his employer would suffice for his dismissal.
A -buyer who covertly usurps the seller's ownership of the property prior to the full payment of the price is in breach of the contract and the seller is entitled to rescission because the breach is substantial and fundamental as it defeats the very object of . Following the prevailing jurisprudence on the matter.00048 to be in order. it is worthy to underscore the established rule that the filing of a complaint for illegal dismissal is inconsistent with resignation or abandonment. TUMIBAY-deceased.171692 June 3. vs. TUMIBAY and AURORA T.R. SPOUSES MELVIN A. GRACE JULIE ANN TUMIBAY MANUEL. there is nothing in the records to show that she voluntarily resigned from her position in their company. A. 46 Instead. 82653 is AFFIRMED WITH MODIFICATION: the award of separation pay is deleted and in lieu thereof. From the foregoing discussion. then the non-compliance with procedural due process should not render the termination from employment illegal or ineffectual. WHEREFORE. SO ORDERED. the Petition for Review is DENIED. MARIA LOURDES P. respondents were amiss in complying with the two-notice requirement. DECISION DEL CASTILLO. SERENO Chief Justice WE CONCUR: Republic of the Philippines SUPREME COURT Manila SECOND DIVISION G. the conclusion of the NLRC and the CA that Mendoza voluntarily resigned in consideration of respondents’ supposed payment of a settlement is bereft of any basis.: In a contract to sell. The Decision dated 14 November 2008 of the CA in CA G. the seller retains ownership of the property until the buyer has paid the price in full. 2013 SPOUSES DELFIN O. this Courts finds the award of nominal damages in the amount of P30. 45 In fact. VISITACION LOPEZ. the employer must indemnify the employee in the form of nominal damages. 44 Moreover. nominal damages in the amount of P30. and respondents cannot be held liable for the payment of either backwages or separation pay.R. LOPEZ and ROWENA GAY T. J. it is evident that although there was a just cause for terminating the services of Mendoza. Considering all the circumstances surrounding this case. Respondents. SP No. The lower tribunals merely surmised that the parties forged a compromise agreement despite respondents’ own admission that they never decided thereon. In this regard.000 is awarded in favor of petitioner. No. if the dismissal is based on a just cause.resign after they had expressed their loss of trust in her. the records are clear that none of the parties claimed the existence of any settlement in exchange for her resignation. legal representative. the dismissal of Mendoza should be upheld. Petitioners. 47 Therefore.
00 to be paid on installment. and recovery of ownership and possession of land with the RTC of Malaybalay City. that. remained a Filipino citizen.R. petitioners executed a special power of attorney (SPA) 12 in favor of Reynalda granting the latter the power to offer for sale the subject land.000. or if said respondents should refuse to do so or are unable to do so.00. The respective parties must bear their own expenses except that respondents. respondents should be held liable for damages. to return the said amount of $12. The case was raffled to Branch 9 and docketed as Civil Case No. Respondents averred that on December 12. Visitacion Lopez (respondent Rowena). and that petitioners should be held liable for damages for filing the subject Complaint in bad faith. and the February 10. and that. On May 25. spouses Melvin and Rowena Gay Lopez.00 at the present rate of exchange less the expenses to be incurred for the transfer of the property in question under the name of the petitioners. 2006 Resolution 4 denying petitioner-spouses Delfin O. The Petition for Review on Certiorari1 assails the May 19. 1998.00. in furtherance of the agreement. respondent Rowena paid the monthly installments thereon as evidenced by money orders. Tumibay’s Motion for Reconsideration. 1997 be declared void ab initio. that on January 25. 1998. respondent Rowena paid in cash to petitioners the sum of $1. that they are natural born Filipino citizens but petitioner Delfin acquired American citizenship while his wife.000. Bukidnon covered by Transfer Certificate of Title (TCT) No. petitioner Aurora. petitioners filed a Complaint 7 for declaration of nullity ab initio of sale. that from 1995 to 1997.000. T-62674 in the name of the respondent Rowena Gay T. as follows. Visitacion-Lopez and to issue a new TCT in the name of the petitioners. which sale is null and void because an agent cannot purchase for herself the property subject of the agency. (2) Ordering the Register of Deeds of Bukidnon to cancel TCT No. . and that Reynalda. Petitioners prayed that (1) the deed of sale dated July 23. 2003. 1995. and (3) respondents be ordered to pay damages. jointly and severally. respondents filed their Answer 11 with counterclaim. Respondents prayed that the Complaint be dismissed and that petitioners be ordered to pay damages. Petitioners also claimed that the monthly payments from 1995 to 1997 were mere deposits as requested by respondent Rowena so that she (Rowena) would not spend the same pending their agreement as to the purchase price. petitioners filed an Answer to Counterclaim. (2) the subject land be reconveyed to petitioners. 2005 Decision 2 of the Court of Appeals (CA) in CA-G. for these fraudulent acts.the parties in entering into the contract to sell. (4) No x x x damages are awarded.00 although said property had a market value of more than P2. Tumibay and Aurora5 T.000. (1) Ordering the petitioners. (3) Ordering respondents. 1998. 79029. that petitioner Aurora is the sister of Reynalda Visitacion (Reynalda). which reversed the January 6.000. a deed of sale was executed and the corresponding title was issued in favor of respondent Rowena. respondent Rowena and petitioners agreed that the former would buy the subject land for the price of P800. the Clerk of Court of the RTC and ex-officio Provincial Sheriff to execute such Deed of Reconveyance.9 that on July 23. 2003 Decision 3 of the Regional Trial Court (RTC) of Malaybalay City. Ruling of the Regional Trial Court On January 6. 13 Petitioners admitted the existence of the SPA but claimed that Reynalda violated the terms thereof when she (Reynalda) sold the subject land without seeking the approval of petitioners as to the selling price. 2759-98. T-25334 8 (subject land) in the name of petitioner Aurora. must pay the costs of this suit. viz: WHEREFORE. Reynalda sold the subject land to her daughter. In their Complaint. executed the deed of sale in her favor but placed it in the name of her daughter. Decision is hereby rendered. jointly and severally. Branch 9 in Civil Case No. acting with evident bad faith. 2759-98. that the subject sale was done without the knowledge and consent of petitioners. that the subject sale was done with the knowledge and consent of the petitioners as evidenced by the receipt of payment by petitioners. through a deed of sale 10 for an unconscionable amount of P95.6 Factual Antecedents On March 23. respondent Rowena. CV No. 1990. petitioners alleged that they are the owners of a parcel of land located in Sumpong. that sometime in 1994.000. On May 19. the RTC rendered a Decision in favor of petitioners. Malaybalay. 1997. Rowena Gay T. to execute a Deed of Reconveyance in favor of the petitioners.
V. SO ORDERED. Whether the actuations of petitioner Aurora in receiving money from respondent Rowena amounted to the ratification of the breach in the exercise of the SPA. 2003 Order16 denying the aforesaid motion. to sell the subject land to the latter.000.000. (5) petitioners impliedly ratified the subject SPA and contract of sale as well as its effects. respondent Rowena.00) to the petitioners effective within 30 days from receipt of this Decision and in case of delay. and. (5) the sale contravenes Article 1491. Thus.000.00. 2005.00 to petitioners and pegging the exchange rate at that time at P26. this Petition. the appealed Decision of the Court a quo is hereby REVERSED and SET ASIDE. premises considered.000. Hence. Under the principle of unjust enrichment. The trial court held that Reynalda. Both parties are deemed mutually compensated and must bear their own expenses. respondent Rowena. Issues Petitioners raise the following issues for our resolution: I. (3) petitioners are estopped from repudiating the sale after they had received the deposits totaling $12. Ruling of the Court of Appeals On May 19.000.000.17 In reversing the trial court’s Decision. the trial court clarified that the reimbursement of $12. Considering that respondent Rowena proved that she remitted a total of $12. without first seeking the approval of petitioners as to the selling price thereof. Whether under the SPA Reynalda had the power to sell the subject land. (4) the sale is not contrary to public policy because there is no rule or law which prohibits the sale of property subject of the agency between the agent and his children unless it would be in fraud of creditors which is not the case here. petitioners should. paragraph 2.00 selling price was already received by petitioners. thus.SO ORDERED. of the Civil Code which prohibits the agent from acquiring the property subject of the agency unless the consent of the principal has been given. title to the subject property shall remain in the name of the Appellant ROWENA GAY VISITACION-LOPEZ. respondents appealed to the CA. Petitioners filed a partial motion for reconsideration 15 praying for the award of attorney’s fees.00 for the subject land is deemed reasonable based on the testimony of respondent Rowena as this was the selling price agreed upon by her and petitioner Delfin. Whether the CA erred in not declaring the sale void on grounds of public policy. (4) Reynalda. be ordered to reimburse the same without interest.00 in favor of respondents was without interest because there was also no award of rental income in favor of petitioners.00 selling price of the subject land. the CA rendered the assailed Decision reversing the judgment of the trial court.000. (3) the SPA does not sufficiently confer on Reynalda the authority to sell the subject land. and. acted outside the scope of her authority under the SPA.000. connived with her daughter.00 of the P800. the appellate court ruled that: (1) the SPA sufficiently conferred on Reynalda the authority to sell the subject land.00. From this Decision.000. IV. Thus. to pay the legal rate of interests [sic] at 12% per annum until fully paid. respondents are only liable for the balance ofP488. as agent. In its January 14. the trial court held: (1) the SPA merely authorized Reynalda to offer for sale the subject land for a price subject to the approval of the petitioners. viz: WHEREFORE. the appellate court ruled that P312. The trial court further ruled that petitioners are not entirely free from liability because they received from respondent Rowena deposits totaling $12.00 per dollar. the sale is null and void and the subject land should be reconveyed to petitioners. through fraud and with bad faith. (2) Reynalda violated the terms of the SPA when she sold the subject land to her daughter. (2) although there is no direct evidence of petitioners’ approval of the selling price of the subject land.18 . Accordingly. II. Whether the CA erred in adopting the testimony of respondent Rowena as to the P800.14 In ruling in favor of petitioners. III. petitioner Aurora’s acts of receiving two money orders and several dollar checks from respondent Rowena over the span of three years amount to the ratification of any defect in the authority of Reynalda under the SPA.00. (6) the selling price of P800.000. Whether the CA erred in resolving the issue in the case at bar. The latter and her spouse MELVIN LOPEZ are directed to pay the balance of Four Hundred Eighty Eight Thousand Pesos (P488.
Reynalda merely used her daughter. 1997 is valid. Finally. Further. Petitioners deny that they agreed to sell the subject land to respondent Rowena for the price of P800. as a dummy to acquire the subject land. the existence of the alleged contract of sale was not proven because the parties failed to agree on the purchase price as stated by petitioner Aurora in her testimony.00 to be paid in 10 years through monthly installments. this case falls under one of the recognized exceptions thereto because the factual findings of the trial court and appellate court are conflicting. Furthermore. Reynalda.00 payable in 10 years through monthly installments.00. while respondent Rowena appeared as buyer.000. 1997. the appellate court properly ruled on the former. They claim that the payments received from respondent Rowena were for safekeeping purposes only pending the final agreement as to the purchase price of the subject land.00 to petitioner Aurora which was followed by 22 intermittent monthly installments of $500. Sometime in 1994. Reynalda appeared and signed as attorney-in-fact of petitioner Aurora. We explain these factual findings and the consequences thereof below. Using the aforesaid SPA. As a general rule. as principals and sellers.000.19 Our review of the records leads us to conclude that the following are the relevant factual antecedents of this case. petitioners. as agent. 20 to thesubject land was issued in the name of respondent Rowena. after having paid a total of $10. T-25334 in the name of petitioner Aurora.00 as consideration for the subject land. she did not secure the approval as to the price from petitioners before executing the subject deed of sale.e.000.000. petitioners and respondent Rowena agreed to enter into an oral contract to sell over the subject land for the price of P800. We are inclined to give credence to the claim of the respondents for the following reasons. Petitioners also contend that there was no ratification of the subject sale through petitioners’ acceptance of the monthly checks from respondent Rowena because the sale occurred subsequent to the receipt of the aforesaid checks. given to petitioners from 1995 to 1997 were mere deposits until the parties could agree to the purchase price. they reiterate the findings of the appellate court that the receipt of monthly installments constitutes an implied ratification of any defect in the SPA and deed of sale dated July 23. After which. petitioners question the determination by the appellate court that the fair market value of the subject land is P800. They further claim that the sale was void because it was not only simulated but violates Article 1491 of the Civil Code which prohibits the agent from acquiring the property subject of the agency. Our Ruling The Petition is meritorious. Petitioners were the owners of the subject land covered by TCT No. Respondents’ Arguments Respondents counter that the issue as to whether there was a perfected contract of sale between petitioners and respondent Rowena is inextricably related to the issue of whether the deed of sale dated July 23. They emphasize that petitioners received a total of $12. 1995.00 spanning almost three years. Sometime in 1997. 62674. claiming that she had already bought the subject land from petitioners. In the aforesaid deed. as seller. 1990. to. in cash and checks. On January 25.Petitioners’ Arguments Petitioners argue that the appellate court went beyond the issues of this case when it ruled that there was a contract of sale between respondent Rowena and petitioner Aurora because the issues before the trial court were limited to the validity of the deed of sale dated July 23. the sale is null and void. 1997 without the knowledge and consent of petitioners. respondent Rowena called her mother.00 for lack of any factual and legal basis. However.. respondent Rowena paid the first monthly installment of $1. executed an SPA in favor of Reynalda. hence. The money. Petitioners and respondent Rowena entered into a contract to sell over the subject land. . TCT No.000. offer for sale the subject land provided that the purchase price thereof should be approved by the former. On December 12. Reynalda acted beyond the scope of her authority under the SPA because she was merely authorized to look for prospective buyers of the subject land.000. 1997 for being executed by Reynalda beyond the scope of her authority under the SPA. among others. Here. respondent Rowena. Even assuming that she had the power to sell the subject land under the SPA. hence. a new title. we do not disturb the factual findings of the appellate court. i. Reynalda then transferred the title to the subject land in respondent Rowena’s name through a deed of sale dated July 23. Moreover.
First, the payment of monthly installments was duly established by the evidence on record consisting of money orders21 and checks22 payable to petitioner Aurora. Petitioners do not deny that they received 23 monthly installments over the span of almost three years. As of November 30, 1997 (i.e., the date of the last monthly installment), the payments already totaled $12,000.00, to wit: Date January 25, 1995 February 21, 1995 March 27, 1995 April 25, 1995 June 1, 1995 June 30, 1995 July 31, 1995 May 29, 1996 June 30, 1996 July 31, 1996 August 31, 1996 September 30, 1996 October 29, 1996 December 31, 1996 January 31, 1997 February 28, 1997 March 31, 1997 May 31, 1997 July 19, 1997 August 31, 1997 September 30, 1997 October 31, 1997 November 30, 1997 Total Amount Paid (in dollars) 1,000.0023 500.00 500.00 500.00 500.00 500.00 500.00 500.00 500.00 500.00 500.00 500.00 500.00 500.00 500.00 500.00 500.00 500.00 500.00 500.00 500.00 500.00 500.00 12,000.00
Second, in her testimony, petitioner Aurora claimed that the $1,000.00 in cash that she received from respondent Rowena on January 25, 1995 was a mere deposit until the purchase price of the subject land would have been finally agreed upon by both parties.24 However, petitioner Aurora failed to explain why, after receiving this initial sum of $1,000.00, she thereafter accepted from respondent Rowena 22 intermittent monthly installments in the amount of $500.00. No attempt was made on the part of petitioners to return these amounts and it is fair to assume that petitioners benefited therefrom. Third, it strains credulity that respondent Rowena would make such monthly installments for a substantial amount of
money and for a long period of time had there been no agreement between the parties as to the purchase price of the subject land. We are, thus, inclined to rule that there was, indeed, a contractual agreement between the parties for the purchase of the subject land and that this agreement partook of an oral contract to sell for the sum of P800,000.00. A contract to sell has been defined as "a bilateral contract whereby the prospective seller, while expressly reserving the ownership of the subject property despite delivery thereof to the prospective buyer, binds himself to sell the said property exclusively to the prospective buyer upon fulfillment of the condition agreed upon, that is, full payment of the purchase price."25 In a contract to sell, "ownership is retained by the seller and is not to pass until the full payment of the price x x x."26 It is "commonly entered into so as to protect the seller against a buyer who intends to buy the property in installments by withholding ownership over the property until the buyer effects full payment therefor." 27 In the case at bar, while there was no written agreement evincing the intention of the parties to enter into a contract to sell, its existence and partial execution were sufficiently established by, and may be reasonably inferred from the actuations of the parties, to wit: (1) the title to the subject land was not immediately transferred, through a formal deed of conveyance, in the name of respondent Rowena prior to or at the time of the first payment of $1,000.00 by respondent Rowena to petitioner Aurora on January 25, 1995; 28 (2) after this initial payment, petitioners received 22 intermittent monthly installments from respondent Rowena in the sum of $500.00; and, (3) in her testimony, respondent Rowena admitted that she had the title to the subject land transferred in her name only later on or on July 23, 1997, through a deed of sale, because she believed that she had substantially paid the purchase price thereof,29 and that she was entitled thereto as a form of security for the installments she had already paid. 30 Respondent Rowena was in breach of the contract to sell. Although we rule that there was a contract to sell over the subject land between petitioners and respondent Rowena, we find that respondent Rowena was in breach thereof because, at the time the aforesaid deed of sale was executed on July 23, 1997, the full price of the subject land was yet to be paid. In arriving at this conclusion, we take judicial notice31 of the prevailing exchange rates at the time, as published by the Bangko Sentral ng Pilipinas, 32 and multiply the same with the monthly installments respondent Rowena paid to petitioners, as supported by the evidence on record, to wit: Date January 25, 1995 February 21, 1995 March 27, 1995 April 25, 1995 June 1, 1995 June 30, 1995 July 31, 1995 May 29, 1996 June 30, 1996 July 31, 1996 August 31, 1996 September 30, 1996 October 29, 1996 December 31, 1996 Amount Paid (in dollars) 1,000.00 500.00 500.00 500.00 500.00 500.00 500.00 500.00 500.00 500.00 500.00 500.00 500.00 500.00 Exchange Rate (peso per dollar) 24.7700 25.1140 25.9670 26.0270 25.8040 25.5750 25.5850 26.1880 26.203033 26.2280 26.202034 26.2570 26.2830 26.288035 Peso Equivalent 24,770.00 12,557.00 12,983.50 13,013.50 12,902.00 12,787.50 12,792.50 13,094.00 13,101.50 13,114.00 13,101.00 13,128.50 13,141.50 13,144.00
January 31, 1997 February 28, 1997 March 31, 1997 May 31, 1997 July 19, 1997
500.00 500.00 500.00 500.00 500.00
26.3440 26.3330 26.3670 26.374036 28.574037 Total
13,172.00 13,166.50 13,183.50 13,187.00 14,287.00 260,626.50
Thus, as of July 19, 1997 or prior to the execution of the deed of sale dated July 23, 1997, the total amount of monthly installments paid by respondent Rowena to petitioners was only P260,626.50 or 32.58%38 of theP800,000.00 purchase price. That the full price was yet to be paid at the time of the subject transfer of title was admitted by respondent Rowena on cross-examination, viz: ATTY. OKIT: Q - Let us make this clear. You now admit that x x x you agreed to buy the lot at eight hundred thousand, to which the Plaintiff x x x agreed. Now based on the dollar rate, your total payment did not reach x x x eight hundred thousand pesos? Is that correct? [sic] A - Yes. Q - Since notwithstanding the fact this eight hundred thousand which you have agreed is not fully paid why did your mother finalize the deed of sale? A - My mother is equipped with the SPA to transfer the lot to me only for security purposes but actually there is no full payment.39 (Emphasis supplied) Respondent Rowena tried to justify the premature transfer of title by stating that she had substantially paid the full amount of the purchase price and that this was necessary as a security for the installments she had already paid. However, her own evidence clearly showed that she had, by that time, paid only 32.58% thereof. Neither can we accept her justification that the premature transfer of title was necessary as a security for the installments she had already paid absent proof that petitioners agreed to this new arrangement. Verily, she failed to prove that petitioners agreed to amend or novate the contract to sell in order to allow her to acquire title over the subject land even if she had not paid the price in full. Significantly, the evidence on record indicates that the premature transfer of title in the name of respondent Rowena was done without the knowledge and consent of petitioners. In particular, respondent Rowena’s narration of the events leading to the transfer of title showed that she and her mother, Reynalda, never sought the consent of petitioners prior to said transfer of title, viz: COURT: Q- Why is this check (in the amount of $1,000.00) in your possession now? A- This is the check I paid to her (referring to petitioner Aurora) which is in cash. [sic] ATTY. BARROSO: Q - Now did you continue x x x paying the $500.00 dollar to him (referring to petitioner Delfin)? A - Yes. xxxx Q - Now having stated substantially paid, what did you do with the land subject of this case? [sic] A - I called my mother who has equipped with SPA to my Uncle that I have already bought the land. [sic] Q - And you called your mother? A - Yes. xxxx
thus. x x x As a general rule. The contract to sell is rescissible. unless there be just cause authorizing the fixing of a period. Reynalda. if the latter should become impossible. without the knowledge and consent of petitioners and despite non-payment of the full price thereof. The court shall decree the rescission claimed. We. Her own testimony and documentary evidence established this fact. as buyer. Article 1170 of the Civil Code provides: Art. [sic]40 (Emphases supplied) Respondent Rowena’s reliance on the SPA as the authority or consent to effect the premature transfer of title in her name is plainly misplaced.58% thereof) when she had the title to the subject land transferred to her name. we find that respondent Rowena’s act of transferring the title to the subject land in her name. the tenor of her testimony indicates that respondent Rowena made a unilateral determination that she had substantially paid the purchase price and that she is entitled to the transfer of title as a form of security for the installments she had already paid. a buyer who willfully contravenes this fundamental object or purpose of the contract. thus. as unjustified. the seller’s obligation to convey and the buyer’s right toconveyance of the property arise only upon full payment of the price. 43 Indeed. considering that these acts betrayed in no small measure the trust reposed by petitioners in her and her mother. 44 In the case at bar.Q .After two years my mother called me if how much I have paid the land and being equipped with SPA. Those who in the performance of their obligations are guilty of fraud. we find that respondent Rowena was guilty of fraud in the performance of her obligation under the subject contract to sell because (1) she knew that she had not yet paid the full price (having paid only 32. Where fraud and bad faith have been . constitutes a substantial and fundamental breach of the contract to sell. so she transferred the land to me.Then what transpired next? A . reasons. Put simply. should continue with the contract to sell even after the discovery of the aforesaid breach committed by respondent Rowena. 42 As a result. as sellers. and those who in any manner contravene the tenor thereof. are liable for damages. Article 1191 of the Civil Code provides: Art. to effect the transfer of title to the subject land in her (Rowena’s) name without the knowledge and consent of petitioners and despite non-payment of the full price. It merely authorized Reynalda to sell the subject land at a price approved by petitioners. The SPA could not have amended or novated the contract to sell to allow respondent Rowena to acquire the title over the subject land despite non-payment of the price in full for the reason that the SPA was executed four years prior to the contract to sell. or delay. we previously noted. commits a substantial and fundamental breach which entitles the seller to rescission of the contract. in case one of the obligors should not comply with what is incumbent upon him. Thus. rule that petitioners are entitled to the rescission of the subject contract to sell. He may also seek rescission even after he has chosen fulfillment. but only for such breaches as are substantial and fundamental as to defeat the object of the parties in making the agreement. respondent Rowena took advantage of the SPA. The power to rescind obligations is implied in reciprocal ones. it would be highly iniquitous for us to rule that petitioners. 1170. the main object or purpose of a seller in entering into a contract to sell is to protect himself against a buyer who intends to buy the property in installments by withholding ownership over the property until the buyer effects full payment therefor. Fraud or malice (dolo) has been defined as a "conscious and intentional design to evade the normal fulfillment of existing obligations" and is. The terms of the SPA are clear. Petitioners are entitled to moral damages and attorney’s fees while respondent Rowena is entitled to the reimbursement of the monthly installments with legal interest. The injured party may choose between fulfillment and the rescission of the obligation. in the name of her mother and executed four years prior to the contract to sell. with the payment of damages in either case. As previously noted. incompatible with good faith." 41 In the case at bar. by covertly transferring the ownership of the property in his name at a time when the full purchase price has yet to be paid. and (2) she orchestrated the aforesaid transfer of title without the knowledge and consent of petitioners. negligence. "rescission will not be permitted for a slight or casual breach of the contract. 1191. In fine.
00 500.00. thus. 1996 September 30. The records indicate that. the award of moral damages is proper.50 13. 1997 February 28.1140 25. 1996 January 31. 1995 February 21. we deplore petitioners’ lack of candor in prosecuting their claims before the trial court and intent to evade recognition of the monthly installments that they received from respondent Rowena.50 13. that this was brought to light to which petitioners readily admitted. respondent Rowena’s aforesaid acts caused petitioners to incur expenses in litigating their just claims.established.5850 26.00 500.557.172.47 Anent the monthly installments respondent Rowena paid to petitioners.9670 26.00 500. our review of the records leads us to conclude that respondent Rowena is entitled to the reimbursement of the same with legal interest.00 500. We.7700 25. 1995 June 30.3440 26. 1995 March 27.00 13.50 12. the sums paid by respondent Rowena as monthly installments to petitioners should.2880 26. 1995 June 1. 1996 July 31.50 13.00 and P50.00 500. under Article 2208(2)46 of the Civil Code.00 12.00 500.902.50 12.013.144.00 13.3670 26.00 13.00 500.2570 26. thus.187.00 500. 1997 May 31.00 500.00 .2020 26.101. 1996 December 31.101.141. when respondent Rowena presented the proof of payment of the monthly installments in her Answer to the Complaint.770. 1996 October 29.000.00 500. 1996 June 30.00 13.00 500. no evidence was presented to prove that respondent Rowena occupied the subject land or benefited from the use thereof upon commencement of the contract to sell which would have justified the setting off of rental income against the monthly installments paid by respondent Rowena to petitioners.166.983.2830 26. It was only later on.00 500.00 500. 45 Further.00 12.00 500.787. petitioners made no mention of the fact that they had entered into a contract to sell with respondent Rowena and that they had received 23 monthly installments from the latter. Further.183. the award of attorney’s fees is proper where the plaintiff is compelled to litigate with third persons or incur expenses to protect his interest because of the defendant’s act or omission.50 13.00 12. respectively.00 500. 1997 Amount Paid (in dollars) 1.0270 25.00 500. find respondent Rowena liable for moral damages and attorney’s fees which we fix at P100. Here. Although respondent Rowena was clearly unjustified in prematurely and covertly transferring the title to the subject land in her name. 1995 April 25.00 Exchange Rate (peso per dollar) 24.5750 25. In view of the foregoing.50 13. in their Complaint.00 13.792.8040 25. 1995 May 29.3330 26.114.2280 26.128.00 500.2030 26. The Complaint merely alleged that the subject sale was done without the knowledge and consent of petitioners.50 13.3740 Peso Equivalent 24.000. be returned to her with legal interest.1880 26. 1997 March 31.094.000. 1996 August 31.50 13. The total amount to be reimbursed by petitioners to respondent Rowena is computed as follows: Date January 25. 1995 July 31.
1650 33. Town of Quezon.287. The sale of the subject land. we now rule on the validity of the deed of sale dated July 23. and the principal does not ratify the contract.327. widow.000. of legal age and residing at Don Carlos.00 500. If the agent contracts in the name of the principal. place and stead and for our use and benefit to do and perform the following acts and deed: To administer our real property located in the Province of Bikidnon. Inc.50.442. Clark. constitute and appoint REYNALDA VISITACION. Maramag and Barrio of Kiburiao. The SPA stated in part: That we spouses. Article 1898 of the Civil Code provides: Art. 1997 which was used to effect the aforesaid transfer of ownership. 1997 October 31. Barrio of Bantaunon. It will be recalled that on December 12. among others. is void. Bukidnon. on behalf of petitioners. however.000.469. For her part.51. as attorney-in-fact of petitioner Aurora. the agent is liable if he undertook to secure the principal’s ratification. It should be noted that. AURORA TUMIBAY and DELFIN TUMIBAY. v.262. the selling price of which will be subject to our approval.00 500. effected through the deed of sale dated July 23.50 16.July 19.6550 Total 14. and (3) sign the contract of sale on behalf of petitioners upon locating a buyer willing and able to purchase the subject land at the price approved by petitioners. the principal’s ratification of the acts of the agent.50 327. for us and in our name.9380 34.00 (which may be treated as the approved price) was not yet fully paid because respondent Rowena at the time had paid only P260. (2) seek the approval of petitioners as to the selling price thereof.00 with an interest of 6% per annum computed from May 19. executed an SPA in favor of Reynalda.00.00 15. as agent. 1997 August 31.52 Reynalda. 1997. 199849 until finality of judgement and thereafter at 12% per annum until fully paid in accordance with our ruling in Eastern Shipping Lines. it shall be void if the party with whom the agent contracted is aware of the limits of the powers granted by the principal. respondent Rowena cannot deny that she was aware of the limits of Reynalda’s power under the SPA because she (Rowena) was the one who testified that the agreed price for the subject land was P800. In this case. Town of Malaybalay. 1997 September 30.082. under Article 1898 of the Civil Code. exceeding the scope of his authority.00 17. 1997.00 28.000. we set the interest rate at 6% per annum computed from the time of the filing of the Answer 48 to the Complaint on May 19. 1997 November 30. 1990. the SPA gave Reynalda the power and duty to. to be our true and lawful Attorney-in-fact. when Reynalda.50 Petitioners are. New Jersey. thus. as previously discussed. signed the subject deed of sale dated July 23. 07066 name.00 500.442. (1) offer for sale the subject land to prospective buyers.5740 30. 1898. done . To offer for sale said properties.00 Since this amount is neither a loan nor forbearance of money. 1997 500. of legal age and presently residing at 36 Armstrong Drive. Paradise. ordered to pay respondent Rowena the sum of P327. at a price of P95.936.50 17.00 which was not approved by the latter. Philippines. 1998 until finality of judgment and thereafter of 12% per annum until fully paid. acted beyond the scope of her authority because she signed the subject deed of sale. there would have been no obstacle to its use by Reynalda had the ensuing sale been consummated according to its terms. As can be seen. However. xxxx To sign all papers and documents on our behalf in a contract of sale x x x. Towns of Maramag.8730 34. therefore. as principals and sellers. Court of Appeals. Having ruled that respondent Rowena was in substantial breach of the contract to sell because she had the title to the subject land transferred in her name without the knowledge and consent of petitioners and despite lack of full payment of the purchase price. the agreed price of P800.00 500. Although the SPA was executed four years prior to the contract to sell. petitioners.
Respondent Rowena is ordered to pay petitioners the sum of P100. 4. entitled to the reconveyance of the subject land. ruled that whatever defect attended the sale of the subject land should be deemed impliedly ratified by petitioners’ acceptance of the monthly installments paid by respondent Rowena. they shall pay legal interest thereon at the rate of 12% per annum until fully paid.e. therefore. CV No. 2006 Resolution of the Court of Appeals in CA-G. between petitioners. (2) respondent Rowena was aware of the limits of the authority of Reynalda under the SPA.00 with legal interest of 6% per annum from May 19. had paid only 32. covered by TCT No. . covered by TCT No. To rule otherwise would be to reward respondent Rowena for the fraud that she committed on petitioners. As stated earlier. as sellers. through the deed of sale dated July 23. the acts of Reynalda. 1997 in favor of respondent Rowena. No costs. Petitioners are ordered to pay respondent Rowena the sum of P327. T-25334. 1âwphi1 3. 5. 2. and conveyed the subject land to respondent Rowena at a price not approved by petitioners. by itself. acted beyond the scope of her authority under the SPA when she executed the deed of sale dated July 23. The deed of sale dated July 23. August 31. The May 19. the appellate court seemed to rely on the four monthly installments (i. 2759-98 is REINSTATED and MODIFIED to read as follows: 1. the sale is void and petitioners are. 1997 over the subject land. On the contrary. 1997. Under Article 1898 of the Civil Code. The January 6. 1997. WHEREFORE.R.000. the evidence on record established that the subject sale was done without petitioners’ knowledge and consent which would explain why receipt or acceptance by petitioners of the aforementioned four monthly installments still occurred. did not. Further..442. as principals and sellers. Based on the foregoing. it runs contrary to common human experience and reason that petitioners. 2003 Decision of the Regional Trial Court of Malaybalay City. as sellers. and that the subsequent discovery of the aforesaid fraudulent sale led them to promptly file this case with the courts to be more credible and in accord with the evidence on record. is declared rescinded. and respondent Rowena is declared void. as agent. it would be unusual for the seller to consent to the transfer of ownership of the property to the buyer prior to the full payment of the purchase price because the reservation of the ownership in the seller is precisely intended to protect the seller from the buyer. We. We disagree.beyond the scope of the latter’s authority.00 as moral damages andP50. and November 30. especially so in this case where respondent Rowena. 1997) respondent Rowena paid to petitioners which the latter presumably received and accepted even after the execution of the deed of sale dated July 23. nonetheless. impliedly or expressly. as buyer. as buyer. represented by Reynalda as her attorney-in-fact. may cure the defect in the contract entered into between the agent and a third person. Though not clearly stated in its Decision. the Petition is GRANTED. T-62674. would forego the reservation or retention of the ownership over the subject land. 79029 are ANNULLED and SET ASIDE. The appellate court conceded that there was no evidence that respondents sought the approval of petitioners for the subject sale but it. The Register of Deeds of Malaybalay City is ordered to cancel TCT No. and respondent Rowena. thus. as buyer. 1998 until finality of this Decision. between petitioner Aurora. The contract to sell over the subject land. we rule that (1) Reynalda. In case petitioners fail to pay the amount due upon finality of this Decision. the fact that petitioners continued to receive the aforesaid monthly installments tended to establish that they had yet to discover the covert transfer of title in the name of respondent Rowena. That petitioners continued to receive four monthly installments even after the premature titling of the subject land in the name of respondent Rowena. establish that petitioners ratified such sale. and (3) petitioners did not ratify. T-25334 in the name of petitioner Aurora. T-62674 in the name of respondent Rowena and to reinstate TCT No. October 31.000.00 as attorney’s fees.58% of the purchase price. which was intended to guarantee the full payment of the price under the contract to sell. September 30. find that petitioners’ claim that they did not ratify the subject sale. Branch 9 in Civil Case No. In a contract to sell. 2005 Decision and February 10. This seems to be the line of reasoning adopted by the appellate court in upholding the validity of the subject sale. which was done without their knowledge and consent. without the knowledge and consent of petitioners.
INC. the Manila RTC Br. declaring the entire obligation as due and demandable and requiring to pay Php576. 2008 Resolution2of the Court of Appeals in CAG. J. subsequently. or surrender the mortgaged vehicle immediately upon receiving the letter. The contract provides.7 Despite this. 2005 Decision 3 of the Regional Trial Court. Branch 33. Citimotors. The contentions are untenable.04. likewise assigned the same to respondent BPI Family Savings Bank. the subject vehicle was not seized.664. petitioners shall pay Php 17. 2002. hence. Inc. PERALTA. because the Deed of Assignment executed in its favor did not specifically mention ABN AMRO’s account receivable from petitioners. 2002 an action for Replevin and Damages before the Manila Regional Trial Court (RTC). and (3) respondent’s remedy of resorting to both actions of replevin and collection of sum of money is contrary to the provision of Article 14849 of the Civil Code and the Elisco Tool Manufacturing Corporation v. the loan is secured by a 2001 Mitsubishi Adventure Super Sport.391. 768. Court of Appeals10 ruling. which affirmed the August 11. 2007 Decision 1 and May 19. and the costs of suit. (ABN AMRO). denied the motion for reconsideration.: This is a petition for review on certiorari assailing the April 30. 8 Trial on the merits ensued. On February 15. 33 ruled for the respondent and ordered petitioners to jointly and severally pay the amount of Php576. Inc. among others. respondent filed on October 4. 2002 until fully paid.4 On the same day. Respondent. 86021.664. On August 11.04 plus interest at the rate of 72% per annum from August 20. petitioners argue that: (1) respondent has no cause of action. through counsel. on May 31. CV No. but the CA affirmed the lower court’s decision and. Manila City. 2002. Before this Court. Inc. petitioners spouses Deo Agner and Maricon Agner executed a Promissory Note with Chattel Mortgage in favor of Citimotors.00 every 15th day of each succeeding month until fully paid.Republic of the Philippines SUPREME COURT Manila THIRD DIVISION G. With respect to the first issue. sent to petitioners a demand letter dated August 29. title and interests in the Promissory Note with Chattel Mortgage to ABN AMRO Savings Bank. Petitioners. 182963 June 3. 2002.R. BPI FAMILY SAVINGS BANK. No. 2005. 2013 and MARICON AGNER. it would be sufficient to state that the matter surrounding the Deed of Assignment had DECISION .R.00. that: for receiving the amount of Php834. SPOUSES DEO AGNER vs. which. and an interest of 6% per month shall be imposed for failure to pay each installment on or before the stated due date. Petitioners appealed the decision to the Court of Appeals (CA). assigned all its rights. 2002 to August 15.. respondent. 6 As the demand was left unheeded. Inc.5 For failure to pay four successive installments from May 15. 2001. this petition. (2) petitioners cannot be considered to have defaulted in payment for lack of competent proof that they received the demand letter. A writ of replevin was issued.
We look into the Promissory Note with Chattel Mortgage. Rule 60 of the Rules of Court that requires the applicant to make a demand on the possessor of the property before an action for a writ of replevin could be filed. petitioners were not able to make a formal offer of evidence considering that they have not marked any documentary evidence during the presentation . or notifications of any judicial or extrajudicial action shall be sent to the MORTGAGOR at the address indicated on this promissory note with chattel mortgage or at the address that may hereafter be given in writing by the MORTGAGOR to the MORTGAGEE or his/its assignee. The mere act of sending any correspondence by mail or by personal delivery to the said address shall be valid and effective notice to the mortgagor for all legal purposes and the fact that any communication is not actually received by the MORTGAGOR or that it has been returned unclaimed to the MORTGAGEE or that no person was found at the address given. it is an issue of fact that is not a proper subject of a petition for review under Rule 45. or that the address is fictitious or cannot be located shall not excuse or relieve the MORTGAGOR from the effects of such notice. To note. Perusing over the records. Likewise. the Court even ruled in Navarro v. 11 Time and again. what is clear is that petitioners did not take advantage of all the opportunities to present their evidence in the proceedings before the courts below. the presumption that "a letter duly directed and mailed was received in the regular course of the mail"17 stands in the absence of satisfactory proof to the contrary. petitioners’ representation that they have not received a demand letter is completely inconsequential as the mere act of sending it would suffice. Also. without prior notice or demand. records bear that both verbal and written demands were in fact made by respondent prior to the institution of the case against petitioners. since the co-signors expressly waived demand in the promissory notes. An issue is factual when the doubt or difference arises as to the truth or falsehood of alleged facts. summonses.13 wherein We held: The Civil Code in Article 1169 provides that one incurs in delay or is in default from the time the obligor demands the fulfillment of the obligation from the obligee. since there is nothing in Section 2. Petitioners cannot find succour from Ting v. for argument’s sake. any sum which I/We are obliged to pay under this note and/or any other obligation which I/We or any of us may now or in the future owe to the holder of this note or to any other party whether as principal or guarantor x x x then the entire sum outstanding under this note shall. existence and relevancy of specific surrounding circumstances. demand was unnecessary for them to be in default. there is really no need for it because petitioners legally waived the necessity of notice or demand in the Promissory Note with Chattel Mortgage.already been considered by the trial court and the CA. or when the query invites calibration of the whole evidence. We found insufficient the mere presentation of a copy of the demand letter allegedly sent through registered mail and its corresponding registry receipt as proof of receiving the notice of dishonor. We stress that this Court is not a trier of facts and generally does not weigh anew evidence which lower courts have passed upon. Neither have they demonstrated any written requests to respondent to furnish them with official receipts or a statement of account. immediately become due and payable. subpoenas. Thus. their relation to each other and to the whole. As to the second issue. that no demand letter was sent by respondent. including demand letters. (Emphasis and underscoring supplied) A provision on waiver of notice or demand has been recognized as legal and valid in Bank of the Philippine Islands v. As a higher quantum of proof – that is. which provides: All correspondence relative to this mortgage. 22 or the Bouncing Checks Law. and the probabilities of the situation. proof beyond reasonable doubt – is required in view of the criminal nature of the case. Court of Appeals. Hence. the law expressly provides that demand is not necessary under certain circumstances. 16 (Emphasis and underscoring supplied) The Court cannot yield to petitioners’ denial in receiving respondent’s demand letter. Escobido 15 that prior demand is not a condition precedent to an action for a writ of replevin. Court of Appeals 18 simply because it pertained to violation of Batas Pambansa Blg. 12 Even assuming. and one of these circumstances is when the parties expressly waive demand. Worse. They miserably failed to produce the original cash deposit slips proving payment of the monthly amortizations in question. Not even a photocopy of the alleged proof of payment was appended to their Answer or shown during the trial. However. which they voluntarily and knowingly signed in favor of respondent’s predecessor-in-interest. Again. considering mainly the credibility of witnesses.14 Further. their postal address evidently remained unchanged from the time they executed the Promissory Note with Chattel Mortgage up to time the case was filed against them. Said contract expressly stipulates: In case of my/our failure to pay when due and payable.
after two (2) years and eight (8) months. Susan Doe and other person or persons in whose possession the said motor vehicle may be found. The car was not returned to private respondent until April 16. ON THE SECOND CAUSE OF ACTION To forthwith issue a Writ of Replevin ordering the seizure of the motor vehicle more particularly described in paragraph 3 of the Complaint.24 The debtor has the burden of showing with legal certainty that the obligation has been discharged by payment. 27 The Court therein ruled: The remedies provided for in Art. 21 Respondent's possession of the Promissory Note with Chattel Mortgage strongly buttresses its claim that the obligation has not been extinguished. A promissory note in the hands of the creditor is a proof of indebtedness rather than proof of payment. Likewise.054. plus interest at the legal rate. PRAYER COMMON TO ALL CAUSES OF ACTION 1. for and as attorney's fees. 1989.054. repossession. 1485 was fulfilled in this case by the filing by petitioner of the complaint for replevin to recover possession of movable property. John Doe. Court of Appeals. Petitioner prayed that private respondents be made to pay the sum of P39. In an action for replevin by a mortgagee. it prayed for the issuance of a writ of replevin or the delivery to it of the motor vehicle "complete . it is prima facie evidence that the promissory note has not been paid. 1485.of Deo Agner’s testimony. and direct deliver thereof to plaintiff in accordance with law. not cumulative. Plaintiff also prays for such further reliefs as this Honorable Court may deem just and equitable under the premises. the burden rests on the defendant to prove payment. plaintiffs pray that judgment be rendered as follows: ON THE FIRST CAUSE OF ACTION Ordering defendant Rolando Lantan to pay the plaintiff the sum of P39. Ordering defendants to pay the costs of suit. in civil cases.26 In Elisco. petitioner's complaint contained the following prayer: WHEREFORE. At the same time. 20 When the creditor is in possession of the document of credit. As held in Bank of the Philippine Islands v. upon issuance by the Court of Appeals of a writ of execution.86. there is no violation of Article 1484 of the Civil Code and the Court’s decision in Elisco Tool Manufacturing Corporation v. This limitation applies to contracts purporting to be leases of personal property with option to buy by virtue of Art. Spouses Royeca:22 x x x The creditor's possession of the evidence of debt is proof that the debt has not been discharged by payment.25 Lastly. an uncanceled mortgage in the possession of the mortgagee gives rise to the presumption that the mortgage debt is unpaid. from defendant Rolando Lantan and/or defendants Rina Lantan. and 3. rather than on the plaintiff to prove non-payment. and after due hearing to confirm said seizure and plaintiff's possession over the same. the burden of proving that it has been extinguished by payment devolves upon the debtor who offers such defense to the claim of the creditor. bonding fees and other incidental expenses to be proved during the trial. 2. the deputy sheriff seized the vehicle on August 6. 1484 are alternative. The condition that the lessor has deprived the lessee of possession or enjoyment of the thing for the purpose of applying Art. The exercise of one bars the exercise of the others. one who pleads payment has the burden of proving it. complete with accessories and equipment. Ordering defendants to pay the cost or expenses of collection. By virtue of the writ of seizure issued by the trial court. Ordering the defendant Rolando Lantan to pay the plaintiff an amount equivalent to twenty-five percent (25%) of his outstanding obligation.19 Jurisprudence abounds that.23 Indeed.86 plus legal interest from the date of demand until the whole obligation is fully paid. when the existence of a debt is fully established by the evidence contained in the record. the amount that they were supposed to pay as of May 1986. 1986 and thereby deprived private respondents of its use. proof of non-payment is not needed for it is presumed.
R. (b) Or.00. The trial court. together with the Registration Certificate thereof. Petitioners spouses Deo Agner and Maricon Agner are ORDERED to pay. nothing in the said circular could possibly be read as granting carte blanche authority to lenders to raise interest rates to levels which would either enslave their borrowers or lead to a hemorrhaging of their assets. the petition is DENIED and the Court AFFIRMS WITH MODIFICATION the April 30.857. "plus accrued monthly rentals thereof with interests at the rate of fourteen percent (14%) per annum until fully paid. and (2) the costs of suit. thus. PERALTA Associate Justice WE CONCUR: Republic of the Philippines SUPREME COURT . effectively removed the ceiling on interest rates for both secured and unsecured loans. iniquitous. 2002 until full payment and with the remaining outstanding balance of their car loan as of May 15. SO ORDERED. 905-82.with accessories and equipment. We are of the opinion that the interest of 6% per month should be equitably reduced to one percent (1%) per month or twelve percent (12%) per annum. DIOSDADO M. in the event that manual delivery of the said motor vehicle cannot be effected to render judgment in favor of plaintiff and against defendant(s) ordering them to pay to plaintiff." Certainly. CV No. which took effect on January 1.33 WHEREFORE. and (2) costs of suit. even assuming that private respondents have defaulted in the payment of their obligation. This led the trial court to say that petitioner wanted to eat its cake and have it too. the sum ofP576. rightfully granted the alternative prayer for sum of money. bonding fees and other expenses incurred in the seizure of the said motor vehicle. respondent BPI Family Savings Bank. the interest rate may be reduced as reason and equity demand. 31 While Central Bank Circular No. to order defendant(s) to pay jointly and severally: (1) the sum of P297. and direct the delivery thereof to plaintiff in accordance with law and after due hearing. unconscionable. it was prayed that private respondent Rolando Lantan be made to pay petitioner the amount of P60. it is as if there was no express contract on said interest rate." In the event the car could not be delivered to petitioner. Inc. As there was no seizure that transpired.664. Plaintiff further prays for such other relief as this Honorable Court may deem just and equitable in the premises.04 plus interest and/or late payment charges thereon at the rate of 72% per annum from August 20. 2002 as the base amount.000. jointly and severally. it cannot be said that petitioners were deprived of the use and enjoyment of the mortgaged vehicle or that respondent pursued. complete with all its accessories and equipments. 86021. commenced or concluded its actual foreclosure. 1âwphi1 All the foregoing notwithstanding. (c) In either case. 29 Compared with Elisco. ( 1) the remaining outstanding balance of their auto loan obligation as of May 15. and exorbitant. and upon filing and approval of the bond. to confirm the said seizure. 2007 Decision and May 19. Settled is the principle which this Court has affirmed in a number of cases that stipulated interest rates of three percent (3%) per month and higher are excessive. the vehicle subject matter of this case was never recovered and delivered to respondent despite the issuance of a writ of replevin. liquidated damages. respondent in this case prayed: (a) Before trial. 28 In contrast." This prayer of course cannot be granted.54 as attorney’s fees.32 Since the stipulation on the interest rate is void for being contrary to morals. therefore. regardless of maturity. 2008 Resolution of the Court of Appeals in CA-G. 2002 with interest at one percent ( 1 o/o) per month from May 16. which is equivalent to the remedy of "exacting fulfillment of the obligation. 2002 until fully paid. the "estimated actual value" of the car. there is no double recovery or unjust enrichment30 to speak of. 2002 until fully paid. jointly and severally. 1983. to be reckoned from May 16. to forthwith issue a Writ of Replevin ordering the seizure of the motor vehicle above-described. if not against the law.
Ernesto filed with the PARAD a petition 6 for ejectment and collection of back lease rentals against the respondents. disputed the validity of the purchase. the respondents attached copies of rental payment receipts 10 for the crop years 1988-1998 issued by Corazon Quiambao and Laureano Quiambao. Petitioner. for which reasons the decision became final. 2000. and on April 6. 12 Andres and Fernando added that. Although duly served with summons. the PARAD . 2005 decision 3 of the Department of Agrarian Reform Adjudication Board (DARAB) in DARAB Case No. the father of respondents Andres and Fernando. and ordered the respondents to vacate the subject property and to pay the lease rentals in arrears.: We resolve in this Rule 45 petition for review on certiorari 1 the challenge to the November 28. he verbally demanded that the respondents pay the lease rentals. Gapan. 2006 decision 2 of the Court of Appeals (CA) in CA-G. 1999 decision. Respondents. the authorized representatives of Aurora Yuzon. 8 On May 4. these also led to their belated discovery of the approved Barangay Committee for Land Production (BCLP) valuation. 7 Thus. 1988. In his petition.997 square meter parcel of agricultural land (subject property) situated in Sitio Balanti. Nueva Ecija. the respondents failed to answer Ernesto’s petition and were deemed to have waived their right to present evidence. Andres Mariano and Doroteo Garcia. NATIVIDAD. they are now the new beneficiaries or allocatees of the lots covered by Diego’s CLT. owned and registered in the name of Esperanza Yuzon under Transfer Certificate of Title No. 2000. the respondents. The PARAD granted Ernesto’s petition in its October 27. Lastly. They cited these reasons as their excusable negligence justifying the grant of the relief from judgment prayed for.11 They added that Diego Mariano. 14 The PARAD declared that none of the grounds for the grant of a petition for relief exists and can be invoked against its October 27. Ernesto alleged that he purchased the subject property in a public auction held on July 17. they have an approved valuation report issued by the BCLP. The respondents are the tenants of the subject property. The DARAB ruling.R. through a private law firm. Despite his repeated demands. On June 7. The respondents did not appeal the decision despite due notice. 10051.Manila SECOND DIVISION G. as heirs of Diego. 1973. The respondents claimed that their inexperience and lack of knowledge of agrarian reform laws and the DARAB Rules of Procedure prevented them from appearing before the PARAD in due course. FERNANDO MARIANO. or could have prevented the respondents from taking an appeal. the PARAD denied the respondents’ first petition. vs. the respondents pointed out that as of the year 2000. finding no sufficient basis for its grant. NT-15747. filed an Appearance and Petition for Relief from Judgment9 (first petition) on the ground of excusable negligence.R. 13 Finally. the PARAD granted Ernesto’s motion for the issuance of a writ of execution. The Factual Antecedents At the core of the dispute in this case is a 66. The assailed decision affirmed the February 21. and respondent Doroteo were issued Certificates of Land Transfer (CLTs) on July 28. The PARAD found merit in Ernesto’s unrebutted allegations. despite due notices. The records show that the respondents were duly notified of the scheduled hearing date and of the issuance of its decision. 2000. prompting him to orally request the respondents to vacate the subject property. the respondents refused to pay. SP No. 1999 decision. the respondents failed to appear and to appeal. alternatively. the respondents denied knowledge of Ernesto’s purchase of the subject property and. They averred that they had been paying lease rentals to the landowner. 89365. the PARAD’s decision became final and executory. DECISION BRION. The PARAD allowed the case to proceed ex parte. Immediately after the purchase. He filed the petition when the respondents refused his demand to vacate. reversed the decision 4 dated October 27. In support of their position. J. 1999 of the Provincial Agrarian Reform Adjudication (PARAD) of Nueva Ecija granting the petition for ejectment and collection of back lease rentals filed by petitioner Ernesto L. 2013 ERNESTO L. In answer to Ernesto’s allegations. Natividad against respondents Fernando Mariano.5 On December 23. No. 1998. in turn. 179643 June 3. ANDRES MARIANO and DOROTEO GARCIA.
no lawful cause existed for the ejectment of the respondents as tenants. It was bound by these findings since the findings of the DARAB were supported by substantial evidence.20 The DARAB ordered Ernesto to maintain the respondents in the peaceful possession and cultivation of the subject property.24 The Petition Ernesto imputes on the CA the following reversible errors: first. No.19 The Ruling of the DARAB On February 21. When the PARAD denied their subsequent motion for reconsideration. The CA ruled that under Section 7 of Republic Act (R.18 the respondents appealed to the DARAB. second. the DARAB found the evidence insufficient to support Ernesto’s allegation that the respondents did not pay the lease rentals. Finally. the conclusion that the respondents cannot be ejected since they were excused from paying lease rentals to him for lack of knowledge of the legality of the latter’s acquisition of the subject property. the landowner (Ernesto) bears the burden of proving that: (1) the tenant did not pay the rentals. the DARAB granted the respondents’ appeal and reversed the PARAD’s October 27. the PARAD denied 15 the respondents’ motion for reconsideration of the June 7. 17The respondents repeated the allegations in their first petition. Ernesto appealed the February 21. The CA also declared that the DARAB did not err in taking cognizance of the respondents’ appeal and in admitting mere photocopies of the respondents’ receipts of their rental payments. the DARAB noted. 3844. and at the same time ordered the respondents to pay the rentals in arrears as computed by the Municipal Agrarian Reform Officer (MARO). 2007 resolution. controverted Ernesto’s claim. in fact. filed a second Petition for Relief from Judgment (second petition). 3844. Ernesto argues that the respondents’ admission in their pleadings and the rental receipts.A. 2005. No. 2006 decision. the landowner-lessor is prohibited from ejecting a tenant-lessee unless authorized by the court for causes provided by law.21 The Ruling of the CA In its November 28.considered that the respondents’ petition had been filed out of time. which they submitted to prove payment. The CA held that the DARAB Rules of Procedure and the provisions of R. 2000 order. never repudiated the authority of Corazon and Laureano to receive rental payments from the respondents. The respondents’ respective receipts of payment. the PARAD denied the respondents’ second petition based on technical grounds. not excused from paying the lease rentals to him.) No. As Ernesto failed to prove these elements. but added lack of sufficient financial means as the reason that prevented them from seeking appropriate legal assistance. once a leasehold relationship is established. and third. Litigation Division of the Department of Agrarian Reform (DAR). the CA noted that the issues Ernesto raised were factual in nature. the respondents. While non-payment of lease rentals is one of the enumerated causes. 2000. this time represented by the Agrarian Legal Assistance. and (2) the tenant did not suffer crop failure pursuant to Section 36 of R. He claims that the respondents had long since known that he is the new owner of the subject property when the petition for the annulment of the levy and . The CA added that the attendant facts and the respondents’ substantive right to security of tenure except the case from the application of the doctrine of immutability of judgments. 22 The CA declared that Ernesto failed to prove by clear. evidently show that the respondents paid the lease rentals to Corazon and Laureano as representatives of Esperanza and not as his representatives. the finding that he authorized Corazon and Laureano to receive the respondents’ lease rentals on his behalf. 1999 decision. the CA denied Ernesto’s petition for review for lack of merit. 2000. 2000. On July 20. 6657 (the Comprehensive Agrarian Reform Law of 1988) specifically authorize the DARAB to ascertain the facts of every case and to decide on the merits without regard to the law’s technicalities. therefore. On July 13. Ernesto filed the present petition after the CA denied his motion for reconsideration 23 in its August 10. A.25 Ernesto further insists that the respondents cannot deny knowledge of the legality of his acquisition of the subject property and are. Unlike the PARAD. positive and convincing evidence the respondents’ failure to pay the lease rentals and.16 On June 23. the ruling that the final and fully executed decision of the PARAD could still be reopened or modified.A. 2005 DARAB decision to the CA via a petition for review under Rule 43 of the Rules of Court.
The doctrine of .28 the respondents maintain that Ernesto’s purchase of the subject property is null and void. such as the situation obtaining in this case. 36 The resolution of factual issues is the function of the lower tribunals or bodies whose findings.32 Lastly. 33 The Issue The case presents to us the core issue of whether Ernesto had sufficient cause to eject the respondents from the subject property.A.31 The respondents further contend that the doctrine of immutability of judgments does not apply where substantive rights conferred by law are impaired. observes this Rule 45 proscription as this Court is not a trier of facts.. when duly supported by substantial evidence and affirmed by the CA. barring its reopening or modification. Preliminary considerations As a preliminary matter. we set aside the above rules under the circumstances of this case. 26 Finally. Ernesto also violated R. No. These are factual inquiries beyond the reach of this petition. Ernesto concludes that the respondents’ inaction rendered the PARAD’s decision final and fully executed. as a rule. however. The courts’ power to suspend or disregard rules justified the action taken by the DARAB (as well as the CA in affirming the former) in altering the decision of the PARAD although it had been declared final.38 In the present petition.27 The Case for the Respondents In their comment. when . found Ernesto’s claim unsubstantiated. This conflict in the factual conclusions of the PARAD and the DARAB on the alleged non-payment by the respondents of the lease rentals is one such exception to the rule that only questions of law are to be resolved in a Rule 45 petition. we reiterate the rule that a petition for review on certiorari under Rule 45 of the Rules of Court shall raise only questions of law. 6657. i.through the PARAD’s final decision . Ernesto maintains that despite due receipt of their respective copies of the PARAD’s decision. The Court. In effect. as in this case.29 Ernesto’s subsequent purchase of the subject property via the execution sale cannot work to defeat such rights as any sale of property covered by a CLT violates the clear and express mandate of Presidential Decree (P. and resolve it on the merits. Ernesto essentially argues that the CA erred in ruling that he failed to sufficiently prove any cause to eject the respondents from the subject property. which the respondents filed against him. bind the CA. when supported by substantial evidence.execution sale. Ernesto asks this Court to reexamine and reevaluate the probative weight of the evidence on record. The Court’s Ruling We DENY the petition. that title to land acquired pursuant to the Act is not transferable. Doctrine of immutability of judgments We cannot blame Ernesto for insisting that the PARAD decision can no longer be altered. 27. On the issue of the DARAB’s grant of the respondents’ appeal.e. 30 In fact. the PARAD gave credit to Ernesto’s claim that the respondents did not pay the lease rentals. The respondents contend that both Diego and Doroteo acquired rights over the subject property when they were granted a CLT in 1973. we have deviated from the above rules. the respondents posit that the CA did not err in upholding the DARAB’s ruling since the findings of facts of quasi-judicial bodies. was decided in his favor.39 Under exceptional circumstances. Ernesto claims that the CA erred in disregarding the doctrine of immutability of final judgments simply on the respondents’ feigned ignorance of the rules of procedure and of the free legal assistance offered by the DARAB.he ejected the respondents from the subject property. in contrast.D. The DARAB. 40 Thus. In the present case. bind this Court. the respondents nevertheless still failed to seek reconsideration of or to appeal the PARAD’s decision.) No.34 A question that invites a review of the factual findings of the lower tribunals or bodies is beyond the scope of this Court’s power of review35 and generally justifies the dismissal of the petition.37 The reviewable question sanctioned by a Rule 45 petition is one that lies solely on what the law provides on the given set of circumstances.
employing all reasonable means to ascertain the facts of every case in accordance with justice and equity. on some definite date fixed by law. 50 the DARAB and its adjudicators "shall not be bound by technical rules of procedure and evidence as prescribed in the Rules of Court. they filed their first petition on May 4. is well settled. mistake and excusable neglect x x x. A petition for relief from the judgment of the PARAD is governed by Section 4. we also find that the respondents filed their petition well within the prescriptive period. 2000 or five months after. after all. Relief from Judgment. 2000 49 or 35 days before they filed their first petition. In their first and second petitions. disputes or controversies in a most expeditious manner. the respondents invoked the ground of excusable negligence. the records show that the respondents received a copy of the PARAD’s October 27. The records. 1999 decision on December 10. The same provision also presents two periods that must be observed for such grant – 90 days and six months. First.43 The judgment of courts and the award of quasi-judicial agencies must.41 whether the modification is to be made by the court that rendered it or by the highest court of the land. because the PARAD denied the respondents’ petition for relief from judgment simply on a sweeping declaration that none of the grounds for the grant of the petition exists and that the petition had been filed out of time. Clearly. we are not persuaded that the DARAB and the CA erred in reopening. We are also convinced that the respondents complied with the twin period requirement set by Section 4. and ruling on the merits of the case. but shall proceed to hear and decide all agrarian cases. as well as indigence. despite the lapse of ten months from the respondents’ notice of the PARAD’s decision.45 This doctrine of immutability of judgments notwithstanding.taken altogether sufficiently convince us that the respondents’ negligence is more than excusable and constitutes a justifiable ground for the grant of their petition for relief. accident. the PARAD effectively and gravely abused its discretion and acted without jurisdiction in denying the petition for relief from judgment. They alleged that they failed to appear before the PARAD due to their inexperience and ignorance of agrarian reform laws and of the DARAB Rules of Procedure. once a decision has attained finality. In the present petition. Provided. We construe this date as the time when the respondents discovered the adverse consequence of their failure to answer. however. become final even at the risk of occasional errors. sufficiently contradict the PARAD’s reasons for denying the respondents’ petition for relief. seek reconsideration or appeal the PARAD’s decision. following our above discussion that the respondents had sufficiently shown grounds for the grant of their petition.42 The doctrine holds true even if the modification is meant to correct erroneous conclusions of fact and law. accident. This is the precise situation that we presently find before this Court. the respondents filed their petition well within 6 months from their notice of the PARAD’s decision and within 90 days from the discovery of their excusable negligence. 46 If the rigid and pedantic application of procedural norms would frustrate rather than promote justice. not only do we find justifiable grounds for its grant. 44 The only accepted exceptions to this general rule are the correction of clerical errors. it becomes immutable and unalterable and may no longer be modified in any respect. at the earliest. Second. the so-called nunc pro tunc entries which cause no prejudice to any party. 47 particularly if defects of jurisdiction appear to be present. that the petition is filed with the Adjudicator a quo within three (3) months from the time the fraud.immutability of final judgments. the DARAB granted the respondents’ appeal. Based on these considerations. Under Section 3. accident. the Court always has the power to suspend the rules or except a particular case from its operation. Rule IX of the 1994 DARAB Rules of Procedure. [italics supplied. we are convinced that the DARAB did not err in granting the respondents’ appeal despite the procedural lapses. These circumstances – their averred ignorance coupled with financial constraints if not outright poverty . It reads in part: SECTION 4. and whenever circumstances transpire after the finality of the decision which render its execution unjust and inequitable. The broader interests of justice and equity demand that we set aside procedural rules as they are. we perforce count the 90-day period from the respondents’ discovery of their excusable negligence. Thus. intended to promote rather than defeat substantial justice. emphasis ours] A reading of Section 4 shows that four grounds justify the grant of the petition for relief from judgment. which was when they were evicted from the subject property on June 9." The same provision is . mistake and excusable negligence. A petition for relief from judgment must be verified and must be based on grounds of fraud. grounded on the fundamental principle of public policy and sound practice. namely: fraud. 1999. Indeed. Rule I of the 1994 DARAB Rules of Procedure. Rule IX of the 1994 DARAB Rules of Procedure48 (the governing DARAB rules at the time Ernesto filed his complaint). resolution or decision from which relief is sought. mistake or excusable neglect was discovered and six (6) months from notice of order. void judgments.
cannot accord any merit to his claim that he made such demands. Ernesto should be deemed to have made his demand only at the time he filed the petition for ejectment before the PARAD.57 deliberate refusal or continued refusal to pay the lease rentals by the agricultural lessee for a period of two (2) years shall. No. 58 Mere failure of an agricultural lessee to pay the agricultural lessor's share does not necessarily give the latter the right to eject the former absent a deliberate intent on the part of the agricultural lessee to pay. upon hearing and final judgment. absent any supporting evidence. Our review of the records shows that Ernesto did not present any evidence. 6657 further reiterates. We. Finally.D. His allegation. Additionally.A. result in the cancellation of the CLT issued in the agricultural lessee’s favor. No. In sum. The term "deliberate" is characterized by or results from slow. In our view. we do not find the respondents’ alleged non-payment of the lease rentals sufficient to warrant their dispossession of the subject property. Non-payment of lease rentals as ground for eviction of tenants. When confronted with the respondents’ defense of due payment with supporting documentary evidence of it. in order to protect this right. 3844. The respondents’ alleged non-payment did not last for the required twoyear period. 3844 upon which Ernesto heavily relied. to prove that he demanded from the respondents the payment of the lease rentals. Ernesto countered that their payments should not be considered as he did not authorize Corazon and Laureano to receive the payments on his behalf.51 Section 36 of R. assuming that Ernesto made such demands. that the security of tenure previously acquired shall be respected.52 The subsequent R.54 Thus. First. No.A. These allegations pose to us three essential points that we need to address. and only for the specifically enumerated causes.A. 3844 rests the burden of proving the existence of a lawful cause for the ejectment of the agricultural lessee on the agricultural lessor. we do not . the respondents’ rental payments were not yet due and the respondents were not in default at the time Ernesto filed the petition for ejectment as Ernesto failed to prove his alleged prior verbal demands. in order to warrant his dispossession of the landholding. 816. We again rule in the NEGATIVE on the second point. No. 3844 ordains that once the tenancy relationship is established. while the term "willful" is defined. such as the affidavit of the person or persons present at that time. At this point. justifying the relaxation of the rules and the DARAB’s grant of the respondents’ appeal.A. second. No.A. the respondents were not yet in delay 55 and could not be deemed to have failed in the payment of their lease rentals. To reiterate our discussion above. Non-payment of the lease rentals whenever they fall due is a ground for the ejectment of an agricultural lessee under paragraph 6. Section 37 of R. after due notice and hearing.) No. Accordingly. we rule that the DARAB correctly allowed the respondents’ appeal despite the lapse of the reglementary period. whether the respondents deliberately failed or continuously refuse to pay the lease rentals. must be willful and deliberate and must have lasted for at least two (2) years. 3844 strengthens this right by providing that the agricultural lessee has the right to continue the enjoyment and possession of the landholding and shall not be disturbed in such possession except only upon court authority in a final and executory judgment. whether the lease rentals paid by the respondents to Corazon and Laureano are valid.essentially embodied in R. therefore. as one governed by will without yielding to reason or without regard to reason. Landowner with burden to prove sufficient cause for eviction Section 7 of R. a tenant or agricultural lessee is entitled to security of tenure.A. The agricultural lessee's failure to pay the lease rentals. thorough calculation and consideration of effects and consequences.53 Ernesto’s petition for ejectment against the respondents was anchored precisely on the latter’s alleged non-payment of the lease rentals beginning 1988 until 1998 despite his repeated verbal demands. whether Ernesto indeed made demands on the respondents for the payment of the lease rentals. and third. is nothing more than a hollow claim under the rule that he who alleges a fact has the burden of proving it as mere allegation is not evidence. considerations of equity. justice and jurisdiction surround this case. assuming arguendo that the respondents failed to pay the lease rentals. careful. Section 36 of R.59 In the present petition. we cannot impute error on the CA in not reversing the DARAB’s decision simply under the doctrine of immutability of judgments. We rule in the NEGATIVE on the first point. 56 In relation to Section 2 of Presidential Decree (P. under its Section 6. No.
as with P. the respondents thus cannot be faulted for continuously paying the lease rentals to Corazon and Laureano.D. A CLT is a document that evidences an agricultural lessee’s inchoate ownership of an agricultural land primarily devoted to rice and corn production. Thus. His prolonged inaction. issued on July 17. No. one of which was the full payment of the monthly amortization or lease rentals to acquire absolute ownership. Thus. 27 is accomplished in two stages: (1) issuance of a CLT to a farmer-beneficiary as soon as the DAR transfers the landholding to the farmer-beneficiary in recognition that said person is a "deemed owner". and (2) issuance of an Emancipation Patent as proof of full ownership of the landholding upon full payment of the annual amortizations or lease rentals by the farmer-beneficiary. given the absence of any objection on his part.) No. and (c) Other modes of payment as may be prescribed or approved by the Presidential Agrarian Reform Council. 228. This cannot be said of the respondents’ case.D. beginning from the time he purchased the subject property.O. we agree with their position that they have acquired rights over the subject property and are in fact deemed owners of it. In the present petition. the respondents had been paying the lease rentals to Corazon and Laureano. No. if the tenant-farmer defaults. The receipts on record show that the respondents had paid the lease rentals for the years 1988-1998. However. P. the landowner is . With no demand coming from Ernesto for the payment of the lease rentals for ten years. marked by complete absence of any payment.O. without any deliberate and willful refusal to pay lease rentals for two years. the records show that the respondents were members of a Samahang Nayon. All the while. To be deliberate or willful.D. at the very least. The pertinent portion reads: SECTION 3.consider the failure to be deliberate or willful. No. with ten percent (10%) of the value of the land payable immediately in cash.D. 27. with the cooperative having a right of recourse against the farmer. at the option of the landowners: (a) Bond payment over ten (10) years. which it shall hold in trust for the landowner. we rule in the AFFIRMATIVE on the third point. 27 ordains that the amortization due shall be paid by the farmer’s cooperative where the defaulting tenant-farmer is a member. 27. Diego and respondent Doroteo were deemed the owners of the subject property pursuant to P. 27. Import of the respondents’ CLT Diego and respondent Doroteo were undoubtedly awarded CLTs over the subject property pursuant to P. Compensation shall be paid to the landowners in any of the following modes. Finally. under this scheme. No. Ernesto should have demanded from the respondents the payment of the lease rental soon after he purchased the subject property.60 It is the provisional title of ownership 61 issued to facilitate the agricultural lessee’s acquisition of ownership over the landholding. [emphases supplied] In the event a dispute arises between the landowner and the tenant-farmer on the amount of the lease rentals. he only demanded the payment of the lease rentals in 1998. the Land Bank of the Philippines shall still process the payment of the landowner’s compensation claim. and the balance in the form of LBP bonds. No. Thus. modified P. 27. No. Executive Order (E. The transfer of the landholding to the agricultural lessee under P. i. Hence.e.62 The CLTs of Diego and of respondent Doroteo were issued in 1973. the respondents’ ejectment from the subject property. No.D.D. No. 27 on the manner of payment and provided for different modes of payment of the value of the land to the landowner. based on this ground. pending resolution of the dispute. Thus. In any case. 1987.63 In the event the tenant-farmer defaults in the payment of the amortization. the landowner is assured of payment since the farmers’ cooperative will assume the obligation. 228 provides that the DAR and the concerned BCLP shall resolve the dispute. but subject to the compliance with certain conditions and requirements. Section 2 of E. as of 1973. the non-payment of lease rentals must be absolute. led the respondents to consider Corazon and Laureano to still be the authorized payees of the lease rentals. Ernesto purchased the subject property in 1988. Pursuant to P. Ernesto should have claimed the unpaid lease rentals or amortizations from the respondents’ Samahang Nayon. in demanding the payment of the lease rentals or asserting his right to receive such rentals.D. is baseless and unjustified. (b) Direct payment in cash or in kind by the farmer-beneficiaries with the terms to be mutually agreed upon by the beneficiaries and landowners and subject to the approval of the Department of Agrarian Reform.. whether by intention or negligence.
and the DARAB is directed to ensure the immediate restoration of possession of the subject property to the respondents.D. series of 1973. Sp No. 1988. 27 is prohibited. 228. 27 and E. 6657. we AFFIRM with MODIFICATION the decision dated November 28. series of 1978. BRION* Associate Justice WE CONCUR: .O. italics supplied) Following these guarantees to the landowner under P. 1988. ARTURO D. the concerned BCLP has already issued an approved valuation for the subject property.65 Thus. as well as R. 1âwphi1 As a final note.A. Diego waived his right over the 3-hectare. series of 1978. In light of this decree. series of 1973. we point out that under P. 6657. we cannot agree with the DARAB’s ruling that the MARO should assist the parties in executing a new leasehold contract. E. No. Diego and respondent Doroteo are valid holders of CLTs. 2007 of the Court of Appeals in CA-G.A. physical assets or other qualified investments in accordance with guidelines set by the PARC. in relation to Department Memorandum Circular No. pursuant to R. (3) Tax credits which can be used against any tax liability. the manner and the mode of payment were further modified with the options available to the landowner. To recall. provided as follows: "SECTION 18. Natividad is ORDERED to immediately surrender possession of the subject property to the respondents. Hence. No. (2) Shares of stock in government-owned or controlled corporations.64 In addition. the clear rule is that notwithstanding the non-payment of the amortization to the landowner. and the related issuances and regulation of the DAR. Natividad in accordance with R. we must remand the case to the DAR for the proper determination of the manner and mode of payment of the full value of the subject property to Ernesto. -19. 228. 27 and R. No.R. 2006 and the resolution dated August 10. save only by hereditary succession or to the Government.D. the ownership and cultivation of the landholding must ultimately be consolidated in one heir who possesses the requisite qualifications. — x x x xxxx (1) Cash payment.A. No. 19. WHEREFORE. Petitioner Ernesto L. Department Memorandum Circular No. No costs. (4) LBP bonds. 6657. No. Valuation and Mode of Compensation. No. We REMAND the case to the Department of Agrarian Reform for the: (1) proper determination of the manner and mode of payment of the full value of the land to petitioner Emesto L. and (2) proper determination of the successor-ininterest of Diego Mariano as the farmer-beneficiary to the landholding covered by his CLT. Under these circumstances. effectively. which ordered the respondents to surrender the possession of the subject property to Ernesto as this was in clear contravention of the objectives of the agrarian reform laws. 6657 on June 10. 228. 228. in accordance with the provisions of Ministry Memorandum Circular No.D. we hold that the DARAB correctly reversed the decision of the PARAD. with each obtaining an equal half interest. No. as of the year 2000. This arrangement directly contravenes Ministry Memorandum Circular Nd. 26. No. under paragraph 2 of the memorandum circular. 26. as in this case. LBP preferred shares. Nevertheless. and other related issuances and regulation of the Department of Agrarian Reform. should the farmer-beneficiary have several heirs.assured of payment of the full value of the land under E. No.O No.O.A.lot covered by his CLT (which formed part of the subject property) in favor of his two sons. reversion of the landholding to the landholder is absolutely proscribed. Also. Andres and Fernando. the proper procedure is for Ernesto and the DAR to agree on the manner of processing the compensation payment for the subject property. 89365. 6657. the transfer or waiver of the landholding acquired by virtue of P. the tenant-farmer retains possession of the landholding. No. This memorandum circular specifically proscribes the partition of the landholding.A." (emphases ours. in view of these considerations. SO ORDERED. we observe that on April 11. Executive Order No. With the enactment of R. Andres and Fernando must agree on one of them to be the sole owner and cultivator of the lot covered by Diego's CLT. x x x.
Donnabel Deloy. 1965. Maria Deloy-Masicap. 2006 Resolution 3 and the September 27. Zosimo Deloy. Edgardo Deloy. Isagani L. Domingo Deloy. which affirmed the dismissal of an unlawful detainer case by the Municipal Trial Court in Cities of Trece Martires City (MTCC).R. Rogelio Deloy.Republic of the Philippines SUPREME COURT Manila THIRD DIVISION G. The Facts On July 8. vs.550 square meters located in Trece Martires City (Trece Martires property). Ronnio Deloy. Cynthia Deloy. Arnel Deloy. Trece Martires City. Respondents are the owners. HEIRS OF SPOUSES DIONISIO DELOY and PRAXEDES MARTONITO. 2013 MANILA ELECTRIC COMPANY. J. in CA-G. DECISION MENDOZA. Dionisio. Evelyn Deloy. Glenda Deloy. Mario Deloy. and Policarpio Deloy (respondents). The challenged decision set aside the May 4. Lino Deloy. 96998. of a parcel of land consisting of 8. On November 12. represented by Policarpio Deloy. 2010 Resolution 2 of the Court of Appeals (CA).Respondents. 2009 Decision' and the July 5. Adelina Banta. Norma Deloy. 192893 June 5. 2003. Reyes. respondents’ predecessor-in-interest. represented by POLICARPIO DELOY. instituted the Complaint for Unlawful Detainer 5 against Manila Electric Company (MERALCO) before the MTCC. Petitioner. by way of succession. Maricel Deloy. . Cornelio Deloy. all heirs of Spouses Dionisio Deloy (Dionisio) and Praxedes MartonitoDeloy. Silveria Deloy-Mabiling. Branch 23 (RTC). SP No.: Before the Court is a petition for review on certiorari under Rule 45 of the Rules of Court seeking the reversal of the November 9. Milagros Panganiban.R. No. 2006 Order 4 of the Regional Trial Court.
donated a 680-square meter portion (subject land) of the 8. and a request that a member of the Deloy family be employed by MERALCO were some of the reasons. 2006 Order. its electric distribution system. The RTC pointed out that the only issue in an unlawful detainer case was possession. through its Assistant Vice President and Head of the Legal Department. Not satisfied with the adverse ruling. the RTC sustained the MTCC decision. 2006. MERALCO occupied the subject land. On October 11. dated May 4. 2001 Decision. In its November 9. Respondents moved for reconsideration but their motion was denied by the RTC in its September 27. CEDA offered for sale to MERALCO. respondents claimed that they had no immediate use for the subject land and that they were preoccupied with the judicial proceedings to rectify errors involving the reconstituted title of the Trece Martires property. MERALCO did not move out of the subject land. and customer meters and all rights and privileges necessary for providing electrical service in Cavite. 2013. MERALCO countered that CEDA. L. Sometime in 1985. it opined that MERALCO was entitled to the possession of the subject land. 1985. 7dated June 28. 2006 Resolution. 11 dated May 19. not merely incidental. it was stated that the death of Dionisio. Thus. In an internal memorandum. service drops. It was of the view that it would only be when the deed of donation would be revoked or the deed of sale nullified that MERALCO’s possession of the subject land would become unlawful. it had legal justification to occupy the subject land. lawfully sold to it all rights necessary for the operation of the electric service in Cavite by way of a deed of sale on June 28. The parties were not able to reach any agreement. CEDA and MERALCO executed the Deed of Absolute Sale. Torres). 1985.550 square meter property to the Communications and Electricity Development Authority (CEDA) for the latter to provide cheap and affordable electric supply to the province of Cavite.D. Thereafter. signed by the parties. Thus. 1985. the instant Petition is GRANTED. Despite the written demand. and Order. the interpretation of the deed of sale and the deed of donation was the main. from L. MERALCO. MERALCO stressed that the condition of providing affordable electricity to the people of Cavite. Traversing respondents’ complaint. Gonzales and Atty.G. Nevertheless. respondents demanded that MERALCO vacate the subject land on or before June 15. Torres (Atty. The assailed Resolution. On September 15. but their offer was rejected. the proceedings were terminated and the decision became final. respondents were constrained to file the complaint for unlawful detainer. wires. For said reason. MERALCO claimed that. On the same date.R. issue. 1985. respondents appealed the MTCC ruling to the RTC. It affirmed the MTCC ruling that the latter had no jurisdiction to interpret contracts involving the sale of the subject land to MERALCO.respondents offered to sell the subject land to MERALCO. respondents elevated the case before the CA via a petition for review under Rule 42 of the Rules of Court. This was embodied in a memorandum of agreement (MOA). 2003. poles and hardware. 12 imposed in the deed of donation between Dionisio and CEDA. on July 8. On November 22. the lack of agreement yet among the heirs.10 Not long after. as the owner of the subject land by virtue of the deed of donation executed by Dionisio. wrote a letter8 to Dionisio requesting the latter’s permission for the continued use of the subject land as a substation site. being CEDA’s successor-in-interest. in their letter. 1985. the MTCC rendered the decision 13 dismissing respondents’ complaint for unlawful detainer against MERALCO. 9 dated December 16. 2003. De La Paz of the Trece Martires Substation of MERALCO to Atty. consisting of transformers and accessories. A deed of donation6 was executed to reflect and formalize the transfer. The fallo of the decision reads: WHEREFORE. According to the RTC. In its May 4. G. The MTCC ruled that it had no jurisdiction over the case because it would require an interpretation of the deed of donation making it one not capable of pecuniary estimation. 2005. Atty. after the approval of the MOA. Meanwhile. after the latter raised the issue of ownership of the subject land. was still being observed and complied with. Aggrieved. June 28. Torres of the Realty Division of MERALCO. 2001. the CA set aside the RTC ruling. which included the subject land. dated .
. L. the CA explained that an ejectment case. Torres. III WHETHER OR NOT TITLE TO THE PROPERTY DONATED TO CEDA WAS VALIDLY TRANSFERRED TO THE PETITIONER. Branch 23. 15 by one L.D. As to the issue of possession. Pursuant to Section 26. failing which. would not have asked permission from Dionisio if it had an unconditional or superior right to possess the subject land. these admissions and/or declarations may be admitted against Meralco. Where the plaintiff allowed the defendant to use his/her property by tolerance without any contract. DELA PAZ WHICH PURPORTEDLY RECOGNIZED RESPONDENTS’ OWNERSHIP OF THE PROPERTY CAN PREVAIL OVER THE DEED OF ABSOLUTE SALE. Unlawful detainer involved the person’s withholding from another of the possession of real property to which the latter was entitled. De la Paz to Atty.G. based on the allegation of possession by tolerance. ISSUES I WHETHER OR NOT THE COMPLAINT STATES A CAUSE OF ACTION FOR UNLAWFUL DETAINER. Respondent is ordered to vacate the subject property and to pay Petitioners the amount of P50. because the issue of physical possession is inextricably linked with the proper interpretation of the deed of donation executed between Dionisio and CEDA. 2006. Torres. an action for unlawful detainer would lie. V WHETHER OR NOT THE COMPLAINT WAS BARRED BY PRESCRIPTION AND LACHES. and P25. SUCH AS THE LETTERS DATED 11 OCTOBER 1985 OF PETITIONER’S ASSISTANT VICE PRESIDENT AND HEAD OF LEGAL DEPARTMENT. Rule 130 of the Rules of Evidence. expressly declaring Dionisio as the owner of the subject land. this petition for review.00 as attorney’s fees. up to the time Respondent shall have fully vacated the subject property. and (2) if it is. Hence. in Civil Case No. MERALCO expressly acknowledged his paramount right of possession. Further.00 monthly rental counting from June 16. Meralco even marked these letters as documentary exhibits. the MTCC was without jurisdiction to hear and decide the case. the vital issues for the Court’s consideration are: (1) whether an action for unlawful detainer is the proper remedy in this case. who has a better right of physical possession of the disputed property. II WHETHER OR NOT EVIDENCE ALIUNDE. In presenting its case before the Court.14 In partially granting the appeal. Indeed. The CA considered the fact that this recognition of Dionisio’s right over the subject land was amplified by another letter. the defendant was necessarily bound by an implied promise that he/she would vacate on demand. 2003.0000. both of the Regional Trial Court of Trece Martires City. 16 Simply put.September 27. dated December 16. Atty. would fall under the category of unlawful detainer. Costs against Respondent. are hereby SET ASIDE and a new one rendered partially granting Petitioners’ Complaint for Unlawful Detainer against Respondent. Thus. after the expiration or termination of the former’s right to hold possession under a contract.000. Accordingly. thru its representative. but for one incapable of pecuniary estimation. TMCV0055005. MERALCO. the CA stated that by seeking Dionisio’s permission to continuously occupy the subject land. TORRES AND INTERNAL MEMORANDUM DATED 6 DECEMBER 1985 OF PETITIONER’S L. MERALCO moved for reconsideration but its motion was denied by the CA in its July 5. either express or implied. MERALCO never disputed the declarations contained in these letters. SO ORDERED. Neither did it claim that the same was made through palpable mistake. MERALCO argues that respondents’ complaint before the MTCC failed to state a cause of action for unlawful detainer.G. MERALCO avers that it validly acquired title to the subject land by virtue of the deed of sale executed by CEDA in its favor on June 28. 2010 Resolution. IV WHETHER OR NOT THE SALE OF THE PROPERTY TO THE PETITIONER VIOLATED OR REVOKED THE DONATION TO CEDA. 1985.
Section 33 (2) of Batas Pambansa (B.) Blg. the CA opined that by seeking Dionisio’s permission to occupy the subject land. in such cases. The Court’s Ruling The petition lacks merit. cannot contradict the terms of the deed of sale between CEDA and MERALCO pursuant to Section 9.18 The only issue to be resolved in an unlawful detainer case is physical or material possession of the property involved. As a consequence. Resolving defense of ownership. as amended by Republic Act (R. independent of any claim of ownership by any of the parties involved. the issue of ownership shall be resolved only to determine the issue of possession. That when. it is the trial court’s duty and obligation to exercise the same when properly invoked. When the issue of ownership is raised in an ejectment case. and Municipal Circuit Trial Courts shall exercise: xxxx (2) Exclusive original jurisdiction over cases of forcible entry and unlawful detainer: Provided. an action for unlawful detainer will lie. cannot contradict the terms of the deed of sale between CEDA and . 1985. 19 An ejectment case. 16. Accordingly.20 Jurisdiction of the MTCC MERALCO contends that respondents’ complaint failed to make out a case for unlawful detainer but.1985. Right of Possession As earlier stated. 1985. Thus. the first level courts are not ipso facto divested of its jurisdiction.A. to arrive at the proper and complete determination of the question on physical possession or possession de facto. the MTCC should have taken cognizance of the complaint as it was well within its jurisdiction to do so.] xxxx In this regard. the issue of ownership shall be resolved only to determine the issue of possession. Unlawful detainer is an action to recover possession of real property from one who illegally withholds possession after the expiration or termination of his right to hold possession under any contract. 33. it is unquestionably clear that the first level courts are clothed with the power to preliminarily resolve questions on the ownership of real property. This contention fails to persuade. as amended. such as the letters. and Municipal Circuit Trial Courts in Civil Cases. Where the plaintiff allows the defendant to use his/her property by tolerance without any contract. to provisionally determine the issue of ownership for the sole purpose of resolving the issue of physical possession. Rule 13017 of the Rules of Court. falls under the category of unlawful detainer. on the issue of possession. – Metropolitan Trial Courts. It stresses the allegations in the complaint involve a prior determination on the issue of ownership before the issue of possession can be validly resolved.P.21provides: Sec. dated December 6. rather. based on the allegation of possession by tolerance. MERALCO expressly acknowledged his paramount right of possession. Municipal Trial Courts. in ejectment cases. dated October 11.) No. 1985. the defendant raises the question of ownership in his pleadings and the question of possession cannot be resolved without deciding the issue of ownership. properly cognizable by the RTC and not the MTCC. one incapable of pecuniary estimation. Municipal Trial Courts. Rule 70 of the Rules of Court allows the first level courts. Jurisdiction of Metropolitan Trial Courts. MERALCO posits that extrinsic evidence. MERALCO contends that extrinsic or extraneous evidence. and the Internal Memorandum.P. 7691. 129. The possession of the defendant in unlawful detainer is originally legal but became illegal due to the expiration or termination of the right to possess. 129. [Underscoring supplied. considering that B. Blg. dated October 11.–When the defendant raises the defense of ownership in his pleadings and the question of possession cannot be resolved without deciding the issue of ownership. Section 16. 1985 and December 6. if necessary. such as the letter request. Sec. the defendant is necessarily bound by an implied promise that he/she will vacate on demand. has distinctly defined and granted the MTCC with jurisdiction. as correctly ruled by the CA. express or implied. failing which. Moreover.
In compliance with the franchise Nationalization program of the National Government. we shall highly appreciate your kind cooperation on this matter and awaiting your reply. through its Assistant Vice President and Head of the Legal Department. Mr. The Court has combed the records and is not convinced. informing them of some obstacles in reaching a lease agreement with the Deloys. Dionisio Deloy Trece Martires City 2724 Province of Cavite Dear Mr. De La Paz of the Trece Martires Substation of MERALCO sent the December 16. G.B. He died on December 5. m. had passed Meralco’s entrance examination. 1985 This refers to the proposed contract of lease with Mr. 1985. D. his application papers were being processed by the Branch Services Department. Governor Remulla had favorably recommended Lino Deloy. She suggested that we should come . the man was already dead. [Signed] L. 1965 between Communications and Electricity Development Authority (CEDA) and Dionisio D(e)loy for a 680-square meter of land used as a substation site adjacent to A. the company informed him through its letter of its intention of continuing with the use of the property as a result of its acquisition of CEDA’s franchise. former CEDA employee. 1985. Torres. TORRES Assistant Vice-President & Head. Legal Department23 [Underscoring supplied] Relative thereto. Very truly yours.R.R. As it was not proper to discuss things with the family. 1985. His body laid at state in his residence. we asked the wife when the family would be available. G. portion of his co-owned land for CEDA’s substation in Trece Martires in 1966. MERALCO. Copy of the Donation is enclosed. A son. addressed to Atty. It was unfortunate that when we went to see him on December 6. sent a letter to Dionisio seeking his permission for the continued use of the subject land. TORRES TRECE MARTIRES SUBTATION REALTY SERVICES DECEMBER 16. Atty. On October 11. we wish to inform you that Meralco had taken over the electric operations in the province of Cavite being served by CEDA.MERALCO pursuant to Section 9. Mr. subject to the terms and conditions which we may mutually agree upon. Gonzales and Atty. According to PAD. Deloy had donated the use of 680-sq. He agreed to the request and proposed rental would be free provided one of his sons/grandsons would be employed by Meralco. for a position in the company. Deloy: This has reference to the Deed of Donation (Inter-vivos) executed on November 12. L. co-owner of the lot wherein the Trece Martires Substation is located. Rule 13022 of the Rules of Court. In the interest of public service. to finalize the Contract of Lease. It is undisputed that on October 11. may we respectfully request you to please allow Manila Electric Company (Meralco) to continue the use of the above-mentioned portion of land as a substation site.D. The Internal Memorandum reads: ATTY. Memorial Hospital x x x. 1985 Internal Memorandum. The letter reads: Mr. 1985 or four (4) months after the approval of the MOA and the corresponding Deed of Absolute Sale. L. one of his grandsons. Torres .G. Dionisio Deloy. In view of this recent development. GONZALES ATTY. Policarpio Deloy.
x x x. cannot contradict the terms of the deed of sale between CEDA and MERALCO pursuant to Section 9. 1âwphi1 Nevertheless.G. we will be able to work it out. service drops. even if these were their own. Thus. [Signed] L. by these two documents. SEC. and all the rights and privileges necessary for the operation of the electric service x x x. the Court must stress that the ruling in this case is limited only to the determination as to who between the parties has a better right to possession. the proper signatories in the contract of lease to be drawn We do hope whatever the problem may be. In Heirs of Bernardo Ulep v.24 it was written. On that day. DE LA PAZ x x x x. 1985." 26 No mention was made of any land. These are: 1. Thus. The land on which the substation was erected was not included. MERALCO would not have written Dionisio to ask permission for the continued use of the subject land. also.28 the Court reiterated the rule that a certificate of title has a superior probative value as against that of an unregistered deed of sale in ejectment cases. 27 In Pascual v. The Court has read the MOA and the Deed of Absolute Sale but found nothing that clearly stated that the subject land was included therein. MERALCO never disputed the declarations contained in these letters which were even marked as its own exhibits. it would have been so stated in the two documents. Otherwise. offered and properly admitted as part of the evidence on record by MERALCO itself. MERALCO acknowledged that the owners of the subject land were the Deloys. Guided by the foregoing rules and jurisprudence. or omission of a party as to a relevant fact may be given in evidence against him. constitute an admission against its own interest. the desire to have more members of the family to be employed in Meralco 3. all the members of the family would be free to confer with us. such as the two documents. Pursuant to Section 26. the rent free use of the substation may not push through 4. in this petition. it is fair to presume that the declaration corresponds with the truth. including possession. the documents are the best evidence which affords the greatest certainty of the facts in dispute. It is clear as daylight. Deloy. it is fundamental that a certificate of title serves as evidence of an indefeasible and incontrovertible title to the property in favor of the person whose name appears therein. MERALCO should appropriately be bound by the contents of the documents. otherwise. declaration. these admissions and/or declarations are admissible against MERALCO. Rights and privileges could only refer to franchises. At any rate. What were sold. It bears to emphasize that the titleholder is entitled to all the attributes of ownership of the property. Admissions of a party – The act. and customers' electric meters except those owned by the VENDOR'S customers. Hence. and it is his fault if it does not. Rule 13025 of the Rules of Court. There are some problems that may come up with the death of Mr. 26. The rationale for the rule is based on the presumption that no man would declare anything against himself unless such declaration was true. Rule 130 of the Rules of Evidence. the Court must uphold the age-old rule that the person who has a Torrens title over a land is entitled to its possession. thus: x x x Being an admission against interest. The first letter was written barely four (4) months after the deed of sale was accomplished. As observed by the CA. This adjudication is not a final determination on the issue of ownership . the Court holds that the letter and the internal memorandum presented. Coronel. For your information.back on December 21. transferred and conveyed were "its electric distribution facilities. MERALCO insists that extrinsic evidence. permits and authorizations necessary for the operation of the electric service. Ducat. the settlement of his estate among his heirs 2. Evidently. 1âwphi1 On a final note.
211. despite the fact that at that time. in the statement of their account as of October 17. among others. It ruled. however.R. 1028 (3952).: This is a petition for review on certiorari assailing the July 28.13.R. Spouses Rubin and Portia Hojas (petitioners). the mortgaged properties were awarded to respondent Ramon Kue (Kue). 1991. that PAB did not credit the payment they made totalingP165. DECISION MENDOZA. 1988. PAB applied for the extrajudicial foreclosure of the mortgaged real properties of petitioners with the Ex-Officio Sheriff." The petitioners. wrote Roberto Hojas (Roberto). the redemption period was extended until December 31.3 It was further alleged that on March 9. only 13 payments were credited. alleged that on April 11. dated January 3. PHILIPPINE AMANAH BANK AND RAMON KUE. in CAG. that: 1) PAB was not guilty of .2 Petitioners further averred that for failure to pay the loan. 1987 and. informing him that although the one-year redemption period would expire on April 21.24. and that. Zamboanga City (RTC).623. WHEREFORE.54 on the principal.13. that in the said bidding. Respondents. 1980.048. 1996. that on November 4. that despite said letter from the OIC-President. J. Debt. they received a letter from the OIC of the Project Development Department. that Kue then sent another letter. with Prayer for Preliminary Injunction" against PAB. Farouk A. erroneously amounting to P317.162. they secured a loan from respondent Philippine Amanah Bank (PAB) in the amount of P450. SO ORDERED. 1987 setting the foreclosure sale on April 21. that subsequently. 2010 Decision 1 of the Court of Appeals (CA). Petitioners. petitioners’ son. 1981 to June 27. CV No. they made various payments amounting to P486. a public bidding was conducted. No.683.83. through the intervention of then Senator Aquilino Pimentel. 1996 Decision of the Regional Trial Court. Branch 13. 1988.09 as 30% interest. Annulment/Setting Aside of Extrajudicial Foreclosure of Mortgage and Damages. by virtue of the bank’s incentive scheme. thus. 1988. and that.000. and P138. dated January 31. that from May 14. the petition is hereby DENIED. 1986. Annulment/Setting Aside of Extrajudicial Foreclosure of Mortgage and Damages.00. 55722. the RTC dismissed petitioners’ complaint.472. will not bar any party from filing an action raising the matter of ownership.162. did not properly credit their payments. dismissing Civil Case No. 1988.00. 2013 SPOUSES RUBIN AND PORTIA HOJAS. all amounting to P550. an action for "Determination of True Balance of Mortgage. 1989.63. that based on the summary of payments furnished by PAB to them on February 24. 1984. JOSE CATRAL MENDOZA Associate Justice WE CONCUR: Republic of the Philippines SUPREME COURT Manila THIRD DIVISION G.000. that PAB. PAB acquired said real property. that consequently. 5 On May 27. 4 and that because of this development. a Notice of Extrajudicial Foreclosure was issued on January 12. vs. on May 7. informing them that they had fifteen (15) days from receipt within which to vacate the premises. the OICPresident of PAB. in the public auction conducted. 193453 June 5. 1989. Carpizo (Carpizo). 1989. the OIC of the Project Development Department of PAB wrote Rubin Hojas that the real properties acquired by PAB would be sold in a public bidding before the end of August. stating therein the mortgage debt in the sum of P450. PAB listed their total payment as ₱412. that this loan was secured by a mortgage. which affirmed the May 27. with Prayer for Preliminary Injunction.and. 1988. petitioners had already paid the total sum of P486. petitioners filed an action for "Determination of True Balance of Mortgage Debt. covering both personal and real properties. informing them that he had already acquired the said property and that they were requested to vacate the premises within fifteen (15) days from receipt thereof.
7 Their basis was the portion of said letter which stated: xxxx As the Bank has adopted an incentive scheme whereby payments are liberalized to give chances to former owners to repossess their properties. 1988 Letter of Carpizo was an invitation for petitioners to submit a proposal to PAB.10 Undaunted." PAB should have. did not make an unqualified representation to petitioners that it had extended the redemption period. In other . As such. they suffered damages and were greatly prejudiced. however. As such. 1988. is AFFIRMED. the dispositive portion of the CA decision reads: ACCORDINGLY. Through estoppel. 1988. 2) because petitioners failed to redeem their properties within the period allowed. and justice and its purpose is to forbid one to speak against his own act. The date "December 31. it had the right to sell the same to Kue. 15 The petition is bereft of merit. representations or commitments to the injury of one to whom they were directed and who reasonably relied on it. failed to exert effort to settle their accounts. 1988 PUBLIC SALE. 1988 Letter of Carpizo to Roberto Hojas extended the redemption period from April 21 to December 31. Considering that they had relied on Carpizo’s representation. waited until December 31. 11 They also argued that since they manifested their interest in availing of the said "incentive scheme. petitioners filed the present petition for review. we suggest that you advise your parents to drop by at our Zamboanga Office so they can avail of this rare privilege which shall be good only up to December 31. of the Regional Trial Court. Petitioners reiterated their argument that the November 4. in order for this doctrine to operate. petitioners filed an appeal assailing the May 27. In fact. in Civil Case No. when PAB sold the property before said date. It was merely the last day for the availment of the liberalized payment for the repossession of foreclosed assets under PAB’s incentive scheme. The Decision dated May 27. before it sold the subject foreclosed property in a public auction. 13 of Zamboanga City.bad faith in conducting the extrajudicial foreclosure as it. 1996. 17Thus. PAB wrote petitioners informing them of the scheduled public bidding. PAB did not hear from petitioners again. They. SO ORDERED. the instant appeal is DENIED. 1988. as such. PAB explains that the purpose of the "incentive scheme" was to give previous owners the chance to redeem their properties on easy payment term basis. Therefore. (Emphasis supplied) 8 The CA was not sympathetic with petitioners’ position. through condonation of some charges and penalties and allowing payment by installment based on their proposals which may be acceptable to PAB. fair dealing. at one time. PAB violated the principle of estoppel when it conducted the public sale on November 4. who acquired the property for value and in good faith. 13 It was not meant to extend the oneyear redemption period. collusion between PAB and Kue was certainly alien to the issue. a representation must have been made to the detriment of another who relied on it. nevertheless. 1028 (3952). through said letter. As early as August 11. even suspended the conduct of the foreclosure upon the request of petitioners.9 Thus. PAB. Redemption is not a matter of intent but involved making the proper payment or tender of the price of the land within the specified period. PAB could not be said to have violated the principle of estoppel when it conducted a public sale on November 4. 1988. 1988 public sale by PAB was violative of the principle of estoppel because said bank made it appear that the one-year redemption period was extended. They asserted that the March 9. the respondent sold the subject property in a public sale on November 4. It held that the period of redemption was never extended. who. 1988 14 PAB cited the RTC’s finding that although the petitioners manifested their intention to avail of the incentive scheme desire alone was not sufficient. 9th Judicial Region. 16 This doctrine is based on the grounds of public policy. 1988. 1996 RTC Decision. 1988. As such. and 3) the subsequent foreclosure and auction sale having been conducted above board and in accordance with the requisite legal procedure. After receipt of the letter. Branch No. an admission or representation is rendered conclusive upon the person making it. It postulated the sole issue: WHETHER OR NOT THE CA ERRED IN NOT HOLDING PAB TO HAVE VIOLATED THE PRINCIPLE OF ESTOPPEL WHEN THE LATTER CONDUCTED THE NOVEMBER 4.6 Aggrieved. 1988" was not an extension of the redemption period. petitioners went to PAB to signify their willingness to avail of the said incentive scheme. and cannot be denied or disproved as against the person relying on it. good faith. 12 On the other hand. at the very least. PAB became its absolute owner and. failed to submit a proposal. the March 9.
1988. the offer by respondents on July 24.782. 1988" refers to the last day when owners of foreclosed properties. In Bodiongan vs. the date "December 31. For said reason. Iribani wrote the petitioners about the scheduled bidding. on which petitioners based their position that the redemption period had been extended. Thus. did not make any representation. (3) the amount of any assessments or taxes which the purchaser may have paid on the property after the purchase. In this regard. . a perusal of the letter. the CA was correct when it wrote: Here. the petitioners told Iribani that they would go Manila to explain their case. This constitutes the exercise of the right to repurchase. there was an unequivocal tender of payment for the full amount of the repurchase price. 1988 was null and void for having been prematurely conducted. to wit: The general rule in redemption is that it is not sufficient that a person offering to redeem manifests his desire to do so.500. The letter was very clear. like petitioners. did not amount to an exercise of redemption precluding the bank from making the public sale. there is no estoppel to speak of. the judgment debtor must pay the purchaser the redemption price composed of the following: (1) the price which the purchaser paid for the property. 21 this Court expounded on what constitutes a proper exercise of the right of redemption. the mortgaged property was included in the list of mortgaged properties that would be sold through a scheduled public bidding. in this case. the OIC of the Project Development Department of PAB. could submit their payment proposals to the bank. Consequently. Thus. It appears that the petitioners could not come up with a proposal acceptable to the bank. The opportunity given to the petitioners was to avail of the liberalized payment scheme which program would expire on December 31. it was to give a chance to previous owners to repossess their properties on easy term basis. On the last day for redemption. 1988. 1986 to redeem the foreclosed properties for ₱1. the offer to redeem is ineffectual. The letter of Carpizo was an invitation to the petitioners to come to the bank with their proposal. [Emphases and Underscoring Supplied]18 As correctly held by the RTC and upheld by the CA. The statement of intention must be accompanied by an actual and simultaneous tender of payment. However. return even after the public bidding. was ineffective since the amount offered and actually consigned not only did not include the interest but was in fact also way below the P2. 1988. and (4) interest of 1% per month on such assessments and taxes x x x. It was April 21. petitioners’ allegation that they had signified their intention to avail of the incentive scheme (which they have equated to their intention to redeem the property). estoppel would not lie against one who. possibly by condonation of charges and penalties and payment on instalment. Bona fide redemption necessarily implies a reasonable and valid tender of the entire repurchase price. In several cases decided by the Court where the right to repurchase was held to have been properly exercised. They did not.935 and the subsequent consignation in court of P1. shows otherwise. the borrowers concerned can still exercise the one (1) year right of redemption over the foreclosed properties until April 21. As the Bank has adopted an incentive scheme whereby payments are liberalized to give chances to former owners to repossess their properties. Pertinent portions of the said letter read: xxxx Our records show that the above account has already been foreclosed by the bank. 1988. while made within the period of redemption. 20 In the case of China Banking Corporation v. 1988.words. Martir.872. 19 Moreover. on August 11. 1988. (2) interest of 1% per month on the purchase price. otherwise the rule on the redemption period fixed by law can easily be circumvented. Otherwise.000 on August 27. It was about the availment of the liberalized payment scheme of the bank. we suggest that you advise your parents to drop by at our Zamboanga Office so they can avail of this rare privilege which shall be good only up to December 31. Moreover. however. As explained by Abraham Iribani (Iribani). Court of Appeals. we held: In order to effect a redemption. the letter was also clear. In this case. in the first place. 1986. the Hojases have no basis in positing that the public sale conducted on November 4. It was never extended.66 paid by the highest bidder/purchaser of the properties during the auction sale. jurisprudence also characterizes a valid tender of payment as one where the full redemption price is tendered.554. The letter does not show that the Bank had unqualifiedly represented to the Hojases that it had extended the redemption period to December 31. In response.
CABRAL. 2013 GREEN ACRES HOLDINGS. SPS. At any rate. they can examine the Certificate of Sale registered with the Register of Deeds to verify the purchase price. PAB was well within its right to sell its property in a public sale. whether or not respondents '"were diligent in asserting their willingness to pay is irrelevant. and petitioner's failure to accede to said requests do not invalidate the foreclosure. WHEREFORE. vs. they could have moved for a computation of the redemption price and consigned the same to the court. Article 1616 of the Civil Code of the Philippines provides: The vendor cannot avail himself of the right to repurchase without returning to the vendee the price of the sale x x x. SO ORDERED. Respondents can find other ways to know the redemption price. the petition is DENIED. Redemption within the period allowed by law is not a matter of intent but a question of payment or valid tender of the full redemption price within said period. Petitioner.R. Hence.Furthermore. VICTORIA P. It is not difficult to understand why the redemption price should either be fully offered in legal tender or else validly consigned in court. or upon the filing of their complaint. JOSE CATRAL MENDOZA Associate Justice WE CONCUR: Republic of the Philippines SUPREME COURT Manila FIRST DIVISION G. 1âwphi1 Respondents' repeated requests for information as regards the amount of loan availed from the credit line and the amount of redemption. ENRIQUE T. Even the complaint instituted by respondents cannot aid their plight because the institution of an action to annul a foreclosure sale does not suspend the running of the redemption period.. No. For one. and . 175542 June 5. Only by such means can the auction winner be assured that the offer to redeem is being made in good faith. MORAGA and VICTORIA SORIANO. INC. (Underscoring supplied) 22 In the case at bench. aside from the fact that petitioners manifested their intention to avail of the scheme. the record is bereft of concrete evidence that would show that. as they failed to exercise their right of redemption and failed to take advantage of the liberalized incentive scheme. they were also ready to pay the redemption price. FILCON READY MIXED. DEPARTMENT OF AGRARIAN REFORM ADJUDICATION BOARD (DARAB).. INC.
T-270126 (M) covering 2. T-73737 (M). Bulacan and new titles were issued in the name of Green Acres including TCT Nos. LONGBOAN I OFFICE OF THE AGRARIAN REFORM ADJUDICATOR. industrial and nonagricultural land by the Zoning Administrator of the Housing and Land Use Regulatory Board. MORAGA and VICTORIA SORIANO and FILCON READY MIXED. CV No. 1999. 11 T-345661 (M)12 and T-345662 (M)13 covering the subject properties.R. No. vs. SP No. commercial. 1999. 1996. TCT Nos. notices. Green Acres then constructed a warehouse building complex on the said lots. liens. The land was placed under the coverage of Presidential Decree (P..) No. On April 29. x-----------------------x G. 2006 Decision1 of the Court of Appeals (CA) in CA-G. Bulacan with an area of 11.715 square meters. 256260 (M) into three smaller lots. 1994.5 While the appeal was pending. GREEN ACRES HOLDINGS.R. SPOUSES ENRIQUE T.. 2008 Decision3 and May 29. On January 17. Cabral filed a complaint before the Provincial Agrarian Reform Adjudicator (PARAD) seeking the cancellation of the Emancipation Patents issued to the Spouses Moraga on the grounds that these were obtained through fraud and that the land is not suitable for rice and corn production and has long been classified as residential. No. (Filcon for brevity) and TCT Nos. Green Acres purchased 9 five lots from Filcon including the three subject properties covered by TCT Nos. the Spouses Moraga sold the lots to Filcon Ready Mixed Inc. Respondents. 1995. 739-Bul-94.715 square meters were thereafter issued in their names on May 29. JR. the PARAD rendered a decision denying the petition for cancellation of the Emancipation Patents and dismissing the complaint for lack of merit.REGISTRY OF DEEDS OF BULACAN. 496041 with an area of 8. 256260 (M). as amended. the properties subject of this case.941 square meters.R. 1996. DECISION VILLARAMA. 1993. Case No. claims or encumbrances.D. INC. 2004 Order2 of the Regional Trial Court (RTC) while in G. T-274487 (M) and T-274488 (M) in the name of Filcon. and EP No. 496041 and its conversion to TCT No. 27. The facts are as follows: Victoria Cabral was the original owner of a parcel of land in Barangay Pandayan. PROVINCIAL ADJUDICATOR. 175542. Inc. Cabral appealed the decision to the Department of Agrarian Reform Adjudication Board (DARAB). and on March 23. INC. JOSEPH NOEL C. On August 29. Except for an already cancelled annotation of a real estate mortgage in favor of Philippine Commercial International Bank (PCI Bank). T-270125 (M) covering 3. T-274486 (M).511 square meters..432 square meters and covered by Transfer Certificate of Title (TCT) No. Petitioner. Meycauayan. three Emancipation Patents were issued to the spouses Enrique Moraga and Victoria Soriano (Spouses Moraga) as follows: EP No. MEYCAUA YAN BRANCH.R. 183205. 496039 with an area of 861 square meters. the DARAB resolved Cabral’s appeal and rendered judgment ordering the cancellation of the titles issued in the names of the Spouses Moraga and those of Filcon for having been illegally acquired. petitioner Green Acres Holdings.R. The case was docketed as Reg. 2001. EP No. Respondents. 2008 Resolution4 of the CA in CA-G. The dispositive portion of the DARAB decision reads: . 496040 with an area of 2. On April 30. The Spouses Moraga thereafter caused the cancellation of EP No. petitioner Victoria Cabral seeks to set aside the February 27. and T-270127 (M) covering 2. 99651. CABRAL. the titles of Filcon were cancelled by the Register of Deeds of Meycauayan.159 square meters. 183205 VICTORIA P. 1996. T-345660 (M). No. 85766 dismissing its appeal from the November 3. Green Acres) assails the November 24. On December 15. (hereafter. the Spouses Moraga subdivided the lot covered by TCT No. In G. On June 19. J. 10 the titles were free from any annotations. T-274486 (M).: Before us are two consolidated petitions for review on certiorari under Rule 45 of the 1997 Rules of Civil Procedure. 6 T-274487 (M)7 and T-274488 (M)8 were issued in the name of Filcon on June 24.
MORAGA and FILCON. TCT No. EP-052 (M) (EP No. On January 25. She maintains that the complaint is not appropriate for quieting of title since it omitted to assail her titles over the subject property but instead questioned the proceedings held at the DARAB. In the meantime. Neither was it a party to the DARAB proceedings nor did it have notice of the said proceedings where the DARAB Decision of January 17. Filcon assured Green Acres that it is coordinating with its predecessor. 4. 3. After Green Acres presented its evidence. T-274488 (M) – all in the name of FILCO[N] READY MIXED INC.18 denied all the material allegations in the complaint and alleged that Green Acres never acquired valid title to the subject property.. 2005 21 as no further recourse was sought by the Spouses Moraga from the denial of their motion for reconsideration on February 24. TCT No. T-270125 (M). much less. . or encumbrance on the properties. 496041). 2001. 2006. 2005. TCT No. to make sure that Green Acres’ interest over the property is protected. It ruled: Only the decision of the Board as embodied in the dispositive portion of the decision can be implemented by virtue of a writ of execution. 2001 was issued. Filcon. The January 17. Filcon replied that it was also an innocent purchaser for value since at the time it purchased the subject property. Green Acres filed a Complaint 17 for Quieting of Title.R. In a letter16 dated March 30. to vacate the premises of the lands in question and turn over their possession to herein plaintiff. Directing the Register of Deeds of Bulacan to restore TCT No. Fearing that its titles and possession might be disturbed by the DARAB decision. the DARAB and the Registry of Deeds of Meycauayan. and. Damages with Application for Preliminary Injunction and Writ of Preliminary Attachment before the RTC of Malolos. EP-052 (M) (EP No. premises considered. Green Acres filed with the CA an appeal which was docketed as CA-G. 2001 decision merely orders the cancellation of the Emancipation Patent and Transfer Certificate of Titles issued by the Registry of Deeds of Bulacan in favor of Sps. 22On July 8. SO ORDERED. Green Acres claimed that the DARAB decision casts a cloud on its titles. TCT No. In an Order20 dated November 3. CV No. and TCT No. TCT No. Green Acres’ motion for reconsideration having been denied. Ordering defendants Moraga and their assign. She likewise insisted that the trial court has no jurisdiction over the subject property since the same is still within the coverage of the Comprehensive Agrarian Reform Law and thus under the jurisdiction of the DARAB. 2001. T-270127 (M) – all in the names of defendants spouses Moraga. All claims and counterclaims of both parties are hereby dismissed for insufficiency of evidence. 274486 (M). the decision is hereby REVERSED and SET ASIDE and a NEW JUDGMENT is rendered disposing as follows: 1. FILCON READY MIXED INC. T74487 (M). and TCT No.WHEREFORE. Cabral. 85766. Cabral. Bulacan. the PARAD issued a Resolution denying the Motion for Issuance of Writ of Execution for lack of merit. She further averred that a declaratory judgment in a petition to quiet title will effectively subject the DARAB decision to review. The case was docketed as Civil Case No. EP-051 (M) (EP No. the Spouses Moraga. lien. In fact. 496039. 496040). it sent a Letter 15 to Filcon on March 15. 2001 advising the latter that it learned that the properties it bought from Filcon were the subject of an adverse decision of the DARAB. 2005. T-73737 (M) in the name of plaintiff Victoria P.14 When Green Acres learned about the DARAB decision. in her Answer. can it claim to be an innocent purchaser for value. TCT No. the DARAB decision became final and executory on April 13. Cabral filed with the PARAD a Motion for Issuance of Writ of Execution23 of the DARAB decision. it had no knowledge of any legal infirmity in the title of the Spouses Moraga. T-270126 (M). claiming that it had no notice or knowledge of any adverse claim. Ordering the cancellation of TCT No. 279-M-2001. Green Acres reminded Filcon of its warranties under the deed of sale. Cabral filed a Demurrer to Plaintiff’s Evidence 19 arguing that Green Acres failed to prove that it is a purchaser in good faith and for value. the trial court granted the demurrer and ordered the case dismissed. it was able to secure a loan from PCI Bank in the amount of P12 million with the subject property as collateral. On April 19. Bulacan against Cabral. 2004. 2. the Spouses Moraga. Green Acres sought to quiet its title and alleged that it is a purchaser in good faith and for value.
Branch 84 and docketed as Civil Case 279-M-2001 which was appealed to the Court of Appeals. 2006. this Forum will also be violating the generally accepted principle of due process.27 Thus. 2006 Resolutions.R. 2006. to allow movants’ contention will also render the pending case of quieting of title filed by GREEN ACRES against herein plaintiff movant on April 18. On February 27. the PARAD issued an Order 30 denying due course to Cabral’s Notice of Appeal and held that the resolution denying the motion for execution is an interlocutory order against which the remedy is a petition for certiorari under Rule 65. Much less was it mentioned in the decision sought to be executed itself. 24 Cabral filed a Motion for Recusation 25 and a Motion for Reconsideration. Citing the case of Foster-Gallego v. record. The PARAD further ruled that Cabral’s act of impleading Green Acres as additional defendant only in the execution stage is highly irregular and that to enforce the decision against Green Acres would violate the latter’s right to due process. Moreover. 2006. as the relief prayed for has become fait accompli. the CA denied Cabral’s petition. modified or cancelled in direct proceeding in accordance with law x x x. x x x xxxx Aside from amending the final and executory decision in this case. much less to annul the final judgment of a co-equal court. Third Judicial Region.Hence. rendered a decision in CA-G. x x x xxxx It is clear as the sun rises from the east that GREEN ACRES was never made a party in the case at bar. titles issued under the Torrens system can only be altered. still. It is already settled that even the administrative arm of the government exercising quasi-judicial functions are not exempt from observing due process. Nothing in the body of the decision as well as the dispositive portion thereof directs the cancellation of the title issued in favor of GREEN ACRES. The appellate court further held that the only issue in an action to quiet title is whether there is a cloud in a title to real property because of any instrument. 29 the appellate court held that the trial court had no authority to interfere with the proceedings of a court of equal jurisdiction.31 (Citations omitted. denied Cabral’s motions on September 11. Green Acres was never a party to the case nor it was (sic) mentioned in the decision sought to be executed. Spouses Galang. CV No. On June 18. A buyer in good faith is one who buys the property of another without notice that some other person has a right to or interest in such property x x x. we will be in effect amending the aforementioned decision because we will be inserting something that has not been directed to be done. hence. The appellate court ratiocinated as follows: An execution can only be issued against a party and not against one who did not have his day in court x x x. on November 7. 2006 and September 11. if ever a Writ of Execution will be issued. encumbrance or a proceeding that has a prima facie appearance of validity and the DARAB decision does not fall within said enumeration. If we subscribe to the prayer of the movant. to apply the decision against Green Acres will amount to collateral attack against its titles because nowhere in the case or decision that it was considered or passed upon. 2007 Order of the PARAD. the CA. it will be up to the FILCON which was included in the dispositive portion of the Decision that has become final and executory. and not an appeal to the DARAB. 85766 dismissing Green Acres’ appeal. the titles of Sps. All told. GREEN ACRES can not be made to suffer the consequences of a case where it did not participate. as well as the February 27. xxxx Lastly. 2007.) . On February 27. MORAGA and FILCON sought to be cancelled in the decision have already been cancelled. Therefore. 2008. there is nothing to be done anymore. 26 The PARAD. Green Acres has valid and legitimate titles over the same since it is a purchaser in good faith and for value when it acquired the properties from Filcon. claim. on November 24. however. 2007. To maintain otherwise would be to ignore the constitutional prohibition against depriving a person of his property without due process of law x x x. Green Acres cannot be made to suffer the consequences of a case where it did not participate. moot and academic. Cabral filed with the PARAD a Notice of Appeal. Under the Property Registration Decree. Cabral filed with the CA a petition for certiorari under Rule 65 seeking to annul the January 25.28 In the meantime. 2001 before the Regional Trial Court. Even assuming that spouses Moraga and Filcon fraudulently acquired the disputed lots.
R. 2001 DARAB decision in her favor. Green Acres points out that if the issuance of a writ of execution that conforms to the decision may be denied on the ground that it will be inequitable. She also points out that the transfer from the Spouses Moraga to Filcon in 1996 and eventually to Green Acres in 1999 transpired after she filed a case with the DARAB in 1994. for its part. it is Green Acres. Cabral also argues that contrary to the PARAD’s ruling. and (2) Whether the said DARAB decision in favor of Cabral constitutes a cloud on Green Acres’ title over the subject properties. AS WELL AS THE APPLICABLE JURISPRUDENCE. x x x DECLARED THAT (SIC) RESPONDENT GREEN ACRES TO BE AN "INNOCENT PURCHASER FOR VALUE. Cabral also insists that Green Acres cannot be considered an innocent purchaser for value because the transfers were made to defeat the DARAB ruling."33 Simply put. 2001 DARAB decision may be enforced against Green Acres. she is not seeking the amendment of the final decision sought to be executed. Cabral. Cabral contends that the PARAD committed grave abuse of discretion in not issuing the writ of execution to enforce the January 17. Rule XX of the 2003 DARAB Rules of Procedure which provides that the execution of a final order or decision shall issue as a matter of course. x x x DISMISSED PETITIONER’S PETITION FOR CERTIORARI. First Issue: Whether the January 17. No. P. Green Acres contends that Cabral. 2001 CANNOT BE MADE TO APPLY TO RESPONDENT GREEN ACRES. 183205. AMONG OTHERS. argues that the CA erred when it: x x x FAILED TO CORRECTLY APPLY THE PERTINENT PROVISIONS OF THE DARAB 2003 RULES OF PROCEDURE. Green Acres points out that Cabral’s motion for execution specifically sought the cancellation of Green Acres’ titles even though the DARAB decision neither included Green Acres or its titles. x x x FAILED TO RULE THAT THERE WAS GRAVE ABUSE OF DISCRETION AMOUNTING TO LACK OF OR ABUSE OF DISCRETION ON THE PART OF PUBLIC RESPONDENT PROVINCIAL ADJUDICATOR LONGBOAN. on the other hand. In this case. She contends that the directive to the Register of Deeds to restore TCT No. the issues raised in the two petitions are essentially as follows: (1) Whether the January 17.Both Green Acres and Cabral are now before this Court seeking the reversal of the CA decisions adverse to them. x x x HOLDING THAT THE COURT DOES NOT HAVE AUTHORITY TO QUIET TITLES TO REAL PROPERTY AND REMOVE A CLOUD PRODUCED BY A DARAB DECISION. She argues that the issuance of a writ of execution is ministerial under Section 1.2. through her motion for execution. 1529 AND THE CIVIL CODE. the PARAD may not issue a writ of execution against Filcon and Green Acres as prayed for by Cabral. . 175542. Rule XX of the DARAB Rules. Therefore. sought the amendment of the DARAB decision and did not move merely for its execution. moreso should it be denied in the case where the writ of execution prayed for goes beyond the decision. submits that the CA did not err in denying Cabral’s petition for certiorari. 2001 DARAB decision may be enforced against Green Acres.32 In G. ITS TITLE CAN NOT BE QUIETED. Hence. THUS. In G.D. 2004 THEREBY IMPLIEDLY HOLDING THAT GREEN ACRES IS NOT A PURCHASER IN GOOD FAITH FOR VALUE. even if the issuance of a writ of execution to enforce a final and executory decision is a ministerial duty. Green Acres contends that the CA erred in: x x x RULING THAT THE DARAB DECISION IS NOT A SOURCE OF A CLOUD THAT IS SUSCEPTIBLE TO AN ACTION FOR QUIETING OF TITLE. x x x AFFIRMING THE ORDER OF THE REGIONAL TRIAL COURT DATED NOVEMBER 3.R. x x x DECLARED THAT THE DECISION PROMULGATED ON JANUARY 17. Green Acres. No. under Section 12. Green Acres is considered a successor in interest by title subsequent to the commencement of the action upon whom the final judgment or order of the DARAB is conclusive. T-73737 (M) in her name means that it should be done regardless of who holds title to the property at the time of execution.
Certificate not subject to collateral attack. the cited DARAB rule does not operate to bind Green Acres. Green Acres further contends that Cabral’s argument that it is not a purchaser in good faith and for value may not be considered in the resolution of her petition before this Court as her argument goes into the merits of the case and said matters were not raised in her motion for execution. In the same manner. failed to annotate a notice of lis pendens on said titles. if granted. that its acquisition of the titles to the properties was made through "surreptitious and illegal transfers. a Torrens title.36 (Emphasis supplied. Consequently. Yabut. as a general rule. despite said notice.35 this Court ruled: An action for declaration of nullity of title and recovery of ownership of real property.) In Sps.Green Acres also argues that it cannot be bound by the DARAB decision since a writ of execution of a decision can only be issued against a party to the case and not against one who did not have his day in court. The principle that a person cannot be prejudiced by a ruling rendered in an action or proceeding in which he was not made a party conforms to the constitutional guarantee of due process of law. the January 17. either presently or in the future. Green Acres submits that Section 12 is a mere reproduction of Section 47. Jr. Since they were not impleaded as parties and given the opportunity to participate in Civil Case No. as Cabral claimed. In the same manner. she is nonetheless deemed to have received constructive notice of the same because the properties were registered under the Torrens System. Sarmiento v. 1529 provides: SEC. the execution sought will constitute a collateral attack against the titles of Green Acres since nowhere in the DARAB decision sought to be executed were they mentioned. modified. and strangers to a case are not bound by any judgment rendered by the court. without any indication that the titles had their origins from the application of any agrarian law. 2001 DARAB decision cannot bind Green Acres. The effect of the said judgment cannot be extended to BPI Family and the spouses Chan by simply issuing an alias writ of execution against them. Only real parties in interest in an action are bound by the judgment therein and by writs of execution issued pursuant thereto. (Emphasis supplied.D. It cannot be altered. No one shall be affected by any proceeding to which he is a stranger. for it binds a particular individual only although it concerns the right to a tangible thing.2 of the DARAB Rules to mean that a judgment issued in a case is binding upon. No. is irrevocable and indefeasible. Thus. even against those parties not impleaded in the case. Likewise. No man shall be affected by any proceeding to which he is a stranger. the binding effect of the DARAB decision cannot be extended to Green Acres by the mere issuance of a writ of execution against it. a writ of execution can be issued only against a party and not against one who did not have his day in court. Yet. and thus . is a real action but it is an action in personam. Moreover. a writ of execution can be issued only against a party and not against one who did not have his day in court. and strangers to a case are not bound by any judgment rendered by the court.38 this Court explained when an action is a direct attack on a title and when it is collateral: An action is deemed an attack on a title when the object of the action or proceeding is to nullify the title. We find in favor of Green Acres. Green Acres also adds that Cabral misinterpreted Section 12. Cabral. Green Acres points out that when it purchased the properties from Filcon. the final judgment in said case cannot bind BPI Family and the spouses Chan. Green Acres also adds that the occupancy or possession of the properties of both Filcon and Green Acres were not clandestine as Cabral claims. But even if the argument could be considered. Rule 39 of the Rules of Court on the principle of res judicata. Court of Appeals. Q-28580. Section 48 of P. 48. – A certificate of title shall not be subject to collateral attack. with gross negligence. Green Acres likewise argues that impleading it as an additional defendant in the execution stage aggravates the violation of its right to due process. 34 In Muñoz v. or re-conveyance. the properties were covered by transfer certificates of title. to the DARAB decision which does not mention Green Acres either in the body or the dispositive portion." Green Acres argues that Cabral must have known about the alleged illegal subdivision of the property and issuance of the transfer certificates of titles or Emancipation Patents. and can be executed. Green Acres claims that the merits of the case show that it is a purchaser in good faith and for value. Only real parties in interest in an action are bound by the judgment therein and by writs of execution and demolition issued pursuant thereto.37 Moreover. not Emancipation Patents.. Any judgment therein is binding only upon the parties properly impleaded. and the duty of the court is to see to it that this title is maintained and respected unless challenged in a direct proceeding.) It is beyond dispute that Green Acres was not made a party in the DARAB case. Neither can it be true. or if she did not know. or cancelled except in a direct proceeding in accordance with law.
Inc. or enjoin its enforcement. the writ has pro tanto no validity. Cantos:42 A writ of execution should conform to the dispositive portion of the decision to be executed. Green Acres was under no obligation to investigate beyond Filcon’s titles as Green Acres had all the reason to believe that said titles were free from any lien. failed to annotate a notice of lis pendens on the titles of the Spouses Moraga and Filcon and thus give notice to future transferees. x x x47 Green Acres is considered an innocent purchaser for value. We also agree with the CA that Cabral’s allegation that the Spouses Moraga. Nowhere in the said decision is Green Acres or its TCTs mentioned. Also. 46 thus: Where innocent third persons. and the execution is void if it is in excess of and beyond the original judgment or award. The only annotation on them was a cancelled real estate mortgage in favor of PCI Bank. This is contrary to the evident purpose of the law. the transfers to Filcon and eventually to Green Acres were made through public documents and procedures. As Green Acres correctly pointed out. Nonetheless.43 A reading of the fallo of the DARAB decision would show that nothing in it directs the cancellation of the titles issued in favor of Green Acres. "also never acquired valid title to the subject land" and "hence. seeking the cancellation of the titles of Green Acres by a mere Motion for Issuance of Writ of Execution of a decision rendered in a case where said titles were not in issue constitutes a collateral attack on them which this Court cannot allow. it is Cabral herself. The effect of such an outright cancellation would be to impair public confidence in the certificate of title. Furthermore.challenge the judgment pursuant to which the title was decreed. bought the property from the registered owner. It is settled that a void title may be the source of a valid title in the hands of an innocent purchaser for value. Filcon and Green Acres were parties to illegal contracts cannot be given weight as such goes into the merits of the case and may not be considered in the execution stage. its present TCTs thereto should likewise be cancelled (together with the respective Emancipation Patents and TCTs of Sps. and Green Acres Holdings. To subscribe to Cabral’s prayer in her motion is tantamount to modifying or amending a decision that has already attained finality in violation of the doctrine of immutability of judgment. Moraga and Filcon Ready Mixed. claim or encumbrance. in an action to obtain a different relief. The attack is direct when the object of the action is to annul or set aside such judgment. in her Motion for Issuance of Writ of Execution. due to her own negligence. for it is a settled general principle that a writ of execution must conform strictly with every essential particular of the judgment promulgated. who. On the other hand. or interest in such property and pays a full and fair price for the same at the time of such purchase or before he has notice of the claim or interest of some other person in the property. Where the writ of execution is not in harmony with and exceeds the judgment which gives it life. Cabral alleged that Green Acres." 40 She prayed for the issuance of a writ of execution against the Spouses Moraga and "their subsequent assigns/successors in interest Filcon Ready Mixed. mentioned in the DARAB Decision) and reverted back to her TCT. It is also worth noting that the fact that the DARAB by final judgment ordered the cancellation of the titles of the Spouses Moraga and Filcon does not automatically make the titles of Green Acres null and void. 39 In the instant case. Nor may it go beyond the terms of the judgment sought to be executed. 44 An innocent purchaser for value is one who. It relied on the certificates of title of Filcon. occupation of the . as held by the CA. 45 The rationale therefor was expressed by this Court in the earlier case of Republic v. acquire rights over the property the court cannot disregard such rights and order the total cancellation of the certificate. If there is anyone to be blamed for Cabral’s failure to recover the subject properties. Cabral seeks the execution of a final and executory DARAB decision that directs the cancellation of the TCTs in the name of the Spouses Moraga and Filcon. It may not vary the terms of the judgment it seeks to enforce. Court of Appeals. Thus. only the decision of the DARAB as embodied in the dispositive portion of the decision can be implemented by a writ of execution. like Filcon. relying on the correctness of the certificate of title thus issued. free from any liens and encumbrances. as correctly ruled by the PARAD and upheld by the appellate court. without notice that some other person has a right to. Inc. As held in Ingles v."41 Clearly. the attack is indirect or collateral when. relying on the certificate of title. Every person dealing with registered land may safely rely on the correctness of the certificate of title issued therefor and the law will in no way oblige him to go behind the certificate to determine the condition of the property. an attack on the judgment is nevertheless made as an incident thereof. considering the significant size of the properties. She cannot claim that she was clueless that the subject properties were being transferred. for everyone dealing with property registered under the Torrens system would have to inquire in every instance whether the title has been regularly or irregularly issued. Inc.
encumbrance or proceeding. voidable. ineffective. Green Acres does not seek a review or reversal of the DARAB decision. and make the claimant. the pronouncements therein on the nature. or proceeding that is apparently valid or effective. It also contends that the appellate court’s reliance on Foster-Gallego v. encumbrance. Whenever there is a cloud on title to real property or any interest therein. or unenforceable. a "record" and reflects a "claim" on the properties. not only to place things in their proper places. and may be prejudicial to said title. A cloud on title consists of (1) any instrument.same cannot be made clandestinely. and (2) the deed. and (4) may be prejudicial to the title sought to be quieted. so that whoever has the right will see every cloud of doubt over the property dissipated. An action may also be brought to prevent a cloud from being cast upon title to real property or any interest therein. an action may be brought to remove such cloud or to quiet the title. record. ineffective. voidable. Whether the DARAB Decision in favor of Cabral constitutes a cloud on Green Acres’ title over the subject properties Green Acres argues that the DARAB decision is among those enumerated in Article 476 48 of the Civil Code as a possible source of a cloud on title to real property. but is in truth and in fact. who has no rights to said immovable. by reason of any instrument. the competent court is tasked to determine the respective rights of the complainant and the other claimants. claim. function. Cabral. or unenforceable. encumbrance. record.51 There is no dispute as to the first requisite since Green Acres has legal title over the subject properties. (3) but is in truth and in fact invalid. In such action. as well as use. and may be prejudicial to said title. doubt. claim. Quieting of title is a common law remedy for the removal of any cloud upon. the properties were fenced by concrete walls and Filcon had constructed a batch plant while Green Acres erected a warehouse and building on it. claim. As to the applicability of Foster-Gallego. Green Acres submits that Foster-Gallego is not applicable because the ruling there was that an action to quiet title is not the proper remedy when to remove a cloud on a title. Whenever there is a cloud on title to real property or any interest in real property by reason of any instrument. this Court has no choice but to uphold the titles of Green Acres. or unenforceable. she argues that assuming that the ruling on the main issue in said case is not directly germane. respect and not disturb the one so entitled. It contends that there can hardly be any doubt that the DARAB Decision is an "instrument. a final and executory decision of the court need to be reviewed or vacated. In fact. claim. for her part. and even abuse the property. encumbrance or proceeding which is apparently valid or effective but is in truth and in fact invalid. In the present case. Having failed to make such annotation. invalid. . The issue lies in the second requisite. or uncertainty affecting title to real property. Had her adverse claim been annotated on said titles.52 This Court holds that the DARAB decision in favor of Cabral satisfies all four elements of a cloud on title. voidable. Spouses Galang49 is misplaced since nothing in said case supports the proposition that a decision of a coordinate court cannot be a source of cloud under Article 476 of the Civil Code. Article 476 of the Civil Code provides: Art. but also for the benefit of both.50 For an action to quiet title to prosper. (2) which is apparently valid or effective. record. two indispensable requisites must concur: (1) the plaintiff or complainant has a legal or equitable title or interest in the real property subject of the action. an action may be brought to remove such cloud or to quiet the title. Green Acres’ arguments are meritorious. 476." or if not. and he can thereafter fearlessly introduce any desired improvements. an innocent purchaser for value. ineffective. insists that the DARAB decision is not among those enumerated in Article 476 which may cast a cloud on title to real property. while the proceedings before the DARAB are "proceedings" directed at the real properties now owned by Green Acres which are "apparently valid or effective" but "unenforceable" against the titles of Green Acres. or proceeding claimed to be casting a cloud on his title must be shown to be in fact invalid or inoperative despite its prima facie appearance of validity or legal efficacy. said notice would have served as a warning to Green Acres or other purchasers of the properties that any right they acquire would be subject to the outcome of the litigation before the DARAB. purpose and limitations of a case for quieting of title and the power of the courts in such proceedings are applicable.
Court of Appeals. the mortgage was foreclosed and the Ngs were declared owners of the property. The Decision dated February 27. respect and not disturb the one so entitled. Dare later discovered that said property was previously mortgaged by the Goc-ongs to the Ngs. record. 53 A record. The petitioner may vindicate its rights in the property through an action for quieting of title. The Decision dated November 24.56 Also.R. 739-Bul-94) is hereby REMOVED. In said case. in the case of Dare Adventure Farm Corporation v. on the other hand. but also for the benefit of both. as discussed above. the competent court is tasked to determine the respective rights of the plaintiff and the other claimants. and he can thereafter fearlessly introduce any desired improvements. When the Goc-ongs failed to pay their obligation. the petition in G. With costs against the petitioner in G. it would waste its own time and effort. and make the claimant.54 It is likewise a "claim" which is defined as a cause of action or a demand for money or property 55 since Cabral is asserting her right over the subject lots. It is a final decision that has not been reversed.R. It is timely for the Court to remind that the petitioner will be better off if it should go to the courts to obtain relief through the proper recourse. voidable. As such.R. court proceeding. 2001 of the Department of Agrarian Reform Adjudication Board in DARAB Case No. 1âwphi1 Furthermore. 2006 of the Court of Appeals in CA-G. No. the DARAB decision is apparently valid and effective. 2008 and Resolution dated May 29. 183205 is DENIED for lack of merit. However. T-345660 (M). vacated or nullified. TCT Nos. Dare. or doubt. so that whoever has the right will see every cloud of doubt over the property dissipated. not only to put things in their proper places. a common law remedy designed for the removal of any cloud upon. In the action. in truth and in fact. and even abuse the property. 85766 is REVERSED and SET ASIDE. but is. CV No. No. aside from thereby unduly burdening the dockets of the courts. SP No. are declared VALID and any cloud over such titles which may have been created by the Decision dated January 17. securing.58 WHEREFORE. a final one at that. is defined as a written account of some act. 175542 is GRANTED. one of which is an action for quieting of title: We agree with the CA's suggestion that the petitioner's proper recourse was either an action for quieting of title or an action for reconveyance of the property. transaction or instrument drawn up under authority of law." Black’s Law Dictionary defines an instrument as a document or writing which gives formal expression to a legal act or agreement. 57 this Court had the occasion to rule that one of the proper remedies of a person who was not impleaded in the proceedings declaring null and void the title from which his title to the property had been derived.As Green Acres correctly points out. It is likewise apparently effective and may be prejudicial to Green Acres’ titles since it orders the cancellation of the titles of the Spouses Moraga and Filcon all from which Green Acres derived its titles. More importantly. encumbrance. SO ORDERED. . 183205. otherwise. Green Acres is an innocent purchaser for value. 2008 of the Court of Appeals in CA-G. ineffective.R. or uncertainty affecting title to real property. T-345661 (M) and T -345662 (M) registered in the name of Green Acres Holdings. The petition in G. it is a "proceeding" which is defined as a regular and orderly progress in form of law including all possible steps in an action from its commencement to the execution of judgment and may refer not only to a complete remedy but also to a mere procedural step that is part of a larger action or special proceeding. for the purpose of creating. who has no rights to the immovable. who was not impleaded in the foreclosure case. is both an "instrument" and a "record. filed a petition for annulment of the judgment of the trial court with the appellate court. The Court upheld the appellate court’s dismissal of the petition since such remedy may be availed only when other remedies are wanting. Case No. 99651 are AFFIRMED. is an action for quieting title. invalid.R. Dare Adventure Farm Corporation purchased property from the Goc-ongs. or proceeding that is apparently valid or effective. and may be prejudicial to said title. We further ruled that Dare’s resort to annulment of judgment was unnecessary since it cannot be prejudiced by the judgment as it was not impleaded. claim. 5129 (Reg. it is ineffective and unenforceable against Green Acres because Green Acres was not properly impleaded in the DARAB proceedings nor was there any notice of lis pendens annotated on the title of Filcon so as to serve notice to Green Acres that the subject properties were under litigation. The action for quieting of title may be brought whenever there is a cloud on title to real property or any interest in real property by reason of any instrument. and designed to remain as a memorial or permanent evidence of the matters to which it relates. Two remedies were suggested to Dare as proper recourse. Inc. the DARAB decision. No. as well as use. or unenforceable. by a proper officer. modifying or terminating a right.
2000. JR. 2013 PHILIPPINE NATIONAL CONSTRUCTION CORPORATION. which plaintiff-appellee accepted. based on the latest liquidation report. JR.: In this Petition for Review on Certiorari under Rule 45 of the Revised Rules on Civil Procedures. CJ. involving crushed basalt rock delivered by plaintiffappellee to defendant-appellant PNCC. alleging that the complaint was premature considering that defendant-appellant PNCC had been faithfully paying its obligations to plaintiff-appellee. for which the latter had delivered and supplied good quality crushed basalt rock. the primordial issue to be resolved is whether the Court of Appeals (CA) 1 correctly affirmed the court a quo2 in holding petitioner liable to respondent for attorney’s fees. 1999.. represented by defendants-appellants Rogelio Espiritu and Rolando Macasaet. and (iii) after making deliveries pursuant to the purchase orders and despite demands by plaintiff-appellee. 1999 until the full obligation is completely settled and paid.095. The complaint prayed for payment of the amount of P782. For their repeated failure to attend the hearings. plaintiff-appellee filed with the trial court a complaint against defendants-appellees for collection of sum of money with damages." among others.80 "plus legal interest at the rate of not less than 6% monthly. 2006. DECISION SERRENO. represented by Cesar M. alleging that (i) in March 1998. as can be seen from the substantial reduction of its overdue account as of August 1999.. defendants-appellants engaged the services of plaintiff-appellee by buying aggregates materials from plaintiff-appellee. represented by CESAR M. On July 10. defendants-appellants requested from plaintiff-appellee a 30-day term from the delivery date within which to pay. vs. judgment is hereby rendered in favor of the plaintiff. Respondents. In an Order dated January 17. Ong. as the Court of Appeals (CA) adopted the findings of fact of the Regional Trial Court (RTC) of Quezon City. However. Thus. to start in April. the dispositive portion of which reads: WHEREFORE. (ii) the parties had initially agreed on the terms of payment.296. Petitioner. as follows: The present case involves a simple purchase transaction between defendant-appellant Philippine National Construction Corporation (PNCC).92. Branch 96. amounted to onlyP474. 1999. VILLARAMA. trial was held. On November 16. whereby defendants-appellants would issue the check corresponding to the value of the materials to be delivered. The Antecedent Facts Considering that there are no factual issues involved. defendants-appellants filed a motion to dismiss. Associate Justice WE CONCUR: Republic of the Philippines SUPREME COURT Manila FIRST DIVISION G. the trial court denied the motion to dismiss. defendants-appellants filed their answer. ONG. 190957 June 5. and plaintiff-appellee APAC.MARTIN S. we hereby adopt the CA’s findings. APAC MARKETING CORPORATION. ordering defendants jointly and solidarily to pay: . No. Jr. defendants-appellants were deemed to have waived the presentation of their evidence. After the submission of the respective pre-trial briefs of the parties. alleging that the obligation of defendant-appellant PNCC was only with respect to the balance of the principal obligation that had not been fully paid which. the trial court rendered a Decision." but prior to the implementation of the said payment agreement. defendants appellants failed and refused to pay and settle their overdue accounts. only plaintiff-appellee presented its evidence. or "Check Before Delivery. On August 17.R.
petitioner fully agreed with the CA Decision imposing 6% legal interest per annum on the principal obligation and absolving Rogelio Espiritu and Rolando Macasaet from any liability as members of the board of directors of PNCC. 2208. 1999 until its full payment in January 2001. In the absence of stipulation." Defendants-appellants filed the present appeal which is premised on the following assignment of errors: I. herein petitioner filed a Motion for Reconsideration. THE REGIONAL TRIAL COURT GRAVELY ERRED IN HOLDING DEFENDANTS ROGELIO ESPIRITU AND ROLANDO MACASAET JOINTLY AND SOLIDARILY LIABLE WITH DEFENDANT PNCC. II. plus P3. affirming with modification the assailed Decision of the court a quo. As a general rule.80 as actual damages. On 29 July 2009. 2. alleging that during the pendency of the case.00 per court appearance.000. the principal obligation was fully paid and hence.000. this article restrictively enumerates the instances when these fees may be recovered. THE REGIONAL TRIAL COURT GRAVELY ERRED IN AWARDING INTEREST AT THE RATE OF 12% PER ANNUM AMOUNTING TO P220. THE COURT’S RULING The Petition is impressed with merit. the decision dated July 10.083 AND ATTORNEY’S FEES IN FAVOR OF PLAINTIFF-APPELLEE.4 It should be noted that in said motion. Thus: "WHEREFORE. Article 2208 of the New Civil Code of the Philippines states the policy that should guide the courts when awarding attorney’s fees to a litigant. 3. the main focus of the Motion for Reconsideration was on the CA’s affirmation of the court a quo’s Decision awarding attorney’s fees in favor of respondent.296. the Special Fourth Division of the CA promulgated a Decision 3 in CA-G. 2006. by ordering defendants jointly and solidarily to pay plaintiff as follows.00 per court appearance. which raised the lone issue of the propriety of the award of attorney’s fees in favor of respondent. P50. attorney's fees and expenses of litigation. SO ORDERED. petitioner now assails before us the 9 July 2009 Decision of the CA by raising the sole issue of whether the CA gravely erred in awarding attorney’s fees to respondent.234.00 as attorney’s fees. P220. The Order dated October 6.R.000. In the absence on such stipulation. to wit: Art. but still it ordered them to pay legal interest of twelve per cent (12%) per annum.1. Defendants-appellants Rogelio Espiritu and Rolando Macasaet are absolved from liability. computed from January 8. Cost of suit. the parties may stipulate the recovery of attorney’s fees.00 as attorney’s fees.000. SO ORDERED. THE RULING OF THE COURT OF APPEALS On 9 July 2009. Thus. the appellate court’s Former Special Fourth Division denied petitioner’s Motion for Reconsideration in a Resolution dated 18 January 2010. the award by the trial court of actual damages in the amount ofP782.083 2. 2006 is affirmed.80 was without factual and legal bases. to wit: 1.6 THE SOLE ISSUE Aggrieved. However. Defendants-appellants filed a motion for reconsideration.269. 88827. the appealed Order dated October 6. other than judicial costs. In an Order dated October 6. The dispositive portion of the CA Decision reads as follows: WHEREFORE. 2006 is hereby modified. 3. subject to the modification that defendantappellant PNCC is ordered to pay legal interest at six per cent (6%) per annum on the principal obligation. Cost of Suit.234. 2006 is affirmed in all other respects. CV No. cannot be . the trial court considered defendants-appellants’ claim of full payment of the principal obligation. P782. P50. plus P3.
Attorney's fees as part of damages are awarded only in the instances specified in Article 2208 of the Civil Code. it alleges that the court a quo has not given any factual. and in all cases it must be reasonable. it is necessary for the court to make findings of fact and law that would bring the case within the ambit of these enumerated instances to justify the grant of such award. are not necessarily equated to the amount paid by a litigant to a lawyer. 1âwphi1 Petitioner contends that the RTC’s Decision has no finding that would fall under any of the exceptions enumerated in Article 2208 of the new Civil Code. (10) When at least double judicial costs are awarded. as part of damages. .recovered. CA. We do not put a premium on the right to litigate. laborers and skilled workers. The power of the court to award attorney’s fees under Article 2208 demands factual.8 we explained the reason behind the need for the courts to arrive upon an actual finding to serve as basis for a grant of attorney’s fees. the attorney's fees and expenses of litigation must be reasonable. and equitable justification. counsel's fees are not awarded every time a party prevails in a suit because of the policy that no premium should be placed on the right to litigate. legal. In the ordinary sense. still attorney’s fees may not be awarded where no sufficient showing of bad faith could be reflected in a party’s persistence in a case other than an erroneous conviction of the righteousness of his cause. the basis for the grant must be clearly expressed in the decision of the court. legal. In ABS-CBN Broadcasting Corp. (2) When the defendant's act or omission has compelled the plaintiff to litigate with third persons or to incur expenses to protect his interest. Villaflores. We can glean from the above ruling that attorney’s fees are not awarded as a matter of course every time a party wins. considering the dual concept of these fees as ordinary and extraordinary: It is settled that the award of attorney's fees is the exception rather than the general rule. (9) In a separate civil action to recover civil liability arising from a crime. (8) In actions for indemnity under workmen's compensation and employer's liability laws. or equitable justification for applying paragraph 11 of Article 2208 as basis the latter’s exercise of discretion in holding petitioner liable for attorney’s fees. except: (1) When exemplary damages are awarded. Further. (4) In case of a clearly unfounded civil action or proceeding against the plaintiff. Even when a claimant is compelled to litigate with third persons or to incur expenses to protect his rights. In Benedicto v. As such. The general rule is that attorney’s fees cannot be recovered as part of damages because of the policy that no premium should be placed on the right to litigate. attorney's fees represent the reasonable compensation paid to a lawyer by his client for the legal services he has rendered to the latter. In all cases. They are not to be awarded every time a party wins a suit. v. (3) In criminal cases of malicious prosecution against the plaintiff.7 this Court had the occasion to expound on the policy behind the grant of attorney’s fees as actual or compensatory damages: (T)he law is clear that in the absence of stipulation. (11) In any other case where the court deems it just and equitable that attorney's fees and expenses of litigation should be recovered. On occasions that those fees are awarded. Attorney's fees. just and demandable claim.9 We agree with petitioner on these points. while in its extraordinary concept. (6) In actions for legal support. attorney’s fees may be recovered as actual or compensatory damages under any of the circumstances provided for in Article 2208 of the Civil Code. they may be awarded by the court as indemnity for damages to be paid by the losing party to the prevailing party. (5) Where the defendant acted in gross and evident bad faith in refusing to satisfy the plaintiff's plainly valid. (7) In actions for the recovery of wages of household helpers.
there must be compelling legal reason to bring the case within the exceptions provided under Article 2208 of the Civil Code to justify the award. represented by BELEN LIM VDA. a rigid standard is imposed on the courts before these fees could be granted. we find that there is an obvious lack of a compelling legal reason to consider the present case as one that falls within the exception provided under Article 2208 of the Civil Code.00 as appearance fee. in favor of respondent APAC Marketing Incorporated. 10 Due to the special nature of the award of attorney’s fees. WHEREFORE. DE UY. to litigate and to protect his interest by reason of an unjustified act of the other party. Thus. The RTC found as follows: x x x since it is clear that plaintiff was compelled to hire the services of a counsel.000. legal.00 which it paid as acceptance fee and P3. or equitable justification for the award of attorney’s fees in favor of respondent. as complainant in the civil case. in that the award of attorney’s fees in the amount of P50. and equitable justification to avoid speculation and conjecture surrounding the grant thereof. plaintiff is entitled to recover attorney’s fees in the amount of P50. 12 We have perused the assailed CA’s Decision. we hold that the award of attorney’s fees by the court a quo. thus.13 The only discernible reason proffered by the trial court in granting the award was that respondent. the foregoing Petition is GRANTED. The CA merely adopted the RTC’s rational for the award.R. was forced to litigate to protect the latter’s interest. No pronouncement as to costs.000 as acceptance fee and P3. The assailed Decision dated 9 July 2009 of the Court of Appeals in CA-G.000 as appearance fee. CV No. was improper and must be deleted. Absent such finding. It is not enough that they merely state the amount of the grant in the dispositive portion of their decisions. 176425 HEIRS OF MANUEL UY EK LIONG. Chairperson WE CONCUR: Republic of the Philippines SUPREME COURT Manila SECOND DIVISION G. 11 It bears reiteration that the award of attorney’s fees is an exception rather than the general rule.R. is hereby DELETED. but cannot find any factual. . MARIA LOURDES P. There was no elaboration on the basis. Petitioners. which in this case we find to be sorely inadequate. A. 88827 is MODIFIED. it is imperative that they clearly and distinctly set forth in their decisions the basis for the award thereof. as sustained by the appellate court. The appellate court simply quoted the portion of the RTC Decision that granted the award as basis for the affirmation thereof. Hence. SO ORDERED.We have consistently held that an award of attorney’s fees under Article 2208 demands factual. There is therefore an absence of an independent CA finding of the factual circumstances and legal or equitable basis to justify the grant of attorney’s fees. SERENO Chief Justice.000. No. legal.
000. No pronouncement as to costs.Respondents. it appears.00. 8085 before the then Court of First Instance (CFI) of Quezon. The parties likewise agreed to further enter into such other stipulations as would be necessary to ensure that the sale would push through and/or in the event of illegality or impossibility of any part of the Kasunduan. it was stipulated in the notarized Agreement that. respondents and Buenaflor entered into an Agreement dated 20 September 1978 whereby they procured the legal services of Atty. It was likewise agreed that any party violating the Kasunduan would pay the aggrieved party a penalty fixed in the sum of P50. T-32227. Inc. UMALI. Santiago Rivera.. caused the same to be titled in its name.: Assailed in this Petition for Review on Certiorari filed pursuant to Rule 45 of the Rules of Court is the Decision 1dated 23 January 2007 rendered by the Fifteenth Division of the Court of Appeals in CA-G. 2 the dispositive portion of which states: WHEREFORE. RADA. BERTILLA C. Felipe Castillo. The record also shows that the proceedings in Civil Case No. the assailed January 27. 84687. Marietta Cavanez. for the purpose of seeking the annulment of the transactions and/or proceedings involving the subject parcels. ICP likewise sold said parcels in favor of Philippine Machinery Parts Manufacturing Co. as financier. J. agreed to underwrite the litigation expenses entailed by the case. MARIETTA C. premises considered. (PMPMCI) which. JALBUENA and PHILIP M. The parties stipulated that Manuel would pay a downpayment in the sum ofP1. in Civil Case No. 5 Encountering financial difficulties in the prosecution of Civil Case No. is hereby REVERSED and SET ASIDE and a new one entered declaring the AGREEMENT and the KASUNDUAN void ab initio for being contrary to law and public policy. from Bormaheco.3 (Italics and Underscore Ours) The Facts Alongside her husband. DECISION PEREZ. namely. Mauricia. situated in Silangan Mayao.307 square meters. MAURICIA MEER CASTILLO. a deed of extrajudicial partition over his estate was executed by his heirs. With the death of Felipe. Buenaflor Umali and respondents Victoria Castillo. Leovina Jalbuena and Philip Castillo.vs. in the event of a favorable decision in Civil Case No. CASTILLO. in turn.00. however. T-42104. CAVANEZ. Inc. 8085 culminated in this Court’s rendition of a 13 . represented by NANCY UMALI. 93-176. Utilized as security for the payment of a tractor purchased by Mauricia’s nephew. without prejudice to the attorney’s filing a proper action for collection of reasonable attorney’s fees based on quantum meruit and without prejudice also to administrative charges being filed against counsel for counsel’s openly entering into such an illegal AGREEMENT in violation of the Canons of Professional Responsibility which action may be instituted with the Supreme Court which has exclusive jurisdiction to impose such penalties on members of the bar.000. VICTORIA H. de Uy. In exchange. Bertilla Rada.. Atty. 8085. Heirs of Manuel Uy Ek Liong.R.6 On the same date.750-square meter portion of said real properties. Lucena City and registered in their names under Transfer Certificate of Title (TCT) Nos.000. that the subject properties were subsequently sold at a public auction where Insurance Corporation of the Philippines (ICP) tendered the highest bid. 8 Manuel was survived by petitioners. 2005 Decision of the Regional Trial Court of Lucena City. 8085. HEIRS OF BUENAFLOR C.4 On 29 September 1976. respondent Mauricia Meer Castillo was the owner of four parcels of land with an aggregate area of 53. Zepeda and Manuel would be entitled to "a share of forty (40%) percent of all the realties and/or monetary benefits. LEOVINA C. gratuities or damages" which may be adjudicated in favor of respondents. CV No. respondents and Buenaflor entered into another notarized agreement denominated as a Kasunduan whereby they agreed to sell their remaining sixty (60%) percent share in the subject parcels in favor of Manuel for the sum of P180. together with the attorney’s fees and litigation expenses incurred should a case be subsequently filed in court. who were later represented in the negotiations regarding the subject parcels and in this suit by petitioner BelenLim Vda. T-31752 and T-42103. CASTILLO. Branch 59. Having consolidated its title.00 upon the execution of the Kasunduan and that respondents and Buenaflor would retain and remain the owners of a 1.7 With his death on 19 August 1989. respondents and Buenaflor instituted Civil Case No. Edmundo Zepeda and the assistance of Manuel Uy Ek Liong who. as well as the TCTs procured by PMPMCI. SO ORDERED.
the Regional Trial Court (RTC). On 27 January 2005. T-72029.00 balance of the agreed price. petitioners commenced the instant suit with the filing of their complaint for specific performance and damages against the respondents and respondent Heirs of Buenaflor.R. Informed that petitioners were ready to pay the remaining P179. T32227 and T-42104 which are now covered by Transfer Certificates of Title Nos. the Court finds for the petitioners and hereby: 1. Faulting respondents with unjustified refusal to comply with their obligation under the Kasunduan. 22 went on to issue the 18 July 1997 Order disallowing the filing of said pleading on the ground that the validity of the Agreement and the cause of action against Atty.23 The denial24 of their motion for reconsideration of the foregoing order 25 prompted respondents to file a notice of appeal26 which was. all of the Registry of Deeds of Lucena City. T-72027. the RTC ruled that said contract became effective upon the finality of this Court’s 13 September 1990 Decision in G. upon petitioners’ motion for reconsideration. as then represented by Menardo Umali. Together with the dismissal of the complaint and the annulment of said contracts and TCT No. 33 the RTC disposed of the case in the following wise: WHEREFORE. respondents filed their Answer with Counterclaim and Motion to File Third Party Complaint on 3 December 1993. petitioners called to the witness stand Samuel Lim Uy Ek Liong 30whose testimony was refuted by Philip 31 and Leovina32 during the presentation of the defense evidence. as well as attorney’s fees and litigation expenses.000. in turn.00 per square meter. with indemnities for moral and exemplary damages.13 Supposedly acting on the advice of Atty. would be better threshed out in a separate action. Having benefited from the legal services rendered by Atty. however.10 Subsequent to the finality of the Court’s Decision.19 The issues thereby joined. in the meantime. whose whereabouts were then unknown. excluding the 1.11 it appears that the subject parcels were subdivided in accordance with the Agreement. Maintaining that the Agreement and the Kasunduan were illegal for being unconscionable and contrary to public policy. and . premises considered. litigation expenses and the costs of the suit. T-72030. Zepeda under TCT No. respondents averred that Atty. died. No. however.29 In the ensuing trial of the case on the merits. respondents also called petitioners’ attention to the fact. respondents were also declared estopped from questioning the validity of the Agreement. T-72026. 42104. proveeded to conduct the mandatory preliminary conference in the case. respondents wrote petitioners a letter dated 22 March 1993.R. T-72026. No. essentially informing petitioners that respondents were willing to sell their sixty (60%) percent share in the subject parcels for the consideration of P500.000. T-72029. 17 On 6 October 1993. denied due course by the RTC on the ground that the orders sought to be appealed were non-appealable. T-72032. respondents sought the grant of their counterclaims for moral and exemplary damages.15 respondents wrote a 28 May 1993 reply.12 Consisting of 21. Branch 54. petitioners prayed that the former be ordered to execute the necessary Deed of Absolute Sale over their shares in the subject parcels. T-72030.27 On 14 December 1997. T-3175.14 Insisting on the price agreed upon in the Kasunduan. T-72032 and T72033. Zepeda. 20 After initially granting respondents’ motion to file a third party complaint against Atty. with sixty (60%) percent thereof consisting of 31. Brushing aside Philip’s testimony that respondents were forced to sign the Kasunduan. With the Kasunduan upheld as the law between the contracting parties and their privies. T-72028. among others. 89561 which served as a suspensive condition therefor. Lucena City. registered in the names of petitioners and Atty. T72026.983 square meters equally apportioned among and registered in the names of respondents and Buenaflor under TCT Nos. 16 In a letter dated 1 June 1993. T-72031. T-72027. Orders the respondents to execute and deliver a Deed of Conveyance in favor of the petitioners covering the 60% of the properties formerly covered by Transfer Certificates of Title Nos.00 in accordance with the provisions of the KASUNDUAN. that their right to ask for an additional consideration for the sale was recognized under the Kasunduan. the remaining forty (40%) percent was. as well as attorney’s fees. the RTC rendered a decision finding the Kasunduan valid and binding between respondents and petitioners who had the right to demand its fulfillment as Manuel’s successors-in-interest. T-72033 and T-72026. Kasunduan and TCT No. reminding the former of their purported refusal of earlier offers to sell the shares of Leovina and of Buenaflor who had. Zepeda.21 the RTC. for and in consideration of the amount of P180. T-72028. Zepeda. 895619 in favor of respondents and Buenaflor. Zepeda was an indispensable party to the case. Zepeda and the financial assistance extended by Manuel. petitioners sent a letter dated 19 May 1993. T-72031. Menardo died 28 and was substituted by his daughter Nancy as representative of respondent Heirs of Buenaflor.September 1990 Decision in G. requesting respondents to execute within 15 days from notice the necessary Deed of Absolute Sale over their 60% share as aforesaid.750-square meter portion specified in their agreement with Manuel.18 Served with summons. T-42103.324 square meters.
44 The fact that Atty.000. in its order dated 18 July 1997. 37 respondents sought the complete reversal of the appealed decision on the ground that the Agreement and the Kasunduan were null and void. (c) jointly designed to completely deprive respondents of the subject parcels.2. and (d) without prejudice to his liability for violation of the Canons of Professional Responsibility. Manuel. and c). IN CIVIL CASE NO. respondents subsequently filed a notice of appeal which was. While petitioners prayed for the increase of the monetary awards adjudicated a quo. as well as the further grant of liquidated damages in their favor. As Atty. far from contributing to the expeditious settlement of the case.42 Absent a showing that the RTC’s ruling on the foregoing issues was reversed and set aside. the Agreement and the Kasunduan are invalid and unconscionable. disallowed the filing of a third-party complaint against Atty. Zepeda. SO ORDERED. CV No. b). Since it is generally accepted that no man shall be affected by any proceeding to which he is a stranger. to wit: (a) the Agreement and Kasunduan are byproducts of the partnership between Atty. COMITTED A REVERSIBLE ERROR WHEN IT REVERSED AND SET ASIDE THE DECISION OF THE RTC BRANCH 59. FIFTEENTH DIVISION. Although the answer filed by respondents also assailed the validity of the Agreement and TCT No. we find that the CA reversibly erred in ruling on the validity of the Agreement which respondents executed not only with petitioners’ predecessor-in-interest. it bears pointing out that the complaint for specific performance filed before the RTC sought only the enforcement of petitioners’ rights and respondents’ obligation under the Kasunduan. as a non-lawyer. P50. Zepeda can file an action to collect attorney’s fees based on quantum meruit. the RTC also ruled that. but also with Atty. setting aside the RTC’s decision.000.00 as and for exemplary damages. 38 On 23 January 2007. Zepeda and Manuel who. 43 the rule is settled that a court must first acquire jurisdiction over a party – either through valid service of summons or voluntary appearance – for the latter to be bound by a court decision. Zepeda on the ground that the causes of action in respect to said contract and title would be better threshed out in a separate action. P50. Orders the respondents to pay the petitioners the following amounts: a).41 With the 1 October 1998 denial of their motion for reconsideration of the foregoing order.R. denied due course on the ground that the orders denying their motion to file a third-party complaint and their motion for reconsideration were interlocutory and nonappealable. P50. the amount of P179.000. however. was not authorized to practice law. and to pay the costs.40 The Court’s Ruling We find the petition impressed with partial merit. Orders the petitioners to pay and deliver to the respondents upon the latter’s execution of the Deed of Conveyance mentioned in the preceding paragraph. the CA rendered the herein assailed decision. the record shows that the RTC. upon the following findings and conclusions.39 The Issue Petitioners seek the reversal of the CA’s decision on the following issue: WHETHER OR NOT THE HONORABLE COURT OF APPEALS. the grant of respondents’ motion to file a third-party complaint would only delay the proceedings in the case. 84687. At the outset. both petitioners 35 and respondents perfected their appeals36 which were docketed before the CA as CA-G. Zepeda’s whereabouts were then unknown. T-72026.00 as and for attorney’s fees.34 Dissatisfied with the RTC’s decision. Zepeda was not properly impleaded in the suit and given a chance to present his side of the controversy before the RTC should have dissuaded the CA from invalidating the Agreement and holding that . Atty. 1491 OF THE NEW CIVIL CODE AND THE CANONS OF PROFESSIONAL RESPONSIBILITY.00 as and for moral damages. LUCENA CITY. and 3. (b) the Agreement is void under Article 1491 (5) of the Civil Code of the Philippines which prohibits lawyers from acquiring properties which are the objects of the litigation in which they have taken part.000. 93-176 DECLARING THE AGREEMENT AND KASUNDUAN VOID AB INITIO FOR BEING CONTRARY TO LAW AND PUBLIC POLICY FOR BEING VIOLATIVE OF ART.00 representing the balance of the purchase price as provided in the KASUNDUAN.
petitioners correctly argue that the CA reversibly erred in not determining the validity of the Kasunduan independent from that of the Agreement.00. his testimony does not show such vitiation of consent as would warrant the avoidance of the contract. on the other hand. however. Viewed in the light of the autonomous nature of contracts enunciated under Article 1306 50 of the Civil Code. have the force of law between the contracting parties 60who are expected to abide in good faith with their contractual commitments. not weasel out of them. Defined as a meeting of the minds between two persons whereby one binds himself. more or less.000.00. that the prohibition applies only during the pendency of the suit 46 and generally does not cover contracts for contingent fees where the transfer takes effect only after the finality of a favorable judgment. instead. that the parties were able to agree on new stipulations that would modify their agreement. the Kasunduan was. our perusal of the record shows that respondents’ main objection to the enforcement of the Kasunduan was the perceived inadequacy of the P180.49 Executed in exchange for the legal services of Atty. when the terms of the contract are clear and leave no doubt as to the intention of the contracting parties.57 respondents even invoked the last paragraph 58 of the Kasunduan to the effect that the parties agreed to enter into such other stipulations as would be necessary to ensure the fruition of the sale.attorney’s fees should.54 At any rate. courts have no authority to alter a contract by construction or to make a new contract for the parties. the Kasunduan simply concerned the sale of the former’s 60% share in the subject parcel. less the 1.00. we find that petitioners and respondents are bound by the original terms embodied in the Kasunduan. Given these clear distinctions. in the event of a favorable judgment in Civil Case No. we find that the Kasunduan was correctly found by the RTC to be a valid and binding contract between the parties. objects and causes different from that of the other. (b) object certain which is the subject matter of the contract. with parties. concluded by respondents with Manuel alone. however.000. (c) cause of the obligation which is established.750-square meter portion to be retained.53 Although Philip had repeatedly claimed that respondents had been forced to sign the Agreement and the Kasunduan.00 per square meter56 or a total of P15. in fact. In such cases. 63 Our perusal of the Kasunduan also shows that it contains a penal clause 64 which provides that a party who violates any of its provisions shall be liable to pay the aggrieved party a penalty fixed at P50. Rather than claiming vitiation of their consent in the answer they filed a quo. As a notarized document that carries the evidentiary weight conferred upon it with respect to its due execution. it cannot likewise be gainsaid that the Agreement and the Kasunduan are independent contracts. Admittedly. 8085. the rule is settled that the literal meaning of its stipulations should govern.900.47 Although executed on the same day. The CA lost sight of the fact. 59 In the absence of any showing. it has been ruled that courts cannot supply material stipulations or read into the contract words it does not contain. Zepeda and the financial assistance to be extended by Manuel.00. 62Indeed.991. be computed on a quantum meruit basis.500.00 which the parties had fixed as consideration for 60% of the subject parcels. for the purpose of selling in favor of the latter 60% of their share in the subject parcels for the agreed price of P180.000. While concededly subject to the same suspensive condition."55 In their 22 March 1993 letter to petitioners. 61 Moreover. in contrast. Since their duty is confined to the interpretation of the one which the parties have made for themselves without regard to its wisdom or folly. the Agreement concerned respondents’ transfer of 40% of the avails of the suit. Article 1491 (5) 45 of the Civil Code prohibits lawyers from acquiring by purchase or assignment the property or rights involved which are the object of the litigation in which they intervene by virtue of their profession. respondents. with respect to the other to give something or to render some service. courts will not relieve a party from the adverse effects of an unwise or unfavorable contract freely entered into. In response to petitioners’ insistence on the price originally agreed upon by the parties. Obligations arising from contracts.000. together with the attorney’s fees and litigation expenses incurred by the latter should judicial resolution of the matter becomes necessary. Already partially executed with respondents’ receipt of P1. distinctly averred that the Kasunduan was tantamount to unjust enrichment and "a clear source of speculative profit" at their expense since their remaining share in said properties had "a current market value of P9. He simply meant that respondents felt constrained to accede to the stipulations insisted upon by Atty. Zepeda and Manuel who were not otherwise willing to push through with said contracts. for the agreed consideration of P180. respondents also cited prices then prevailing for the sale of properties in the area and offered to sell their 60% share for the price of P500. 51 the Kasunduan was shown to have been signed by respondents with full knowledge of its contents. as may be gleaned from the testimonies elicited from Philip52 and Leovina.00 from Manuel upon the execution thereof. and. after all.594.65 An accessory undertaking to assume greater liability on the part of the obligor in case of breach of an .00.48 a contract requires the concurrence of the following requisites: (a) consent of the contracting parties.000.
1226. 1227. said disposition should.66 "The obligor would then be bound to pay the stipulated indemnity without the necessity of proof of the existence and the measure of damages caused by the breach. The penalty may be enforced only when it is demandable in accordance with the provisions of this Code. damages shall be paid if the obligor refuses to pay the penalty or is guilty of fraud in the fulfillment of the obligation. the penalty generally substitutes the indemnity for damages and the payment of interests in case of noncompliance. In lieu thereof. if there is no stipulation to the contrary. however. Since the parties also fixed liquidated damages in the sum of P50. In obligations with a penal clause."67 Articles 1226 and 1227 of the Civil Code state: Art." In the absence of a showing that they expressly reserved the right to pay the penalty in lieu of the performance of their obligation under the Kasunduan. if after the creditor has decided to require the fulfillment of the obligation. Art. respondents were correctly ordered by the RTC to execute and deliver a deed of conveyance over their 60% share in the subject parcels in favor of petitiOners. proper. the penalty may be enforced. the Court of Appeals' assailed 23 January 2007 Decision is REVERSED and SET ASIDE.750 square meters. be modified to give full effect to the intention of the contracting parties. Aside from the fact that the penal clause included a liability for said award in the event of litigation over a breach of the Kasunduan. SO ORDERED.750-square meter portion from the 60% share in the subject parcel respondents were ordered to convey in favor of petitioners. unless this right has been clearly granted to him. and (b) the deletion of the awards of moral and exemplary damages. JOSE PORTUGAL PEREZ Associate Justice WE CONCUR: . we find that said amount should suffice as petitioners' indemnity.00 is. premises considered. the penalty shall substitute the indemnity for damages and the payment of interests in case of noncompliance. however. Nevertheless.000. The rights of the parties under the Agreement may be determined in a separate litigation. However. save in the case where this right has been expressly reserved for him. Neither can the creditor demand the fulfillment of the obligation and the satisfaction of the penalty at the same time. The debtor cannot exempt himself from the performance of the obligation by paying the penalty. the performance thereof should become impossible without his fault.70 1âwphi1 WHEREFORE. the rule is settled that a penal clause is not limited to actual and compensatory damages69 The RTC's award of attorney's fees in the sum of P50. the foregoing stipulation is a penal clause which serves to strengthen the coercive force of the obligation and provides for liquidated damages for such breach. the RTC's 27 January 2005 Decision is REINSTATED subject to the following MODIFICATIONS: (a) the exclusion of a 1.00 in case of breach. without further need of compensation for moral and exemplary damages.obligation. Considering that the Kasunduan stipulated that respondents would retain a portion of their share consisting of 1.000.68 Usually incorporated to create an effective deterrent against breach of the obligation by making the consequences of such breach as onerous as it may be possible. In obligations with a penal clause. petitioners were able to prove that they incurred said sum in engaging the services of their lawyer to pursue their rights and protect their interests.
No. unlawfully . 2009 of the Court of Appeals in CA-G. 2013 -Appellee.C.-B. which affirmed the Judgment 2dated November 28. and sometime prior thereto. and within the jurisdiction of this Honorable Court. the said accused Romeo Bustamante y Aliganga. in the Municipality of Alcala. 7406. Branch 3 in Criminal Case No. Accused-Appellant.Republic of the Philippines SUPREME COURT Manila FIRST DIVISION G. Province of Cagayan.R. AAA. 8353 (the Anti-Rape Law of 1997) that reclassified and defined rape as a crime against persons under Articles 266-A to 266-D of the same Code. No. 03102. The trial court found appellant Romeo Bustamante y Aliganga guilty beyond reasonable doubt of the crime of rape as defined and penalized under Article 335 of the Revised Penal Code.4 with lewd design and by means of threat and intimidation did then and there wilfully.R. Romeo Bustamante y Aliganga. PEOPLE OF THE PHILIPPINES. 2007 of the Regional Trial Court (RTC) of Tuguegarao City. 1997 of Republic Act No. 1997. Plaintiff vs. The pertinent portion of the Information3 charging appellant with the crime of rape reads: That on or about February 17. entitled People of the Philippines v.: For our review is this appeal from the Decision 1 dated July 31. CR. considering that the offense was committed before the effectivity on October 22. DECISION LEONARDO-DE CASTRO. J. ROMEO BUSTAMANTE y ALIGANGA. 189836 June 5. father of the complainant.
Cagayan without informing him why. He went to Mrs. He then removed his pants. Cagayan about 7:00 o’clock in the evening. Poli to tell them his problem regarding AAA and her cousin having sex. He did not enter the report in the blotter because they did not have a blotter so he advised appellant to have the case entered in the blotter of Alcala Police. 1997. then entered his house. his brothers-inlaw mauled him. His daughter AAA charged him of the heinous crime of rape because his wife and brothers-inlaw harbored ill feelings against him. Thereafter. 5 During pre-trial. Appellant forced her and she was not able to resist because she was still young during that time. When they were approaching their house. He did not file any charges against his brothers-in-law. 1997. he went to Tuguegarao with his daughter. appellant pleaded not guilty to the charge against him. as summed by the trial court and adopted by the Court of Appeals.and feloniously have sexual intercourse with his own daughter. she was alone in the second floor in their house when the appellant arrived. appellant testified that he did not report any barangay official that Randy Torrado sexually molested his daughter x x x . AAA testified that she filed the case against the appellant so that the latter would no longer box and maltreat her and because he raped her. are as follows: AAA testified that she lived with his father. but went to a person Ernie Fiesta who was not a barangay official. the appellant in this case. starting from the time that the offended party was only eleven (11) years of age. On cross-examination. Poli who asked AAA questions but the same was not entered in the blotter of the Cagayan Police Provincial Office. Cagayan. policemen arrived and brought him to the Municipal Hall of Alcala. and Sgt. appellant further testified that it was his daughter AAA who told him that Randy Torrado molested her so he brought her to Tuguegarao the following day. Alcala. Appellant told him that his daughter was molested by a nephew of his wife but he could not recall the name. He admittedly told his problem to Sgt. his employer. thus: she knew appellant who was the mechanic of . He asked the wife if she could help but the latter could not do it because her brother and sister were interested to pursue the case. Poli testified as follows: He was then the Assistant Chief Investigator at the Cagayan Police Provincial Headquarters on February 17. She did not shout because she was afraid. in x x x. Admittedly. Her younger brother Jayjun was playing outside while her mother went to clean their ginger garden. He was not able to enter it in the blotter of Alcala police as directed by Sgt. The facts of this case. The appellant laid her down on the floor and removed her shorts and panty. Appellant. On re-direct. blaming him to have spread the rumor that Rogelio Torrado was the father of the child of his own sister Purita Torrado. She reported the incident to her mother and the police. He advised appellant to have the incident reported to. against her will. Rogelio and Amador Torrado. On re-cross. The report was not recorded because appellant only sought his advice and that he would first talk to his wife as the suspect was her relative. Poli because when they arrived in Maraburab. appellant made an admission with regard to the identity of the victim in this case. Purita Torrado and brothers. Appellant threatened her before he raped her. Upon arraignment. They stayed in Tuguegarao the whole day and went back to x x x. xxxx Appellant testified that in the early morning on February 7. he invited the wife of appellant to his office upon the request of her in-laws who pitied and considered the appellant as their son. Purita Torrado called for AAA and told appellant that he was a traitor. 1997. his daughter AAA admitted to him that she had sexual relations with her cousin Randy Torrado for which reason he went to Tuguegarao to help AAA file a complaint against said Randy Torrado. 6 Trial on the merits thereafter commenced. 3 brothers and a sister. Lolit Casauay. It was after they came from Tuguegarao that his daughter AAA charged him with rape. On re-direct examination. The last witness for the defense was Lolita Casauay who testified. and entered in the blotter of. Police Inspector Carlos T. February 17. He talked to AAA who admitted that there was truth to the report that she was molested and that there was a second occasion. Appellant removed his penis after he ejaculated and told her not to report what had happened. went on top of her and inserted his penis into her vagina. Sgt. mother and younger siblings. Before February 17. the Alcala Police Station where the incident took place and to return for investigation. 1997. Alcala. Alcala from Tuguegarao. it was revealed that appellant was neither armed during the incident nor covered her mouth when he laid her down. Poli advised appellant to go to Alcala Police to have his problem entered in the blotter and to go back to him after. the herein offended party. with his daughter AAA went to him. AAA for several times. At about lunch time or thereafter on February 17. AAA. mauled him and tied his hands. 1997.
and consistent with human nature and the normal course of things. premises considered. 3. P75. c.12 In the case at bar. In March 1997.000. appellant implores this Court to review the same and render a judgment reversing his conviction for the crime of rape. convincing. She asked the wife why the appellant was incarcerated and the former felt guilty of what happened to the latter. 2. the appellant and AAA went to her house in Caggay. 1997. of the Revised Penal Code. the Court finds that the evidence on record has fully established with moral certainty the guilt of the accused beyond reasonable doubt of the felony of RAPE. his appeal was denied in the assailed Decision dated July 31. When she saw the appellant in jail. On February 13. Cagayan.her brother. of the court a quo is hereby AFFIRMED in toto.000. and hereby sentences him: 1. P50. The appeal is without merit. Tuguegarao. the trial court convicted appellant of the crime of rape. she learned of the charge of rape against the appellant. as evidenced by the victim’s own testimony. 1997. He claims that. Poli for this purpose. II THE COURT A QUO ERRED IN FINDING THE ACCUSEDAPPELLANT GUILTY OF THE CRIME OF RAPE DESPITE THE PROSECUTION’S FAILURE TO PROVE HIS GUILT BEYOND REASONABLE DOUBT.00 as exemplary damages. the appellant brought the present appeal before this Court wherein he merely adopted the Appellant’s Brief he submitted to the Court of Appeals in lieu of submitting a Supplemental Brief as permitted by this Court. defined and penalized under the provisions of Article 335. she went to Maraburab. to wit: I THE COURT A QUO ERRED IN GIVING FULL CREDENCE TO THE TESTIMONY OF THE PRIVATE COMPLAINANT. the accused may be convicted solely on the basis of the testimony of the victim that is credible. 2009. She told the appellant to go to the police to enter the incident in the blotter. AAA voluntarily related to her that she was molested by her cousin Randy Torrado.00 by way of civil indemnity. however. instant appeal is DENIED. On February 17. are accorded great weight and respect and will not be disturbed on appeal. Accordingly. appellant maintains that the accusation against him is baseless and untrue. Accordingly. both the trial court and the Court of Appeals found AAA to be a credible witness and her testimony . especially on the credibility of the rape victim. Appellant assigned two errors for our consideration. and. and called for the wife and daughter of the appellant. the dispositive portion of which states: WHEREFORE.) To pay the costs. The appellant went to Sgt. Alcala.000.8 Appellant elevated his case to the Court of Appeals in the hope of having a reversal of judgment.) To indemnify the private complainant AAA in the amount of : a.11 Jurisprudence is likewise instructive that the factual findings of the trial court. It is settled in jurisprudence that in a prosecution for rape. 2007 Judgment of the trial court reads as follows: WHEREFORE.7 At the conclusion of trial. as amended.9 Hence. he met the appellant who asked her advice regarding his daughter who was sexually molested. It appears that the crux of appellant’s appeal centers on the credibility of AAA’s testimony. the assailed Judgment. b. AAA filed a false complaint of rape against him mainly due to her ill feelings towards him brought about by his purported repeated physical maltreatment of the victim. supra.10 In his appeal.) To suffer imprisonment of reclusion perpetua.00 as moral damages. P30. The dispositive portion of the assailed November 28.
We agree with the appellate court that the following portion of AAA’s testimony indicated the presence of the foregoing elements of the crime of rape in this case. sir. we find no reason to deviate from the findings of the lower courts. what happened. or when the victim is under 12 years of age. sir. if your father who arrived on that time and day. Q In the upper part of your house on the second floor. where did he proceed? A He went upstairs.worthy of full faith and credit. The witness is pointing to a person inside the courtroom who wears T-shirt and a coldoroy pants who gave his name as Romeo Bustamante when asked by the Court. Q Where in particular in your house because according to you as your house has a second floor? A At the second floor. the elements of rape are (1) the offender had carnal knowledge of the victim. 2. and 3. sir. the trial court correctly applied Article 335 of the Revised Penal Code which provides: Art. can you recognize him? A Yes. Q When the accused laid you down in a bed or to the floor? A On the floor. do you have any companions in your house? A None. Q Now. When the woman is under twelve years of age or is demented. Since the incident at issue happened prior to the enactment of Republic Act No. sir. . sir. – Rape is committed by having carnal knowledge of a woman under any of the following circumstances: 1. do you remember where were you? A I was in our house. sir. Q At that time and day. By using force or intimidation. and (2) such act was accomplished through force and intimidation. do you recall if any member of your family arrived? A Yes sir. are there rooms there? A None. sir. Q Will you please go down from the witness stand and point to him? A That one sir. SAGUCIO] Q At about lunch time or thereafter on February 17. or when the victim is deprived of reason or otherwise unconscious. sir. if any? A He laid me down. Q Who arrived? A My father. When and how rape is committed. sir. 335. Q When the accused arrived. to wit: [PROS. 1997. When the woman is deprived of reason or otherwise unconscious. Q When you were alone in your house that time and day. After a careful review of the records of this case. there was. Q That means that upstairs that you were? A Yes. sir. Therefore. 8353. according to the aforementioned provision. Q When the accused went upstairs where you were.
sir. Q After he went on top of you. Q And after the accused removed his pants. were you still in that lying position? A Yes. sir. is a self-serving assertion that deserves no weight in law because denial cannot prevail over the positive. if any? A He removed my short and my panty. Furthermore. 1âwphi1 With regard to the allegation that the accusation of rape was motivated by ill will and revenge. or the common-law spouse of .17 Under the old rape law which is applicable in this case. sir. what happened next. 14 In his defense. Q How long did the penis of the accused stayed inside your vagina? A When he ejaculates that’s the time he removed his penis. sir. 15 Likewise. stepfather. if any? A He went on top of me. we were only two. the same is still appreciated in the case at bar because it is doctrinally settled that the moral ascendancy of an accused over the victim renders it unnecessary to show physical force and intimidation since. what did he do next. and as between the positive declaration of the complainant and the negative statement of the appellant. for accusing him of rape. ascendant. However. Q You said after the accused ejaculated he removed his penis. despite the absence of any evident force and intimidation. what did he do next. stepparent. especially when her charge could mean the death or lifetime imprisonment of her own father. sir.Q Aside from you and your father in that precise time that he laid you down to the floor. were there other persons inside the house? A None sir. Q When the accused laid you down to the floor. if any? A He inserted his penis into my vagina. Q Did you not resist? A He forced me so I was not able to resist. One such particular circumstance is when the victim is under eighteen (18) years of age and the offender is a parent. Q At the time that the accused removed your short and panty. or the common-law spouse of her mother. moral influence or ascendancy takes the place of violence or intimidation. his own biological daughter. guardian. relative by consanguinity or affinity within the third civil degree. We have consistently held that such alleged motives cannot prevail over the positive and credible testimonies of complainants who remained steadfast throughout the trial. the death penalty shall be imposed if the crime of rape is committed under certain enumerated circumstances which would designate the crime as qualified rape. sir. it is well-settled that denial. candid and categorical testimony of the complainant. what did he do next if any? A He removed also his pants. the former deserves more credence. sir. sir.13 Clearly. the testimonies of the witnesses presented by appellant failed to buttress his defense of denial as they merely related to tangential matters which do not seriously affect the issue of AAA’s credibility. in rape committed by a close kin. if unsubstantiated by clear and convincing evidence.16 Jurisprudence tells us that it is against human nature for a young girl to fabricate a story that would expose herself as well as her family to a lifetime of shame. sir. xxxx Q After the accused removed your short and your panty. what did he do next? A He told me not to report what had happened to me. appellant interposes denial while also ascribing ill motive on the part of the victim. Q Why were you not able to resist. such as the victim’s father. the element of carnal knowledge is present in the foregoing narration. uncle. can you explain? A Because he was strong and I was still young during that time. this Court is not surprised at this rather common excuse being raised by offenders in rape cases.
and (2) Appellant Romeo A.18 WHEREFORE. However.00) to SeventyFive Thousand Pesos (P75.00). The minority of the victim and her relationship to the accused were duly proven by her birth certificate.the parent of the victim. we therefore affirm the conviction of appellant for qualified rape for which he is to suffer the penalty of reclusion perpetua without eligibility for parole in consonance with Article 335 of the Revised Penal Code and Republic Act No.00) to Seventy-Five Thousand Pesos (P75. Bustamante for qualified rape for which he is to suffer the penalty of reclusion perpertua without eligibility for parole is hereby AFFIRMED with the MODIFICATIONS that: (1) The moral damages to be paid by appellant Romeo A.000." the trial court correctly imposed upon appellant the penalty of reclusion perpetua. the Decision dated July 31. due to the effectivity of Republic Act No. Bustamante is increased from Fifty Thousand Pesos (P50. otherwise known as "An Act Prohibiting the Imposition of Death Penalty in the Philippines. LEONARDO-DE CASTRO Associate Justice WE CONCUR: . 03102 convicting appellant Romeo A.-HC No. However. 9346. 9346.000. premises considered.00). Bustamante is ordered to pay the private offended party interest on all damages awarded at the legal rate of six percent ( 6%) per annum from the date of finality of this judgment. the award of moral damages is increased from Fifty Thousand Pesos (P50. CR. The award of civil indemnity and exemplary damages is likewise upheld.R.000. In view of the foregoing. in line with jurisprudence. No pronouncement as to costs.000. 2009 of the Court of Appeals in CA-G. SO ORDERED. TERESITA J.
RESOLUTION REYES.Republic of the Philippines SUPREME COURT Manila FIRST DIVISION G. He was subjected to medical check-up on board. 2005 after having been declared ‘fit for sea duties’ in his PreEmployment Medical Examination. Jerome delos Angeles as its Manager. AND/OR MR. 2013 MAERSK FILIPINAS CREWING INC. assails the Decision 2 dated October 27.R.: This Petition for Review on Certiorari. 2011 of the Court of Appeals (CA) in CA-G. 2008 of the Labor Arbiter (LA) awarding US$75.. 200837 June 5. J. with Mr.000.00 total disability benefits to Nelson Mesina (respondent) as well as attorney’s fees. He initially deferred seeking medical attention but when the itching became unbearable in October 2005. Maersk Services. Ltd. for and in behalf of its principal. while on board he cooked and served three meals everyday for sixty (60) persons. 2005. Likewise assailed is the CA Resolution5 dated February 29. Respondent. (petitioners) as a steward on board the vessel "Sealand Innovator" for a period of nine (9) months with a monthly basic salary of US$425. as may be required. JEROME DELOS ANGELES. No. MESINA. Sometime in June 2005.R. the respondent’s functions involved kitchen-related services.7 As a steward./MAERSK SERVICES LTD.. the respondent was employed by Maersk Filipinas Crewing Inc.00. After considering the extent of the rashes on his upper torso 8and the fact that he is engaged in food preparation and service.. 113470 which reversed and set aside the Decision 3dated July 23. He also washed a cabin-load of dirty laundry all by himself using strong detergent and fabric conditioner. vs. 2009 of the National Labor Relations Commission (NLRC) and reinstated the Decision 4 dated April 14. . 2012 which denied reconsideration. 2005. he requested for a thorough medical check-up.1 under Rule 45 of the Rules of Court. He was further ordered by the vessel’s captain to wash-paint the decks from second to fourth deck using special soap and chemicals. SP No. 6 The respondent boarded the vessel on May 3. he was medically repatriated on October 7. cleaning accommodation spaces and performing laundry services. Thus. Antecedent Facts On March 29. NELSON E. the respondent started to feel unusual itchiness all over his body followed by the appearance of small spots on his skin.Petitioners.
The complete hepatitis profile was normal. This prompted the respondent to commence the herein complaint for the payment of full disability benefits. . Fugoso). laundry and ship decks. In addition. The respondent claimed that his illness is compensable because it manifested during his employment aboard the petitioners’ vessel. Diagnosed as Psoriasis Vulgaris (a recurring non-contagious papulosquamous disease aggravated by stress drug intake alcohol etc. yielded no settlement. thus: Our own research confirms that respondent’s illness can be reasonably related to his work as steward. the respondent was referred to the petitioners’ company-designated physician. Also. In a letter dated June 23. however. Aggrieved. Their conferences. the petitioners discontinued paying the respondent’s benefits. Certain environmental triggers play a role in causing psoriasis in people who have these gene mutations. His skin condition has occupied 80% of his body which will need a longer time to control. Alegre). the skin). which submitted him for diagnosis to Dr. daily hassles of life can also trigger a flare. Glenda Anastacio-Fugoso (Dr. Essentiale Forte three times daily is prescribed and follow-up is requested on 23 July 2006. but scientists are still unclear about exactly how this occurs. Alegre’s finding that psoriasis is not work-related.htm). Ultrasound of the liver showed severe fatty infiltration. (//dermatology. This is called koebner phenomenon. The SGPT and SGOT were elevated indicating liver inflammation. a disease aggravated by work but is not contagious. Rioflorido adjudged the respondent’s illness to be reasonably connected to his work and thus compensable.about. Fugoso certified that: Mr. There is nothing in the record to show that respondent’s illness was caused by genetic predisposition or drug reaction. the petitioners shouldered the medical expenses of the respondent and paid him sick wage benefits. Nelson E. Dr. the petitioners denied liability on the basis of Dr. Natalio Alegre II (Dr. an auto-immune ailment that is not work-related. damages. the Associated Maritime Officers’ and Seamen’s Union of the Philippines (AMOSUP). one study showed that people who are categorized as "huge worriers" were almost two times less likely to respond to treatment compared to "low worriers".org/psoriasiscause. Dr. Dr. (www. 2007. LA Romelita N. Fugoso confirmed that the respondent is suffering from Psoriasis Vulgaris.psoriasiscafe. Ruling of the LA In its Decision12 dated April 14. It is not work-related and based on POEA contract. Alegre’s declaration that it is not a work-related ailment and psoriasis is not an occupational disease under the 2000 Philippine Overseas Employment Administration-Standard Employment Contract for Seafarers (POEA-SEC). Psoriasis is an auto-immune ailment whereby the immune system misbehaves for no known reasons to attack a particular part of the body (in this case. During all these times. Mesina followed-up on 23 June 2006.10 Based on Dr.com/od/psoriasisbasics/a/psorcause. Not every everyone [sic] who has the gene mutations gets psoriasis and there are several forms of psoriasis that people can develop. 2007. He further averred that it was triggered by his exposure to strong detergent soap and chemicals which he used in washing the dishes. Mesina is at present disabled.htm). 2006 to the petitioners. psychological stress has long been understood as a trigger for psoriasis flares. and attorney’s fees before the LA. Dr. The respondent also underwent phototherapy for not less than twenty (20) sessions.9 before whom he reported for treatment twice a week for eight (8) months. the parties pursued grievance machinery under the Total Crew Cost-International Maritime Employers CommitteeCollective Bargaining Agreement (TCC-IMEC CBA). viz: Mr. the respondent sought the assistance of his union. Alegre declared the respondent to be afflicted with psoriasis. Nelson E. Upon the other hand. 2008.Upon arrival in the Philippines. a dermatologist at the Seaman’s Hospital.11 In view of the conflicting findings of the two doctors on the causal connection between respondent’s illness and work. Sometimes even mild injuries to the skin such as abrasions can trigger psoriasis flares. stressful event trigger a rash to worsen. The LA explained. no disability could be assessed.). In another handwritten certification dated February 20. In a handwritten certification dated February 13. Studies do show that not only can a sudden.
Fugoso even failed to make a clear finding that it was the stress specifically experienced by the respondent while aboard the vessel that aggravated his disease. permanently and totally disabled for purposes of compensation under the law. jointly and severally. Obviously. the respondent’s continued employment is deleterious to his health because he will be exposed to factors that can increase the risk of the further recurrence or aggravation of his psoriasis.19 The petitioners moved for reconsideration but their motion was denied in the CA Resolution 20 dated February 29. (OFW-M) 07-000527-08 is REVERSED and SET ASIDE. OFW-(M)-06-06586-07 is hereby REINSTATED. the decretal portion of the LA decision read: WHEREFORE. ITS FINDINGS WERE CONTRARY TO THE PROVISIONS OF THE POEA . 2009. what remains is the environmental factor such as respondent’s constant exposure to strong laundry detergent powder and fabric conditioner. the assailed Decision dated 23 July 2009 of the National Labor Relations Commission in NLRC LAC No. Alegre. SO ORDERED.13 The LA further reasoned that in disability compensation.14 Accordingly. The NLRC observed that the only evidence substantiating the claim that the respondent’s illness is work-related were his bare allegations and the two certifications of Dr. The fact that the petitioners no longer employed him is the most eloquent proof of his permanent disability. SO ORDERED. the abrasions on his skin remain repulsive despite treatment for eight (8) months.500. premises considered. it is not the injury which is compensated but rather the incapacity to work resulting in the impairment of one’s earning capacity. chemicals and the stress and strain which are present in his work. and another one entered DISMISSING the instant complaint for lack of merit.00. SO ORDERED.000. at the rate of exchange prevailing at the time of actual payment. viz: WHEREFORE. in Philippine currency. The NLRC accorded more weight to the certification issued by Dr. The decretal portion of the CA Decision 18 dated October 27. premises considered.Having ruled out these causes. the appealed Decision is hereby REVERSED and SET ASIDE. All other claims are dismissed. the doubt as to whether his illness is work-related should be resolved in his The CA further pointed out that despite the failure of the two doctors to declare the respondent to be fit to return to work. Issues The petitioners impute the following errors to the appellate court. the amount of US$75. who was in a better position to assess the respondent after having examined and treated him twice a week for eight (8) months. The NLRC noted that Dr. hence. 2012. plus attorney’s fees of US$7.15 Ruling of the NLRC The NLRC differed with the conclusions of the LA and held that there is actually no substantial evidence to prove that the nature of and the stress concomitant to the respondent’s work aggravated his psoriasis. and the Decision dated 14 April 2008 of the Labor Arbiter Romelita N. THE CONCLUSION OF THE CA WAS BASED ON INFERENCES THAT WERE MANIFESTLY MISTAKEN. the foregoing considered. Fugoso who examined him only once.00 representing his total disability benefits. 2011 thus read: WHEREFORE. Rioflorido rendered in NLRC NCR CASE No. judgment is hereby rendered ordering petitioners to pay the respondent. the NLRC reversed the LA’s ruling and disposed as follows in its Decision 16 dated July 23. Thus.17 Ruling of the CA The CA sustained the LA’s judgment elaborating that inasmuch as the actual cause of psoriasis is unknown and given the probability that its onset was caused by factors found within the respondent’s work environment. viz: I. and the fact that there is no known cure for psoriasis reasonably establish that he can no longer work as seaman.
The provision further states that the determination of whether an illness is work-related shall be made in accordance with Philippine laws on employees’ compensation.28 The Court has likewise ruled that the list of illnesses/diseases in Section 32-A does not preclude other illnesses/diseases not so listed from being compensable. the seafarer is entitled to sickness allowance equivalent to his basic wage until he is declared fit to work or the degree of permanent disability has been assessed by the company-designated physician but in no case shall this period exceed one hundred twenty (120) days. 22 Under Section 20.1. Upon sign-off from the vessel for medical treatment. II. the Court has held that for disability to be compensable under Section 20(B) of the 2000 POEA-SEC. Ruling of the Court At the onset. THE HONORABLE CA BLATANTLY ERRED IN REVERSING THE DECISION OF THE NLRC EVEN IF RESPONDENT FAILED TO DEMONSTRATE THAT THE NLRC COMMITTED GRAVE ABUSE OF DISCRETION AMOUNTING TO LACK OF OR EXCESS OF JURISDICTION IN DECIDING TO REVERSE THE DECISION OF LA RIOFLORIDO." 26 In interpreting the said definition. viz: SECTION 20.21 The primordial issue submitted for the Court’s resolution is whether or not the respondent is entitled to permanent total disability benefits. or that the risk of contracting the illness was increased by his working conditions. the fundamental consideration has been that the POEA-SEC was designed primarily for the protection and benefit of Filipino seamen in the pursuit of their employment on board ocean-going vessels.24 The 2000 POEA-SEC25 defines "work-related illness" as "any sickness resulting to disability or death as a result of an occupational disease listed under Section 32-A of this contract with the conditions set therein satisfied. it is well to note that in resolving disputes on disability benefits.STANDARD EMPLOYMENT CONTRACT AND THE CBA.27 it is not sufficient to establish that the seafarer’s illness or injury has rendered him permanently or partially disabled." Concomitant with such presumption is the burden placed upon the claimant to present substantial evidence that his working conditions caused or at least increased the risk of contracting the disease. its provisions must be construed and applied fairly.31 Only a reasonable proof of work-connection. 29 This is in view of Section 20(B)(4) of the POEASEC which states that "those illnesses not listed in Section 32 of this Contract are disputably presumed as workrelated. reasonably and liberally in their favor because only then can its beneficent provisions be fully carried into effect. 30 Substantial evidence consists of such relevant evidence which a reasonable mind might accept as adequate to justify a conclusion that there is a causal connection between the nature of his employment and his illness. As such. The POEA-SEC cannot be presumed to contain all the possible injuries that render a seafarer unfit for further sea duties.4. it must also be shown that there is a causal connection between the seafarer’s illness or injury and the work for which he had been contracted.123 of the parties’ AMOSUP/IMEC-CPA for 2004. AND THE AGREEMENTS BETWEEN THE PARTIES. . the respondent shall be entitled to compensation if he suffers permanent disability as a result of a work-related illness while serving on board. COMPENSATION AND BENEFITS (B) COMPENSATION AND BENEFITS FOR INJURY OR ILLNESS xxxx 3. not direct causal relation is required to establish compensability of a non-occupational disease. 32 Equally relevant to the resolution of the present claim are the following provisions of the POEA-SEC.
Failure of the seafarer to comply with the mandatory reporting requirement shall result in his forfeiture of the right to claim the above benefits. chronic itch. About one in four patients experience major psychological distress. the employer shall bear the full cost of repatriation in the event the seafarer is declared (1) fit for repatriation. The plaques are typically oval-shaped. 5.For this purpose. As an extrajudicial measure of settling their differences. umbilicus. scaling. inconvenience.35 Psoriasis comes from the Greek word "psora" which means itch. POEA-SEC itself. a seaman should be given the opportunity to assert his claim after proving the nature of his injury. Those illnesses not listed in Section 32 of this Contract are disputably presumed as work related. 38 As a result of the chronic. the seafarer shall submit himself to a post employment medical examination by a company-designated physician within three working days upon his return except when he is physically incapacitated to do so. and the effect of living with a highly visible. disfiguring skin disease (difficulties with relationships. in which case. the diagnosis of the company-designated physician bears vital significance. bleeding. This is because resort to a third doctor remains a mere directory not a mandatory provision as can be gleaned from the tenor of Section 20(B)(3). it has been held that if serious doubt exists on the company designated physician’s declaration of the nature of a seaman’s injury. In case of permanent total or partial disability of the seafarer caused by either injury or illness the seafarer shall be compensated in accordance with the schedule of benefits arising from an illness or disease shall be governed by the rates and the rules of compensation applicable at the time the illness or disease was contracted. In doing so. the POEA-SEC gives the parties the option of agreeing jointly on a third doctor whose assessment shall break the impasse and shall be the final and binding diagnosis. 4. and the extent . arthritis. After all. thickening and inflammation in the skin. Upon sign-off of the seafarer from the vessel for medical treatment. resort to prognosis of other competent medical professionals should be made. In determining the work-causation of a seafarer’s illness. Symptoms specifically related to the skin (i. nail involvement).e. 36 People with psoriasis typically have sharply demarcated erythematous plaques covered by silvery white scales. knees. or (2) fit to work but the employer is unable to find employment for the seafarer on board his former vessel or another vessel of the employer despite earnest efforts. associated morbidity is significant. Patients in primary care and hospital settings have similar reductions in quality of life specifically in the functional.34 Hence. which most commonly appear on the elbows. problems related to treatments (mess. and lumbar area. psychological and social dimensions.37 Chronic plaque psoriasis (psoriasis vulgaris) is the most common type of the disease which manifests thru plaques of varying degrees of scaling. Nevertheless. incurable nature of psoriasis. it is not the absolute and automatic consequence in all cases. If a doctor appointed by the seafarer disagrees with the assessment. Further. of variable size and clearly distinct from adjacent normal skin. and poor selfesteem) all contribute to morbidity.33 The conflicting findings of the company’s doctor and the seafarer’s physician often stir suits for disability compensation. 6. odor. a third doctor may be agreed jointly between the employer and the seafarer. difficulties with securing employment. It is a common disfiguring and stigmatising skin disease associated with profound impaired quality of life. time). While it has been held that failure to resort to a third doctor will render the company doctor’s diagnosis controlling. scalp. This proof will in turn be used to determine the benefits rightfully accruing to him. it is before him that the seafarer must initially report to upon medical repatriation pursuant to above terms. a written notice to the agency within the same period is deemed as compliance.. the company physician’s assessment does not evince irrefutable and conclusive weight in assessing the compensability of an illness as the seafarer has the right to seek a second opinion from his preferred physician. the right of a seafarer to consult a physician of his choice can only be sensible when his findings are duly evaluated by the labor tribunals in awarding disability claims. The third doctor’s decision shall be final and binding on both parties.
These factors. At best. Fugoso which categorically declared the respondent as "disabled. special soap and chemicals in performing his duties as a steward. Based on these observations.45 thus: Permanent disability is inability of a worker to perform his job for more than 120 days. In fact. 113470 are AFFIRMED. Despite the declaration in the medical reports that psoriasis is not contagious. Extended disease control is. Rosete. Alegre failed to consider the varied factors the respondent could have been exposed to while on board the vessel. x x x. REYES Associate Justice WE CONCUR: . Alegre’s specialization is General Surgery 44 while Dr. 40 Until now. Dr. Fugoso is a dermatologist. the Court finds that serious doubts pervade in the former. Stress and climate changes likewise permeate his working environment as with that of any other seafarer. Alegre immediately concluded that it is not work-related on the basis merely of the absence of psoriasis in the schedule of compensable diseases in Sections 32 and 32-A of the POEA-SEC. Alegre and Fugoso. fabric conditioner. even in the absence of an official finding by the company-designated physician or the respondent’s own physician. Alegre is. taken together with Dr. lack of long-term cure and the vulnerability of the patient to cardiovascular diseases and some cancers. premises considered. regardless of whether or not he loses the use of any part of his body. A total disability is considered permanent if it lasts continuously for more than 120 days. and stress may also trigger its onset or development.39 Current available treatments for the disease are reasonably effective as short-term therapy. or totally paralyzed. Dr. A total disability does not require that the employee be completely disabled. 42 drugs. Fugoso who categorically stated a factor that triggered the activity of the respondent’s disease – stress. BIENVENIDO L. 2011 and Resolution dated February 29. Dr. 41 Other environmental factors such as climate changes. His permanent disability thus effectively became total in nature entitling him to permanent total disability benefits as correctly awarded by the LA and the CA. or one with specialized knowledge and expertise in skin conditions and diseases like psoriasis. thus. Alegre’s certification was issued only after 259 days with the respondent needing further medical treatments thus rendering him unable to pursue his customary work. it’s chronic nature. The Decision dated October 27. the exact cause of psoriasis remains a mystery. WHEREFORE. he is deemed to have suffered permanent total disability pursuant to the following guidelines in Fil-Star Maritime Corporation v. it was only Dr. however. difficult to achieve as the safety profile of most therapeutic agents limit their long-term use. 46 (Citations omitted) 1âwphi1 It is undisputed that from the time the respondent was medically repatriated on October 7. although the inheritance pattern is still unclear. drug or alcohol intake. means the disablement of an employee to earn wages in the same kind of work of similar nature that he was trained for.43 After a circumspect evaluation of the conflicting medical certifications of Drs. no profit-minded employer will hire him considering the repulsive physical manifestation of the disease. It remains undisputed that the respondent used strong detergent. Dr. 2005 he was unable to work for more than 120 days. Fugoso’s certification deserves greater weight. physical trauma. the petition is hereby DENIED. But several family studies have provided compelling evidence of a genetic predisposition to psoriasis. 47 Its inevitable impact to the respondent’s chances of being hired and capacity to continue working as a seaman cannot be ignored. or accustomed to perform. confirm the existence of a reasonable connection between the nature of respondent’s work and the onset of his psoriasis. Total disability. on the other hand. infections of the upper respiratory tract. Fugoso’s certification. or any kind of work which a person of his mentality and attainments could do. inconclusive for purposes of determining the compensability of psoriasis under the POEA-SEC. his certification was merely concerned with the examination of the respondent for purposes of diagnosis and treatment and not with the determination of his fitness to resume his work as a seafarer in stark contrast with the certification issued by Dr. etc. SO ORDERED. While both doctors gave a brief description of psoriasis. SP No. 2012 of the Court of Appeals in CA-G." The certification of Dr. it is the Court’s considered view that Dr. At any rate. Moreover. What is necessary is that the injury must be such that the employee cannot pursue his or her usual work and earn from it.R.to which they feel socially stigmatised and excluded is significant.
00 loan to the P1. J. thus.. amounted to P571. (2) respondent bank still added theP300. 284051 had already been assigned to respondent bank. On April 20. 7 On April 10. No. On December 22. and penalty and collection charges of 12% p. but not less than P200. MALLARI and AUREA V.000. respondent bank's Assistant Manager sent petitioners two (2) separate Statements of Account as of April 23.700. temporary restraining order and damages claiming.18. but was renewed up to February 17. DECISION PERALTA. 1992. Petitioners.3 Under the promissory note.00 was increased to P594. petitioners spouses Florentino and Aurea Mallari (petitioners) obtained again from respondent bank another loan of P1.a. Respondent bank filed its Answer with counterclaim arguing that: (1) the interest rates were clearly provided in the . 2010 and the Resolution2 dated July 20.700. preliminary injunction.a. 2013 SPOUSES FLORENTINO T.00 loan obligation should have been considered paid. Petitioners asked the court to restrain respondent bank from proceeding with the scheduled foreclosure sale.54.. BDS 606-89. T215175 of the Register of Deeds of Tarlac to answer for the said loan. attorney's fees equivalent to 15% p. which when computed up to January 31. in case of default.54 for PN No.000. CV No.00 and. while the P1.836. 1984.e. deeds. 1992. the loan of P300.).a.000. through its lawyer.218.000. the latter. i. 1985. respondent bank filed with the Regional Trial Court (RTC) of Tarlac. thus. vs.000. On February 25.00. attorney's fees equivalent to 15% of the total amount due but not less than P200. 1985. the loan was subject to an interest rate of 21% per annum (p. The loan had a maturity date of January 10. that: (1) the P300. and (3) they realized that there were onerous terms and conditions imposed by respondent bank when it tried to unilaterally increase the charges and interest over and above those stipulated. of the total amount due.82 for PN No. 2011 of the Court of Appeals (CA) in CA-G.7 million as evidenced by PN No. a penalty and collection charges of 12% p. PRUDENTIAL BANK (now BANK OF THE PHILIPPINE ISLANDS). 65993.991.294. Petitioner Florentino executed a Deed of Assignment 4 wherein he authorized the respondent bank to pay his loan with his time deposit with the latter in the amount ofP300.a. The antecedent facts are as follows: On December 11. the auction sale was set by the Provincial Sheriff on April 23. sent a demand letter to the former for them to pay their obligations. They stipulated that the loan will bear 23% interest p. a petition for the extrajudicial foreclosure of petitioners' mortgaged property for the satisfaction of the latter's obligation ofP1.00 loan was already P3.Republic of the Philippines SUPREME COURT Manila THIRD DIVISION G. 1992. 197861 June 5.R.000. Respondent. a loan in the amount of P300. 1992. of the total amount due. BD 84-055 and P2. BDS 606-89 5 with a maturity date of March 22.00 secured by such mortgage. 1989. injunction. petitioner Florentino T.043. 1992. Petitioners executed a Deed of Real Estate Mortgage6 in favor of respondent bank covering petitioners' property under Transfer Certificate of Title (TCT) No. BD 84055. among others. Petitioners failed to settle their loan obligations with respondent bank.000.: Before us is a Petition for Review on Certiorari under Rule 45. 1990. Mallari (Florentino) obtained from respondent Prudential Bank-Tarlac Branch (respondent bank). MALLARI. because the time deposit with the same amount under Certificate of Time Deposit No.171.00 as evidenced by Promissory Note (PN) No.R. assailing the Decision 1 dated June 17.a. petitioners filed a complaint for annulment of mortgage.7 million loan obligation for purposes of applying the proceeds of the auction sale. 1992.00.
Trial thereafter ensued. respondent bank filed a Motion to Dismiss Complaint 11 for failure to prosecute action for unreasonable length of time to which petitioners filed their Opposition. Subsequently. and allowed the loan interest to accumulate reaching the amount of P594. and not the P300. and (3) the statement of account as of April 10.promissory notes.043.000. 1992.18 per Statement of Account dated April 27. 1985. It also found that Article 1229 of the Civil Code invoked by petitioners for the reduction of the interest was not applicable. hence. Respondent bank also claimed that petitioners were fully apprised of the bank's terms and conditions. Petitioners appealed the RTC decision to the CA.5 million.00 loan covered by another PN No. since banks are not hospitable or equitable institutions but are entities formed primarily for profit. However.000. 1993 added to the loan already amounted to P3.00 loan..7 million and respondent bank's bid price was P3. A Comment was filed by respondent bank and petitioners filed their Reply thereto. .500. Respondent bank filed its Motion to Lift Restraining Order. since petitioners had not paid any single centavo of the P1. after the restraining order was lifted. respondent bank did not. which the RTC granted in its Order 10 dated March 9. the dispositive portion of which reads: WHEREFORE. which maturity coincided with petitioners' loan maturity. this case is hereby ordered DISMISSED. In an Order8 dated November 10. 12 On November 19. 1992 to July 7. Thus.294. and that contrary to petitioners' claim. 1993. respondent bank should had just applied the time deposit to the loan.000.000.000. NO COSTS. which was later extended to February 17.54 as of April 10. and that the extrajudicial foreclosure was sought for the satisfaction of the second loan in the amount of P1.00 loan. the RTC issued its Order13 denying respondent bank's Motion to Dismiss Complaint. 1993.991. but the certificate of sale was executed by the sheriff only on July 7.15 The RTC found that as to the P300. Subsequently. petitioners had assigned petitioner Florentino's time deposit in the amount of P300. the stipulated interest and penalty charges from January 31. However. 1993. SO ORDERED. Respondent bank then proceeded with the extrajudicial foreclosure of the mortgaged property. BDS 606-89 and the real estate mortgage. the amount of P292.00 in favor of respondent bank. since the proceeds of petitioners' time deposit was applied to the payment of interest and penalty charges for the preceding period. It found that since petitioners' obligation had reached P2. 1998.00 loan to the P1. The RTC found that the 23% interest rate p. respondent bank did not add the P300. Considering there is no evidence of bad faith. Petitioner Florentino was presented as the lone witness for the plaintiffs. 1999.836.82 as of January 31. which was then the prevailing loan rate of interest could not be considered unconscionable. As to the P1. 1992. 84-055. On November 15.00 as penalty charges was unjust and without basis. which were used in computing for interest charges.171. if the loan was unpaid.7 million loan which showed they had not complied with any part of the obligation.00. in petitioners' Supplemental Motion for Issuance of a Restraining Order and/or Preliminary Injunction to enjoin respondent bank and the Provincial Sheriff from effecting or conducting the auction sale.5 million as of the auction sale. 1992. the RTC reversed itself and issued the restraining order in its Order9 dated January 14.8 million. 1993.7 million loan obligation for purposes of applying the proceeds of the auction sale.a. the latter should return to petitioners the difference of P1. petitioners' time deposit was made to apply for the payment of interest of their P300. The RTC found no legal basis for petitioners' claim that since the total obligation was P1. a Certificate of Sale was issued to respondent bank being the highest bidder in the amount ofP3. 1992 provided for a computation of interest and penalty charges only from May 26.00 loan. 1989.7 million covered by PN No. the Court need not order the plaintiffs to pay damages under the general concept that there should be no premium on the right to litigate. 1993. On July 7. (2) as early as January 1986. the RTC issued its Order 14 granting respondent's demurrer to evidence. it had reached the amount of P3. the RTC denied the Application for a Writ of Preliminary Injunction. which was computed based on the 23% interest rate and 12% penalty charge agreed upon by the parties.000.000.7 million loan which petitioners obtained from respondent bank after the P300. respondent bank filed a Demurrer to Evidence.600.
00. 2010.250.. which the CA denied in a Resolution dated July 20. Court of Appeals. interest rate and the 12% p. 23 where the stipulated interest rates were 7% and 5% a month. if the stipulations in the contract are valid.On June 17. which are much lower than those interest rates agreed upon by the parties in the above-mentioned cases. likewise. petitioners and respondent bank agreed upon on a 23% p. Court of Appeals. respectively. the CA issued its assailed Decision. collection charges and attorney's fees agreed upon. which are equivalent to 84% and 60% p. public order. penalty charge on petitioners'P1.7 million loan. It also found not persuasive petitioners' claim that the P300. The Order dated November 15.81% per month on a P10 million loan. Timan. Banco Filipino Savings and Mortgage Bank. In this case. the parties thereto are bound to comply with them. the dispositive portion of which reads: WHEREFORE.a. imposed by respondent bank is excessive or unconscionable. Court of Appeals. However.00 was equivalent only to the principal amount of the loan ofP300. hence. We said that we need not unsettle the principle we had affirmed in a plethora of cases that stipulated interest rates of 3% per month and higher are excessive. contrary to morals if not against the law and declared such stipulation void. morals. 2011. 25 where the issue raised was whether the 24% p. terms and conditions as they may deem convenient.a. Tarlac City. stipulated interest rate is unreasonable under the circumstances.043.a. agreed upon by the parties. interest rate on the P1.000. Based on the above jurisprudence. invoking our ruling in Medel v. Dagupan City Branch. we had reduced the same to 1% per month or 12% p.700. provided they are not contrary to law. petitioners now contend that the interest rate of 23% p. Branch 64. Timan. Spouses Ganzon-Olan. 1999 issued by the Regional Trial Court (RTC). in Civil Case No. but such freedom is not absolute. Also. We do not consider the interest rate of 23% p. Petitioners filed their Motion for Reconsideration. In Villanueva v. the interest rate agreed upon by the parties was only 23% p. hence. Court of Appeals.00 loan excessive.54.18 Toring v.20 We are not persuaded. the outstanding balance of petitioners' loan was P594. unconscionable and exorbitant. 7550 is hereby AFFIRMED. or public policy.21 we found the stipulated interest rate of 66% p. DESPITE THE FACT THAT THE SAME IS CONTRARY TO SETTLED JURISPRUDENCE ON THE MATTER. "The contracting parties may establish such stipulations." Hence.000. or a 5.000.a. In Medel v. we answered in the negative and held: In Spouses Zacarias Bacolor and Catherine Bacolor v. Hence. penalty. TARLAC CITY.a.00 loan to which they agreed upon is excessive or unconscionable under the circumstances.5% per month on aP500.19 and Chua v. unconscionable and exorbitant.17 The issue for resolution is whether the 23% p.a. there is no similarity of factual milieu for the application of those cases. this Court sustained the agreement of the parties to a 24% per annum interest on an P8. since such contract is the law between the parties.000. 1999. Thus. As such.. petitioners filed this petition for review arguing that: THE HON. the stipulation was void for being contrary to morals.00 loan was added to the P1. agreed upon by petitioners and respondent bank to be unconscionable.00 loan finding the same to be reasonable and clearly evidenced by the amended credit line agreement entered into by the parties as well as two promissory notes executed by the borrower in favor of the lender. the Court ruled that the borrowers cannot renege on their obligation to comply with what is incumbent upon them under the contract of loan as the said contract is the law between the parties and they are bound by its stipulations. clauses. found that the interest rates and penalty charges imposed were not unconscionable and adopted in toto the findings of the RTC on the matter. in Garcia v.a. In Toring v. 22 the stipulated interest rates involved were 3% and 3. the Court finds that the 24% per annum interest rate.00 and would not be sufficient to cover the interest. As Article 1306 of the Civil Code provides. While in Chua v. or less than 2% per month. in the Statement of Account dated April 10. thus. Parties are free to enter into agreements and stipulate as to the terms and conditions of their contract. this Court held that the interest rate of 24% per annum on a loan of P244.16 The CA found that the time deposit of P300. COURT OF APPEALS ERRED IN AFFIRMING THE ORDER OF THE RTC-BRANCH 64. the instant appeal is hereby DENIED.649.7 million loan.000. good customs. Spouses Ganzon-Olan. may not be considered as unconscionable and excessive.000.a. provided for in the subject . The CA.a. 1992. DATED NOVEMBER 15. which we find under the circumstances excessive and reduced the same to 1% per month. 24 In this case.a.
.00. the petition for review is DENIED.26 Clearly. PERALTA Associate Justice WE CONCUR: . penalty charge. interest rate imposed on petitioners' loan in this case can by no means be considered excessive or unconscionable. This surcharge or penalty stipulated in a loan agreement in case of default partakes of the nature of liquidated damages under Art. stipulated interest rate was not considered unconscionable. x x x 28 And in Development Bank of the Philippines v. Moreover. jurisprudence establish that the 24% p. CA. petitioners cannot now back out on their obligation to pay the penalty charge. the same is the law between them and they are bound to comply with the provisions contained therein.000. 2010 and the Resolution dated July 20. 2011 of the Court of Appeals are hereby AFFIRMED. The non-performance gives rise to the presumption of fault. Also referred to as a penalty clause.the failure of the performance was due to either force majeure or the acts of the creditor himself. it is expressly recognized by law.mortgage contracts for a loan of P225. A contract is the law between the parties and they are bound by the stipulations therein.30 Here.. the 23% p.a. The obligor would then be bound to pay the stipulated amount of indemnity without the necessity of proof on the existence and on the measure of damages caused by the breach. The Decision dated June 17. and since there was no showing that petitioners' failure to perform their obligation was due to force majeure or to respondent bank's acts. Ltd.a.27 we held: The 1% surcharge on the principal loan for every month of default is valid. thus. may not be considered unconscionable. the debtor has the burden of proving an excuse . considering that the mortgage agreement was freely entered into by both parties.a. It is an accessory undertaking to assume greater liability on the part of an obligor in case of breach of an obligation. SO ORDERED. DIOSDADO M. petitioners defaulted in the payment of their loan obligation with respondent bank and their contract provided for the payment of 12% p. 2227 of the New Civil Code.a. penalty charge excessive or unconscionable. WHEREFORE.29 we held that: 1âwphi1 x x x The enforcement of the penalty can be demanded by the creditor only when the non-performance is due to the fault or fraud of the debtor. We also do not find the stipulated 12% p. and is separate and distinct from interest payment. Family Foods Manufacturing Co. in order to avoid the payment of the penalty. In Ruiz v.