G.R. No.
115324 February 19, 2003 In opening the account, the authorized signatories were Inocencia
PRODUCERS BANK OF THE PHILIPPINES (now FIRST
INTERNATIONAL BANK), petitioner,
vs.
HON. COURT OF APPEALS AND FRANKLIN VIVES, respondents.
DECISION
CALLEJO, SR., J.:
This is a petition for review on certiorari of the Decision1 of the Court of
Appeals dated June 25, 1991 in CA-G.R. CV No. 11791 and of its
Resolution2 dated May 5, 1994, denying the motion for reconsideration
of said decision filed by petitioner Producers Bank of the Philippines.
Sometime in 1979, private respondent Franklin Vives was asked by his
neighbor and friend Angeles Sanchez to help her friend and townmate,
Col. Arturo Doronilla, in incorporating his business, the Sterela
Marketing and Services ("Sterela" for brevity). Specifically, Sanchez
asked private respondent to deposit in a bank a certain amount of
money in the bank account of Sterela for purposes of its incorporation.
She assured private respondent that he could withdraw his money from
said account within a month’s time. Private respondent asked Sanchez
to bring Doronilla to their house so that they could discuss Sanchez’s
request.3
On May 9, 1979, private respondent, Sanchez, Doronilla and a certain
Estrella Dumagpi, Doronilla’s private secretary, met and discussed the
matter. Thereafter, relying on the assurances and representations of
Sanchez and Doronilla, private respondent issued a check in the
amount of Two Hundred Thousand Pesos (₱200,000.00) in favor of
Sterela. Private respondent instructed his wife, Mrs. Inocencia Vives,
to accompany Doronilla and Sanchez in opening a savings account in
the name of Sterela in the Buendia, Makati branch of Producers Bank
of the Philippines. However, only Sanchez, Mrs. Vives and Dumagpi
went to the bank to deposit the check. They had with them an
authorization letter from Doronilla authorizing Sanchez and her
companions, "in coordination with Mr. Rufo Atienza," to open an
account for Sterela Marketing Services in the amount of ₱200,000.00.
Vives and/or Angeles Sanchez. A passbook for Savings Account No.
10-1567 was thereafter issued to Mrs. Vives.4
Subsequently, private respondent learned that Sterela was no longer
holding office in the address previously given to him. Alarmed, he and
his wife went to the Bank to verify if their money was still intact. The
bank manager referred them to Mr. Rufo Atienza, the assistant
manager, who informed them that part of the money in Savings Account
No. 10-1567 had been withdrawn by Doronilla, and that only
₱90,000.00 remained therein. He likewise told them that Mrs. Vives
could not withdraw said remaining amount because it had to answer for
some postdated checks issued by Doronilla. According to Atienza, after
Mrs. Vives and Sanchez opened Savings Account No. 10-1567,
Doronilla opened Current Account No. 10-0320 for Sterela and
authorized the Bank to debit Savings Account No. 10-1567 for the
amounts necessary to cover overdrawings in Current Account No. 10-
0320. In opening said current account, Sterela, through Doronilla,
obtained a loan of ₱175,000.00 from the Bank. To cover payment
thereof, Doronilla issued three postdated checks, all of which were
dishonored. Atienza also said that Doronilla could assign or withdraw
the money in Savings Account No. 10-1567 because he was the sole
proprietor of Sterela.5
Private respondent tried to get in touch with Doronilla through Sanchez.
On June 29, 1979, he received a letter from Doronilla, assuring him that
his money was intact and would be returned to him. On August 13,
1979, Doronilla issued a postdated check for Two Hundred Twelve
Thousand Pesos (₱212,000.00) in favor of private respondent.
However, upon presentment thereof by private respondent to the
drawee bank, the check was dishonored. Doronilla requested private
respondent to present the same check on September 15, 1979 but
when the latter presented the check, it was again dishonored.6
Private respondent referred the matter to a lawyer, who made a written
demand upon Doronilla for the return of his client’s money. Doronilla
issued another check for ₱212,000.00 in private respondent’s favor but
the check was again dishonored for insufficiency of funds.7
Private respondent instituted an action for recovery of sum of money in
the Regional Trial Court (RTC) in Pasig, Metro Manila against Doronilla,
Sanchez, Dumagpi and petitioner. The case was docketed as Civil
Case No. 44485. He also filed criminal actions against Doronilla,
Sanchez and Dumagpi in the RTC. However, Sanchez passed away
on March 16, 1985 while the case was pending before the trial court.
On October 3, 1995, the RTC of Pasig, Branch 157, promulgated its
Decision in Civil Case No. 44485, the dispositive portion of which reads:
IN VIEW OF THE FOREGOING, judgment is hereby rendered
sentencing defendants Arturo J. Doronila, Estrella Dumagpi and
Producers Bank of the Philippines to pay plaintiff Franklin Vives jointly
and severally –
(a) the amount of ₱200,000.00, representing the money
deposited, with interest at the legal rate from the filing of the
complaint until the same is fully paid;
(b) the sum of ₱50,000.00 for moral damages and a similar
amount for exemplary damages;
(c) the amount of ₱40,000.00 for attorney’s fees; and
(d) the costs of the suit.
SO ORDERED.8
Petitioner appealed the trial court’s decision to the Court of Appeals. In
its Decision dated June 25, 1991, the appellate court affirmed in toto
the decision of the RTC.9 It likewise denied with finality petitioner’s
motion for reconsideration in its Resolution dated May 5, 1994.10
On June 30, 1994, petitioner filed the present petition, arguing that –
I.
THE HONORABLE COURT OF APPEALS ERRED IN UPHOLDING
THAT THE TRANSACTION BETWEEN THE DEFENDANT
DORONILLA AND RESPONDENT VIVES WAS ONE OF SIMPLE
LOAN AND NOT ACCOMMODATION;
II.
THE HONORABLE COURT OF APPEALS ERRED IN UPHOLDING
THAT PETITIONER’S BANK MANAGER, MR. RUFO ATIENZA,
CONNIVED WITH THE OTHER DEFENDANTS IN DEFRAUDING
PETITIONER (Sic. Should be PRIVATE RESPONDENT) AND AS A
CONSEQUENCE, THE PETITIONER SHOULD BE HELD LIABLE
UNDER THE PRINCIPLE OF NATURAL JUSTICE;
III.
THE HONORABLE COURT OF APPEALS ERRED IN ADOPTING
THE ENTIRE RECORDS OF THE REGIONAL TRIAL COURT AND
AFFIRMING THE JUDGMENT APPEALED FROM, AS THE
FINDINGS OF THE REGIONAL TRIAL COURT WERE BASED ON A
MISAPPREHENSION OF FACTS;
IV.
THE HONORABLE COURT OF APPEALS ERRED IN DECLARING
THAT THE CITED DECISION IN SALUDARES VS. MARTINEZ, 29
SCRA 745, UPHOLDING THE LIABILITY OF AN EMPLOYER FOR
ACTS COMMITTED BY AN EMPLOYEE IS APPLICABLE;
V.
THE HONORABLE COURT OF APPEALS ERRED IN UPHOLDING
THE DECISION OF THE LOWER COURT THAT HEREIN
PETITIONER BANK IS JOINTLY AND SEVERALLY LIABLE WITH
THE OTHER DEFENDANTS FOR THE AMOUNT OF P200,000.00
REPRESENTING THE SAVINGS ACCOUNT DEPOSIT, P50,000.00
FOR MORAL DAMAGES, P50,000.00 FOR EXEMPLARY DAMAGES,
P40,000.00 FOR ATTORNEY’S FEES AND THE COSTS OF SUIT.11
Private respondent filed his Comment on September 23, 1994.
Petitioner filed its Reply thereto on September 25, 1995. The Court then
required private respondent to submit a rejoinder to the reply. However,
said rejoinder was filed only on April 21, 1997, due to petitioner’s delay
in furnishing private respondent with copy of the reply12 and several
substitutions of counsel on the part of private respondent.13 On January
17, 2001, the Court resolved to give due course to the petition and
required the parties to submit their respective memoranda.14 Petitioner
filed its memorandum on April 16, 2001 while private respondent
submitted his memorandum on March 22, 2001.
Petitioner contends that the transaction between private respondent
and Doronilla is a simple loan (mutuum) since all the elements of a
mutuum are present: first, what was delivered by private respondent to
Doronilla was money, a consumable thing; and second, the transaction
was onerous as Doronilla was obliged to pay interest, as evidenced by
the check issued by Doronilla in the amount of ₱212,000.00, or
₱12,000 more than what private respondent deposited in Sterela’s
bank account.15 Moreover, the fact that private respondent sued his
good friend Sanchez for his failure to recover his money from Doronilla
shows that the transaction was not merely gratuitous but "had a
business angle" to it. Hence, petitioner argues that it cannot be held
liable for the return of private respondent’s ₱200,000.00 because it is
not privy to the transaction between the latter and Doronilla.16
It argues further that petitioner’s Assistant Manager, Mr. Rufo Atienza,
could not be faulted for allowing Doronilla to withdraw from the savings
account of Sterela since the latter was the sole proprietor of said
company. Petitioner asserts that Doronilla’s May 8, 1979 letter
addressed to the bank, authorizing Mrs. Vives and Sanchez to open a
savings account for Sterela, did not contain any authorization for these
two to withdraw from said account. Hence, the authority to withdraw
therefrom remained exclusively with Doronilla, who was the sole
proprietor of Sterela, and who alone had legal title to the savings
account.17 Petitioner points out that no evidence other than the
testimonies of private respondent and Mrs. Vives was presented during
trial to prove that private respondent deposited his ₱200,000.00 in
Sterela’s account for purposes of its incorporation.18 Hence, petitioner
should not be held liable for allowing Doronilla to withdraw from
Sterela’s savings account. 1a\^/phi1.net
Petitioner also asserts that the Court of Appeals erred in affirming the
trial court’s decision since the findings of fact therein were not accord
with the evidence presented by petitioner during trial to prove that the
transaction between private respondent and Doronilla was a mutuum,
and that it committed no wrong in allowing Doronilla to withdraw from
Sterela’s savings account.19
Finally, petitioner claims that since there is no wrongful act or omission
on its part, it is not liable for the actual damages suffered by private
respondent, and neither may it be held liable for moral and exemplary
damages as well as attorney’s fees.20
Private respondent, on the other hand, argues that the transaction
between him and Doronilla is not a mutuum but an
accommodation,21 since he did not actually part with the ownership of
his ₱200,000.00 and in fact asked his wife to deposit said amount in
the account of Sterela so that a certification can be issued to the effect
that Sterela had sufficient funds for purposes of its incorporation but at
the same time, he retained some degree of control over his money
through his wife who was made a signatory to the savings account and
in whose possession the savings account passbook was given.22
He likewise asserts that the trial court did not err in finding that
petitioner, Atienza’s employer, is liable for the return of his money. He
insists that Atienza, petitioner’s assistant manager, connived with
Doronilla in defrauding private respondent since it was Atienza who
facilitated the opening of Sterela’s current account three days after Mrs.
Vives and Sanchez opened a savings account with petitioner for said
company, as well as the approval of the authority to debit Sterela’s
savings account to cover any overdrawings in its current account.23
There is no merit in the petition.
At the outset, it must be emphasized that only questions of law may be
raised in a petition for review filed with this Court. The Court has
repeatedly held that it is not its function to analyze and weigh all over
again the evidence presented by the parties during trial.24 The Court’s
jurisdiction is in principle limited to reviewing errors of law that might
have been committed by the Court of Appeals.25 Moreover, factual
findings of courts, when adopted and confirmed by the Court of
Appeals, are final and conclusive on this Court unless these findings
are not supported by the evidence on record.26 There is no showing of
any misapprehension of facts on the part of the Court of Appeals in the
case at bar that would require this Court to review and overturn the
factual findings of that court, especially since the conclusions of fact of
the Court of Appeals and the trial court are not only consistent but are
also amply supported by the evidence on record.
No error was committed by the Court of Appeals when it ruled that the
transaction between private respondent and Doronilla was a
commodatum and not a mutuum. A circumspect examination of the
records reveals that the transaction between them was a
commodatum. Article 1933 of the Civil Code distinguishes between the
two kinds of loans in this wise:
By the contract of loan, one of the parties delivers to another, either
something not consumable so that the latter may use the same for a
certain time and return it, in which case the contract is called a
commodatum; or money or other consumable thing, upon the condition
that the same amount of the same kind and quality shall be paid, in
which case the contract is simply called a loan or mutuum.
Commodatum is essentially gratuitous.
Simple loan may be gratuitous or with a stipulation to pay interest.
In commodatum, the bailor retains the ownership of the thing loaned,
while in simple loan, ownership passes to the borrower.
The foregoing provision seems to imply that if the subject of the contract
is a consumable thing, such as money, the contract would be a
mutuum. However, there are some instances where a commodatum
may have for its object a consumable thing. Article 1936 of the Civil
Code provides:
Consumable goods may be the subject of commodatum if the purpose
of the contract is not the consumption of the object, as when it is merely
for exhibition.
Thus, if consumable goods are loaned only for purposes of exhibition,
or when the intention of the parties is to lend consumable goods and to
have the very same goods returned at the end of the period agreed
upon, the loan is a commodatum and not a mutuum.
The rule is that the intention of the parties thereto shall be accorded
primordial consideration in determining the actual character of a
contract.27 In case of doubt, the contemporaneous and subsequent acts
of the parties shall be considered in such determination.28
As correctly pointed out by both the Court of Appeals and the trial court,
the evidence shows that private respondent agreed to deposit his
money in the savings account of Sterela specifically for the purpose of
making it appear "that said firm had sufficient capitalization for
incorporation, with the promise that the amount shall be returned within
thirty (30) days."29 Private respondent merely "accommodated"
Doronilla by lending his money without consideration, as a favor to his
good friend Sanchez. It was however clear to the parties to the
transaction that the money would not be removed from Sterela’s
savings account and would be returned to private respondent after
thirty (30) days.
Doronilla’s attempts to return to private respondent the amount of
₱200,000.00 which the latter deposited in Sterela’s account together
with an additional ₱12,000.00, allegedly representing interest on the
mutuum, did not convert the transaction from a commodatum into a
mutuum because such was not the intent of the parties and because
the additional ₱12,000.00 corresponds to the fruits of the lending of the
₱200,000.00. Article 1935 of the Civil Code expressly states that "[t]he
bailee in commodatum acquires the use of the thing loaned but not its
fruits." Hence, it was only proper for Doronilla to remit to private
respondent the interest accruing to the latter’s money deposited with
petitioner.
Neither does the Court agree with petitioner’s contention that it is not
solidarily liable for the return of private respondent’s money because it
was not privy to the transaction between Doronilla and private
respondent. The nature of said transaction, that is, whether it is a
mutuum or a commodatum, has no bearing on the question of
petitioner’s liability for the return of private respondent’s money
because the factual circumstances of the case clearly show that
petitioner, through its employee Mr. Atienza, was partly responsible for
the loss of private respondent’s money and is liable for its restitution.
Petitioner’s rules for savings deposits written on the passbook it issued
Mrs. Vives on behalf of Sterela for Savings Account No. 10-1567
expressly states that—
"2. Deposits and withdrawals must be made by the depositor personally
or upon his written authority duly authenticated, and neither a deposit
nor a withdrawal will be permitted except upon the production of the
depositor savings bank book in which will be entered by the Bank the
amount deposited or withdrawn."30
Said rule notwithstanding, Doronilla was permitted by petitioner,
through Atienza, the Assistant Branch Manager for the Buendia Branch
of petitioner, to withdraw therefrom even without presenting the
passbook (which Atienza very well knew was in the possession of Mrs.
Vives), not just once, but several times. Both the Court of Appeals and
the trial court found that Atienza allowed said withdrawals because he
was party to Doronilla’s "scheme" of defrauding private respondent:
XXX
But the scheme could not have been executed successfully without the
knowledge, help and cooperation of Rufo Atienza, assistant manager
and cashier of the Makati (Buendia) branch of the defendant bank.
Indeed, the evidence indicates that Atienza had not only facilitated the
commission of the fraud but he likewise helped in devising the means
by which it can be done in such manner as to make it appear that the
transaction was in accordance with banking procedure.
To begin with, the deposit was made in defendant’s Buendia branch
precisely because Atienza was a key officer therein. The records show
that plaintiff had suggested that the ₱200,000.00 be deposited in his
bank, the Manila Banking Corporation, but Doronilla and Dumagpi
insisted that it must be in defendant’s branch in Makati for "it will be
easier for them to get a certification". In fact before he was introduced
to plaintiff, Doronilla had already prepared a letter addressed to the
Buendia branch manager authorizing Angeles B. Sanchez and
company to open a savings account for Sterela in the amount of
₱200,000.00, as "per coordination with Mr. Rufo Atienza, Assistant
Manager of the Bank x x x" (Exh. 1). This is a clear manifestation that
the other defendants had been in consultation with Atienza from the
inception of the scheme. Significantly, there were testimonies and
admission that Atienza is the brother-in-law of a certain Romeo Mirasol,
a friend and business associate of Doronilla.
1awphi1.nét
Then there is the matter of the ownership of the fund. Because of the
"coordination" between Doronilla and Atienza, the latter knew before
hand that the money deposited did not belong to Doronilla nor to
Sterela. Aside from such foreknowledge, he was explicitly told by
Inocencia Vives that the money belonged to her and her husband and
the deposit was merely to accommodate Doronilla. Atienza even
declared that the money came from Mrs. Vives.
Although the savings account was in the name of Sterela, the bank
records disclose that the only ones empowered to withdraw the same
were Inocencia Vives and Angeles B. Sanchez. In the signature card
pertaining to this account (Exh. J), the authorized signatories were
Inocencia Vives &/or Angeles B. Sanchez. Atienza stated that it is the
usual banking procedure that withdrawals of savings deposits could
only be made by persons whose authorized signatures are in the
signature cards on file with the bank. He, however, said that this
procedure was not followed here because Sterela was owned by
Doronilla. He explained that Doronilla had the full authority to withdraw
by virtue of such ownership. The Court is not inclined to agree with
Atienza. In the first place, he was all the time aware that the money
came from Vives and did not belong to Sterela. He was also told by
Mrs. Vives that they were only accommodating Doronilla so that a
certification can be issued to the effect that Sterela had a deposit of so
much amount to be sued in the incorporation of the firm. In the second
place, the signature of Doronilla was not authorized in so far as that
account is concerned inasmuch as he had not signed the signature
card provided by the bank whenever a deposit is opened. In the third
place, neither Mrs. Vives nor Sanchez had given Doronilla the authority
to withdraw.
Moreover, the transfer of fund was done without the passbook having
been presented. It is an accepted practice that whenever a withdrawal
is made in a savings deposit, the bank requires the presentation of the
passbook. In this case, such recognized practice was dispensed with.
The transfer from the savings account to the current account was
without the submission of the passbook which Atienza had given to
Mrs. Vives. Instead, it was made to appear in a certification signed by
Estrella Dumagpi that a duplicate passbook was issued to Sterela
because the original passbook had been surrendered to the Makati
branch in view of a loan accommodation assigning the savings account
(Exh. C). Atienza, who undoubtedly had a hand in the execution of this
certification, was aware that the contents of the same are not true. He
knew that the passbook was in the hands of Mrs. Vives for he was the
one who gave it to her. Besides, as assistant manager of the branch
and the bank official servicing the savings and current accounts in
question, he also was aware that the original passbook was never
surrendered. He was also cognizant that Estrella Dumagpi was not
among those authorized to withdraw so her certification had no effect
whatsoever.
The circumstance surrounding the opening of the current account also
demonstrate that Atienza’s active participation in the perpetration of the
fraud and deception that caused the loss. The records indicate that this
account was opened three days later after the ₱200,000.00 was
deposited. In spite of his disclaimer, the Court believes that Atienza
was mindful and posted regarding the opening of the current account
considering that Doronilla was all the while in "coordination" with him.
That it was he who facilitated the approval of the authority to debit the
savings account to cover any overdrawings in the current account (Exh.
2) is not hard to comprehend.
Clearly Atienza had committed wrongful acts that had resulted to the
loss subject of this case. x x x.31
Under Article 2180 of the Civil Code, employers shall be held primarily
and solidarily liable for damages caused by their employees acting
within the scope of their assigned tasks. To hold the employer liable
under this provision, it must be shown that an employer-employee
relationship exists, and that the employee was acting within the scope
of his assigned task when the act complained of was committed.32 Case
law in the United States of America has it that a corporation that
entrusts a general duty to its employee is responsible to the injured
party for damages flowing from the employee’s wrongful act done in the
course of his general authority, even though in doing such act, the
employee may have failed in its duty to the employer and disobeyed
the latter’s instructions.33
There is no dispute that Atienza was an employee of petitioner.
Furthermore, petitioner did not deny that Atienza was acting within the
scope of his authority as Assistant Branch Manager when he assisted
Doronilla in withdrawing funds from Sterela’s Savings Account No. 10-
1567, in which account private respondent’s money was deposited, and
in transferring the money withdrawn to Sterela’s Current Account with
petitioner. Atienza’s acts of helping Doronilla, a customer of the
petitioner, were obviously done in furtherance of petitioner’s
interests34 even though in the process, Atienza violated some of
petitioner’s rules such as those stipulated in its savings account
passbook.35 It was established that the transfer of funds from Sterela’s
savings account to its current account could not have been
accomplished by Doronilla without the invaluable assistance of Atienza,
and that it was their connivance which was the cause of private
respondent’s loss.
The foregoing shows that the Court of Appeals correctly held that under
Article 2180 of the Civil Code, petitioner is liable for private
respondent’s loss and is solidarily liable with Doronilla and Dumagpi for
the return of the ₱200,000.00 since it is clear that petitioner failed to
prove that it exercised due diligence to prevent the unauthorized
withdrawals from Sterela’s savings account, and that it was not
negligent in the selection and supervision of Atienza. Accordingly, no
error was committed by the appellate court in the award of actual, moral
and exemplary damages, attorney’s fees and costs of suit to private
respondent.
WHEREFORE, the petition is hereby DENIED. The assailed Decision
and Resolution of the Court of Appeals are AFFIRMED.
SO ORDERED.
G.R. No. 146364 June 3, 2004
COLITO T. PAJUYO, petitioner,
vs.
COURT OF APPEALS and EDDIE GUEVARRA, respondents.
DECISION
CARPIO, J.:
The Case
Before us is a petition for review1 of the 21 June 2000 Decision2 and 14
December 2000 Resolution of the Court of Appeals in CA-G.R. SP No.
43129. The Court of Appeals set aside the 11 November 1996
decision3 of the Regional Trial Court of Quezon City, Branch
81,4 affirming the 15 December 1995 decision5 of the Metropolitan Trial
Court of Quezon City, Branch 31.6
The Antecedents
In June 1979, petitioner Colito T. Pajuyo ("Pajuyo") paid ₱400 to a
certain Pedro Perez for the rights over a 250-square meter lot in Barrio
Payatas, Quezon City. Pajuyo then constructed a house made of light
materials on the lot. Pajuyo and his family lived in the house from 1979
to 7 December 1985.
On 8 December 1985, Pajuyo and private respondent Eddie Guevarra
("Guevarra") executed a Kasunduan or agreement. Pajuyo, as owner
of the house, allowed Guevarra to live in the house for free provided
Guevarra would maintain the cleanliness and orderliness of the house.
Guevarra promised that he would voluntarily vacate the premises on
Pajuyo’s demand.
In September 1994, Pajuyo informed Guevarra of his need of the house
and demanded that Guevarra vacate the house. Guevarra refused.
Pajuyo filed an ejectment case against Guevarra with the Metropolitan
Trial Court of Quezon City, Branch 31 ("MTC").
In his Answer, Guevarra claimed that Pajuyo had no valid title or right
of possession over the lot where the house stands because the lot is
within the 150 hectares set aside by Proclamation No. 137 for
socialized housing. Guevarra pointed out that from December 1985 to
September 1994, Pajuyo did not show up or communicate with him.
Guevarra insisted that neither he nor Pajuyo has valid title to the lot.
On 15 December 1995, the MTC rendered its decision in favor of
Pajuyo. The dispositive portion of the MTC decision reads:
WHEREFORE, premises considered, judgment is hereby
rendered for the plaintiff and against defendant, ordering the
latter to:
A) vacate the house and lot occupied by the defendant
or any other person or persons claiming any right under
him;
B) pay unto plaintiff the sum of THREE HUNDRED
PESOS (₱300.00) monthly as reasonable
compensation for the use of the premises starting from
the last demand;
C) pay plaintiff the sum of ₱3,000.00 as and by way of
attorney’s fees; and
D) pay the cost of suit.
SO ORDERED.7
Aggrieved, Guevarra appealed to the Regional Trial Court of Quezon
City, Branch 81 ("RTC").
On 11 November 1996, the RTC affirmed the MTC decision. The
dispositive portion of the RTC decision reads:
WHEREFORE, premises considered, the Court finds no
reversible error in the decision appealed from, being in accord
with the law and evidence presented, and the same is hereby
affirmed en toto.
SO ORDERED.8
Guevarra received the RTC decision on 29 November 1996. Guevarra
had only until 14 December 1996 to file his appeal with the Court of
Appeals. Instead of filing his appeal with the Court of Appeals,
Guevarra filed with the Supreme Court a "Motion for Extension of Time
to File Appeal by Certiorari Based on Rule 42" ("motion for extension").
Guevarra theorized that his appeal raised pure questions of law. The
Receiving Clerk of the Supreme Court received the motion for
extension on 13 December 1996 or one day before the right to appeal
expired.
On 3 January 1997, Guevarra filed his petition for review with the
Supreme Court.
On 8 January 1997, the First Division of the Supreme Court issued a
Resolution9 referring the motion for extension to the Court of Appeals
which has concurrent jurisdiction over the case. The case presented no
special and important matter for the Supreme Court to take cognizance
of at the first instance.
On 28 January 1997, the Thirteenth Division of the Court of Appeals
issued a Resolution10 granting the motion for extension conditioned on
the timeliness of the filing of the motion.
On 27 February 1997, the Court of Appeals ordered Pajuyo to comment
on Guevara’s petition for review. On 11 April 1997, Pajuyo filed his
Comment.
On 21 June 2000, the Court of Appeals issued its decision reversing
the RTC decision. The dispositive portion of the decision reads:
WHEREFORE, premises considered, the assailed Decision of
the court a quo in Civil Case No. Q-96-26943
is REVERSED and SET ASIDE; and it is hereby declared that
the ejectment case filed against defendant-appellant is without
factual and legal basis.
SO ORDERED.11
Pajuyo filed a motion for reconsideration of the decision. Pajuyo pointed
out that the Court of Appeals should have dismissed outright
Guevarra’s petition for review because it was filed out of time.
Moreover, it was Guevarra’s counsel and not Guevarra who signed the
certification against forum-shopping.
On 14 December 2000, the Court of Appeals issued a resolution
denying Pajuyo’s motion for reconsideration. The dispositive portion of
the resolution reads:
WHEREFORE, for lack of merit, the motion for reconsideration
is hereby DENIED. No costs.
SO ORDERED.12
The Ruling of the MTC
The MTC ruled that the subject of the agreement between Pajuyo and
Guevarra is the house and not the lot. Pajuyo is the owner of the house,
and he allowed Guevarra to use the house only by tolerance. Thus,
Guevarra’s refusal to vacate the house on Pajuyo’s demand made
Guevarra’s continued possession of the house illegal.
The Ruling of the RTC
The RTC upheld the Kasunduan, which established the landlord and
tenant relationship between Pajuyo and Guevarra. The terms of
the Kasunduan bound Guevarra to return possession of the house on
demand.
The RTC rejected Guevarra’s claim of a better right under Proclamation
No. 137, the Revised National Government Center Housing Project
Code of Policies and other pertinent laws. In an ejectment suit, the RTC
has no power to decide Guevarra’s rights under these laws. The RTC
declared that in an ejectment case, the only issue for resolution is
material or physical possession, not ownership.
The Ruling of the Court of Appeals
The Court of Appeals declared that Pajuyo and Guevarra are squatters.
Pajuyo and Guevarra illegally occupied the contested lot which the
government owned.
Perez, the person from whom Pajuyo acquired his rights, was also a
squatter. Perez had no right or title over the lot because it is public land.
The assignment of rights between Perez and Pajuyo, and
the Kasunduan between Pajuyo and Guevarra, did not have any legal
effect. Pajuyo and Guevarra are in pari delicto or in equal fault. The
court will leave them where they are.
The Court of Appeals reversed the MTC and RTC rulings, which held
that the Kasunduan between Pajuyo and Guevarra created a legal tie
akin to that of a landlord and tenant relationship. The Court of Appeals
ruled that the Kasunduan is not a lease contract but
a commodatum because the agreement is not for a price certain.
Pajuyo raises the following issues for resolution:
Since Pajuyo admitted that he resurfaced only in 1994 to claim the
property, the appellate court held that Guevarra has a better right over
the property under Proclamation No. 137. President Corazon C. Aquino
("President Aquino") issued Proclamation No. 137 on 7 September
1987. At that time, Guevarra was in physical possession of the
property. Under Article VI of the Code of Policies Beneficiary Selection
and Disposition of Homelots and Structures in the National Housing
Project ("the Code"), the actual occupant or caretaker of the lot shall
have first priority as beneficiary of the project. The Court of Appeals
concluded that Guevarra is first in the hierarchy of priority.
In denying Pajuyo’s motion for reconsideration, the appellate court
debunked Pajuyo’s claim that Guevarra filed his motion for extension
beyond the period to appeal.
The Court of Appeals pointed out that Guevarra’s motion for extension
filed before the Supreme Court was stamped "13 December 1996 at
4:09 PM" by the Supreme Court’s Receiving Clerk. The Court of
Appeals concluded that the motion for extension bore a date, contrary
to Pajuyo’s claim that the motion for extension was undated. Guevarra
filed the motion for extension on time on 13 December 1996 since he
filed the motion one day before the expiration of the reglementary
period on 14 December 1996. Thus, the motion for extension properly
complied with the condition imposed by the Court of Appeals in its 28
January 1997 Resolution. The Court of Appeals explained that the
thirty-day extension to file the petition for review was deemed granted
because of such compliance.
The Court of Appeals rejected Pajuyo’s argument that the appellate
court should have dismissed the petition for review because it was
Guevarra’s counsel and not Guevarra who signed the certification
against forum-shopping. The Court of Appeals pointed out that Pajuyo
did not raise this issue in his Comment. The Court of Appeals held that
Pajuyo could not now seek the dismissal of the case after he had
extensively argued on the merits of the case. This technicality, the
appellate court opined, was clearly an afterthought.
The Ruling of the Court
The Issues
WHETHER THE COURT OF APPEALS ERRED OR ABUSED
ITS AUTHORITY AND DISCRETION TANTAMOUNT TO
LACK OF JURISDICTION:
1) in GRANTING, instead of denying, Private
Respondent’s Motion for an Extension of thirty days to
file petition for review at the time when there was no
more period to extend as the decision of the Regional
Trial Court had already become final and executory.
2) in giving due course, instead of dismissing, private
respondent’s Petition for Review even though the
certification against forum-shopping was signed only by
counsel instead of by petitioner himself.
3) in ruling that the Kasunduan voluntarily entered into
by the parties was in fact a commodatum, instead of a
Contract of Lease as found by the Metropolitan Trial
Court and in holding that "the ejectment case filed
against defendant-appellant is without legal and factual
basis".
4) in reversing and setting aside the Decision of the
Regional Trial Court in Civil Case No. Q-96-26943 and
in holding that the parties are in pari delicto being both
squatters, therefore, illegal occupants of the contested
parcel of land.
5) in deciding the unlawful detainer case based on the
so-called Code of Policies of the National Government
Center Housing Project instead of deciding the same
under the Kasunduan voluntarily executed by the
parties, the terms and conditions of which are the laws
between themselves.13
The procedural issues Pajuyo is raising are baseless. However, we find
merit in the substantive issues Pajuyo is submitting for resolution.
Procedural Issues
Pajuyo insists that the Court of Appeals should have dismissed outright
Guevarra’s petition for review because the RTC decision had already
become final and executory when the appellate court acted on
Guevarra’s motion for extension to file the petition. Pajuyo points out
that Guevarra had only one day before the expiry of his period to appeal
the RTC decision. Instead of filing the petition for review with the Court
of Appeals, Guevarra filed with this Court an undated motion for
extension of 30 days to file a petition for review. This Court merely
referred the motion to the Court of Appeals. Pajuyo believes that the
filing of the motion for extension with this Court did not toll the running
of the period to perfect the appeal. Hence, when the Court of Appeals
received the motion, the period to appeal had already expired.
We are not persuaded.
Decisions of the regional trial courts in the exercise of their appellate
jurisdiction are appealable to the Court of Appeals by petition for review
in cases involving questions of fact or mixed questions of fact and
law.14 Decisions of the regional trial courts involving pure questions of
law are appealable directly to this Court by petition for review.15These
modes of appeal are now embodied in Section 2, Rule 41 of the 1997
Rules of Civil Procedure.
Guevarra believed that his appeal of the RTC decision involved only
questions of law. Guevarra thus filed his motion for extension to file
petition for review before this Court on 14 December 1996. On 3
January 1997, Guevarra then filed his petition for review with this Court.
A perusal of Guevarra’s petition for review gives the impression that the
issues he raised were pure questions of law. There is a question of law
when the doubt or difference is on what the law is on a certain state of
facts.16 There is a question of fact when the doubt or difference is on
the truth or falsity of the facts alleged.17
In his petition for review before this Court, Guevarra no longer disputed
the facts. Guevarra’s petition for review raised these questions: (1) Do
ejectment cases pertain only to possession of a structure, and not the
lot on which the structure stands? (2) Does a suit by a squatter against
a fellow squatter constitute a valid case for ejectment? (3) Should a
Presidential Proclamation governing the lot on which a squatter’s
structure stands be considered in an ejectment suit filed by the owner
of the structure?
These questions call for the evaluation of the rights of the parties under
the law on ejectment and the Presidential Proclamation. At first glance,
the questions Guevarra raised appeared purely legal. However, some
factual questions still have to be resolved because they have a bearing
on the legal questions raised in the petition for review. These factual
matters refer to the metes and bounds of the disputed property and the
application of Guevarra as beneficiary of Proclamation No. 137.
The Court of Appeals has the power to grant an extension of time to file
a petition for review. In Lacsamana v. Second Special Cases
Division of the Intermediate Appellate Court,18 we declared that the
Court of Appeals could grant extension of time in appeals by petition
for review. In Liboro v. Court of Appeals,19 we clarified that the
prohibition against granting an extension of time applies only in a case
where ordinary appeal is perfected by a mere notice of appeal. The
prohibition does not apply in a petition for review where the pleading
needs verification. A petition for review, unlike an ordinary appeal,
requires preparation and research to present a persuasive
position.20The drafting of the petition for review entails more time and
effort than filing a notice of appeal.21 Hence, the Court of Appeals may
allow an extension of time to file a petition for review.
In the more recent case of Commissioner of Internal Revenue v.
Court of Appeals,22 we held that Liboro’sclarification
of Lacsamana is consistent with the Revised Internal Rules of the
Court of Appeals and Supreme Court Circular No. 1-91. They all allow
an extension of time for filing petitions for review with the Court of
Appeals. The extension, however, should be limited to only fifteen days
save in exceptionally meritorious cases where the Court of Appeals
may grant a longer period.
A judgment becomes "final and executory" by operation of law. Finality
of judgment becomes a fact on the lapse of the reglementary period to
appeal if no appeal is perfected.23 The RTC decision could not have
gained finality because the Court of Appeals granted the 30-day
extension to Guevarra.
The Court of Appeals did not commit grave abuse of discretion when it
approved Guevarra’s motion for extension. The Court of Appeals gave
due course to the motion for extension because it complied with the
condition set by the appellate court in its resolution dated 28 January
1997. The resolution stated that the Court of Appeals would only give
due course to the motion for extension if filed on time. The motion for
extension met this condition.
The material dates to consider in determining the timeliness of the filing
of the motion for extension are (1) the date of receipt of the judgment
or final order or resolution subject of the petition, and (2) the date of
filing of the motion for extension.24 It is the date of the filing of the motion
or pleading, and not the date of execution, that determines the
timeliness of the filing of that motion or pleading. Thus, even if the
motion for extension bears no date, the date of filing stamped on it is
the reckoning point for determining the timeliness of its filing.
Guevarra had until 14 December 1996 to file an appeal from the RTC
decision. Guevarra filed his motion for extension before this Court on
13 December 1996, the date stamped by this Court’s Receiving Clerk
on the motion for extension. Clearly, Guevarra filed the motion for
extension exactly one day before the lapse of the reglementary period
to appeal.
Assuming that the Court of Appeals should have dismissed Guevarra’s
appeal on technical grounds, Pajuyo did not ask the appellate court to
deny the motion for extension and dismiss the petition for review at the
earliest opportunity. Instead, Pajuyo vigorously discussed the merits of
the case. It was only when the Court of Appeals ruled in Guevarra’s
favor that Pajuyo raised the procedural issues against Guevarra’s
petition for review.
A party who, after voluntarily submitting a dispute for resolution,
receives an adverse decision on the merits, is estopped from attacking
the jurisdiction of the court.25 Estoppel sets in not because the judgment
of the court is a valid and conclusive adjudication, but because the
practice of attacking the court’s jurisdiction after voluntarily submitting
to it is against public policy.26
In his Comment before the Court of Appeals, Pajuyo also failed to
discuss Guevarra’s failure to sign the certification against forum
shopping. Instead, Pajuyo harped on Guevarra’s counsel signing the
verification, claiming that the counsel’s verification is insufficient since
it is based only on "mere information."
A party’s failure to sign the certification against forum shopping is
different from the party’s failure to sign personally the verification. The
certificate of non-forum shopping must be signed by the party, and not
by counsel.27 The certification of counsel renders the petition
defective.28
On the other hand, the requirement on verification of a pleading is a
formal and not a jurisdictional requisite.29 It is intended simply to secure
an assurance that what are alleged in the pleading are true and correct
and not the product of the imagination or a matter of speculation, and
that the pleading is filed in good faith.30 The party need not sign the
verification. A party’s representative, lawyer or any person who
personally knows the truth of the facts alleged in the pleading may sign
the verification.31
We agree with the Court of Appeals that the issue on the certificate
against forum shopping was merely an afterthought. Pajuyo did not call
the Court of Appeals’ attention to this defect at the early stage of the
proceedings. Pajuyo raised this procedural issue too late in the
proceedings.
Absence of Title over the Disputed Property will not Divest the
Courts of Jurisdiction to Resolve the Issue of Possession
Settled is the rule that the defendant’s claim of ownership of the
disputed property will not divest the inferior court of its jurisdiction over
the ejectment case.32 Even if the pleadings raise the issue of
ownership, the court may pass on such issue to determine only the
question of possession, especially if the ownership is inseparably
linked with the possession.33 The adjudication on the issue of
ownership is only provisional and will not bar an action between the
same parties involving title to the land.34 This doctrine is a necessary
consequence of the nature of the two summary actions of ejectment,
forcible entry and unlawful detainer, where the only issue for
adjudication is the physical or material possession over the real
property.35
In this case, what Guevarra raised before the courts was that he and
Pajuyo are not the owners of the contested property and that they are
mere squatters. Will the defense that the parties to the ejectment case
are not the owners of the disputed lot allow the courts to renounce their
jurisdiction over the case? The Court of Appeals believed so and held
that it would just leave the parties where they are since they are in pari
delicto.
We do not agree with the Court of Appeals.
Ownership or the right to possess arising from ownership is not at issue
in an action for recovery of possession. The parties cannot present
evidence to prove ownership or right to legal possession except to
prove the nature of the possession when necessary to resolve the issue
of physical possession.36 The same is true when the defendant asserts
the absence of title over the property. The absence of title over the
contested lot is not a ground for the courts to withhold relief from the
parties in an ejectment case.
The only question that the courts must resolve in ejectment
proceedings is - who is entitled to the physical possession of the
premises, that is, to the possession de facto and not to the
possession de jure.37 It does not even matter if a party’s title to the
property is questionable,38 or when both parties intruded into public land
and their applications to own the land have yet to be approved by the
proper government agency.39 Regardless of the actual condition of the
title to the property, the party in peaceable quiet possession shall not
be thrown out by a strong hand, violence or terror.40 Neither is the
unlawful withholding of property allowed. Courts will always uphold
respect for prior possession.
Thus, a party who can prove prior possession can recover such
possession even against the owner himself.41Whatever may be the
character of his possession, if he has in his favor prior possession in
time, he has the security that entitles him to remain on the property until
a person with a better right lawfully ejects him.42 To repeat, the only
issue that the court has to settle in an ejectment suit is the right to
physical possession.
In Pitargue v. Sorilla,43 the government owned the land in dispute. The
government did not authorize either the plaintiff or the defendant in the
case of forcible entry case to occupy the land. The plaintiff had prior
possession and had already introduced improvements on the public
land. The plaintiff had a pending application for the land with the Bureau
of Lands when the defendant ousted him from possession. The plaintiff
filed the action of forcible entry against the defendant. The government
was not a party in the case of forcible entry.
The defendant questioned the jurisdiction of the courts to settle the
issue of possession because while the application of the plaintiff was
still pending, title remained with the government, and the Bureau of
Public Lands had jurisdiction over the case. We disagreed with the
defendant. We ruled that courts have jurisdiction to entertain ejectment
suits even before the resolution of the application. The plaintiff, by
priority of his application and of his entry, acquired prior physical
possession over the public land applied for as against other private
claimants. That prior physical possession enjoys legal protection
against other private claimants because only a court can take away
such physical possession in an ejectment case.
While the Court did not brand the plaintiff and the defendant
in Pitargue44 as squatters, strictly speaking, their entry into the disputed
land was illegal. Both the plaintiff and defendant entered the public land
without the owner’s permission. Title to the land remained with the
government because it had not awarded to anyone ownership of the
contested public land. Both the plaintiff and the defendant were in effect
squatting on government property. Yet, we upheld the courts’
jurisdiction to resolve the issue of possession even if the plaintiff and
the defendant in the ejectment case did not have any title over the
contested land.
Courts must not abdicate their jurisdiction to resolve the issue of
physical possession because of the public need to preserve the basic
policy behind the summary actions of forcible entry and unlawful
detainer. The underlying philosophy behind ejectment suits is to
prevent breach of the peace and criminal disorder and to compel the
party out of possession to respect and resort to the law alone to obtain
what he claims is his.45 The party deprived of possession must not take
the law into his own hands.46 Ejectment proceedings are summary in
nature so the authorities can settle speedily actions to recover
possession because of the overriding need to quell social
disturbances.47
We further explained in Pitargue the greater interest that is at stake in
actions for recovery of possession. We made the following
pronouncements in Pitargue:
The question that is before this Court is: Are courts without
jurisdiction to take cognizance of possessory actions involving
these public lands before final award is made by the Lands
Department, and before title is given any of the conflicting
claimants? It is one of utmost importance, as there are public
lands everywhere and there are thousands of settlers,
especially in newly opened regions. It also involves a matter of
policy, as it requires the determination of the respective
authorities and functions of two coordinate branches of the
Government in connection with public land conflicts.
Our problem is made simple by the fact that under the Civil
Code, either in the old, which was in force in this country before
the American occupation, or in the new, we have a possessory
action, the aim and purpose of which is the recovery of the
physical possession of real property, irrespective of the
question as to who has the title thereto. Under the Spanish Civil
Code we had the accion interdictal, a summary proceeding
which could be brought within one year from dispossession
(Roman Catholic Bishop of Cebu vs. Mangaron, 6 Phil. 286,
291); and as early as October 1, 1901, upon the enactment of
the Code of Civil Procedure (Act No. 190 of the Philippine
Commission) we implanted the common law action of forcible
entry (section 80 of Act No. 190), the object of which has been
stated by this Court to be "to prevent breaches of the peace
and criminal disorder which would ensue from the
withdrawal of the remedy, and the reasonable hope such
withdrawal would create that some advantage must accrue
to those persons who, believing themselves entitled to the
possession of property, resort to force to gain possession
rather than to some appropriate action in the court to
assert their claims." (Supia and Batioco vs. Quintero and
Ayala, 59 Phil. 312, 314.) So before the enactment of the first
Public Land Act (Act No. 926) the action of forcible entry was
already available in the courts of the country. So the question
to be resolved is, Did the Legislature intend, when it vested the
power and authority to alienate and dispose of the public lands
in the Lands Department, to exclude the courts from
entertaining the possessory action of forcible entry between
rival claimants or occupants of any land before award thereof
to any of the parties? Did Congress intend that the lands
applied for, or all public lands for that matter, be removed from
the jurisdiction of the judicial Branch of the Government, so that
any troubles arising therefrom, or any breaches of the peace or
disorders caused by rival claimants, could be inquired into only
by the Lands Department to the exclusion of the courts? The
answer to this question seems to us evident. The Lands
Department does not have the means to police public lands;
neither does it have the means to prevent disorders arising
therefrom, or contain breaches of the peace among settlers; or
to pass promptly upon conflicts of possession. Then its power
is clearly limited to disposition and alienation, and while it
may decide conflicts of possession in order to make
proper award, the settlement of conflicts of possession
which is recognized in the court herein has another
ultimate purpose, i.e., the protection of actual possessors
and occupants with a view to the prevention of breaches
of the peace. The power to dispose and alienate could not
have been intended to include the power to prevent or
settle disorders or breaches of the peace among rival
settlers or claimants prior to the final award. As to this,
therefore, the corresponding branches of the Government must
continue to exercise power and jurisdiction within the limits of
their respective functions. The vesting of the Lands
Department with authority to administer, dispose, and
alienate public lands, therefore, must not be understood as
depriving the other branches of the Government of the
exercise of the respective functions or powers thereon,
such as the authority to stop disorders and quell breaches
of the peace by the police, the authority on the part of the
courts to take jurisdiction over possessory actions arising
therefrom not involving, directly or indirectly, alienation
and disposition.
Our attention has been called to a principle enunciated in
American courts to the effect that courts have no jurisdiction to
determine the rights of claimants to public lands, and that until
the disposition of the land has passed from the control of the
Federal Government, the courts will not interfere with the
administration of matters concerning the same. (50 C. J. 1093-
1094.) We have no quarrel with this principle. The
determination of the respective rights of rival claimants to public
lands is different from the determination of who has the actual
physical possession or occupation with a view to protecting the
same and preventing disorder and breaches of the peace. A
judgment of the court ordering restitution of the possession of
a parcel of land to the actual occupant, who has been deprived
thereof by another through the use of force or in any other
illegal manner, can never be "prejudicial interference" with the
disposition or alienation of public lands. On the other hand, if
courts were deprived of jurisdiction of cases involving
conflicts of possession, that threat of judicial action
against breaches of the peace committed on public lands
would be eliminated, and a state of lawlessness would
probably be produced between applicants, occupants or
squatters, where force or might, not right or justice, would
rule.
It must be borne in mind that the action that would be used to
solve conflicts of possession between rivals or conflicting
applicants or claimants would be no other than that of forcible
entry. This action, both in England and the United States and
in our jurisdiction, is a summary and expeditious remedy
whereby one in peaceful and quiet possession may recover the
possession of which he has been deprived by a stronger hand,
by violence or terror; its ultimate object being to prevent breach
of the peace and criminal disorder. (Supia and Batioco vs.
Quintero and Ayala, 59 Phil. 312, 314.) The basis of the remedy
is mere possession as a fact, of physical possession, not a legal
possession. (Mediran vs. Villanueva, 37 Phil. 752.) The title or
right to possession is never in issue in an action of forcible
entry; as a matter of fact, evidence thereof is expressly banned,
except to prove the nature of the possession. (Second 4, Rule
72, Rules of Court.) With this nature of the action in mind, by
no stretch of the imagination can conclusion be arrived at that
the use of the remedy in the courts of justice would constitute
an interference with the alienation, disposition, and control of
public lands. To limit ourselves to the case at bar can it be
pretended at all that its result would in any way interfere with
the manner of the alienation or disposition of the land
contested? On the contrary, it would facilitate adjudication, for
the question of priority of possession having been decided in a
final manner by the courts, said question need no longer waste
the time of the land officers making the adjudication or award.
(Emphasis ours)
The Principle of Pari Delicto is not Applicable to Ejectment Cases
The Court of Appeals erroneously applied the principle of pari delicto to
this case.
Articles 1411 and 1412 of the Civil Code48 embody the principle of pari
delicto. We explained the principle of pari delicto in these words:
The rule of pari delicto is expressed in the maxims ‘ex dolo malo
non eritur actio’ and ‘in pari delicto potior est conditio
defedentis.’ The law will not aid either party to an illegal
agreement. It leaves the parties where it finds them.49
The application of the pari delicto principle is not absolute, as there are
exceptions to its application. One of these exceptions is where the
application of the pari delicto rule would violate well-established public
policy.50
In Drilon v. Gaurana,51 we reiterated the basic policy behind the
summary actions of forcible entry and unlawful detainer. We held that:
It must be stated that the purpose of an action of forcible entry
and detainer is that, regardless of the actual condition of the
title to the property, the party in peaceable quiet possession
shall not be turned out by strong hand, violence or terror. 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, and the
reasonable hope such withdrawal would create that some
advantage must accrue to those persons who, believing
themselves entitled to the possession of property, resort to
force to gain possession rather than to some appropriate action
in the courts to assert their claims. 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.52
Clearly, the application of the principle of pari delicto to a case of
ejectment between squatters is fraught with danger. To shut out relief
to squatters on the ground of pari delicto would openly invite mayhem
and lawlessness. A squatter would oust another squatter from
possession of the lot that the latter had illegally occupied, emboldened
by the knowledge that the courts would leave them where they are.
Nothing would then stand in the way of the ousted squatter from re-
claiming his prior possession at all cost.
Petty warfare over possession of properties is precisely what ejectment
cases or actions for recovery of possession seek to prevent.53 Even the
owner who has title over the disputed property cannot take the law into
his own hands to regain possession of his property. The owner must
go to court.
Courts must resolve the issue of possession even if the parties to the
ejectment suit are squatters. The determination of priority and
superiority of possession is a serious and urgent matter that cannot be
left to the squatters to decide. To do so would make squatters receive
better treatment under the law. The law restrains property owners from
taking the law into their own hands. However, the principle of pari
delicto as applied by the Court of Appeals would give squatters free
rein to dispossess fellow squatters or violently retake possession of
properties usurped from them. Courts should not leave squatters to
their own devices in cases involving recovery of possession.
Possession is the only Issue for Resolution in an Ejectment Case
The case for review before the Court of Appeals was a simple case of
ejectment. The Court of Appeals refused to rule on the issue of physical
possession. Nevertheless, the appellate court held that the pivotal
issue in this case is who between Pajuyo and Guevarra has the "priority
right as beneficiary of the contested land under Proclamation No.
137."54 According to the Court of Appeals, Guevarra enjoys preferential
right under Proclamation No. 137 because Article VI of the Code
declares that the actual occupant or caretaker is the one qualified to
apply for socialized housing.
The ruling of the Court of Appeals has no factual and legal basis.
First. Guevarra did not present evidence to show that the contested lot
is part of a relocation site under Proclamation No. 137. Proclamation
No. 137 laid down the metes and bounds of the land that it declared
open for disposition to bona fide residents.
The records do not show that the contested lot is within the land
specified by Proclamation No. 137. Guevarra had the burden to prove
that the disputed lot is within the coverage of Proclamation No. 137. He
failed to do so.
Second. The Court of Appeals should not have given credence to
Guevarra’s unsubstantiated claim that he is the beneficiary of
Proclamation No. 137. Guevarra merely alleged that in the survey the
project administrator conducted, he and not Pajuyo appeared as the
actual occupant of the lot.
There is no proof that Guevarra actually availed of the benefits of
Proclamation No. 137. Pajuyo allowed Guevarra to occupy the disputed
property in 1985. President Aquino signed Proclamation No. 137 into
law on 11 March 1986. Pajuyo made his earliest demand for Guevarra
to vacate the property in September 1994.
During the time that Guevarra temporarily held the property up to the
time that Proclamation No. 137 allegedly segregated the disputed lot,
Guevarra never applied as beneficiary of Proclamation No. 137. Even
when Guevarra already knew that Pajuyo was reclaiming possession
of the property, Guevarra did not take any step to comply with the
requirements of Proclamation No. 137.
Third. Even assuming that the disputed lot is within the coverage of
Proclamation No. 137 and Guevarra has a pending application over the
lot, courts should still assume jurisdiction and resolve the issue of
possession. However, the jurisdiction of the courts would be limited to
the issue of physical possession only.
In Pitargue,55 we ruled that courts have jurisdiction over possessory
actions involving public land to determine the issue of physical
possession. The determination of the respective rights of rival
claimants to public land is, however, distinct from the determination of
who has the actual physical possession or who has a better right of
physical possession.56 The administrative disposition and alienation of
public lands should be threshed out in the proper government agency.57
The Court of Appeals’ determination of Pajuyo and Guevarra’s rights
under Proclamation No. 137 was premature. Pajuyo and Guevarra
were at most merely potential beneficiaries of the law. Courts should
not preempt the decision of the administrative agency mandated by law
to determine the qualifications of applicants for the acquisition of public
lands. Instead, courts should expeditiously resolve the issue of physical
possession in ejectment cases to prevent disorder and breaches of
peace.58
Pajuyo is Entitled to Physical Possession of the Disputed Property
Guevarra does not dispute Pajuyo’s prior possession of the lot and
ownership of the house built on it. Guevarra expressly admitted the
existence and due execution of the Kasunduan. The Kasunduan reads:
Ako, si COL[I]TO PAJUYO, may-ari ng bahay at lote sa Bo. Payatas,
Quezon City, ay nagbibigay pahintulot kay G. Eddie Guevarra, na
pansamantalang manirahan sa nasabing bahay at lote ng "walang
bayad." Kaugnay nito, kailangang panatilihin nila ang kalinisan at
kaayusan ng bahay at lote.
Sa sandaling kailangan na namin ang bahay at lote, sila’y kusang aalis
ng walang reklamo.
Based on the Kasunduan, Pajuyo permitted Guevarra to reside in the
house and lot free of rent, but Guevarra was under obligation to
maintain the premises in good condition. Guevarra promised to vacate
the premises on Pajuyo’s demand but Guevarra broke his promise and
refused to heed Pajuyo’s demand to vacate.
These facts make out a case for unlawful detainer. Unlawful detainer
involves the withholding by a person from another of the possession of
real property to which the latter is entitled after the expiration or
termination of the former’s right to hold possession under a contract,
express or implied.59
Where the plaintiff allows the defendant to use his property by tolerance
without any contract, the defendant is necessarily bound by an implied
promise that he will vacate on demand, failing which, an action for
unlawful detainer will lie.60 The defendant’s refusal to comply with the
demand makes his continued possession of the property
unlawful.61 The status of the defendant in such a case is similar to that
of a lessee or tenant whose term of lease has expired but whose
occupancy continues by tolerance of the owner.62
This principle should apply with greater force in cases where a contract
embodies the permission or tolerance to use the property.
The Kasunduan expressly articulated Pajuyo’s forbearance. Pajuyo did
not require Guevarra to pay any rent but only to maintain the house and
lot in good condition. Guevarra expressly vowed in the Kasunduan that
he would vacate the property on demand. Guevarra’s refusal to comply
with Pajuyo’s demand to vacate made Guevarra’s continued
possession of the property unlawful.
We do not subscribe to the Court of Appeals’ theory that
the Kasunduan is one of commodatum.
In a contract of commodatum, one of the parties delivers to another
something not consumable so that the latter may use the same for a
certain time and return it.63 An essential feature of commodatum is that
it is gratuitous. Another feature of commodatum is that the use of the
thing belonging to another is for a certain period.64 Thus, the bailor
cannot demand the return of the thing loaned until after expiration of
the period stipulated, or after accomplishment of the use for which
the commodatum is constituted.65 If the bailor should have urgent need
of the thing, he may demand its return for temporary use.66 If the use of
the thing is merely tolerated by the bailor, he can demand the return of
the thing at will, in which case the contractual relation is called a
precarium.67 Under the Civil Code, precarium is a kind of
commodatum.68
The Kasunduan reveals that the accommodation accorded by Pajuyo
to Guevarra was not essentially gratuitous. While the Kasunduan did
not require Guevarra to pay rent, it obligated him to maintain the
property in good condition. The imposition of this obligation makes
the Kasunduan a contract different from a commodatum. The effects of
the Kasunduan are also different from that of a commodatum. Case law
on ejectment has treated relationship based on tolerance as one that
is akin to a landlord-tenant relationship where the withdrawal of
permission would result in the termination of the lease.69 The tenant’s
withholding of the property would then be unlawful. This is settled
jurisprudence.
Even assuming that the relationship between Pajuyo and Guevarra is
one of commodatum, Guevarra as bailee would still have the duty to
turn over possession of the property to Pajuyo, the bailor. The
obligation to deliver or to return the thing received attaches to contracts
for safekeeping, or contracts of commission, administration and
commodatum.70 These contracts certainly involve the obligation to
deliver or return the thing received.71
Guevarra turned his back on the Kasunduan on the sole ground that
like him, Pajuyo is also a squatter. Squatters, Guevarra pointed out,
cannot enter into a contract involving the land they illegally occupy.
Guevarra insists that the contract is void.
Guevarra should know that there must be honor even between
squatters. Guevarra freely entered into the Kasunduan. Guevarra
cannot now impugn the Kasunduan after he had benefited from it.
The Kasunduan binds Guevarra.
The Kasunduan is not void for purposes of determining who between
Pajuyo and Guevarra has a right to physical possession of the
contested property. The Kasunduan is the undeniable evidence of
Guevarra’s recognition of Pajuyo’s better right of physical possession.
Guevarra is clearly a possessor in bad faith. The absence of a contract
would not yield a different result, as there would still be an implied
promise to vacate.
Guevarra contends that there is "a pernicious evil that is sought to be
avoided, and that is allowing an absentee squatter who (sic) makes
(sic) a profit out of his illegal act."72 Guevarra bases his argument on
the preferential right given to the actual occupant or caretaker under
Proclamation No. 137 on socialized housing.
We are not convinced.
Pajuyo did not profit from his arrangement with Guevarra because
Guevarra stayed in the property without paying any rent. There is also
no proof that Pajuyo is a professional squatter who rents out usurped
properties to other squatters. Moreover, it is for the proper government
agency to decide who between Pajuyo and Guevarra qualifies for
socialized housing. The only issue that we are addressing is physical
possession.
Prior possession is not always a condition sine qua non in
ejectment.73 This is one of the distinctions between forcible entry and
unlawful detainer.74 In forcible entry, the plaintiff is deprived of physical
possession of his land or building by means of force, intimidation,
threat, strategy or stealth. Thus, he must allege and prove prior
possession.75 But in unlawful detainer, the defendant unlawfully
withholds possession after the expiration or termination of his right to
possess under any contract, express or implied. In such a case, prior
physical possession is not required.76
Pajuyo’s withdrawal of his permission to Guevarra terminated
the Kasunduan. Guevarra’s transient right to possess the property
ended as well. Moreover, it was Pajuyo who was in actual possession
of the property because Guevarra had to seek Pajuyo’s permission to
temporarily hold the property and Guevarra had to follow the conditions
set by Pajuyo in the Kasunduan. Control over the property still rested
with Pajuyo and this is evidence of actual possession.
Pajuyo’s absence did not affect his actual possession of the disputed
property. Possession in the eyes of the law does not mean that a man
has to have his feet on every square meter of the ground before he is
deemed in possession.77 One may acquire possession not only by
physical occupation, but also by the fact that a thing is subject to the
action of one’s will.78 Actual or physical occupation is not always
necessary.79
Ruling on Possession Does not Bind Title to the Land in Dispute
We are aware of our pronouncement in cases where we declared that
"squatters and intruders who clandestinely enter into titled government
property cannot, by such act, acquire any legal right to said
property."80 We made this declaration because the person who had title
or who had the right to legal possession over the disputed property was
a party in the ejectment suit and that party instituted the case against
squatters or usurpers.
In this case, the owner of the land, which is the government, is not a
party to the ejectment case. This case is between squatters. Had the
government participated in this case, the courts could have evicted the
contending squatters, Pajuyo and Guevarra.
Since the party that has title or a better right over the property is not
impleaded in this case, we cannot evict on our own the parties. Such a
ruling would discourage squatters from seeking the aid of the courts in
settling the issue of physical possession. Stripping both the plaintiff and
the defendant of possession just because they are squatters would
have the same dangerous implications as the application of the
principle of pari delicto. Squatters would then rather settle the issue of
physical possession among themselves than seek relief from the courts
if the plaintiff and defendant in the ejectment case would both stand to
lose possession of the disputed property. This would subvert the policy
underlying actions for recovery of possession.
Since Pajuyo has in his favor priority in time in holding the property, he
is entitled to remain on the property until a person who has title or a
better right lawfully ejects him. Guevarra is certainly not that person.
The ruling in this case, however, does not preclude Pajuyo and
Guevarra from introducing evidence and presenting arguments before
the proper administrative agency to establish any right to which they
may be entitled under the law.81
In no way should our ruling in this case be interpreted to condone
squatting. The ruling on the issue of physical possession does not
affect title to the property nor constitute a binding and conclusive
adjudication on the merits on the issue of ownership.82 The owner can
still go to court to recover lawfully the property from the person who
holds the property without legal title. Our ruling here does not diminish
the power of government agencies, including local governments, to
condemn, abate, remove or demolish illegal or unauthorized structures
in accordance with existing laws.
Attorney’s Fees and Rentals
The MTC and RTC failed to justify the award of ₱3,000 attorney’s fees
to Pajuyo. Attorney’s fees as part of damages are awarded only in the
instances enumerated in Article 2208 of the Civil Code.83 Thus, the
award of attorney’s fees is the exception rather than the
rule.84 Attorney’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.85 We therefore delete the attorney’s fees awarded to
Pajuyo.
We sustain the ₱300 monthly rentals the MTC and RTC assessed
against Guevarra. Guevarra did not dispute this factual finding of the
two courts. We find the amount reasonable compensation to Pajuyo.
The ₱300 monthly rental is counted from the last demand to vacate,
which was on 16 February 1995.
WHEREFORE, we GRANT the petition. The Decision dated 21 June
2000 and Resolution dated 14 December 2000 of the Court of Appeals
in CA-G.R. SP No. 43129 are SET ASIDE. The Decision dated 11
November 1996 of the Regional Trial Court of Quezon City, Branch 81
in Civil Case No. Q-96-26943, affirming the Decision dated 15
December 1995 of the Metropolitan Trial Court of Quezon City, Branch
31 in Civil Case No. 12432, is REINSTATEDwith MODIFICATION. The
award of attorney’s fees is deleted. No costs.
SO ORDERED.
G.R. No. L-17474 October 25, 1962
REPUBLIC OF THE PHILIPPINES, plaintiff-appellee,
vs.
JOSE V. BAGTAS, defendant,
FELICIDAD M. BAGTAS, Administratrix of the Intestate Estate left
by the late Jose V. Bagtas, petitioner-appellant.
D. T. Reyes, Liaison and Associates for petitioner-appellant.
Office of the Solicitor General for plaintiff-appellee.
PADILLA, J.:
The Court of Appeals certified this case to this Court because only
questions of law are raised.
On 8 May 1948 Jose V. Bagtas borrowed from the Republic of the
Philippines through the Bureau of Animal Industry three bulls: a Red
Sindhi with a book value of P1,176.46, a Bhagnari, of P1,320.56 and a
Sahiniwal, of P744.46, for a period of one year from 8 May 1948 to 7
May 1949 for breeding purposes subject to a government charge of
breeding fee of 10% of the book value of the bulls. Upon the expiration
on 7 May 1949 of the contract, the borrower asked for a renewal for
another period of one year. However, the Secretary of Agriculture and
Natural Resources approved a renewal thereof of only one bull for
another year from 8 May 1949 to 7 May 1950 and requested the return
of the other two. On 25 March 1950 Jose V. Bagtas wrote to the Director
of Animal Industry that he would pay the value of the three bulls. On 17
October 1950 he reiterated his desire to buy them at a value with a
deduction of yearly depreciation to be approved by the Auditor General.
On 19 October 1950 the Director of Animal Industry advised him that
the book value of the three bulls could not be reduced and that they
either be returned or their book value paid not later than 31 October
1950. Jose V. Bagtas failed to pay the book value of the three bulls or
to return them. So, on 20 December 1950 in the Court of First Instance
of Manila the Republic of the Philippines commenced an action against
him praying that he be ordered to return the three bulls loaned to him
or to pay their book value in the total sum of P3,241.45 and the unpaid
breeding fee in the sum of P199.62, both with interests, and costs; and
that other just and equitable relief be granted in (civil No. 12818).
On 5 July 1951 Jose V. Bagtas, through counsel Navarro, Rosete and
Manalo, answered that because of the bad peace and order situation
in Cagayan Valley, particularly in the barrio of Baggao, and of the
pending appeal he had taken to the Secretary of Agriculture and
Natural Resources and the President of the Philippines from the refusal
by the Director of Animal Industry to deduct from the book value of the
bulls corresponding yearly depreciation of 8% from the date of
acquisition, to which depreciation the Auditor General did not object, he
could not return the animals nor pay their value and prayed for the
dismissal of the complaint.
After hearing, on 30 July 1956 the trial court render judgment —
. . . sentencing the latter (defendant) to pay the sum of
P3,625.09 the total value of the three bulls plus the breeding
fees in the amount of P626.17 with interest on both sums of (at)
the legal rate from the filing of this complaint and costs.
On 9 October 1958 the plaintiff moved ex parte for a writ of execution
which the court granted on 18 October and issued on 11 November
1958. On 2 December 1958 granted an ex-parte motion filed by the
plaintiff on November 1958 for the appointment of a special sheriff to
serve the writ outside Manila. Of this order appointing a special sheriff,
on 6 December 1958, Felicidad M. Bagtas, the surviving spouse of the
defendant Jose Bagtas who died on 23 October 1951 and as
administratrix of his estate, was notified. On 7 January 1959 she file a
motion alleging that on 26 June 1952 the two bull Sindhi and Bhagnari
were returned to the Bureau Animal of Industry and that sometime in
November 1958 the third bull, the Sahiniwal, died from gunshot wound
inflicted during a Huk raid on Hacienda Felicidad Intal, and praying that
the writ of execution be quashed and that a writ of preliminary injunction
be issued. On 31 January 1959 the plaintiff objected to her motion. On
6 February 1959 she filed a reply thereto. On the same day, 6 February,
the Court denied her motion. Hence, this appeal certified by the Court
of Appeals to this Court as stated at the beginning of this opinion.
It is true that on 26 June 1952 Jose M. Bagtas, Jr., son of the appellant
by the late defendant, returned the Sindhi and Bhagnari bulls to Roman
Remorin, Superintendent of the NVB Station, Bureau of Animal
Industry, Bayombong, Nueva Vizcaya, as evidenced by a
memorandum receipt signed by the latter (Exhibit 2). That is why in its
objection of 31 January 1959 to the appellant's motion to quash the writ
of execution the appellee prays "that another writ of execution in the
sum of P859.53 be issued against the estate of defendant deceased
Jose V. Bagtas." She cannot be held liable for the two bulls which
already had been returned to and received by the appellee.
The appellant contends that the Sahiniwal bull was accidentally killed
during a raid by the Huk in November 1953 upon the surrounding
barrios of Hacienda Felicidad Intal, Baggao, Cagayan, where the
animal was kept, and that as such death was due to force majeure she
is relieved from the duty of returning the bull or paying its value to the
appellee. The contention is without merit. The loan by the appellee to
the late defendant Jose V. Bagtas of the three bulls for breeding
purposes for a period of one year from 8 May 1948 to 7 May 1949, later
on renewed for another year as regards one bull, was subject to the
payment by the borrower of breeding fee of 10% of the book value of
the bulls. The appellant contends that the contract
was commodatum and that, for that reason, as the appellee retained
ownership or title to the bull it should suffer its loss due to force majeure.
A contract of commodatum is essentially gratuitous.1 If the breeding fee
be considered a compensation, then the contract would be a lease of
the bull. Under article 1671 of the Civil Code the lessee would be
subject to the responsibilities of a possessor in bad faith, because she
had continued possession of the bull after the expiry of the contract.
And even if the contract be commodatum, still the appellant is liable,
because article 1942 of the Civil Code provides that a bailee in a
contract of commodatum —
. . . is liable for loss of the things, even if it should be through a
fortuitous event:
(2) If he keeps it longer than the period stipulated . . .
(3) If the thing loaned has been delivered with appraisal of its
value, unless there is a stipulation exempting the bailee from
responsibility in case of a fortuitous event;
The original period of the loan was from 8 May 1948 to 7 May 1949.
The loan of one bull was renewed for another period of one year to end
on 8 May 1950. But the appellant kept and used the bull until November
1953 when during a Huk raid it was killed by stray bullets. Furthermore,
when lent and delivered to the deceased husband of the appellant the
bulls had each an appraised book value, to with: the Sindhi, at
P1,176.46, the Bhagnari at P1,320.56 and the Sahiniwal at P744.46. It
was not stipulated that in case of loss of the bull due to fortuitous event
the late husband of the appellant would be exempt from liability.
The appellant's contention that the demand or prayer by the appellee
for the return of the bull or the payment of its value being a money claim
should be presented or filed in the intestate proceedings of the
defendant who died on 23 October 1951, is not altogether without merit.
However, the claim that his civil personality having ceased to exist the
trial court lost jurisdiction over the case against him, is untenable,
because section 17 of Rule 3 of the Rules of Court provides that —
After a party dies and the claim is not thereby extinguished, the
court shall order, upon proper notice, the legal representative
of the deceased to appear and to be substituted for the
deceased, within a period of thirty (30) days, or within such time
as may be granted. . . .
and after the defendant's death on 23 October 1951 his counsel failed
to comply with section 16 of Rule 3 which provides that —
Whenever a party to a pending case dies . . . it shall be the duty
of his attorney to inform the court promptly of such death . . .
and to give the name and residence of the executory
administrator, guardian, or other legal representative of the
deceased . . . .
The notice by the probate court and its publication in the Voz de
Manila that Felicidad M. Bagtas had been issue letters of administration
of the estate of the late Jose Bagtas and that "all persons having claims
for monopoly against the deceased Jose V. Bagtas, arising from
contract express or implied, whether the same be due, not due, or
contingent, for funeral expenses and expenses of the last sickness of
the said decedent, and judgment for monopoly against him, to file said
claims with the Clerk of this Court at the City Hall Bldg., Highway 54,
Quezon City, within six (6) months from the date of the first publication
of this order, serving a copy thereof upon the aforementioned Felicidad
M. Bagtas, the appointed administratrix of the estate of the said
deceased," is not a notice to the court and the appellee who were to be
notified of the defendant's death in accordance with the above-quoted
rule, and there was no reason for such failure to notify, because the
attorney who appeared for the defendant was the same who
represented the administratrix in the special proceedings instituted for
the administration and settlement of his estate. The appellee or its
attorney or representative could not be expected to know of the death
of the defendant or of the administration proceedings of his estate
instituted in another court that if the attorney for the deceased
defendant did not notify the plaintiff or its attorney of such death as
required by the rule.
As the appellant already had returned the two bulls to the appellee, the
estate of the late defendant is only liable for the sum of P859.63, the
value of the bull which has not been returned to the appellee, because
it was killed while in the custody of the administratrix of his estate. This
is the amount prayed for by the appellee in its objection on 31 January
1959 to the motion filed on 7 January 1959 by the appellant for the
quashing of the writ of execution.
Special proceedings for the administration and settlement of the estate
of the deceased Jose V. Bagtas having been instituted in the Court of
First Instance of Rizal (Q-200), the money judgment rendered in favor
of the appellee cannot be enforced by means of a writ of execution but
must be presented to the probate court for payment by the appellant,
the administratrix appointed by the court.
ACCORDINGLY, the writ of execution appealed from is set aside,
without pronouncement as to costs.
G.R. No. L-46240 November 3, 1939
MARGARITA QUINTOS and ANGEL A. ANSALDO, plaintiffs-
appellants,
vs.
BECK, defendant-appellee.
Mauricio Carlos for appellants.
Felipe Buencamino, Jr. for appellee.
IMPERIAL, J.:
The plaintiff brought this action to compel the defendant to return her
certain furniture which she lent him for his use. She appealed from the
judgment of the Court of First Instance of Manila which ordered that the
defendant return to her the three has heaters and the four electric
lamps found in the possession of the Sheriff of said city, that she call
for the other furniture from the said sheriff of Manila at her own
expense, and that the fees which the Sheriff may charge for the deposit
of the furniture be paid pro rata by both parties, without pronouncement
as to the costs.
The defendant was a tenant of the plaintiff and as such occupied the
latter's house on M. H. del Pilar street, No. 1175. On January 14, 1936,
upon the novation of the contract of lease between the plaintiff and the
defendant, the former gratuitously granted to the latter the use of the
furniture described in the third paragraph of the stipulation of facts,
subject to the condition that the defendant would return them to the
plaintiff upon the latter's demand. The plaintiff sold the property to Maria
Lopez and Rosario Lopez and on September 14, 1936, these three
notified the defendant of the conveyance, giving him sixty days to
vacate the premises under one of the clauses of the contract of lease.
There after the plaintiff required the defendant to return all the furniture
transferred to him for them in the house where they were found.
On November 5, 1936, the defendant, through another person,
wrote to the plaintiff reiterating that she may call for the furniture in the
ground floor of the house. On the 7th of the same month, the defendant
wrote another letter to the plaintiff informing her that he could not give
up the three gas heaters and the four electric lamps because he would
use them until the 15th of the same month when the lease in due to
expire. The plaintiff refused to get the furniture in view of the fact that
the defendant had declined to make delivery of all of them.
On November 15th, before vacating the house, the defendant
deposited with the Sheriff all the furniture belonging to the plaintiff and
they are now on deposit in the warehouse situated at No. 1521, Rizal
Avenue, in the custody of the said sheriff.
In their seven assigned errors the plaintiffs contend that the trial court
incorrectly applied the law: in holding that they violated the contract by
not calling for all the furniture on November 5, 1936, when the
defendant placed them at their disposal; in not ordering the defendant
to pay them the value of the furniture in case they are not delivered; in
holding that they should get all the furniture from the Sheriff at their
expenses; in ordering them to pay-half of the expenses claimed by the
Sheriff for the deposit of the furniture; in ruling that both parties should
pay their respective legal expenses or the costs; and in denying pay
their respective legal expenses or the costs; and in denying the motions
for reconsideration and new trial. To dispose of the case, it is only
necessary to decide whether the defendant complied with his obligation
to return the furniture upon the plaintiff's demand; whether the latter is
bound to bear the deposit fees thereof, and whether she is entitled to
the costs of litigation.
lawphi1.net
The contract entered into between the parties is one of commadatum,
because under it the plaintiff gratuitously granted the use of the
furniture to the defendant, reserving for herself the ownership thereof;
by this contract the defendant bound himself to return the furniture to
the plaintiff, upon the latters demand (clause 7 of the contract, Exhibit
A; articles 1740, paragraph 1, and 1741 of the Civil Code). The
obligation voluntarily assumed by the defendant to return the furniture
upon the plaintiff's demand, means that he should return all of them to
the plaintiff at the latter's residence or house. The defendant did not
comply with this obligation when he merely placed them at the disposal
of the plaintiff, retaining for his benefit the three gas heaters and the
four eletric lamps. The provisions of article 1169 of the Civil Code cited
by counsel for the parties are not squarely applicable. The trial court,
therefore, erred when it came to the legal conclusion that the plaintiff
failed to comply with her obligation to get the furniture when they were
offered to her.
As the defendant had voluntarily undertaken to return all the furniture
to the plaintiff, upon the latter's demand, the Court could not legally
compel her to bear the expenses occasioned by the deposit of the
furniture at the defendant's behest. The latter, as bailee, was not
entitled to place the furniture on deposit; nor was the plaintiff under a
duty to accept the offer to return the furniture, because the defendant
wanted to retain the three gas heaters and the four electric lamps.
As to the value of the furniture, we do not believe that the plaintiff is
entitled to the payment thereof by the defendant in case of his inability
to return some of the furniture because under paragraph 6 of the
stipulation of facts, the defendant has neither agreed to nor admitted
the correctness of the said value. Should the defendant fail to deliver
some of the furniture, the value thereof should be latter determined by
the trial Court through evidence which the parties may desire to
present.
The costs in both instances should be borne by the defendant because
the plaintiff is the prevailing party (section 487 of the Code of Civil
Procedure). The defendant was the one who breached the contract
of commodatum, and without any reason he refused to return and
deliver all the furniture upon the plaintiff's demand. In these
circumstances, it is just and equitable that he pay the legal expenses
and other judicial costs which the plaintiff would not have otherwise
defrayed.
The appealed judgment is modified and the defendant is ordered to
return and deliver to the plaintiff, in the residence to return and deliver
to the plaintiff, in the residence or house of the latter, all the furniture
described in paragraph 3 of the stipulation of facts Exhibit A. The
expenses which may be occasioned by the delivery to and deposit of
the furniture with the Sheriff shall be for the account of the defendant.
the defendant shall pay the costs in both instances. So ordered.