CASE

FIRST DIVISION

[G.R. No. 109557.  November 29, 2000]

JOSE UY and his Spouse GLENDA J. UY and GILDA L. JARDELEZA, petitioners, vs. COURT OF APPEALS and TEODORO L. JARDELEZA, respondents.

D E C I S I O N

PARDO, J.:

The case is an appeal via certiorari from the decision[1] of the Court of Appeals and its resolution denying reconsideration[2] reversing that of the Regional Trial Court, Iloilo, Branch  32[3] and declaring void the special proceedings instituted therein by petitioners to authorize petitioner Gilda L. Jardeleza, in view of the comatose condition of her husband, Ernesto Jardeleza, Sr., with the approval of the court, to dispose of their conjugal property in favor of co-petitioners, their daughter and son in law, for the ostensible purpose of “financial need in the personal, business and medical expenses of her ‘incapacitated’ husband.”

The facts, as found by the Court of Appeals, are as follows:

“This case is a dispute between Teodoro L. Jardeleza (herein respondent) on the one hand, against his mother Gilda L. Jardeleza, and sister and brother-in-law, the spouses Jose Uy and Glenda Jardeleza (herein petitioners) on the other hand.  The controversy came about as a result of Dr. Ernesto Jardeleza, Sr.’s suffering of a stroke on March 25, 1991, which left him comatose and bereft of any motor or mental faculties.  Said Ernesto Jardeleza, Sr. is the father of herein respondent Teodoro Jardeleza and husband of herein private respondent Gilda Jardeleza.

“Upon learning that one piece of real property belonging to the senior Jardeleza spouses was about to be sold, petitioner Teodoro Jardeleza, on June 6, 1991, filed a petition (Annex “A”) before the R.T.C. of Iloilo City, Branch 25, where it was docketed as Special Proceeding No. 4689, in the matter of the guardianship of Dr. Ernesto Jardeleza, Sr.  The petitioner averred therein that the present physical and mental incapacity  of Dr. Ernesto Jardeleza, Sr. prevent him from competently administering his properties, and in order to prevent the loss and dissipation of the Jardelezas’ real and personal assets, there was a need for a court-appointed guardian to administer said properties.  It was prayed therein that Letters of Guardianship be issued in favor of herein private respondent Gilda Ledesma Jardeleza, wife of Dr. Ernesto Jardeleza, Sr. It was further prayed that in the meantime, no property of Dr. Ernesto Jardeleza, Sr. be negotiated, mortgaged or otherwise alienated to third persons, particularly Lot No. 4291 and all the improvements thereon, located along Bonifacio Drive, Iloilo City, and covered by T.C.T. No. 47337.

“A few days later, or on June 13, 1991, respondent Gilda L. Jardeleza herself filed a petition docketed as Special Proceeding NO. 4691, before Branch 32 of the R.T.C. of Iloilo City, regarding the declaration of incapacity of Ernesto Jardeleza, Sr., assumption of sole powers of administration of conjugal properties, and authorization to sell the same (Annex “B”).  Therein, the petitioner Gilda L. Jardeleza averred the physical and mental incapacity of her husband, who was then confined for intensive medical care and treatment at the Iloilo Doctor’s Hospital.  She signified to the court her desire to assume sole powers of administration of their conjugal properties.  She also alleged that her husband’s medical treatment and hospitalization expenses were piling up, accumulating to several hundred thousands of pesos already.  For this, she urgently needed to

sell one piece of real property, specifically Lot No. 4291 and its improvements.  Thus, she prayed for authorization from the court to sell said property.

 “The following day, June 14, 1991, Branch 32 of the R.T.C. of Iloilo City issued an Order (Annex “C”) finding the petition in Spec. Proc. No. 4691 to be sufficient in form and substance, and setting the hearing thereof for June 20, 1991.  The scheduled hearing of the petition proceeded, attended by therein petitioner Gilda Jardeleza, her counsel, her two children, namely Ernesto Jardeleza, Jr., and Glenda Jardeleza Uy, and Dr. Rolando Padilla, one of Ernesto Jardeleza, Sr.’s attending physicians.

“On that same day, June 20, 1991, Branch 32 of the RTC of Iloilo City rendered its Decision (Annex “D”), finding that it was convinced that Ernesto Jardeleza, Sr. was truly incapacitated to participate in the administration of the conjugal properties, and that the sale of Lot No. 4291 and the improvements thereon was necessary to defray the mounting expenses for treatment and Hospitalization.  The said court also made the pronouncement that the petition filed by Gilda L. Jardeleza was “pursuant to Article 124 of the Family Code, and that the proceedings thereon are governed by the rules on summary proceedings sanctioned under Article 253 of the same Code x x x.

“The said court then disposed as follows:

“WHEREFORE, there being factual and legal bases to the petition dated June 13, 1991, the Court hereby renders judgment as follows:

“1)  declaring Ernesto Jardeleza, Sr., petitioner’s husband, to be incapacitated and unable to participate in the administration of conjugal properties;

“2)  authorizing petitioner Gilda L. Jardeleza to assume sole powers of administration of their conjugal properties; and

“3)  authorizing aforesaid petitioner to sell Lot No. 4291 of the Cadastral Survey of Iloilo, situated in Iloilo City and covered by TCT No. 47337 issued in the names of Ernesto Jardeleza, Sr. and Gilda L. Jardeleza and the buildings standing thereof.

“SO ORDERED.

“On June 24, 1991, herein petitioner Teodoro Jardeleza filed his Opposition to the proceedings before Branch 32 in Spec. Proc. Case No. 4691, said petitioner being unaware and not knowing that a decision has already been rendered on the case by public respondent.

“On July 3, 1991, herein petitioner Teodoro Jardeleza filed a motion for reconsideration of the judgment in Spec. Proc. No. 4691 and a motion for consolidation of the two cases (Annex “F”).  He propounded the argument that the petition for declaration of incapacity, assumption of sole powers of administration, and authority to sell the conjugal properties was essentially a petition for guardianship of the person and properties of Ernesto Jardeleza, Sr. As such, it cannot be prosecuted in accordance with the provisions on summary proceedings set out in Article 253 of the Family Code.  It should follow the rules governing special proceedings in the Revised Rules of Court which require procedural due process, particularly the need for notice and a hearing on the merits.  On the other hand,  even if  Gilda Jardeleza’s petition can be prosecuted by summary proceedings, there was still a failure to comply with the basic requirements thereof, making the decision in Spec. Proc. No. 4691 a defective one.  He further alleged that under the New Civil Code, Ernesto Jardeleza, Sr. had acquired vested rights as a conjugal partner, and that these rights cannot be impaired or prejudiced without his consent.  Neither can he be deprived of his share in the conjugal properties through

mere summary proceedings.  He then restated his position that Spec. Proc. No. 4691 should be consolidated with Spec. Proc. No. 4689 which was filed earlier and pending before Branch 25.

“Teodoro Jardeleza also questioned the propriety of the sale of Lot No. 4291 and the improvements thereon supposedly to pay the accumulated financial obligations arising from Ernesto Jardeleza, Sr.’s hospitalization.  He alleged that the market value of the property would be around Twelve to Fifteen Million Pesos, but that he had been informed that it would be sold for much less.  He also pointed out that the building thereon which houses the Jardeleza Clinic is a monument to Ernesto Jardeleza Sr.’s industry, labor and service to his fellowmen.  Hence, the said property has a lot of sentimental value to his family.  Besides, argued Teodoro Jardeleza, then conjugal partnership had other liquid assets to pay off all financial obligations.  He mentioned that apart from sufficient cash, Jardeleza, Sr. owned stocks of Iloilo Doctors’ Hospital which can be off-set against the cost of medical and hospital bills.  Furthermore, Ernesto Jardeleza, Sr. enjoys certain privileges at the said hospital which allows him to pay on installment basis.  Moreover, two of Ernesto Jardeleza Sr.’s attending physicians are his own sons who do not charge anything for their professional services.

“On July 4, 1991, Teodoro Jardeleza filed in Spec. Proc. No. 4691 a supplement to his motion for reconsideration (Annex “G”).  He reiterated his contention that summary proceedings was irregularly applied.  He also noted that the provisions on summary proceedings found in Chapter 2 of the Family Code comes under the heading on “Separation in Fact Between Husband and Wife” which contemplates of a situation where both spouses are of disposing mind.  Thus, he argued that were one spouse is “comatose without motor and mental faculties,” the said provisions cannot be made to apply.

“While the motion for reconsideration was pending, Gilda Jardeleza disposed by absolute sale Lot No. 4291 and all its improvements to her daughter, Ma. Glenda Jardeleza Uy, for Eight Million Pesos (P8,000,000.00), as evidenced by a Deed Absolute Sale dated July 8, 1991 executed between them (p. 111, Rollo).  Under date of July 23, 1991, Gilda Jardeleza filed an urgent ex-parte motion for approval of the deed of absolute sale.

“On August 12, 1991 Teodoro Jardeleza filed his Opposition to the motion for approval of the deed of sale on the grounds that: (1) the motion was prematurely filed and should be held in abeyance until the final resolution of the petition; (2) the motion does not allege nor prove the justifications for the sale; and (3) the motion does not allege that had Ernesto Jardeleza, Sr. been competent, he would have given his consent to the sale.

“Judge Amelita K. del Rosario-Benedicto of Branch 32 of the respondent Court, who had penned the decision in Spec. Proc. No. 4691 had in the meantime formally inhibited herself from further acting in this case (Annex “I”).  The case was then reraffled to Branch 28 of the said court.

“On December 19, 1991, the said court issued an Order (Annex “M”) denying herein petitioner’s motion for reconsideration and approving respondent Jardeleza’s motion for approval of the deed of absolute sale.  The said court ruled that:

“After a careful and thorough perusal of the decision, dated June 20, 1991, the Motion for Reconsideration, as well as its supplements filed by “oppositor”, Teodoro L. Jardeleza, through counsel, and the opposition to the Motion for Reconsideration, including its supplements, filed by petitioner, through counsel, this Court is of the opinion and so holds, that her Honor, Amelita K. del Rosario-Benedicto, Presiding Judge of Branch 32, of this Court, has properly observed the procedure embodied under Article 253, in relation to Article 124, of the Family Code, in rendering her decision dated June 20, 1991.

“Also, as correctly stated by petitioner, through counsel, that “oppositor” Teodor L. Jardeleza does not have the personality to oppose the instant petition considering that the property or properties, subject of the petition, belongs to the conjugal partnership of the spouses Ernesto and Gilda Jardeleza, who are both still alive.

“In view thereof, the Motion for Reconsideration of “oppositor” Teodoro L. Jardeleza, is hereby denied for lack of merit.

“Considering the validity of the decision dated June 20, 1991, which among others, authorized Gilda L. Jardeleza to sell Lot No. 4291 of the Cadastral Survey of Iloilo, covered by Transfer Certificate of Title No. 47337 issued in the names of Ernesto Jardeleza, Sr., and Gilda L. Jardeleza and the building standing thereon, the Urgent Ex-Parte Motion for Approval of Deed of Absolute Sale dated July 23, 1991, filed by petitioner, through counsel, is hereby granted and the deed of absolute sale, executed and notarized on July 8, 1991, by and between Gilda L. Jardeleza, as vendor, and Ma. Glenda Jardeleza, as vendee, is hereby approved, and the Register of Deeds of Iloilo City, is directed to register the sale and issue the corresponding transfer certificate of title to the vendee.

“SO ORDERED.”[4]

On December 9, 1992, the Court of Appeals promulgated its  decision reversing the appealed decision and ordering the trial court to dismiss the special proceedings to approve the deed of sale, which was also declared void.[5]

On December 29, 1992, petitioners filed a motion for reconsideration, [6] however, on March 29, 1993, the Court of Appeals denied the motion, finding no cogent and compelling reason to disturb the decision.[7]

Hence, this appeal.[8]

The issue raised is whether petitioner Gilda L. Jardeleza as the wife of Ernesto Jardeleza, Sr. who suffered a stroke, a cerebrovascular accident, rendering him comatose, without motor and mental faculties, and could not manage their conjugal partnership property may assume sole powers of administration of the conjugal property under Article 124 of the Family Code and dispose of a parcel of land with its improvements, worth  more than twelve million  pesos, with the approval of the court in a summary proceedings, to her co-petitioners, her own daughter and son-in-law, for the amount of eight million pesos.

The Court of Appeals ruled that in the condition of Dr. Ernesto Jardeleza, Sr., the procedural rules on summary proceedings in relation to Article 124 of the Family Code are not  applicable.   Because Dr. Jardeleza, Sr. was unable to take care of himself and manage the conjugal property due to illness that had rendered him comatose, the proper remedy was the appointment of a judicial guardian of the person or estate or both of such incompetent, under Rule 93, Section 1, 1964 Revised Rules of Court.   Indeed, petitioner earlier had filed such a petition for judicial guardianship.

Article 124 of the Family Code provides as follows:

“ART. 124.  The administration and enjoyment of the conjugal partnership property shall belong to both spouses jointly.  In case of disagreement, the husband’s decision shall prevail, subject to recourse to the court by the wife for a proper remedy which must be availed of within five years from the date of the contract implementing such decision.

“In the event that one spouse is incapacitated or otherwise unable to participate in the administration of the conjugal properties, the other spouse may assume sole powers of administration.  These powers do not include the powers of disposition or encumbrance which must have the authority of the court or the written consent of the other spouse.  In the absence of such authority or consent, the disposition or encumbrance shall be void.  However, the transaction shall be construed as a continuing offer on the part of the consenting spouse and the third person, and may be perfected as a binding contract upon the acceptance by the other spouse or authorization by the court before the offer is withdrawn by either or both offerors. (165a).”

In regular manner, the rules on summary judicial proceedings under the Family Code govern the proceedings under Article 124 of the Family Code.  The situation contemplated is one where the spouse is

absent, or separated in fact or has abandoned the other or consent is withheld or cannot be obtained. Such rules do not apply to cases where the non-consenting spouse is incapacitated or incompetent to give consent. In this case, the trial court found that the subject spouse "is an incompetent" who was in comatose or semi-comatose condition, a victim of stroke, cerebrovascular accident, without motor and mental faculties, and with a diagnosis of brain stem infarct.[9] In such case, the proper remedy is a judicial guardianship proceedings under Rule 93 of the 1964 Revised Rules of Court.

Even assuming that the rules of summary judicial proceedings under the Family Code may apply to the wife's administration of the conjugal property, the law provides that the wife who assumes sole powers of administration has the same powers and duties as a guardian under the Rules of Court.[10]

Consequently, a spouse who  desires  to  sell real property as such administrator of the conjugal property must observe the procedure for the sale of the ward’s estate required of judicial guardians under Rule 95, 1964 Revised Rules of Court, not the summary judicial proceedings under the Family Code.

In the case at bar, the trial court did not comply with the procedure under the Revised Rules of Court. Indeed, the trial court did not even observe the requirements of the summary judicial proceedings under the Family Code. Thus, the trial court did not serve notice of the petition to the incapacitated spouse; it did not require him to show cause why the petition should not be granted.

Hence, we agree with the Court of Appeals that absent an opportunity to be heard, the decision rendered by the trial court is void for lack of due process. The doctrine consistently adhered to by this Court is that a denial of due process suffices to cast on the official act taken by whatever branch of the government the impress of nullity.[11] A decision rendered without due process is void ab initio and may be attacked directly or collaterally.[12] “A decision is void for lack of due process if, as a result, a party is deprived of the opportunity of being heard.”[13] “A void decision may be assailed or impugned at  any time either directly or collaterally, by means of a separate action, or by resisting such decision in any action or proceeding where it is invoked.” [14]

WHEREFORE, the Court AFFIRMS the decision of the Court of Appeals in CA-G. R. SP No. 26936, in toto.

Costs against petitioners.

SO ORDERED.

Davide, Jr., C.J., (Chairman), Puno, Kapunan, and Ynares-Santiago, JJ., concur.

[1] In CA-G. R. SP No. 26936, promulgated on December 09, 1992, Petition, Annex "R", Rollo, pp. 193-202.

[2] Petition, Annex “T”, Rollo, pp. 233-234.

[3] Ibid., Annex “C”, RTC Decision, Rollo, pp. 55-56.

[4] Supra, Note 1, at pp. 194-198.

[5] Ibid.

[6] Petition, Annex "S", Rollo, pp. 203-232.

[7] Supra, Note 1, Marigomen, J., ponente, Rasul and Galvez, JJ., concurring, Rollo, pp. 233-234.

[8] Petition filed on April 14, 1993, Rollo, pp. 2-49. On March 20, 1996, we gave due course to the petition, Rollo, p. 383.

[9] Petition, Annexes “J” and “K”, medical certificates, Rollo, pp. 145-146.

[10] Article 61, Family Code.

[11] DBP v. Bautista, 135 Phil. 201, 205-206 [1968].

[12] David v. Aquilizan, 94 SCRA 707, 714 [1979].

[13] The Summary Dismissal Board etc. v. Torcita, G. R. No. 130442, April 6, 2000, citing Palu-ay v. Court of Appeals, 293 SCRA 358 [1998].

[14] Ang Lam v. Rosillosa, 86 Phil. 447, 452 [1950].

Republ ic o f the  Phi l ipp inesSupreme Cour t

Mani la  

THIRD DIVISION  

ISAAC VILLEGAS,          G.R. No. 153839                                               Pet i t ioner ,               Present :                YNARES-SANTIAGO,  J. ,                         Chai rperson,                            - versus -          AUSTRIA-MARTINEZ,           CHICO-NAZARIO,  and           NACHURA,  JJ.     VICTOR LINGAN andATTY. ERNESTO CARREON

                Promulgated:

                                               Respondents.            June 29, 2007x - - - - - - - - - - - - - - - - - - - - - - - - - - - - - - - - - - - - - - - - x

D E C I S I O N  AUSTRIA-MARTINEZ,  J . :  

Before the Cour t is a Pet i t ion for Review on  Cert iorar i  under Rule 45 of the Rules

of Cour t assai l ing the Decis ion [ 1 ]  dated November 28, 2001 promulgated by the Cour t o f

Appeals (CA) in CA-G.R. CV No. 55837, which af f i rmed   in to to   the Decis ion dated

December 19, 1996 of the Regional Tr ia l Cour t (RTC), Branch 4, Tuguegarao, Cagayan

in Civ i l Case No. 5036; and the CA Resolut ion [ 2 ]  dated June 10, 2002, denying the

Mot ion for Reconsiderat ion f i led by Isaac Vi l legas (pet i t ioner) .

Th is case or ig inated f rom a Compla in t for Annulment o f T i t le and Inst rument wi th

Damages f i led by the pet i t ioner against V ic tor L ingan ( respondent) and At ty . Ernesto

Carreon as the Regis ter o f Deeds of Cagayan.    The respondent f i led h is Answer and

pre- t r ia l ensued.    The RTC issued a Pre-Tr ia l Order where in i t dec lared that no factua l

issue ex is ts and that the so le legal issue to be reso lved is : 

Whether or not the power o f a t torney is a genera l power o f a t torney or a specia l power o f a t torney.    Corro lar i ly , whether upon the terms thereof , the at torney- in- fact Glor ia Roa Catra l , had author i ty , or none at a l l , to execute the deed of sa le in favor o f [ respondent ] V ic tor L ingan. [ 3 ]

On the bas is o f the pre- t r ia l order and upon mot ion of counsel for pet i t ioner , wi thout any

ob ject ions f rom respondent , the case was submi t ted for summary judgment .

               As found by the RTC and conf i rmed by the CA, the undisputed facts are as fo l lows:                     [Pet i t ioner ] Isaac Vi l legas was the reg is tered owner o f a parce l o f land in Tuguegarao, Cagayan, known as  Lot  2637-C of the Subdiv is ion p lan Psd.2-01-019664, be ing a por t ion of  Lot  2637, Cad. 151, conta in ing an area of 1 ,267 square meters, more or less, s i tuated at Bgy. Pengue, Tuguegarao, Cagayan, covered by Transfer Cer t i f icate of T i t le No. T-63809 of the Regis ter o f Deeds of Cagayan.     In order to secure the payment o f a loan f rom the Development Bank of the Phi l ipp ines (DBP) the [pet i t ioner ] const i tu ted a rea l estate mor tgage over the sa id parce l o f land in favor o f DBP.    The sa id loan and mortgage was subsequent ly t ransferred by the DBP to the Home Mutual Development Fund (HMDF).    When the [pet i t ioner ] fa i led to set t le h is loan, the rea l estate mor tgage he const i tu ted over the proper ty was forec losed, the proper ty was so ld a t publ ic auct ion and, as the HMDF was i tse l f the h ighest b idder a t such publ ic auct ion, a cer t i f icate of sher i f f ’s sa le was issued and, thereaf ter , reg is tered wi th the Regis ter o f Deeds on March 8, 1996.    By v i r tue of a power o f a t torney executed by [pet i t ioner ’s ] wi fe , Mar i lou C. V i l legas in favor o f Glor ia Roa Catra l , the la t ter redeemed the proper ty f rom the HMDF. x x x [ 4 ]

               On May 17, 1996, Glor ia R. Catra l (Catra l ) , by v i r tue of the same power o f

a t torney, executed a Deed of Sale in favor o f respondent . [ 5 ]

Pet i t ioner c la ims that the power o f a t torney executed in favor o f Catra l ,

pet i t ioner ’s mother- in- law, created a pr inc ipa l -agent re la t ionship on ly between h is wi fe ,

Mar i lou Catra l -V i l legas (Mar i lou) as pr inc ipa l , and Catra l , as agent , and then on ly for

the la t ter to admin is ter the proper t ies o f the former; that he never author ized Catra l to

admin is ter h is proper t ies, par t icu lar ly , here in subject proper ty ; and that Catra l had no

author i ty to execute the Deed of Absolute Sale in favor o f the respondent , s ince f rom

the very word ings of the power o f a t torney, she had no specia l author i ty to se l l or

convey any speci f ic rea l proper ty . [ 6 ]  

               On December 19, 1996, the RTC d ismissed the Compla in t , ru l ing that the tenor o f

the power o f a t torney in quest ion is broad enough to inc lude the author i ty to se l l any

proper ty o f the pr inc ipa l , who, in th is case, is the pet i t ioner ; that the act o f the agent ,

Cat ra l , in execut ing the Deed of Absolute Sale in favor o f respondent was wi th in her

power or author i ty ; that the power “ to enter in to any and a l l cont racts and agreements”

qual i f ied the sa id power o f a t torney as a specia l power o f a t torney; that the Deed of

Absolute Sale is va l id and b inds the pr inc ipa l , here in pet i t ioner ; that the author i ty to se l l

came f rom both the pet i t ioner and h is wi fe , Mar i lou, s ince the pet i t ioner h imsel f s igned

the power o f a t torney af f i rming the author i ty o f the agent , Cat ra l ; and that even i f Cat ra l

in fact exceeded her author i ty , the act is deemed to have been per formed wi th in the

scope of the agent ’s author i ty i f such is wi th in the terms of the power o f a t torney as

wr i t ten.

                   D issat is f ied, the pet i t ioner appealed the adverse judgment to the CA c la iming

that the t r ia l cour t er red in f ind ing that there was a pr inc ipa l -agent re la t ionship between

pet i t ioner and Catra l ; and that the t r ia l cour t er red in conclud ing that the power o f

a t torney is a specia l power o f a t torney wi th an author i ty to se l l . [ 7 ]

On November 28, 2001, the CA rendered the here in assai led Decis ion,

a f f i rming   in to to   the RTC Judgment and d ismiss ing the appeal for lack of mer i t . [ 8 ]

               The CA held that when the redempt ion of the proper ty had been made by Catra l by

v i r tue of a Genera l Power o f At torney executed in her favor by Mar i lou, i t fo l lows that

the pet i t ioner is no longer the owner o f the subject proper ty but h is wi fe , Mar i lou; that

the issue as to whether the power o f a t torney was a specia l or genera l one is o f no

moment , because the pet i t ioner was no longer the owner o f the proper ty when i t was

so ld ; in o ther words, any d isposi t ion of the proper ty needs no power o f a t torney f rom the

pet i t ioner h imsel f ; that the pet i t ioner s igned the Genera l Power o f At torney above the

word “conforme,” connot ing an impl ied admiss ion that he was not anymore the owner o f

the sa id proper ty ; and, f ina l ly , that the Deed of Sale between Mar i lou ( through Catra l )

and respondent is va l id .

               Hence, here in Pet i t ion, on the fo l lowing grounds: 

I . 

IT IS SUBMITTED THAT THE COURT OF APPEALS DISREGARDED THE LAW AND APPLICABLE DECISIONS OF THE HONORABLE COURT WHEN IT DISMISSED THE COMPLAINT ON THE GROUND THAT PETITIONER WAS NO LONGER THE OWNER OF THE PROPERTY SUBJECT OF THE CASE.    AS A CONSEQUENCE, IT DID NOT MATTER WHETHER OR NOT THE GENERAL POWER OF ATTORNEY OR A SPECIAL POWER OF ATTORNEY WAS ISSUED IN THIS INSTANT CASE. 

I I . 

IT IS FURTHER SUBMITTED THAT THE COURT OF APPEALS DISREGARDED THE LAW AND THE APPLICABLE DECISIONS OF THE HONORABLE COURT WHEN IT UPHELD THE VALIDITY OF THE DEED OF ABSOLUTE SALE EXECUTED IN FAVOR OF VICTOR LINGAN. [ 9 ]

In h is Memorandum, pet i t ioner argues that the genera l power o f a t torney of

Catra l d id not c lo the her wi th author i ty to se l l the proper ty o f pet i t ioner ; and that the

Deed of Absolute Sale executed between the respondent and Catra l was not va l id . [ 1 0 ]

On the other hand, respondent , in h is Memoranda, contends that the pet i t ioner

has no cause of act ion against h im.    He mainta ins that pet i t ioner lost h is ownersh ip o f

the proper ty a f ter i t was ext ra- jud ic ia l ly forec losed and so ld to HMDF;     that what was

le f t for pet i t ioner was on ly the r ight o f redempt ion, a r ight he shared wi th h is wi fe ;     that

i f there was rea l ly a legal defect in the sa le , the person who has the legal s tanding and

the r ight to quest ion the va l id i ty o f the sa le in h is name is Mar i lou, the person who

exerc ised the r ight o f redempt ion and the person in whom the r ight to d ispose legal ly

res ides; and that Mar i lou has a l l th is t ime remained pass ive. [ 1 1 ]

               The pet i t ion must fa i l .

               There are two pr inc ipa l issues ra ised by the p leadings in the present pet i t ion that

must be reso lved:  Firs t ,  whether Mar i lou, the wi fe o f the pet i t ioner , as successor- in-

in terest , may va l id ly redeem the proper ty in quest ion; and  second,  whether the

pet i t ioner has a cause of act ion against the respondent .

Was there a va l id redempt ion ef fected by Mar i lou?

The answer is in the af f i rmat ive.

Sect ion 6 of Act No. 3135 prov ides: Sec. 6 . In a l l cases in which an ext ra jud ic ia l sa le is made under

the specia l power here inbefore re fer red to ,   the debtor , h is successors- in-in terest  or any jud ic ia l cred i tor or judgment cred i tor o f sa id debtor , or any person hav ing a l ien on the proper ty subsequent to the mortgage or deed of t rust under which the proper ty is so ld , may redeem the same at any t ime wi th in the term of one year f rom and af ter the date of sa le ; and  such redempt ion shal l be governed by the prov is ions of sect ion four hundred and s ix ty- four to four hundred and s ix ty-s ix , inc lus ive, o f the Code of Civ i l Procedure, in so far as these are not inconsis tent wi th the prov is ions of th is Act .   (emphasis suppl ied)

               Sect ion 27, Rule 39 of the 1997 Rules of Civ i l Procedure, prov ides:

 SEC. 27.    Who may redeem real proper ty so so ld .  –Real proper ty

so ld as prov ided in the last preceding sect ion, or any par t thereof so ld separate ly , may be redeemed in the manner here inaf ter prov ided, by the fo l lowing persons: 

(a)    The judgment ob l igor , or h is successor- in- in terest in the whole or any par t o f the proper ty ;

 x x x x

The “successor- in- in terest ” o f the judgment debtor re fer red to in the above

prov is ion inc ludes a person who succeeds to h is proper ty by operat ion of law, or a

person wi th a jo in t in terest in the proper ty , or h is spouse or he i rs . [ 1 2 ]  

Sect ion 33, Rule 39, Rules of Cour t , s ta tes:

 SEC. 33.    Deed and possess ion to be g iven at exp i ra t ion of

redempt ion per iod; by whom executed or g iven.  – I f no redempt ion be made wi th in one (1) year f rom the date of the reg is t ra t ion of the cer t i f icate of sa le , the purchaser is ent i t led to a conveyance and possess ion of the proper ty ;  or , i f so redeemed whenever s ix ty (60) days have e lapsed and no other redempt ion has been made, and not ice thereof g iven, and the t ime for redempt ion has expi red, the last redempt ioner is ent i t led to the conveyance and possess ion; but in a l l cases the judgment ob l igor shal l have the ent i re per iod of one (1) year f rom the date of the reg is t ra t ion of the sa le to redeem the proper ty .    The deed shal l be executed by the of f icer making the sa le or by h is successor in o f f ice, and in the la t ter case shal l have the same va l id i ty as though the of f icer making the sa le had cont inued in o f f ice and executed i t .

 Upon the expi ra t ion of the r ight o f redempt ion, the purchaser or

redempt ioner shal l be subst i tu ted to and acqui re a l l the r ights , t i t le ,

in terest and c la im of the judgment ob l igor to the proper ty a t the t ime of the levy. The possess ion of the proper ty shal l be g iven to the purchaser or last redempt ioner by the same of f icer un less a th i rd par ty is actua l ly ho ld ing the proper ty adverse ly to the judgment ob l igor .   (emphasis suppl ied)

               Under the above prov is ion, pet i t ioner could have redeemed the proper ty f rom

Mar i lou af ter she had redeemed i t . The p leadings f i led and the records of th is case do

not show that pet i t ioner exerc ised sa id r ight .    Consequent ly , as correct ly he ld by the

CA, Mar i lou acqui red ownersh ip o f the subject proper ty . A l l r ights and t i t le o f the

judgment ob l igor are t ransferred upon the expi ra t ion of the r ight o f redempt ion. [ 1 3 ]  

               And where the redempt ion is made under a proper ty reg ime governed by the

conjugal par tnersh ip o f ga ins, Ar t ic le 109 of the Fami ly Code prov ides that proper ty

acqui red by r ight o f redempt ion is the exc lus ive proper ty o f the spouses redeeming the

proper ty .  

               C lear ly , therefore, Mar i lou, as owner , had the r ight to se l l the proper ty to another .

               Th is br ings us to the reso lu t ion of the second issue - - whether pet i t ioner has a

cause of act ion against respondent - - and the answer is in the negat ive.

A cause of act ion is an act or omiss ion of the defendant in v io la t ion of the legal

r ight o f the p la in t i f f . A compla in t s ta tes a cause of act ion when i t conta ins three

essent ia l e lements:     (1) a r ight in favor o f the p la in t i f f by whatever means and under

whatever law i t ar ises; (2) an ob l igat ion of the defendant to respect such r ight ; and (3)

the act or omiss ion of the defendant v io la tes the r ight o f the p la in t i f f . [ 1 4 ]

                In the present case, there is no proper ty r ight that ex is ts in favor o f the pet i t ioner ,

and, wi th more reason, no such ob l igat ion ar ises in behal f o f the defendant , here in

respondent , to respect such r ight .    There was no v io la t ion of a legal r ight o f the

pet i t ioner .  

                I t must be s t ressed that there is no a l legat ion or proof that Mar i lou redeemed the

proper ty in behal f o f the pet i t ioner—Mar i lou d id not act as agent o f the pet i t ioner .

Rather , she exerc ised the r ight o f redempt ion in her own r ight as successor- in- in terest

o f the pet i t ioner .  Under the c i rcumstances, should there be any r ight v io la ted, the

aggr ieved par ty is Mar i lou, pet i t ioner ’s wi fe . The proper ty in quest ion was the exc lus ive

proper ty o f Mar i lou by v i r tue of her redempt ion.  Thus, pet i t ioner has no va l id cause of

act ion against the respondent .

               Consequent ly , the quest ion whether Catra l had va l id ly so ld the subject proper ty to

respondent by v i r tue of the Genera l Power o f At torney executed by Mar i lou, is not wi th in

the rea lm of the Cour t ’s jur isd ic t ion to reso lve in th is case as sa id issue is not proper ly

ra ised by the r ight person, Mar i lou.  

               D ivested of a l l in terest over the proper ty , the pet i t ioner has ceased to be the

proper par ty who may chal lenge the va l id i ty o f the sa le . Moreover , s ince, as a ru le , the

agency, as a cont ract , is b ind ing on ly between the cont ract ing par t ies, [ 1 5 ]   then on ly the

par t ies, as wel l as the th i rd person who t ransacts wi th the par t ies themselves, may

quest ion the va l id i ty o f the agency or the v io la t ion of the terms and condi t ions found

there in .    Th is ru le is a coro l lary o f the foregoing doct r ine on the r ights o f rea l par t ies in

in terest .

The Cour t cannot grant the re l ie f prayed for in pet i t ioner ’s Compla in t as to

damages, cons ider ing that the issue on damages was deemed waived when the par t ies

l imi ted themselves to the legal issue arr ived at dur ing the pre- t r ia l in the RTC. [ 1 6 ]

WHEREFORE, the pet i t ion is  DENIED.   The Decis ion and Resolut ion of the Cour t

o f Appeals are  AFFIRMED.      

Costs against the pet i t ioner .

SO ORDERED. 

       MA. ALICIA AUSTRIA-MARTINEZ       Associate Justice

WE CONCUR:CONSUELO YNARES-SANTIAGO

Associate JusticeChairperson

 MINITA V. CHICO-NAZARIO     ANTONIO EDUARDO B. NACHURA

   Associate Justice                                 Associate Justice 

ATTESTATION I attest that the conclusions in the above Decision had been reached in consultation before the case

was assigned to the writer of the opinion of the Court’s Division.  

CONSUELO YNARES-SANTIAGOAssociate Justice

Chairperson, Third Division

C E R T I F I C A T I O N 

Pursuant to Section 13, Article VIII of the Constitution, and the Division Chairperson’s attestation, it is hereby certified that the conclusions in the above Decision had been reached in consultation before the case was assigned to the writer of the opinion of the Court’s Division.

REYNATO S. PUNO       Chief Just ice

[ 1 ]                      Penned by Associa te Just ice B.A. Adefu in-de La Cruz (now ret i red) , wi th Associa te Just ices Wenceslao I . Agni r , J r . (now ret i red) and Rebecca de Guia-Salvador , concurr ing;     ro l lo , pp. 29-33.

[ 2 ]                       Id .  a t 35-37.[ 3 ]                      RTC Judgment , CA  ro l lo , p . 21.[ 4 ]                       Id .  a t 21-22.[ 5 ]                      Exhib i t “C” & Exhib i t “2 , ”   ro l lo , p . 41.[ 6 ]                      CA  ro l lo , pp. 22-23.[ 7 ]                      Rol lo , p . 30.[ 8 ]                       Id .  a t 32.[ 9 ]                       Id .  a t 21.[ 1 0 ]                     Id .  a t 293.[ 1 1 ]                     Id .  a t 273.[ 1 2 ]                    Castro v . Bague , 411 Phi l . 532, 540 (2001) ;  De Cast ro  v. In termediate

Appel la te Cour t , G.R. No. L-73859,  September 26, 1988, 165 SCRA 654, 660.[ 1 3 ]                    JOSE Y. FERIA & MARIA CONCEPCION S. NOCHE, CIVIL PROCEDUCRE

ANNOTATED,  104 (2001) .[ 1 4 ]                    Barcelona v . Cour t o f Appeals , 458 Phi l . 626, 633 (2003) .[ 1 5 ]                    See Ar t ic les 1159 and 1868 of the Civ i l Code.[ 1 6 ]                    See p. 2 o f here in Decis ion.

Republic of the PhilippinesSUPREME COURT

Manila

THIRD DIVISION

G.R. No. 170346             March 12, 2007

HEIRS OF NICOLAS JUGALBOT, Represented by LEONILA B. JUGALBOT, Petitioners, vs.COURT OF APPEALS and HEIRS OF VIRGINIA A. ROA, Represented by LOLITA R. GOROSPE, Administratrix, Respondents.

D E C I S I O N

YNARES-SANTIAGO, J.:

Petitioners, Heirs of Nicolas Jugalbot, represented by their attorney-in-fact Leonila Jugalbot, assail the Decision1of the Court of Appeals dated October 19, 2005 in CA-G.R. SP No. 81823 where the petitioners’ title to the disputed property, as evidenced by Transfer Certificate of Title (TCT) No. E-103, was cancelled and the previous title, TCT No. T-11543, was reinstated in the name of Virginia A. Roa. The appellate court reversed the Decision2and Resolution3 of the Department of Agrarian Reform Adjudication Board (DARAB) Central Office in DARAB Case No. 7966, affirming the Decision4 of the Provincial Adjudicator and the Order5 denying the motion for reconsideration in DARAB Case No. X (06-1358) filed in Misamis Oriental, for Cancellation of TCT No. E-103, Recovery of Possession and Damages.

On September 28, 1997, an Emancipation Patent (EP) was issued to Nicolas Jugalbot based on the latter’s claim that he was the tenant of Lot 2180-C of the Subdivision plan (LRC) TSD-10465, subject property of the case at bar, with an area of 6,229 square meters, located at Barangay Lapasan, Cagayan de Oro City. The subject property was registered in the name of Virginia A. Roa under Transfer Certificate of Title (TCT) No. T-11543, the same being issued on April 1, 1970 in the name of "Virginia A. Roa married to Pedro N. Roa." The property was originally registered in the name of Marcelino Cabili from whom Virginia A. Roa purchased the same sometime in 1966.6

Nicolas Jugalbot alleged that he was a tenant of the property continuously since the 1950s. On a Certification dated January 8, 1988 and issued by Department of Agrarian Reform (DAR) Team Leader Eduardo Maandig, the subject property was declared to be tenanted as of October 21, 1972 and primarily devoted to rice and corn. On March 1, 1988, the Emancipation Patent was registered with the Register of Deeds and Nicolas Jugalbot was issued TCT No. E-103.7

On August 10, 1998, the heirs of Virginia A. Roa, herein private respondents, filed before the DARAB Provincial Office of Misamis Oriental a Complaint for Cancellation of Title (TCT No. E-103), Recovery of Possession and Damages against Nicolas Jugalbot, docketed as DARAB Case No. X (06-1358).8

On October 23, 1998, a Decision was rendered by the DARAB Provincial Adjudicator dismissing private respondents’ complaint and upholding the validity of the Emancipation Patent. Private respondents’ motion for reconsideration was denied.9

On appeal, the DARAB Central Office affirmed the Provincial Adjudicator’s decision on the sole ground that private respondents’ right to contest the validity of Nicolas Jugalbot’s title was barred by prescription. It held

that an action to invalidate a certificate of title on the ground of fraud prescribes after the expiration of one year from the decree of registration.10

On November 10, 2003, the DARAB denied private respondents’ motion for reconsideration,11 hence they filed a petition for review before the Court of Appeals which was granted. The appellate court reversed the Decision and Resolution of the DARAB Central Office on four grounds: (1) the absence of a tenancy relationship; (2) lack of notice to Virginia Roa by the DAR; (3) the area of the property which was less than one hectare and deemed swampy, rainfed and kangkong-producing; and (4) the classification of the subject property as residential, which is outside the coverage of Presidential Decree No. 27.

Hence, this petition for review on certiorari under Rule 45.

The sole issue for determination is whether a tenancy relationship exists between petitioners Heirs of Nicolas Jugalbot, and private respondents, Heirs of Virginia A. Roa, under Presidential Decree No. 27. Simply stated, are petitioners de jure tenants of private respondents?

As clearly laid down in Qua v. Court of Appeals12 and subsequently in Benavidez v. Court of Appeals,13 the doctrine is well-settled that the allegation that an agricultural tenant tilled the land in question does not automatically make the case an agrarian dispute. It is necessary to first establish the existence of a tenancy relationship between the party litigants. The following essential requisites must concur in order to establish a tenancy relationship: (a) the parties are the landowner and the tenant; (b) the subject matter is agricultural land; (c) there is consent; (d) the purpose is agricultural production; (e) there is personal cultivation by the tenant; and (f) there is a sharing of harvests between the parties.14

Valencia v. Court of Appeals15 further affirms the doctrine that a tenancy relationship cannot be presumed. Claims that one is a tenant do not automatically give rise to security of tenure. The elements of tenancy must first be proved in order to entitle the claimant to security of tenure. There must be evidence to prove the allegation that an agricultural tenant tilled the land in question. Hence, a perusal of the records and documents is in order to determine whether there is substantial evidence to prove the allegation that a tenancy relationship does exist between petitioner and private respondents. The principal factor in determining whether a tenancy relationship exists is intent.16

Tenancy is not a purely factual relationship dependent on what the alleged tenant does upon the land. It is also a legal relationship, as ruled in Isidro v. Court of Appeals.17 The intent of the parties, the understanding when the farmer is installed, and their written agreements, provided these are complied with and are not contrary to law, are even more important.18

Petitioners allege that they are bona fide tenants of private respondents under Presidential Decree No. 27. Private respondents deny this, citing inter alia, that Virginia A. Roa was not given a notice of coverage of the property subject matter of this case; that Virginia A. Roa and the private respondents did not have any tenant on the same property; that the property allegedly covered by Presidential Decree No. 27 was residential land; that the lot was paraphernal property of Virginia A. Roa; and the landholding was less than seven (7) hectares.

The petition is devoid of merit.

The petitioners are not de jure tenants of private respondents under Presidential Decree No. 27 due to the absence of the essential requisites that establish a tenancy relationship between them.

Firstly, the taking of subject property was done in violation of constitutional due process. The Court of Appeals was correct in pointing out that Virginia A. Roa was denied due process because the DAR failed to send

notice of the impending land reform coverage to the proper party. The records show that notices were erroneously addressed and sent in the name of Pedro N. Roa who was not the owner, hence, not the proper party in the instant case. The ownership of the property, as can be gleaned from the records, pertains to Virginia A. Roa. Notice should have been therefore served on her, and not Pedro N. Roa.

Spouses Estonina v. Court of Appeals19 held that the presumption under civil law that all property of the marriage belongs to the conjugal partnership applies only when there is proof that the property was acquired during the marriage. Otherwise stated, proof of acquisition during the marriage is a condition sine qua non for the operation of the presumption in favor of the conjugal partnership.20 In Spouses Estonina, petitioners were unable to present any proof that the property in question was acquired during the marriage of Santiago and Consuelo Garcia. The fact that when the title over the land in question was issued, Santiago Garcia was already married to Consuelo as evidenced by the registration in the name of "Santiago Garcia married to Consuelo Gaza," does not suffice to establish the conjugal nature of the property.21

In the instant case, the Court of Appeals correctly held that the phrase "married to" appearing in certificates of title is no proof that the properties were acquired during the spouses’ coverture and are merely descriptive of the marital status of the person indicated therein. The clear import from the certificate of title is that Virginia is the owner of the property, the same having been registered in her name alone, and being "married to Pedro N. Roa" was merely descriptive of her civil status.22 Since no proof was adduced that the property was acquired during the marriage of Pedro and Virginia Roa, the fact that when the title over the land in question was issued, Virginia Roa was already married to Pedro N. Roa as evidenced by the registration in the name of "Virginia A. Roa married to Pedro N. Roa," does not suffice to establish the conjugal nature of the property.

In addition, the defective notice sent to Pedro N. Roa was followed by a DAR certification signed by team leader Eduardo Maandig on January 8, 1988 stating that the subject property was tenanted as of October 21, 1972 and primarily devoted to rice and corn despite the fact that there was no ocular inspection or any on-site fact-finding investigation and report to verify the truth of the allegations of Nicolas Jugalbot that he was a tenant of the property. The absence of such ocular inspection or on-site fact-finding investigation and report likewise deprives Virginia A. Roa of her right to property through the denial of due process.

By analogy, Roxas & Co., Inc. v. Court of Appeals23 applies to the case at bar since there was likewise a violation of due process in the implementation of the Comprehensive Agrarian Reform Law when the petitioner was not notified of any ocular inspection and investigation to be conducted by the DAR before acquisition of the property was to be undertaken. Neither was there proof that petitioner was given the opportunity to at least choose and identify its retention area in those portions to be acquired.24 Both in the Comprehensive Agrarian Reform Law and Presidential Decree No. 27, the right of retention and how this right is exercised, is guaranteed by law.

Since land acquisition under either Presidential Decree No. 27 and the Comprehensive Agrarian Reform Law govern the extraordinary method of expropriating private property, the law must be strictly construed. Faithful compliance with legal provisions, especially those which relate to the procedure for acquisition of expropriated lands should therefore be observed. In the instant case, no proper notice was given to Virginia A. Roa by the DAR. Neither did the DAR conduct an ocular inspection and investigation. Hence, any act committed by the DAR or any of its agencies that results from its failure to comply with the proper procedure for expropriation of land is a violation of constitutional due process and should be deemed arbitrary, capricious, whimsical and tainted with grave abuse of discretion.

Secondly, there is no concrete evidence on record sufficient to establish that Nicolas Jugalbot or the petitioners personally cultivated the property under question or that there was sharing of harvests, except for their self-serving statements. Clearly, there is no showing that Nicolas Jugalbot or any of his farm household cultivated the land in question. No proof was presented except for their self-serving statements that they were tenants of Virginia A. Roa. Independent evidence, aside from their self-serving statements, is needed to prove personal cultivation, sharing of harvests, or consent of the landowner, and establish a tenancy relationship.

Furthermore, in the findings of fact of the Court of Appeals, it was undisputed that Nicolas Jugalbot was a soldier in the United States Army from June 15, 1946 to April 27, 194925 and upon retirement, migrated to the United States and returned to the Philippines sometime in 1998.26 It was established that Jugalbot’s wife Miguela and daughter Lilia P. Jugalbot are residents of 17623 Grayland Avenue, Artesia, California, U.S.A., where Nicolas Jugalbot spent his retirement.27 Thus, the DAR, in particular its team leader Eduardo Maandig, haphazardly issued a certification dated January 8, 1988 that the subject property was tenanted as of October 21, 1972 by Nicolas Jugalbot and primarily devoted to rice and corn without the benefit of any on-site fact-finding investigation and report. This certification became the basis of the emancipation patent and subsequently, TCT No. E-103 issued on March 1, 1988, which was less than two months from the issuance of the unsubstantiated DAR certification. Coincidentally, October 21, 1972 is the date Presidential Decree No. 27 was signed into law.

Neither was there any evidence that the landowner, Virginia A. Roa, freely gave her consent, whether expressly or impliedly, to establish a tenancy relationship over her paraphernal property.

As declared in Castillo v. Court of Appeals,28 absent the element of personal cultivation, one cannot be a tenant even if he is so designated in the written agreement of the parties.29

In Berenguer, Jr. v. Court of Appeals,30 we ruled that the respondents’ self-serving statements regarding their tenancy relations could not establish the claimed relationship. The fact alone of working on another’s landholding does not raise a presumption of the existence of agricultural tenancy. Substantial evidence does not only entail the presence of a mere scintilla of evidence in order that the fact of sharing can be established; there must be concrete evidence on record adequate enough to prove the element of sharing.31 We further observed inBerenguer, Jr.:

With respect to the assertion made by respondent Mamerto Venasquez that he is not only a tenant of a portion of the petitioner’s landholding but also an overseer of the entire property subject of this controversy, there is no evidence on record except his own claim in support thereof. The witnesses who were presented in court in an effort to bolster Mamerto’s claim merely testified that they saw him working on the petitioner’s landholding. More importantly, his own witnesses even categorically stated that they did not know the relationship of Mamerto and the petitioner in relation to the said landholding. x x x The fact alone of working on another’s landholding does not raise a presumption of the existence of agricultural tenancy. Other factors must be taken into consideration like compensation in the form of lease rentals or a share in the produce of the landholding involved. (Underscoring supplied)

x x x x

In the absence of any substantial evidence from which it can be satisfactorily inferred that a sharing arrangement is present between the contending parties, we, as a court of last resort, are duty-bound to correct inferences made by the courts below which are manifestly mistaken or absurd. x x x

Without the essential elements of consent and sharing, no tenancy relationship can exist between the petitioner and the private respondents. (Underscoring supplied)32

Bejasa v. Court of Appeals33 likewise held that to prove sharing of harvests, a receipt or any other evidence must be presented as self-serving statements are deemed inadequate. Proof must always be adduced.34 In addition –

The Bejasas admit that prior to 1984, they had no contact with Candelaria. They acknowledge that Candelaria could argue that she did not know of Malabanan’s arrangement with them. True enough Candelaria disavowed any knowledge that the Bejasas during Malabanan’s lease possessed the land. However, the Bejasas claim that this defect was cured when Candelaria agreed to lease the land to the Bejasas

for P20,000.00 per annum, when Malabanan died in 1983. We do not agree. In a tenancy agreement, consideration should be in the form of harvest sharing. Even assuming that Candelaria agreed to lease it out to the Bejasas for P20,000 per year, such agreement did not create a tenancy relationship, but a mere civil law lease.35

Thirdly, the fact of sharing alone is not sufficient to establish a tenancy relationship. In Caballes v. Department of Agrarian Reform,36 we restated the well-settled rule that all the requisites must concur in order to create a tenancy relationship between the parties and the absence of one or more requisites does not make the alleged tenant a de facto tenant as contradistinguished from a de jure tenant. This is so because unless a person has established his status as a de jure tenant he is not entitled to security of tenure nor is he covered by the Land Reform Program of the Government under existing tenancy laws.37 The security of tenure guaranteed by our tenancy laws may be invoked only by tenants de jure, not by those who are not true and lawful tenants.38

As reiterated in Qua,39 the fact that the source of livelihood of the alleged tenants is not derived from the lots they are allegedly tenanting is indicative of non-agricultural tenancy relationship.40

Finally, it is readily apparent in this case that the property under dispute is residential property and not agricultural property. Zoning Certification No. 98-084 issued on September 3, 1998 clearly shows that the subject property Lot 2180-C covered by TCT No. T-11543 with an area of 6,229 square meters and owned by Virginia A. Roa is located within the Residential 2 District in accordance with paragraph (b), Section 9, Article IV of Zoning Ordinance No. 880, Series of 1979 issued by the City Planning and Development Office of Cagayan de Oro City.41 To bolster the residential nature of the property, it must also be noted that no Barangay Agrarian Reform Council was organized or appointed by the DAR existed in Barangay Lapasan, Cagayan de Oro City, as all lands have been classified as residential or commercial, as certified by Barangay Captain of Lapasan.42

In Gonzales v. Court of Appeals,43 we held that an agricultural leasehold cannot be established on land which has ceased to be devoted to cultivation or farming because of its conversion into a residential subdivision. Petitioners were not agricultural lessees or tenants of the land before its conversion into a residential subdivision in 1955. Not having been dispossessed by the conversion of the land into a residential subdivision, they may not claim a right to reinstatement.44

This Court in Spouses Tiongson v. Court of Appeals45 succinctly ruled that the land surrounded by a residential zone is always classified as residential. The areas surrounding the disputed six hectares are now dotted with residences and, apparently, only this case has kept the property in question from being developed together with the rest of the lot to which it belongs. The fact that a caretaker plants rice or corn on a residential lot in the middle of a residential subdivision in the heart of a metropolitan area cannot by any strained interpretation of law convert it into agricultural land and subject it to the agrarian reform program.46

Despite the apparent lack of evidence establishing a tenancy relationship between petitioners and private respondents, the DARAB improperly recognized the existence of such a relationship in complete disregard of the essential requisites under Presidential Decree No. 27. DARAB committed grave abuse of discretion amounting to lack of jurisdiction in issuing an Emancipation Patent to Nicolas Jugalbot.

Once again, Benavidez v. Court of Appeals47 is illustrative in its pronouncement that an alleged agricultural tenant tilling the land does not automatically make the case an agrarian dispute which calls for the application of the Agricultural Tenancy Act and the assumption of jurisdiction by the DARAB. It is absolutely necessary to first establish the existence of a tenancy relationship between the party litigants. In Benavidez, there was no showing that there existed any tenancy relationship between petitioner and private respondent. Thus, the case fell outside the coverage of the Agricultural Tenancy Act; consequently, it was the Municipal Trial Court and not the DARAB which had jurisdiction over the controversy between petitioner and private respondent.48

Verily, Morta, Sr. v. Occidental49 ruled that for DARAB to have jurisdiction over a case, there must exist a tenancy relationship between the parties. In order for a tenancy agreement to take hold over a dispute, it would be essential to establish all the indispensable elements of a landlord-tenant relationship:

The regional trial court ruled that the issue involved is tenancy-related that falls within the exclusive jurisdiction of the DARAB. It relied on the findings in DARAB Case No. 2413 that Josefina Opiana-Baraclan appears to be the lawful owner of the land and Jaime Occidental was her recognized tenant. However, petitioner Morta claimed that he is the owner of the land. Thus, there is even a dispute as to who is the rightful owner of the land, Josefina Opiana-Baraclan or petitioner Morta. The issue of ownership cannot be settled by the DARAB since it is definitely outside its jurisdiction. Whatever findings made by the DARAB regarding the ownership of the land are not conclusive to settle the matter. The issue of ownership shall be resolved in a separate proceeding before the appropriate trial court between the claimants thereof.50

At any rate, whoever is declared to be the rightful owner of the land, the case cannot be considered as tenancy-related for it still fails to comply with the other requirements. Assuming arguendo that Josefina Opiana-Baraclan is the owner, then the case is not between the landowner and tenant. If, however, Morta is the landowner, Occidental cannot claim that there is consent to a landowner-tenant relationship between him and Morta. Thus, for failure to comply with the above requisites, we conclude that the issue involved is not tenancy-related cognizable by the DARAB. 51

In Vda. de Tangub v. Court of Appeals,52 the jurisdiction of the Department of Agrarian Reform is limited to the following: (a) adjudication of all matters involving implementation of agrarian reform; (b) resolution of agrarian conflicts and land tenure related problems; and (c) approval and disapproval of the conversion, restructuring or readjustment of agricultural lands into residential, commercial, industrial and other non-agricultural uses.53

To recapitulate, petitioners are not de jure tenants of Virginia A. Roa, to which Presidential Decree No. 27 is found to be inapplicable; hence, the DARAB has no jurisdiction over this case. The DARAB not only committed a serious error in judgment, which the Court of Appeals properly corrected, but the former likewise committed a palpable error in jurisdiction which is contrary to law and jurisprudence. For all the foregoing reasons, we affirm the appellate court decision and likewise hold that the DARAB gravely abused its discretion amounting to lack of jurisdiction on the grounds that the subject matter of the present action is residential, and not agricultural, land, and that all the essential requisites of a tenancy relationship were sorely lacking in the case at bar.

On one final note, it may not be amiss to stress that laws which have for their object the preservation and maintenance of social justice are not only meant to favor the poor and underprivileged. They apply with equal force to those who, notwithstanding their more comfortable position in life, are equally deserving of protection from the courts. Social justice is not a license to trample on the rights of the rich in the guise of defending the poor, where no act of injustice or abuse is being committed against them.54

As the court of last resort, our bounden duty to protect the less privileged should not be carried out to such an extent as to deny justice to landowners whenever truth and justice happen to be on their side. For in the eyes of the Constitution and the statutes, EQUAL JUSTICE UNDER THE LAW remains the bedrock principle by which our Republic abides.

WHEREFORE, the petition is DENIED. The Decision of the Court of Appeals in CA-G.R. SP No. 81823 promulgated on October 19, 2005 is AFFIRMED. The Register of Deeds of Cagayan de Oro City is ordered toCANCEL Transfer Certificate of Title No. E-103 for having been issued without factual and legal basis, andREINSTATE Transfer Certificate of Title No. T-11543 in the name of Virginia A. Roa. The city Assessor’s Office of Cagayan de Oro is likewise directed to CANCEL Tax Declaration No. 80551 issued to Nicolas Jugalbot andRESTORE Tax Declaration No. 270922 in the name of Virginia Angcod Roa. The heirs of Nicolas Jugalbot, represented by Leonila B. Jugalbot or any other person claiming a right or interest to the disputed lot

through the latter’s title are directed to VACATE the premises thereof and peaceably turn over its possession to petitioners Heirs of Virginia A. Roa, represented by Lolita R. Gorospe. No pronouncement as to costs.

SO ORDERED.

CONSUELO YNARES-SANTIAGOAssociate Justice

WE CONCUR:

MA. ALICIA AUSTRIA-MARTINEZAssociate Justice

ROMEO J. CALLEJO, SR.Associate Justice

MINITA V. CHICO-NAZARIOAsscociate Justice

ANTONIO EDUARDO B. NACHURAAssociate Justice

A T T E S T A T I O N

I attest that the conclusions in the above decision were reached in consultation before the case was assigned to the writer of the opinion of the Court’s Division.

CONSUELO YNARES-SANTIAGOAssociate Justice Chairperson, Third Division

C E R T I F I C A T I O N

Pursuant to Section 13, Article VIII of the Constitution and the Division Chairperson’s Attestation, it is hereby certified that the conclusions in the above Decision were reached in consultation before the case was assigned to the writer of the opinion of the Court’s Division.

REYNATO S. PUNOChief Justice

Footnotes

1 Rollo, pp. 28-41. Penned by Associate Justice Rodrigo F. Lim, Jr. and concurred in by Associate Justices Teresita Dy-Liacco Flores and Ramon R. Garcia.

2 Id. at 44-49. Penned by DAR Assistant Secretary Lorenzo R. Reyes, DARAB Vice-Chairman, and concurred in by Undersecretary Federico A. Poblete, Assistant Secretary Augusto P. Quijano, Assistant Secretary Wilfredo M. Peñaflor and Assistant Secretary Edwin C. Sales, Members. DAR Secretary Horacio R. Morales, Jr., Chairman and Undersecretary Conrado S. Navarro, Member, did not take part.

3 Id. at 60-61. Penned by DAR Assistant Secretary Lorenzo R. Reyes, DARAB Vice-Chairman, and concurred in by Undersecretary Rolando G. Mangulabnan, Assistant Secretary Augusto P. Quijano,

Assistant Secretary Edgar A. Igano, and Assistant Secretary Rustico T. de Belen, Members. DAR Secretary Roberto M. Pagdanganan, Chairman and Undersecretary Ricardo S. Arlanza, Member, did not take part.

4 Id. at 55-58. Penned by Provincial Adjudicator Leandricia M. Monsanto.

5 Id. at 59. Penned by Adjudicator Abeto A. Salcedo, Jr.

6 Id. at 29-30.

7 Id. at 30.

8 Id.

9 Id. at 31.

10 Id.

11 Id.

12 G.R. No. 95318, June 11, 1991, 198 SCRA 236.

13 G.R. No. 125848, September 6, 1999, 313 SCRA 714.

14 Id. at 719.

15 449 Phil. 711 (2003).

16 Id. at 736.

17 G.R. No. 105586, December 15, 1993, 228 SCRA 503.

18 Id. at 511.

19 334 Phil. 577 (1997).

20 Id. at 586.

21 Id.

22 Rollo, p. 39.

23 G.R. No. 127876, December 17, 1999, 321 SCRA 106.

24 Id. at 147.

25 Rollo, p. 102.

26 Id. at 37.

27 Id.

28 G.R. No. 98028, January 27, 1992, 205 SCRA 529.

29 Id. at 536.

30 G.R. No. L-60287, August 17, 1988, 164 SCRA 431.

31 Id. at 439.

32 Id. at 439-440.

33 G.R. No. 108941, July 6, 2000, 335 SCRA 190.

34 Id. at 199.

35 Id.

36 G.R. No. L-78214, December 5, 1998, 168 SCRA 247.

37 Id. at 254.

38 Philippine National Railways v. Del Valle, G.R. No. L-29381, September 30, 1969, 29 SCRA 573, 580.

39 Supra note 13.

40 Id. at 239-240.

41 Rollo, p. 143.

42 Id. at 145.

43 G.R. No. 36213, June 29, 1989, 174 SCRA 398.

44 Id. at 401.

45 215 Phil. 430 (1984).

46 Id. at 438.

47 Supra note 14.

48 Id. at 719-720.

49 367 Phil. 438 (1999).

50 Id. at 446.

51 Id. at 447.

52 UDK No. 9864, December 3, 1990, 191 SCRA 885.

53 Id. at 889.

54 Roxas & Co., Inc. v. Court of Appeals, supra note 24 at 176. Ynares-Santiago, J., concurring and dissenting.

Republic of the PhilippinesSUPREME COURT

Manila

SECOND DIVISION

G.R. No. 159889             June 5, 2008

WALTER VILLANUEVA AND AURORA VILLANUEVA, petitioners, vs.FLORENTINO CHIONG AND ELISERA CHIONG, respondents.

D E C I S I O N

QUISUMBING, J.:

This petition for review on certiorari seeks the modification of the Decision1 dated December 17, 2002 of the Court of Appeals in CA-G.R. CV. No. 68383, which had affirmed the Joint Decision2 dated July 19, 2000 of the Regional Trial Court (RTC) of Dipolog City, Branch 6, in Civil Case No. 4460. The RTC annulled the sale made by respondent Florentino Chiong in favor of petitioners Walter and Aurora Villanueva conveying a portion of a parcel of land which respondents acquired during their marriage.

The pertinent facts are as follows:

Respondents Florentino and Elisera Chiong were married sometime in January 1960 but have been separated in fact since 1975. During their marriage, they acquired Lot No. 997-D-1 situated at Poblacion, Dipolog City and covered by Transfer Certificate of Title (TCT) No. (T-19393)-2325,3 issued by the Registry of Deeds of Zamboanga del Norte. Sometime in 1985, Florentino sold the one-half western portion of the lot to petitioners forP8,000, payable in installments. Thereafter, Florentino allowed petitioners to occupy4 the lot and build a store, a shop, and a house thereon. Shortly after their last installment payment on December 13, 1986,5 petitioners demanded from respondents the execution of a deed of sale in their favor. Elisera, however, refused to sign a deed of sale.

On July 5, 1991, Elisera filed with the RTC a Complaint6 for Quieting of Title with Damages, docketed as Civil Case No. 4383. On February 12, 1992, petitioners filed with the RTC a Complaint7 for Specific Performance with Damages, docketed as Civil Case No. 4460. Upon proper motion, the RTC consolidated these two cases.8

On May 13, 1992, Florentino executed the questioned Deed of Absolute Sale9 in favor of petitioners.

On July 19, 2000, the RTC, in its Joint Decision, annulled the deed of absolute sale dated May 13, 1992, and ordered petitioners to vacate the lot and remove all improvements therein. The RTC likewise dismissed Civil Case No. 4460, but ordered Florentino to return to petitioners the consideration of the sale with interest from May 13, 1992.10 The fallo of the decision reads:

WHEREFORE, by preponderance of evidence, judgment is hereby rendered as follows:

For Civil Case No. 4383, (a) annulling the Deed of Sale executed by Florentino Chiong in favor of Walter Villanueva, dated May 13, 1992 (Exhibit "2"); ordering defendant Walter Villanueva to vacate the entire land in question and to remove all buildings therein, subject to [i]ndemnity of whatever damages he may incur by virtue of the removal of such buildings, within a period of 60 days from the finality of this decision; award of damages is hereby denied for lack of proof.

In Civil Case No. 4460, complaint is hereby dismissed, but defendant Florentino Chiong, having received the amount of P8,000.00 as consideration of the sale of the land subject of the controversy, the sale being annulled by this Court, is ordered to return the said amount to [the] spouses Villanueva, with interest to be computed from the date of the annulled deed of sale, until the same is fully paid, within the period of 60 days from finality of this judgment. Until such amount is returned, together with the interest, [the] spouses Villanueva may continue to occupy the premises in question.

No pronouncement as to costs.

IT IS SO ORDERED.11

The Court of Appeals affirmed the RTC's decision:

WHEREFORE, premises considered, the appealed decision dated July 19, 2000 of the Regional Trial Court, Branch 6, Dipolog City is hereby AFFIRMED.

SO ORDERED.12

Petitioners sought reconsideration, but to no avail. Hence, this petition.

Petitioners assign the following errors as issues for our resolution:

I.

THAT THE COURT A QUO AS WELL AS THE HONORABLE COURT OF APPEALS ... GRAVELY ERRED IN NOT HOLDING THAT THE LAND IN QUESTION BELONGED SOLELY TO RESPONDENT FLORENTINO CHIONG AND ULTIMATELY TO THE HEREIN PETITIONERS.

II.

THAT THE LOWER COURT AS WELL AS THE HONORABLE COURT OF APPEALS … LIKEWISE ERRED IN DECLARING AS NULL AND VOID THE DEED OF SALE EXECUTED BY RESPONDENT FLORENTINO CHIONG IN FAVOR OF THE HEREIN PETITIONERS.13

Simply put, the basic issues are: (1) Is the subject lot an exclusive property of Florentino or a conjugal property of respondents? (2) Was its sale by Florentino without Elisera's consent valid?

Petitioners contend that the Court of Appeals erred when it held that the lot is conjugal property. They claim that the lot belongs exclusively to Florentino because respondents were already separated in fact at the time of sale and that the share of Elisera, which pertains to the eastern part of Lot No. 997-D-1, had previously been sold to Spouses Jesus Y. Castro and Aida Cuenca. They also aver that while there was no formal liquidation of respondents' properties, their separation in fact resulted in its actual liquidation. Further, assuming arguendo that the lot is still conjugal, the transaction should not be entirely voided as Florentino had one-half share over it.

Elisera, for her part, counters that the sale of the lot to petitioners without her knowledge, consent or authority, was void because the lot is conjugal property. She adds that the sale was neither authorized by any competent court nor did it redound to her or their children's benefit. As proof of the lot's conjugal nature, she presented a transfer certificate of title, a real property tax declaration, and a Memorandum of Agreement14 dated November 19, 1979 which she and her husband had executed for the administration of their conjugal properties.15

Anent the first issue, petitioners' contention that the lot belongs exclusively to Florentino because of his separation in fact from his wife, Elisera, at the time of sale dissolved their property relations, is bereft of merit. Respondents' separation in fact neither affected the conjugal nature of the lot nor prejudiced Elisera's interest over it. Under Article 17816 of the Civil Code, the separation in fact between husband and wife without judicial approval shall not affect the conjugal partnership. The lot retains its conjugal nature.

Likewise, under Article 16017 of the Civil Code, all property acquired by the spouses during the marriage is presumed to belong to the conjugal partnership of gains, unless it is proved that it pertains exclusively to the husband or to the wife. Petitioners' mere insistence as to the lot's supposed exclusive nature is insufficient to overcome such presumption when taken against all the evidence for respondents.

On the basis alone of the certificate of title, it cannot be presumed that the lot was acquired during the marriage and that it is conjugal property since it was registered "in the name of Florentino Chiong, Filipino, of legal age, married to Elisera Chiong… ."18 But Elisera also presented a real property tax declaration acknowledging her and Florentino as owners of the lot. In addition, Florentino and Elisera categorically declared in the Memorandum of Agreement they executed that the lot is a conjugal property.19 Moreover, the conjugal nature of the lot was admitted by Florentino in the Deed of Absolute Sale dated May 13, 1992, where he declared his capacity to sell as a co-owner of the subject lot.20

Anent the second issue, the sale by Florentino without Elisera's consent is not, however, void ab initio. In Vda. de Ramones v. Agbayani,21 citing Villaranda v. Villaranda,22 we held that without the wife's consent, the husband's alienation or encumbrance of conjugal property prior to the effectivity of the Family Code on August 3, 1988 is not void, but merely voidable. Articles 166 and 173 of the Civil Code 23 provide:

ART. 166. Unless the wife has been declared a non compos mentis or a spendthrift, or is under civil interdiction or is confined in a leprosarium, the husband cannot alienate or encumber any real property of the conjugal partnership without the wife's consent…

This article shall not apply to property acquired by the conjugal partnership before the effective date of this Code.

ART. 173. The wife may, during the marriage, and within ten years from the transaction questioned,ask the courts for the annulment of any contract of the husband entered into without her consent, when such consent is required, or any act or contract of the husband which tends to defraud her or impair her interest in the conjugal partnership property. Should the wife fail to exercise this right, she or her heirs, after the dissolution of the marriage, may demand the value of property fraudulently alienated by the husband. (Emphasis supplied.)

Applying Article 166, the consent of both Elisera and Florentino is necessary for the sale of a conjugal property to be valid. In this case, the requisite consent of Elisera was not obtained when Florentino verbally sold the lot in 1985 and executed the Deed of Absolute Sale on May 13, 1992. Accordingly, the contract entered by Florentino is annullable at Elisera's instance, during the marriage and within ten years from the transaction questioned, conformably with Article 173. Fortunately, Elisera timely questioned the sale when she filed Civil Case No. 4383 on July 5, 1991, perfectly within ten years from the date of sale and execution of the deed.

Petitioners finally contend that, assuming arguendo the property is still conjugal, the transaction should not be entirely voided as Florentino had one-half share over the lot. Petitioners' stance lacks merit. In Heirs of Ignacia Aguilar-Reyes v. Mijares 24 citing Bucoy v. Paulino, et al.,25 a case involving the annulment of sale executed by the husband without the consent of the wife, it was held that the alienation must be annulled in its entirety and not only insofar as the share of the wife in the conjugal property is concerned. Although the transaction in the said case was declared void and not merely voidable, the rationale for the annulment of the whole transaction is the same. Thus:

The plain meaning attached to the plain language of the law is that the contract, in its entirety, executed by the husband without the wife's consent, may be annulled by the wife. Had Congress intended to limit such annulment in so far as the contract shall "prejudice" the wife, such limitation should have been spelled out in the statute. It is not the legitimate concern of this Court to recast the

law. As Mr. Justice Jose B. L. Reyes of this Court and Judge Ricardo C. Puno of the Court of First Instance correctly stated, "[t]he rule (in the first sentence of Article 173) revokes Baello vs. Villanueva, 54 Phil. 213 and Coque vs. Navas Sioca, 45 Phil. 430," in which cases annulment was held to refer only to the extent of the one-half interest of the wife… .26

Now, if a voidable contract is annulled, the restoration of what has been given is proper.27 Article 1398 of the Civil Code provides:

An obligation having been annulled, the contracting parties shall restore to each other the things which have been the subject matter of the contract, with their fruits, and the price with its interest, except in cases provided by law.

In obligations to render service, the value thereof shall be the basis for damages.

The effect of annulment of the contract is to wipe it out of existence, and to restore the parties, insofar as legally and equitably possible, to their original situation before the contract was entered into.28

Strictly applying Article 1398 to the instant case, petitioners should return to respondents the land with its fruits29and respondent Florentino should return to petitioners the sum of P8,000, which he received as the price of the land, together with interest thereon.

On the matter of fruits and interests, we take into consideration that petitioners have been using the land and have derived benefit from it just as respondent Florentino has used the price of the land in the sum of P8,000. Hence, if, as ordered by the lower court, Florentino is to pay a reasonable amount or legal interest for the use of the money then petitioners should also be required to pay a reasonable amount for the use of the land.30 Under the particular circumstances of this case, however, it would be equitable to consider the two amounts as offsetting each other. Hence, the award of the trial court for the payment of interest should be deleted.

WHEREFORE, the petition is DENIED for lack of merit. The assailed Decision dated December 17, 2002 of the Court of Appeals in CA-G.R. CV. No. 68383 affirming the Joint Decision dated July 19, 2000 of the Regional Trial Court of Dipolog City, Branch 6, in Civil Case No. 4460 is hereby AFFIRMED with MODIFICATION. The order for the payment of interest is DELETED.

SO ORDERED.

Tinga, Carpio, Velasco, Jr., Leonardo-de Castro* , Brion, JJ., concur.

Footnotes

* Additional member in place of Justice Conchita Carpio Morales who was on leave of absence.

1 Rollo, pp. 21-31. Penned by Associate Justice Remedios A. Salazar-Fernando, with Associate Justices Ruben T. Reyes (now a member of this Court) and Edgardo F. Sundiam concurring.

2 Records, pp. 123-130 (Civil Case No. 4460). Penned by Judge Primitivo S. Abarquez, Jr.

3 Exhibit "A" (Civil Case No. 4383) and Exhibit "1" (Civil Case No. 4460), folder of exhibits, p. 1.

4 TSN, October 11, 1996, p. 10. As admitted by Elisera, petitioners were already occupying the subject parcel of land since 1976.

5 Exhibit "1" to "1-WWW" (Civil Case No. 4460), folder of exhibits, p. 1.

6 Records (Civil Case No. 4383), pp. 1-6.

7 Records (Civil Case No. 4460 ), pp. 1-4.

8 Id. at 29.

9 Exhibit "2" (Civil Case No. 4460), folder of exhibits, p. 2.

10 Rollo, p. 16.

11 Id. at 16-17.

12 Id. at 31.

13 Id. at 76.

14 Exhibit "D" (Civil Case No. 4383) and Exhibit "3" (Civil Case No. 4460), folder of exhibits, pp. 4-5.

15 Rollo, pp. 61-65. Respondent Florentino failed to file his comment on the petition for review, it appearing that he left his place of residence. Thus, the court resolved to consider the filing of comment by respondent Florentino as waived.

16 ART. 178. The separation in fact between husband and wife without judicial approval, shall not affect the conjugal partnership … .

17 ART. 160. All property of the marriage is presumed to belong to the conjugal partnership, unless it be proved that it pertains exclusively to the husband or to the wife.

18 Exhibit "A" (Civil Case No. 4383) and Exhibit "1" (Civil Case No. 4460), folder of exhibits, p. 1.

x x x x

…is registered in accordance with the provisions of the Land Registration Act in the name of FLORENTINO CHIONG, Filipino, of legal age, married to Elisera Chiong….

x x x x

See Ruiz v. Court of Appeals, G.R. No. 146942, April 22, 2003, 401 SCRA 410, 419.

Under prevailing jurisprudence, the fact that the title is in the name of the husband alone is determinative of its nature as belonging exclusively to said spouse and the only import of

the title is that Florentino is the owner of said property, the same having been registered in his name alone, and that he is married to Elisera Chiong.

19 Exhibit "D" (Civil Case No. 4383) and Exhibit "3" (Civil Case No. 4460), folder of exhibits, p. 4.

KNOW ALL MEN BY THESE PRESENTS:

This agreement entered into by and between ELISERA CARBONEL CHIONG…hereinafter referred to as the FIRST PARTY, and FLORENTINO CHIONG, … as the SECOND PARTY

x x x x

That the FIRST and SECOND PARTIES have the following conjugal properties:

x x x x

d. Residential lot situated at Poblacion Dipolog City at Katipunan Street, with an area of 207 square meters, more or less titled in the name of the spouses;

x x x x

20 Exhibit "2" (Civil Case No. 4460), folder of exhibits, p. 2.

21 G.R. No. 137808, September 30, 2005, 471 SCRA 306.

22 G. R. No. 153447, February 23, 2004, 423 SCRA 571.

23 Since all the relevant events and transactions took place before the effectivity of the Family Code on August 3, 1988, the pertinent law is the Civil Code of the Philippines which took effect on August 30, 1950.

24 G.R. No. 143826, August 28, 2003, 410 SCRA 97.

25 131 Phil. 790 (1968).

26 Supra note 24, at 106-107.

27 Id. at 109.

28 Tolentino, Civil Code, Vol. IV, p. 608.

29 Dumasug v. Modelo, 34 Phil. 252 (1916).

30 Guido v. De Borja, 12 Phil. 718 (1909).

Republic of the PhilippinesSUPREME COURT

Manila

THIRD DIVISION

G.R. NO. 155409              June 8, 2007

VIRGILIO MAQUILAN, petitioner, vs.DITA MAQUILAN, respondent.

D E C I S I O N

AUSTRIA-MARTINEZ, J.:

Before the Court is a Petition for Review on Certiorari under Rule 45 of the Rules of Court assailing the Decision1dated August 30, 2002 promulgated by the Court of Appeals (CA) in CA-G.R. SP No. 69689, which affirmed the Judgment on Compromise Agreement dated January 2, 2002 of the Regional Trial Court (RTC), Branch 3, Nabunturan, Compostela Valley, and the RTC Orders dated January 21, 2002 and February 7, 2002 (ORDERS) in Civil Case No. 656.

The facts of the case, as found by the CA, are as follows:

Herein petitioner and herein private respondent are spouses who once had a blissful married life and out of which were blessed to have a son. However, their once sugar coated romance turned bitter when petitioner discovered that private respondent was having illicit sexual affair with her paramour, which thus, prompted the petitioner to file a case of adultery against private respondent and the latter’s paramour. Consequently, both the private respondent and her paramour were convicted of the crime charged and were sentenced to suffer an imprisonment ranging from one (1) year, eight (8) months, minimum of prision correccional as minimum penalty, to three (3) years, six (6) months and twenty one (21) days, medium of prision correccional as maximum penalty.

Thereafter, private respondent, through counsel, filed a Petition for Declaration of Nullity of Marriage, Dissolution and Liquidation of Conjugal Partnership of Gains and Damages on June 15, 2001 with the Regional Trial Court, Branch 3 of Nabunturan, Compostela Valley, docketed as Civil Case No. 656, imputing psychological incapacity on the part of the petitioner.

During the pre-trial of the said case, petitioner and private respondent entered into a COMPROMISE AGREEMENT in the following terms, to wit:

1. In partial settlement of the conjugal partnership of gains, the parties agree to the following:

a. P500,000.00 of the money deposited in the bank jointly in the name of the spouses shall be withdrawn and deposited in favor and in trust of their common child, Neil Maquilan, with the deposit in the joint account of the parties.

The balance of such deposit, which presently stands at P1,318,043.36, shall be withdrawn and divided equally by the parties;

b. The store that is now being occupied by the plaintiff shall be allotted to her while the bodega shall be for the defendant. The defendant shall be paid the sum of P50,000.00 as his share in the stocks of the store in full settlement thereof.

The plaintiff shall be allowed to occupy the bodega until the time the owner of the lot on which it stands shall construct a building thereon;

c. The motorcycles shall be divided between them such that the Kawasaki shall be owned by the plaintiff while the Honda Dream shall be for the defendant;

d. The passenger jeep shall be for the plaintiff who shall pay the defendant the sum of P75,000.00 as his share thereon and in full settlement thereof;

e. The house and lot shall be to the common child.

2. This settlement is only partial, i.e., without prejudice to the litigation of other conjugal properties that have not been mentioned;

x x x x

The said Compromise Agreement was given judicial imprimatur by the respondent judge in the assailedJudgment On Compromise Agreement, which was erroneously dated January 2, 2002.2

However, petitioner filed an Omnibus Motion dated January 15, 2002, praying for the repudiation of the Compromise Agreement and the reconsideration of the Judgment on Compromise Agreement by the respondent judge on the grounds that his previous lawyer did not intelligently and judiciously apprise him of the consequential effects of the Compromise Agreement.

The respondent Judge in the assailed Order dated January 21, 2002, denied the aforementioned Omnibus Motion.

Displeased, petitioner filed a Motion for Reconsideration of the aforesaid Order, but the same was denied in the assailed Order dated February 7, 2002.3 (Emphasis supplied)

The petitioner filed a Petition for Certiorari and Prohibition with the CA under Rule 65 of the Rules of Court claiming that the RTC committed grave error and abuse of discretion amounting to lack or excess of jurisdiction (1) in upholding the validity of the Compromise Agreement dated January 11, 2002; (2) when it held in its Order dated February 7, 2002 that the Compromise Agreement was made within the cooling-off period; (3) when it denied petitioner’s Motion to Repudiate Compromise Agreement and to Reconsider Its Judgment on Compromise Agreement; and (4) when it conducted the proceedings without the appearance and participation of the Office of the Solicitor General and/or the Provincial Prosecutor.4

On August 30, 2002, the CA dismissed the Petition for lack of merit. The CA held that the conviction of the respondent of the crime of adultery does not ipso facto disqualify her from sharing in the conjugal property, especially considering that she had only been sentenced with the penalty of prision correccional, a penalty that does not carry the accessory penalty of civil interdiction which deprives the person of the rights to manage her property and to dispose of such property inter vivos; that Articles 43 and 63 of the Family Code, which pertain to the effects of a nullified marriage and the effects of legal separation, respectively, do not apply, considering, too, that the Petition for the Declaration of the Nullity of Marriage filed by the respondent invoking Article 36 of the Family Code has yet to be decided, and, hence, it is premature to apply Articles 43 and 63 of the Family Code; that, although adultery is a ground for legal separation, nonetheless, Article 63 finds no application in the instant case since no petition to that effect was filed by the petitioner against the respondent; that the spouses voluntarily separated their property through their Compromise Agreement with court approval under Article 134 of the Family Code; that the Compromise Agreement, which embodies the voluntary separation of property, is valid and binding in all respects because it had been voluntarily entered into by the parties; that, furthermore, even if it were true that the petitioner was not duly informed by his previous counsel about the legal effects of the Compromise Agreement, this point is untenable since the mistake or negligence of the lawyer binds his client, unless such mistake or negligence amounts to gross negligence or deprivation of due process on the part of his client; that these exceptions are not present in the instant case; that the Compromise Agreement was plainly worded and written in simple language, which a person of ordinary intelligence can discern the consequences thereof, hence, petitioner’s claim that his consent was vitiated is highly incredible; that the Compromise Agreement was made during the existence of the marriage of the parties since it was submitted during the pendency of the petition for declaration of nullity of marriage; that the application of Article 2035 of the Civil Code is misplaced; that the cooling-off period under Article 58 of the Family Code has no bearing on the validity of the Compromise Agreement; that the Compromise Agreement is not contrary to law, morals, good customs, public order, and public policy; that this agreement may not be later disowned simply because of a change of mind; that the presence of the Solicitor

General or his deputy is not indispensable to the execution and validity of the Compromise Agreement, since the purpose of his presence is to curtail any collusion between the parties and to see to it that evidence is not fabricated, and, with this in mind, nothing in the Compromise Agreement touches on the very merits of the case of declaration of nullity of marriage for the court to be wary of any possible collusion; and, finally, that the Compromise Agreement is merely an agreement between the parties to separate their conjugal properties partially without prejudice to the outcome of the pending case of declaration of nullity of marriage.

Hence, herein Petition, purely on questions of law, raising the following issues:

I.

WHETHER OF NOT A SPOUSE CONVICTED OF EITHER CONCUBINAGE OR ADULTERY, CAN STILL SHARE IN THE CONJUGAL PARTNERSHIP;

II

WHETHER OR NOT A COMPROMISE AGREEMENT ENTERED INTO BY SPOUSES, ONE OF WHOM WAS CONVICTED OF ADULTERY, GIVING THE CONVICTED SPOUSE A SHARE IN THE CONJUGAL PROPERTY, VALID AND LEGAL;

III

WHETHER OR NOT A JUDGMENT FOR ANNULMENT AND LEGAL SEPARATION IS A PRE-REQUISITE BEFORE A SPOUSE CONVICTED OF EITHER CONCUBINAGE OR ADULTERY, BE DISQUALIFIED AND

PROHIBITED FROM SHARING IN THE CONJUGAL PROPERTY;

IV

WHETHER OR NOT THE DISQUALIFICATION OF A CONVICTED SPOUSE OF ADULTERY FROM SHARING IN A CONJUGAL PROPERTY, CONSTITUTES CIVIL INTERDICTION.5

The petitioner argues that the Compromise Agreement should not have been given judicial imprimatur since it is against law and public policy; that the proceedings where it was approved is null and void, there being no appearance and participation of the Solicitor General or the Provincial Prosecutor; that it was timely repudiated; and that the respondent, having been convicted of adultery, is therefore disqualified from sharing in the conjugal property.

The Petition must fail.

The essential question is whether the partial voluntary separation of property made by the spouses pending the petition for declaration of nullity of marriage is valid.

First. The petitioner contends that the Compromise Agreement is void because it circumvents the law that prohibits the guilty spouse, who was convicted of either adultery or concubinage, from sharing in the conjugal property. Since the respondent was convicted of adultery, the petitioner argues that her share should be forfeited in favor of the common child under Articles 43(2)6 and 637 of the Family Code.

To the petitioner, it is the clear intention of the law to disqualify the spouse convicted of adultery from sharing in the conjugal property; and because the Compromise Agreement is void, it never became final and executory.

Moreover, the petitioner cites Article 20358 of the Civil Code and argues that since adultery is a ground for legal separation, the Compromise Agreement is therefore void.

These arguments are specious. The foregoing provisions of the law are inapplicable to the instant case.

Article 43 of the Family Code refers to Article 42, to wit:

Article 42. The subsequent marriage referred to in the preceding Article9 shall be automatically terminated by the recording of the affidavit of reappearance of the absent spouse, unless there is a judgment annulling the previous marriage or declaring it void ab initio.

A sworn statement of the fact and circumstances of reappearance shall be recorded in the civil registry of the residence of the parties to the subsequent marriage at the instance of any interested person, with due notice to the spouses of the subsequent marriage and without prejudice to the fact of reappearance being judicially determined in case such fact is disputed.

where a subsequent marriage is terminated because of the reappearance of an absent spouse; while Article 63 applies to the effects of a decree of legal separation. The present case involves a proceeding where the nullity of the marriage is sought to be declared under the ground of psychological capacity.

Article 2035 of the Civil Code is also clearly inapplicable. The Compromise Agreement partially divided the properties of the conjugal partnership of gains between the parties and does not deal with the validity of a marriage or legal separation. It is not among those that are expressly prohibited by Article 2035.

Moreover, the contention that the Compromise Agreement is tantamount to a circumvention of the law prohibiting the guilty spouse from sharing in the conjugal properties is misplaced. Existing law and jurisprudence do not impose such disqualification.

Under Article 143 of the Family Code, separation of property may be effected voluntarily or for sufficient cause, subject to judicial approval. The questioned Compromise Agreement which was judicially approved is exactly such a separation of property allowed under the law. This conclusion holds true even if the proceedings for the declaration of nullity of marriage was still pending. However, the Court must stress that this voluntary separation of property is subject to the rights of all creditors of the conjugal partnership of gains and other persons with pecuniary interest pursuant to Article 136 of the Family Code.

Second. Petitioner’s claim that since the proceedings before the RTC were void in the absence of the participation of the provincial prosecutor or solicitor, the voluntary separation made during the pendency of the case is also void. The proceedings pertaining to the Compromise Agreement involved the conjugal properties of the spouses. The settlement had no relation to the questions surrounding the validity of their marriage. Nor did the settlement amount to a collusion between the parties.

Article 48 of the Family Code states:

Art. 48. In all cases of annulment or declaration of absolute nullity of marriage, the Court shall order the prosecuting attorney or fiscal assigned to it to appear on behalf of the State to take steps to prevent collusion between the parties and to take care that the evidence is not fabricated or suppressed. (Emphasis supplied)

Section 3(e) of Rule 9 of the 1997 Rules of Court provides:

SEC. 3. Default; declaration of.- x x x x

x x x x

(e) Where no defaults allowed.— If the defending party in action for annulment or declaration of nullity of marriage or for legal separation fails to answer, the court shall order the prosecuting attorney to investigate whether or not a collusion between the parties exists if there is no collusion, to intervene for the State in order to see to it that the evidence submitted is not fabricated. (Emphasis supplied

Truly, the purpose of the active participation of the Public Prosecutor or the Solicitor General is to ensure that the interest of the State is represented and protected in proceedings for annulment and declaration of nullity of marriages by preventing collusion between the parties, or the fabrication or suppression of evidence.10 While the appearances of the Solicitor General and/or the Public Prosecutor are mandatory, the failure of the RTC to require their appearance does not per se nullify the Compromise Agreement. This Court fully concurs with the findings of the CA:

x x x. It bears emphasizing that the intendment of the law in requiring the presence of the Solicitor General and/or State prosecutor in all proceedings of legal separation and annulment or declaration of nullity of marriage is to curtail or prevent any possibility of collusion between the parties and to see to it that their evidence respecting the case is not fabricated. In the instant case, there is no exigency for the presence of the Solicitor General and/or the State prosecutor because as already stated, nothing in the subject compromise agreement touched into the very merits of the case of declaration of nullity of marriage for the court to be wary of any possible collusion between the parties. At the risk of being repetiti[ve], the compromise agreement pertains merely to an agreement between the petitioner and the private respondent to separate their conjugal properties partially without prejudice to the outcome of the pending case of declaration of nullity of marriage.11

Third. The conviction of adultery does not carry the accessory of civil interdiction. Article 34 of the Revised Penal Code provides for the consequences of civil interdiction:

Art. 34. Civil Interdiction. – Civil interdiction shall deprive the offender during the time of his sentence of the rights of parental authority, or guardianship, either as to the person or property of any ward, of marital authority, of the right to manage his property and of the right to dispose of such property by any act or any conveyance inter vivos.

Under Article 333 of the same Code, the penalty for adultery is prision correccional in its medium and maximum periods. Article 333 should be read with Article 43 of the same Code. The latter provides:

Art. 43. Prision correccional – Its accessory penalties. – The penalty of prision correccional shall carry with it that of suspension from public office, from the right to follow a profession or calling, and that of perpetual special disqualification from the right of suffrage, if the duration of said imprisonment shall exceed eighteen months. The offender shall suffer the disqualification provided in this article although pardoned as to the principal penalty, unless the same shall have been expressly remitted in the pardon.

It is clear, therefore, and as correctly held by the CA, that the crime of adultery does not carry the accessory penalty of civil interdiction which deprives the person of the rights to manage her property and to dispose of such property inter vivos.

Fourth. Neither could it be said that the petitioner was not intelligently and judiciously informed of the consequential effects of the compromise agreement, and that, on this basis, he may repudiate the Compromise Agreement. The argument of the petitioner that he was not duly informed by his previous counsel about the legal effects of the voluntary settlement is not convincing. Mistake or vitiation of consent, as now claimed by the petitioner as his basis for repudiating the settlement, could hardly be said to be evident. In Salonga v. Court of Appeals,12 this Court held:

[I]t is well-settled that the negligence of counsel binds the client. This is based on the rule that any act performed by a lawyer within the scope of his general or implied authority is regarded as an act of his client. Consequently, the mistake or negligence of petitioners' counsel may result in the rendition of an unfavorable judgment against them.

Exceptions to the foregoing have been recognized by the Court in cases where reckless or gross negligence of counsel deprives the client of due process of law, or when its application "results in the outright deprivation of one's property through a technicality." x x x x13

None of these exceptions has been sufficiently shown in the present case.

WHEREFORE, the Petition is DENIED. The Decision of the Court of Appeals is AFFIRMED with MODIFICATION that the subject Compromise Agreement is VALID without prejudice to the rights of all creditors and other persons with pecuniary interest in the properties of the conjugal partnership of gains.

SO ORDERED.

MA. ALICIA AUSTRIA-MARTINEZAssociate Justice

WE CONCUR:

CONSUELO YNARES-SANTIAGOAssociate Justice<brchairperson< p="">

MINITA V. CHICO-NAZARIOAssociate Justice

ANTONIO EDUARDO B. NACHURAAssociate Justice

</brchairperson<>

ATTESTATION

I attest that the conclusions in the above Decision had been reached in consultation before the case was assigned to the writer of the opinion of the Court’s Division.

CONSUELO YNARES-SANTIAGOAssociate JusticeChairperson, Third Division

C E R T I F I C A T I O N

Pursuant to Section 13, Article VIII of the Constitution, and the Division Chairperson’s attestation, it is hereby certified that the conclusions in the above Decision had been reached in consultation before the case was assigned to the writer of the opinion of the Court’s Division.

LEONARDO A. QUISUMBINGActing Chief Justice

Footnotes

1 Penned by Associate Justice Bienvenido L. Reyes, with Associate Justices Roberto A. Barrios (now deceased) and Edgardo F. Sundiam, concurring.

2 The Compromise Agreement is dated January 11, 2002.

3 Rollo, pp. 29-31.

4 Rollo, p. 32.

5 Rollo, pp. 19-20.

6 Article 43 reads:

Art. 43. The termination of the subsequent marriage referred to in the preceding Article shall produce the following effects:

x x x x

(2) The absolute community of property or the conjugal partnership, as the case may be, shall be dissolved and liquidated, but if either spouse contracted said marriage in bad faith, his or her share of the net profits of the community property or conjugal partnership property shall be forfeited in favor of the common children or, if there are none, the children of the guilty spouse by a previous marriage or in default of children, the innocent spouse;

x x x x (emphasis supplied)

7 Article 63 reads:

Art. 63. The decree of legal separation shall have the following effects:

x x x x

(2) The absolute community or the conjugal partnership shall be dissolved and liquidated but the offending spouse shall have no right to any share of the net profits earned by the absolute community or the conjugal partnership, which shall be forfeited in accordance with the provisions of Article 43(2);

x x x x (emphasis supplied)

8 Article 2035 reads:

Art. 2035. No compromise upon the following questions shall be valid:

(1) The civil status of persons;

(2) The validity of a marriage or a legal separation;

(3) Any ground for legal separation;

(4) Future support;

(5) The jurisdiction of courts;

(6) Future legitime. (1814a)

(emphasis supplied)

9 Article 41 reads:

Art. 41. A marriage contracted by any person during the subsistence of a previous marriage shall be null and void, unless before the celebration of the subsequent marriage, the prior spouse had been absent for four consecutive years and the spouse present had a well-founded belief that the absent spouse was already dead. In case of disappearance where there is danger of death under the circumstances set forth in the provisions of Articles 391 of the Civil Code, an absence of only two years shall be sufficient.

For the purpose of contracting the subsequent marriage under the preceding paragraph, the spouse present must institute a summary proceeding as provided in this Code for the declaration of presumptive death of the absentee, without prejudice to the effect of reappearance of the absent spouse.

10 See Republic v. Cuison-Melgar, G.R. No. 139676, March 31, 2006, 486 SCRA 177, 187.

11 Rollo, p. 39.

12 336 Phil. 514 (1997).

13 Id. at 526-527.

Republic of the PhilippinesSUPREME COURT

Manila

FIRST DIVISION

G.R. No. 151153             December 10, 2007

SPOUSES CHARLITO COJA and ANNIE MESA COJA, petitioners, vs.HON. COURT OF APPEALS and HEIRS OF FELICIANO AQUILLO, SR., namely: QUINCIANO VICTOR, SR., LORNA A. VICTOR, ANTONIO VICTOR, QUINCIANO A. VICTOR, JR., SUSANA A. VICTOR, CLARA AQUILLO, CARMENCITA AQUILLO, AGAPITO AQUILLO, NOEL AQUILLO, ADONIS AQUILLO, FELICIANO AQUILLO, JR., RONALD AQUILLO and ALDRIN AQUILLO, respondents.

D E C I S I O N

AZCUNA, J.:

Before us is a petition for review on certiorari1 assailing the Decision of the Court of Appeals (CA) in CA-G.R. CV No. 37583 dated February 5, 2001 and the Resolution2 dated November 5, 2001 denying petitioners’ motion for reconsideration.

The facts of the case are as follows:

Luz Aquillo Victor (hereafter Luz) and Feliciano Aquillo, Jr. (hereafter Feliciano Jr.), both deceased, were the legitimate children of the late spouses Feliciano Aquillo, Sr. (hereafter Feliciano Sr.) and Lorenza Mangarin Aquillo (hereafter Lorenza).3 During their marriage, Feliciano Sr. and Lorenza acquired a 120-square meter lot located at Poblacion, Mandaon, Masbate, upon which they built their conjugal home.4 The subject lot was covered by Tax Declaration No. 11515 issued in the name of Feliciano Sr.

After the death of Lorenza, Feliciano Sr. cohabited with Paz Lachica and lived at the aforesaid house. However, after Lorenza’s death, her heirs failed to partition their hereditary shares in their inheritance.

On February 27, 1960, while Lorenza was cohabiting with Feliciano Sr., Paz Lachica purchased a 192-square meter lot covered by Tax Declaration No. 02115 from the heirs of Juan Rivas.6 She later sold 40.10 square meters of the property to Isabel L. de Real leaving her with only 151.9 square meters.7

On July 7, 1965, or two (2) days before he died, Feliciano Sr. married Paz Lachica.8 After Feliciano Sr. died, his heirs also failed to partition among themselves their hereditary shares in their inheritance.

Sometime in 1969, Paz Lachica was issued Tax Declaration No. 44249 over the remaining 151.9 square meters of the property covered by Tax Declaration No. 02115. The aforesaid Tax Declaration was later cancelled by Tax Declaration No. 3443-Rev.10 On September 10, 1973, Tax Declaration No. 351411 was issued, effectively canceling Tax Declaration No. 3443-Rev. Also, in said Tax Declaration No. 3514, the area originally covered by Tax Declaration No. 3443-Rev was increased from 151.9 square meters to 336 square meters, and it included the 120-square meter property originally covered by Tax Declaration No. 1151. It also contained an annotation at the back stating "Revised as per request of the owner to include the excess area for taxation purposes."12 Thereafter, Tax Declaration No. 3514 was cancelled by Tax Declaration No. 1558,13 which was later cancelled by Tax Declaration No. 1946,14 and later cancelled by Tax Declaration No. 2038.15

On December 18, 1986, Paz Lachica and herein petitioners, Spouses Charlito Coja and Annie Mesa Coja, executed a Deed of Absolute Sale16 wherein the former sold the 336-square meter parcel of land covered by Tax Declaration No. 2038 to the latter. Consequently, Tax Declaration No. 494617 was issued in the name of petitioners, canceling Tax Declaration No. 2038.

Sometime in 1987, Charlito Coja filed an application for the issuance of title with the Regional Trial Court (RTC), Branch 46, Masbate, Masbate (now Masbate City) docketed as LRC No. N-365.18 Luz, being one of the heirs of Feliciano Sr., opposed the application for registration.19 Likewise, the Office of the Solicitor General (OSG) opposed the application. The OSG alleged, among other things, that the applicant or his predecessors-in- interest had not been in open, continuous, exclusive, and notorious possession of the subject land within the period required by law; and that the documents attached to or alleged in the application do not constitute competent and sufficient evidence of a bona fide acquisition of the land or of an open, continuous, exclusive, and notorious possession and occupation thereof in the concept of an owner.20

During the pendency of the case, Luz died. She was substituted by her spouse, Quinciano Victor, Sr., and her children, Lorna, Antonio, Quinciano Jr., and Susana, all surnamed Victor.

On November 3, 1989, respondents filed an action for recovery of possession and ownership with damages, docketed as Civil Case No. 3904, against the petitioners and Paz Lachica.21 Respondents claimed that they are the true and lawful heirs of the Spouses Feliciano Sr. and Lorenza; that Paz Lachica refused to deliver the property to its rightful owners despite repeated demands; that Paz Lachica appropriated the subject property to herself and had the tax declaration transferred to her name; that Paz Lachica sold the property to the Spouses Coja; and that the Spouses Coja failed to deliver the subject property to the rightful heirs despite repeated demands.22

Upon motion by the plaintiffs, LRC No. N-365 and Civil Case No. 3904 were consolidated.23

In their Answer, defendants therein alleged that Paz Lachica acquired the subject property before her marriage to Feliciano Sr. and that she had been in actual and physical possession of the same for more than fifteen (15) years before she sold the property to the Spouses Coja; that they acquired the property by purchasing it from Paz Lachica; that they are buyers in good faith and for value; and that the property in question was the paraphernal property of Paz Lachica and, therefore, plaintiffs therein have no right and interest over the same.24

The parties failed to settle their respective differences and a joint trial ensued.

On March 11, 1992, the RTC rendered a decision25 against the plaintiffs-oppositors and in favor of the defendants-applicants, the decretal portion of which reads:

WHEREFORE, premises considered, decision is hereby rendered in favor of the defendants-applicants, to wit:

1. Ordering the dismissal of the complaint in Civil Case No. 3904 with costs against the plaintiffs-oppositors;

2. Declaring the defendants-applicants spouses Charlito Coja and Annie Mesa, the absolute owner of the land subject of their application in L.R.C. No. N-365;

3. Declaring the title of the applicants, spouses Charlito Coja and Annie Mesa and Sancho Mesa, over the property designated as Psu-05-005736 together with all the improvements thereon, CONFIRMED and REGISTERED pursuant to the provisions of P.D. 1529.

Once this decision becomes final and executory, let the corresponding decree of registration issue.

SO ORDERED.26

The RTC opined that since the land in question is registered in the name of Paz Lachica alone, it is assumed that it is not part of the conjugal partnership properties of Feliciano Sr., and Lorenza, for if it was their conjugal property, it should have been registered in their names. As such, when the Spouses Coja purchased the property from Paz Lachica, they were of the honest belief that the latter was the true and lawful owner. Likewise, on the basis of the evidence adduced, the RTC held that defendants-applicants possess good title proper for registration and confirmation.27

Aggrieved, plaintiffs-oppositors appealed from the decision to the CA, assigning the following errors:

[1] THE TRIAL COURT GRAVELY ERRED IN HOLDING THAT THE DEFENDANTS-APPLICANTS, SPOUSES CHARLITO COJA AND ANNIE MESA COJA ARE THE TRUE AND LAWFUL OWNERS OF THE LAND SUBJECT OF THEIR APPLICATION.

[2] THE TRIAL COURT GRAVELY ERRED IN CONCLUDING THAT THE LAND IN QUESTION IS NOT THE CONJUGAL PARTNERSHIP PROPERTY OF THE COUPLE, THE LATE SPOUSES FELICIANO AQUILLO AND LORENZA MANGARIN

[3] THE TRIAL COURT GRAVELY ERRED IN HOLDING THAT DEFENDANTS-APPLICANTS POSSESS GOOD TITLE, PROPER FOR REGISTRATION.28

On February 5, 2001, the CA rendered a Decision29 reversing and setting aside the decision of the RTC, the pertinent portion of which reads:

WHEREFORE, premises considered, the decision dated March 11, 1992 is hereby REVERSED and SET ASIDE, and a new one entered, as follows:

1. The sale of the property by Paz Lachica to Spouses Charlito Coja and Annie Mesa Coja insofar as the shares of appellants is (sic) concerned is NULLIFIED;

2. Appellees-applicants are ordered to deliver possession of the property originally covered by Tax Declaration No. 1151 to appellants, to the extent of 93.3333 square meters;

3. Appellee-applicants are ordered to pay appellants P300.00 per month as reasonable rent for the use of the property, from the date of filing of the complaint and until possession thereof is restored to appellants;

4. The application for registration of title by Charlito and Annie Coja in L.R.C. No. N-365 is denied; and

5. Costs against appellees.

SO ORDERED.30

The CA concluded that the property formerly covered by Tax Declaration No. 1151, with an area of 120 square meters, is the conjugal property of Feliciano Sr. and Lorenza having been acquired during their marriage. Under the law, upon the death of Lorenza, one-half of said property, or 60 square meters, was transmitted to her heirs, namely Feliciano Sr., Feliciano Jr., and Luz, at 20 square meters each, while the remaining one-half pertained to Feliciano Sr. alone as his share in the conjugal property. Upon the death of Feliciano Sr., his rights over the property, consisting of his inheritance from his wife and his share in the conjugal partnership, or a total of 80 square meters, were transmitted to his heirs, Feliciano Jr., Luz, and his widow, Paz Lachica. Thus, Paz Lachica is entitled to only 26.6666 square meters and the heirs of Feliciano Jr. and Luz are entitled to the remaining 93.3333 square meters of the subject property. Therefore, Paz Lachica had no authority to sell their portions of the property.

Applicants-appellees therein filed a motion for reconsideration but it was denied in the Resolution31 dated November 5, 2001.

Hence, this petition, assigning the following errors:

[1] THE HONORABLE COURT OF APPEALS ERRED IN REVERSING AND SETTING ASIDE THE DECISION OF THE REGIONAL TRIAL COURT, BRANCH 46, AT MASBATE NOW MASBATE CITY (ANNEX "H") AS THE SAME IS IN ACCORDANCE WITH LAW AND JURISPRUDENCE; AND

[2] THE HONORABLE COURT OF APPEALS ERRED IN DENYING THE APPLICATION FOR LAND REGISTRATION OF TITLE OF THE PETITIONERS OVER THEIR RESIDENTIAL AND COMMERCIAL LAND SITUATED AT POBLACION, MANDAON, MASBATE WHICH SHOULD BE CONFIRMED AND REGISTERED PURSUANT TO LAND REGISTRATION LAW IN RELATION TO PD NO. 1529.

Petitioners argue that respondents failed to establish their case on the basis of the evidence they presented during the trial. Respondents only presented Tax Declaration No. 1151 which had never been updated since 1945 up to Feliciano Sr.’s death. In addition, his alleged successors-in-interest have not caused the revision of the said tax declaration nor paid the taxes to the government up to the present and hence the same cannot be considered proof of ownership. Since Feliciano Sr. is not the owner of the property in question, the same cannot be inherited by the respondents. Moreover, no survey of the property had been made in the name of Feliciano Sr.32

Petitioners add that the subject property was the paraphernal property of Paz Lachica since she purchased the property before she married Feliciano Sr. Finally, petitioners maintain that they are purchasers in good faith and for value since the subject property was covered by a tax declaration in Paz Lachica’s name when they bought it from her.33

The petition lacks merit.

The property subject matter of the contract of sale between the Spouses Coja and Paz Lachica, is a 336-square meter parcel of land covered by Tax Declaration No. 2038.34 This includes the property bought by Paz Lachica from the heirs of Juan Rivas, some other parcels of land, and the 120-square meter lot purchased by Feliciano Sr. and Lorenza during their marriage.

Article 160 of the Civil Code provides:

Article 160. All property of the marriage is presumed to belong to the conjugal partnership, unless it be proved that it pertains exclusively to the husband or to the wife.

All properties acquired during the marriage are thus disputably presumed to belong to the conjugal partnership. As a condition for the operation of above article, in favor of the conjugal partnership, the party who invokes the presumption must first prove that the property was acquired during the marriage.35

The CA declared that the 120-square meter lot belonged to the conjugal partnership of Feliciano Sr. and Lorenza because the spouses acquired it during the subsistence of their marriage and the property was in fact declared for taxation purposes during the said period. Thus, the statutory presumption set forth in Article 160 of the Civil Code became operative. Having been acquired during the marital union of Feliciano Sr. and Lorenza, the subject 120-square meter portion of the property sold by Paz Lachica to the Spouses Coja is presumed to be the conjugal property of Feliciano Sr. and Lorenza.

The presumption may be rebutted only with strong, clear, categorical and convincing evidence. There must be strict proof of the exclusive ownership of one of the spouses, and the burden of proof rests upon the party asserting it.36

Petitioners insist that the property subject of the sale was exclusively owned by Paz Lachica having been purchased prior to her marriage with Feliciano Sr. The argument is not supported by evidence. While it may be correct to argue that the 216-square meter portion of the 336-square meter subject of the sale was exclusively owned by Paz Lachica, the same cannot be sustained as to the 120-square meter portion originally covered by Tax Declaration No. 1151. Paz Lachica claims ownership over the property in question on the basis only of a tax declaration issued in her name. But that is Tax Declaration No. 3514 which was belatedly issued in the name of Paz Lachica to include the 120-square meter lot originally covered by Tax Declaration No. 1151. Revision was done upon Paz Lachica’s request after the death of Feliciano Sr. The revision of the tax declaration or the issuance of a new one in her name, did not operate and transfer title of the subject property to her. The property remained as one that formed part of the conjugal property of Feliciano Sr. and Lorenza.

Upon the death of Lorenza, the conjugal partnership was terminated. As a result, one half of the property was automatically reserved in favor of the surviving spouse, Feliciano Sr. as his share in the conjugal partnership. The other half, which is the share of Lorenza, was transmitted to Lorenza’s heirs, Feliciano Jr., Luz, and her husband Feliciano Sr., who is entitled to the same share as that of a legitimate child.37

The Court agrees in toto with the CA’s conclusion:

x x x. Under Article 996 of the Civil Code, upon the death of Lorenza Mangarin, one-half of said property, or 60 square meters, is transmitted to her heirs, namely: Feliciano Aquillo, Sr., Feliciano Aquillo, Jr., and Luz Aquillo, at 20 square meters each, while the remaining one-half is transmitted to Feliciano Aquillo, Sr. Upon the death of Feliciano Aquillo, Sr., his rights over the property, consisting of the 20 square meter-inheritance from his late wife and his 60 square meter-share in the conjugal partnership, or a total of 80 square meters were transmitted to his heirs, namely: Feliciano Aquillo, Jr., Luz Aquillo, and his widow, Paz Lachica. The surviving spouse is entitled to the same share as that of the legitimate children, to the portion of one-third each or 26.6666 square meters each x x x. Thus, as a result of the death of Feliciano Aquillo, Sr., a regime of co-ownership exists among Feliciano, Jr., Luz Aquillo, and Paz Lachica, with respect to the undivided 80 square meters of the property covered by Tax Declaration No. 1151.

The 120 square meters less the hereditary share of Paz Lachica which is 26.6666 square meters, or the 93.3333 square meters of the property covered by Tax Declaration No. 1151, belong to the appellants, being the heirs of the late Feliciano Aquillo, Jr. and Luz Aquillo. x x x.38

Considering that Paz Lachica owns only 26.6666 square meters of the 120-square meter property and the remaining 93.3333-square meter portion thereof is owned by the respondents, the former could only validly sell the portion which rightfully belonged to her. However, considering that Paz Lachica, the predecessor-in-interest of the Spouses Coja, was a co-owner of the subject 120-square meter property; and considering further that partition of the property is wanting, this Court is precluded from directing the Spouses Coja to return specific portions of the property to respondents. Noteworthy is the pronouncement on this issue in De Guia v. Court of Appeals39 citingHermogena G. Engreso with Spouse Jose Engreso v. Nestoria de la Cruz and Herminio de la Cruz:40

It is a basic principle in civil law that before a property owned in common is actually partitioned, all that the co-owner has is an ideal or abstract quota or proportionate share in the entire property. A co-owner has no right to demand a concrete, specific or determinate part of the thing owned in common because until division is effected his right over the thing is represented only by an ideal portion.

As such, the only effect of an action brought by a co-owner against a co-owner will be to obtain recognition of the co-ownership; the defendant cannot be excluded from a specific portion of the

property because as a co-owner he has a right to possess and the plaintiff cannot recover any material or determinate part of the property. x x x.

A co-owner may file an action for recovery of possession against a co-owner who takes exclusive possession of the entire co-owned property. However, the only effect of such action is a recognition of the co-ownership. The courts cannot proceed with the actual partitioning of the co-owned property.41 In fine, judicial or extrajudicial partition is necessary to effect physical division of the subject 120-square meter property.

WHEREFORE, the petition is PARTIALLY GRANTED. The Decision of the Court of Appeals dated February 5, 2001 in CA-G.R. CV No. 37583 is AFFIRMED with the MODIFICATION that the portion ordering petitioners to deliver possession to respondents of the property originally covered by Tax Declaration No. 1151 to the extent of 93.3333 square meters is DELETED. In lieu thereof, the co-ownership between the parties over the subject 120-square meter property is recognized, to the extent of undivided shares of 93.3333 square meters for respondents and 26.6666 square meters for petitioners.

No costs.

SO ORDERED.

Puno, C.J., Chairperson, Ynares-Santiago, Sandoval-Gutierrez, Corona, JJ., concur.

Footnotes

* Designated to sit as additional Member of the First Division under Special Order No. 474 dated October 19, 2007 issued pursuant to Administrative Circular No. 84-2007.

1 Under Rule 45 of the Rules of Court.

2 Rollo, pp. 27-28.

3 Records, p. 1.

4 Rollo, p. 21.

5 Records, p. 94.

6 Id. at 21.

7 Id. at 129.

8 Rollo, p. 22.

9 Records, p. 129.

10 Id. at 128.

11 Id. at 127.

12 Id.

13 Id. at 126.

14 Id. at 125.

15 Id. at 124.

16 Id. at 122.

17 Id. at 123.

18 Rollo, pp. 29-30.

19 Id. at 31-32.

20 Id. at 33-34.

21 Records, pp. 1-6.

22 Id. at 1-6.

23 Rollo, p. 23.

24 Id. at 41-42.

25 Id. at 77-83.

26 Id. at 82-83.

27 Id. at 80-82.

28 Id. at 49-50.

29 Id. at 20-26.

30 Id. at 26.

31 Id. at 27-28.

32 Id. at 12-16.

33 Id.

34 Supra note 15.

35 Go v. Yamane, G.R. No. 160762, May 3, 2006, 489 SCRA 107, 117.

36 Go v. Yamane, id.; Villanueva v. Court of Appeals, G.R. No. 143286, April 14, 2004, 427 SCRA 439, 451.

37 Herbon v. Palad, G.R. No. 149542, July 20, 2006, 495 SCRA 544; Cruz v. Leis, G.R. No. 125233, March 9, 2000, 327 SCRA 570.

38 Rollo, p. 24.

39 G.R. No. 120864, October 8, 2003, 413 SCRA 114, 125.

40 G.R. No. 148727, April 9, 2003, 401 SCRA 217, 220.

41 De Guia v. Court of Appeals, supra at 127

Republic of the PhilippinesSUPREME COURT

Manila

SECOND DIVISION

G.R. No. 141323               June 8, 2005

DAVID V. PELAYO and LORENZA* B. PELAYO, Petitioners, vs.MELKI E. PEREZ, Respondent.

D E C I S I O N

AUSTRIA-MARTINEZ, J.:

This resolves the petition for review on certiorari seeking the reversal of the Decision1 of the Court of Appeals (CA) promulgated on April 20, 1999 which reversed the Decision of the Regional Trial Court (RTC) of Panabo, Davao, Branch 34, in Civil Case No. 91-46; and the CA Resolution dated December 17, 1999 denying petitioners’ motion for reconsideration.

The antecedent facts as aptly narrated by the CA are as follows:

David Pelayo (Pelayo),by a Deed of Absolute Sale executed on January 11, 1988, conveyed to Melki Perez (Perez) two parcels of agricultural land (the lots) situated in Panabo, Davao which are portions of Lot 4192, Cad. 276 covered by OCT P-16873.

Loreza Pelayo (Loreza), wife of Pelayo, and another one whose signature is illegible witnessed the execution of the deed.

Loreza, however, signed only on the third page in the space provided for witnesses on account of which Perez’ application for registration of the deed with the Office of the Register of Deeds in Tagum, Davao was denied.

Perez thereupon asked Loreza to sign on the first and second pages of the deed but she refused, hence, he instituted on August 8, 1991 the instant complaint for specific performance against her and her husband Pelayo (defendants).

The defendants moved to dismiss the complaint on the ground that it stated no cause of action, citing Section 6 of RA 6656 otherwise known as the Comprehensive Agrarian Reform Law which took effect on June 10, 1988 and which provides that contracts executed prior thereto shall "be valid only when registered with the Register of Deeds within a period of three (3) months after the effectivity of this Act."

The questioned deed having been executed on January 10, 1988, the defendants claimed that Perez had at least up to September 10, 1988 within which to register the same, but as they failed to, it is not valid and, therefore, unenforceable.

The trial court thus dismissed the complaint. On appeal to this Court, the dismissal was set aside and the case was remanded to the lower court for further proceedings.

In their Answer, the defendants claimed that as the lots were occupied illegally by some persons against whom they filed an ejectment case, they and Perez who is their friend and known at the time as an activist/leftist, hence feared by many, just made it appear in the deed that the lots were sold to him in order to frighten said illegal occupants, with the intentional omission of Loreza’s signature so that the deed could not be registered; and that the deed being simulated and bereft of consideration is void/inexistent.

Perez countered that the lots were given to him by defendant Pelayo in consideration of his services as his attorney-in-fact to make the necessary representation and negotiation with the illegal occupants-defendants in the ejectment suit; and that after his relationship with defendant Pelayo became sour, the latter sent a letter to the Register of Deeds of Tagum requesting him not to entertain any transaction concerning the lots title to which was entrusted to Perez who misplaced and could [not] locate it.

Defendant Pelayo claimed in any event, in his Pre-trial brief filed on March 19, 1996, that the deed was without his wife Loreza’s consent, hence, in light of Art. 166 of the Civil Code which provides:

Article 166. Unless the wife has been declared a non compos mentis or a spendthrift, or is under civil interdiction or is confined in a leprosarium, the husband cannot alienate or encumber any real property of the conjugal partnership without the wife’s consent . . .

it is null and void.

The trial court, finding, among others, that Perez did not possess, nor pay the taxes on the lots, that defendant Pelayo was indebted to Perez for services rendered and, therefore, the deed could only be considered as evidence of debt, and that in any event, there was no marital consent to nor actual consideration for the deed, held that the deed was null and void and accordingly rendered judgment the dispositive portion of which reads:

WHEREFORE, judgment is hereby rendered ordering and directing the defendants to pay plaintiff Melki Perez the sum of TEN THOUSAND (P10,000.00) Pesos as principal with 12% interest per annum starting from the date of filing of the complaint on August 1, 1991 until plaintiff is fully paid.

The defendants shall likewise pay to plaintiff the sum of THREE THOUSAND (P3,000.00) as attorney’s fees.

The court further orders that the Deed of Absolute Sale, (Annex ‘A’) of the complaint and (Annex ‘C’) of the plaintiff’s Motion for Summary Judgment is declared null and void and without force and it is likewise removed as a cloud over defendants’ title and property in suit. . . ."2

The RTC Decision was appealed by herein respondent Perez to the CA. Petitioners failed to file their appellees’ brief. The CA then promulgated its Decision on April 20, 1999 whereby it ruled that by Lorenza’s signing as witness to the execution of the deed, she had knowledge of the transaction and is deemed to have given her consent to the same; that herein petitioners failed to adduce sufficient proof to overthrow the presumption that there was consideration for the deed, and that petitioner David Pelayo, being a lawyer, is presumed to have acted with due care and to have signed the deed with full knowledge of its contents and import. The CA reversed and set aside the RTC Decision, declaring as valid and enforceable the questioned deed of sale and ordering herein petitioner Lorenza Pelayo to affix her signature on all pages of said document.

Petitioners moved for reconsideration of the decision but the same was denied per Resolution dated December 17, 1999. The CA found said motion to have been filed out of time and ruled that even putting aside technicality, petitioners failed to present any ground bearing on the merits of the case to justify a reversal or setting aside of the decision.

Hence, this petition for review on certiorari on the following grounds:

1. The CA erred in ignoring the specific provision of Section 6, in relation to Section 4 of R.A. No. 6657 otherwise known as the Comprehensive Agrarian Reform Law of 1988 which took effect on June 15, 1988 and which provides that contracts executed prior thereto shall "be valid only when registered with the Register of Deeds within a period of three (3) months after the effectivity of this Act."

2. The CA erred in holding that the deed of sale was valid and considering the P10,000.00 adjudged by the trial court as Perez’s remuneration as the consideration for the deed of sale, instead of declaring the same as null and void for being fictitious or simulated and on the basis of Art. 491, Par. 2 of the New Civil Code which prohibits agents from acquiring by purchase properties from his principal under his charge.

3. The CA made a novel ruling that there was implied marital consent of the wife of petitioner David Pelayo.

4. Petitioners should have been allowed to file their appellees’ brief to ventilate their side, considering the existence of peculiar circumstances which prevented petitioners from filing said brief.

On the other hand, respondent points out that the CA, in resolving the first appeal docketed as CA-G.R. SP No. 387003 brought by respondent assailing the RTC Order granting herein petitioners’ motion to dismiss, already ruled that under R.A. No. 6657, the sale or transfer of private agricultural land is allowed only when the area of the land being conveyed constitutes or is a part of, the landowner-seller retained area and when the total landholding of the purchaser-transferee, including the property sold, does not exceed five (5) hectares; that in this case, the land in dispute is only 1.3 hectares and there is no proof that the transferee’s (herein respondent) total landholding inclusive of the subject land will exceed 5 hectares, the landholding ceiling prescribed by R.A. No. 6657; that the failure of respondent to register the instrument was not due to his fault or negligence but can be attributed to Lorenza’s unjustified refusal to sign two pages of the deed despite several requests of respondent; and that therefore, the CA ruled that the deed of sale subject of this case is valid under R.A. No. 6657.

Respondent further maintains that the CA correctly held in its assailed Decision that there was consideration for the contract and that Lorenza is deemed to have given her consent to the deed of sale.

Respondent likewise opines that the CA was right in denying petitioners’ motion for reconsideration where they prayed that they be allowed to file their appellees’ brief as their counsel failed to file the same on account of said counsel’s failing health due to cancer of the liver. Respondent emphasized that in petitioners’ motion for reconsideration, they did not even cite any errors made by the CA in its Decision.

The issues boil down to the question of whether or not the deed of sale was null and void on the following grounds: (a) for not complying with the provision in R.A. No. 6657 that such document must be registered with the Register of Deeds within three months after the effectivity of said law; (b) for lack of marital consent; (c) for being prohibited under Article 1491 (2) of the Civil Code; and (d) for lack of consideration.

We rule against petitioners.

The issue of whether or not the deed of sale is null and void under R.A. No. 6657, for respondent’s failure to register said document with the Register of Deeds within three months after the effectivity of R.A. No. 6657, had been resolved with finality by the CA in its Decision dated November 24, 1994 in CA-G.R. SP No. 38700.4 Herein petitioners no longer elevated said CA Decision to this Court and the same became final and executory on January 7, 1995.5

In said decision, the CA interpreted Section 4, in relation to Section 70 of R.A. No. 6657, to mean thus:

. . . the proper interpretation of both sections is that under R.A. No. 6657, the sale or transfer of a private agricultural land is allowed only when said land area constitutes or is a part of the landowner-seller retained area and only when the total landholdings of the purchaser-transferee, including the property sold does not exceed five (5) hectares.

Aside from declaring that the failure of respondent to register the deed was not of his own fault or negligence, the CA ruled that respondent’s failure to register the deed of sale within three months after effectivity of The Comprehensive Agrarian Reform Law did not invalidate the deed of sale as "the transaction over said property is not proscribed by R.A. No. 6657."

Thus, under the principle of law of the case, said ruling of the CA is now binding on petitioners.1avvph!1 Such principle was elucidated in Cucueco vs. Court of Appeals,6 to wit:

Law of the case has been defined as the opinion delivered on a former appeal. It is a term applied to an established rule that when an appellate court passes on a question and remands the case to the lower court for further proceedings, the question there settled becomes the law of the case upon subsequent appeal. It

means that whatever is once irrevocably established as the controlling legal rule or decision between the same parties in the same case continues to be the law of the case, whether correct on general principles or not, so long as the facts on which such decision was predicated continue to be the facts of the case before the court.

Petitioners not having questioned the Decision of the CA dated November 24, 1994 which then attained finality, the ruling that the deed of sale subject of this case is not among the transactions deemed as invalid under R.A. No. 6657, is now immutable.

We agree with the CA ruling that petitioner Lorenza, by affixing her signature to the Deed of Sale on the space provided for witnesses, is deemed to have given her implied consent to the contract of sale.

Sale is a consensual contract that is perfected by mere consent, which may either be express or implied.7 A wife’s consent to the husband’s disposition of conjugal property does not always have to be explicit or set forth in any particular document, so long as it is shown by acts of the wife that such consent or approval was indeed given.8 In the present case, although it appears on the face of the deed of sale that Lorenza signed only as an instrumental witness, circumstances leading to the execution of said document point to the fact that Lorenza was fully aware of the sale of their conjugal property and consented to the sale.

In their Pre-Trial Brief,9 petitioners admitted that even prior to 1988, they have been having serious problems, including threats to the life of petitioner David Pelayo, due to conflicts with the illegal occupants of the property in question, so that respondent, whom many feared for being a leftist/activist, offered his help in driving out said illegal occupants.

Human experience tells us that a wife would surely be aware of serious problems such as threats to her husband’s life and the reasons for such threats. As they themselves stated, petitioners’ problems over the subject property had been going on for quite some time, so it is highly improbable for Lorenza not to be aware of what her husband was doing to remedy such problems. Petitioners do not deny that Lorenza Pelayo was present during the execution of the deed of sale as her signature appears thereon. Neither do they claim that Lorenza Pelayo had no knowledge whatsoever about the contents of the subject document. Thus, it is quite

certain that she knew of the sale of their conjugal property between her husband and respondent.

Under the rules of evidence, it is presumed that a person takes ordinary care of his concerns.10 Petitioners did not even attempt to overcome the aforementioned presumption as no evidence was ever presented to show that Lorenza was in any way lacking in her mental faculties and, hence, could not have fully understood the ramifications of signing the deed of sale. Neither did petitioners present any evidence that Lorenza had been defrauded, forced, intimidated or threatened either by her own husband or by respondent into affixing her signature on the subject document. If Lorenza had any objections over the conveyance of the disputed property, she could have totally refrained from having any part in the execution of the deed of sale. Instead, Lorenza even affixed her signature thereto.

Moreover, under Article 173, in relation to Article 166, both of the New Civil Code, which was still in effect on January 11, 1988 when the deed in question was executed, the lack of marital consent to the disposition of conjugal property does not make the contract void ab initio but merely voidable. Said provisions of law provide:

Art. 166. Unless the wife has been declared a non compos mentis or a spendthrift, or is under civil interdiction or is confined in a leprosarium, the husband cannot alienate or encumber any real property of the conjugal property without the wife’s consent. If she refuses unreasonably to give her consent, the court may compel her to grant the same.

. . .

Art. 173. The wife may, during the marriage, and within ten years from the transaction questioned, ask the courts for the annulment of any contract of the husband entered into without her consent, when such consent is required, or any act or contract of the husband which tends to defraud her or impair her interest in the conjugal partnership property. Should the wife fail to exercise this right, she or her heirs, after the dissolution of the marriage, may demand the value of property fraudulently alienated by the husband.

Hence, it has been held that the contract is valid until the court annuls the same and only upon an action brought by the wife whose consent was not obtained.11 In the present case, despite respondent’s repeated demands for Lorenza to affix her signature on all the pages of the deed of sale, showing respondent’s insistence on enforcing said contract, Lorenza still did not file a case for annulment of the deed of sale. It was only when respondent filed a complaint for specific performance on August 8, 1991 when petitioners brought up Lorenza’s alleged lack of consent as an affirmative defense. Thus, if the transaction was indeed entered into without Lorenza’s consent, we find it quite puzzling why for more than three and a half years, Lorenza did absolutely nothing to seek the nullification of the assailed contract.

The foregoing circumstances lead the Court to believe that Lorenza knew of the full import of the transaction between respondent and her

husband; and, by affixing her signature on the deed of sale, she, in effect, signified her consent to the disposition of their conjugal property.

With regard to petitioners’ asseveration that the deed of sale is invalid under Article 1491, paragraph 2 of the New Civil Code, we find such argument unmeritorious. Article 1491 (2) provides:

Art. 1491. The following persons cannot acquire by purchase, even at a public or judicial auction, either in person or through the mediation of another:

. . .

(2) Agents, the property whose administration or sale may have been entrusted to them, unless the consent of the principal has been given;

. . .

In Distajo vs. Court of Appeals,12 a landowner, Iluminada Abiertas, designated one of her sons as the administrator of several parcels of her land. The landowner subsequently executed a Deed of Certification of Sale of Unregistered Land, conveying some of said land to her son/administrator. Therein, we held that:

Under paragraph (2) of the above article, the prohibition against agents purchasing property in their hands for sale or management is not absolute. It does not apply if the principal consents to the sale of the property in the hands of the agent or administrator. In this case, the deeds of sale signed by Iluminada Abiertas shows that she gave consent to the sale of the properties in favor of her son, Rufo, who was the administrator of the properties. Thus, the consent of the principal Iluminada Abiertas removes the transaction out of the prohibition contained in Article 1491(2).13

The above-quoted ruling is exactly in point with this case before us. Petitioners, by signing the Deed of Sale in favor of respondent, are also deemed to have given their consent to the sale of the subject property in favor of respondent, thereby making the transaction an exception to the general rule that agents are prohibited from purchasing the property of their principals.

Petitioners also argue that the CA erred in ruling that there was consideration for the sale. We find no error in said appellate court’s ruling. The element of consideration for the sale is indeed present. Petitioners, in adopting the trial court’s narration of antecedent facts in their petition,14 thereby admitted that they authorized respondent to represent them in negotiations with the "squatters" occupying the disputed property and, in consideration of respondent’s services, they executed the subject deed of sale. Aside from such services rendered by respondent, petitioners also acknowledged in the deed of sale that they received in full the amount of Ten Thousand Pesos. Evidently, the consideration for the sale is respondent’s services plus the aforementioned cash money.

Petitioners contend that the consideration stated in the deed of sale is excessively inadequate, indicating that the deed of sale was merely simulated. We are not persuaded. Our ruling in Buenaventura vs. Court of Appeals15 is pertinent, to wit:

. . . Indeed, there is no requirement that the price be equal to the exact value of the subject matter of sale. . . . As we stated in Vales vs. Villa:

Courts cannot follow one every step of his life and extricate him from bad bargains, protect him from unwise investments, relieve him from one-sided contracts, or annul the effects of foolish acts. Courts cannot constitute themselves guardians of persons who are not legally incompetent. Courts operate not because one person has been defeated or overcome by another, but because he has been defeated or overcome illegally. Men may do foolish things, make ridiculous contracts, use miserable judgment, and lose money by them – indeed, all they have in the world; but not for that alone can the law intervene and restore. There must be, in addition, a violation of the law, the commission of what the law knows as an actionable wrong, before the courts are authorized to lay hold of the situation and remedy it.16

Verily, in the present case, petitioners have not presented proof that there has been fraud, mistake or undue influence exercised upon them by respondent. It is highly unlikely and contrary to human experience that a layman like respondent would be able to defraud, exert undue influence, or in any way vitiate the consent of a lawyer like petitioner David Pelayo who is expected to be more knowledgeable in the ways of drafting contracts and other legal transactions.

Furthermore, in their Reply to Respondent’s Memorandum,17 petitioners adopted the CA’s narration of fact that petitioners stated in a letter they sent to the Register of Deeds of Tagum that they have entrusted the titles over subject lots to herein respondent. Such act is a clear indication that they intended to convey the subject property to herein respondent and the deed of sale was not merely simulated or fictitious.

Lastly, petitioners claim that they were not able to fully ventilate their defense before the CA as their lawyer, who was then suffering from cancer of the liver, failed to file their appellees’ brief. Thus, in their motion for reconsideration of the CA Decision, they prayed that they be allowed to submit such appellees’ brief. The CA, in its Resolution dated December 17, 1999, stated thus:

By movant-defendant-appellee’s own information, his counsel received a copy of the decision on May 5, 1999. He, therefore, had fifteen (15) days from said date or up to May 20, 1999 to file the motion. The motion, however, was sent through a private courier and, therefore, considered to have been filed on the date of actual receipt on June 17, 1999 by the addressee – Court of Appeals, was filed beyond the reglementary period.

Technicality aside, movant has not proffered any ground bearing on the merits of the case why the decision should be set aside.1awphi1

Petitioners never denied the CA finding that their motion for reconsideration was filed beyond the fifteen-day reglementary period. On that point alone, the CA is correct in denying due course to said motion. The motion

having been belatedly filed, the CA Decision had then attained finality. Thus, in Abalos vs. Philex Mining Corporation,18 we held that:

. . . Nothing is more settled in law than that once a judgment attains finality it thereby becomes immutable and unalterable. It may no longer be modified in any respect, even if the modification is meant to correct what is perceived to be an erroneous conclusion of fact or law, and regardless of whether the modification is attempted to be made by the court rendering it or by the highest court of the land.

Moreover, it is pointed out by the CA that said motion did not present any defense or argument on the merits of the case that could have convinced the CA to reverse or modify its Decision.

We have consistently held that a petitioner’s right to due process is not violated where he was able to move for reconsideration of the order or decision in question.19 In this case, petitioners had the opportunity to fully expound on their defenses through a motion for reconsideration. Petitioners did file such motion but they wasted such opportunity by failing to present therein whatever errors they believed the CA had committed in its Decision. Definitely, therefore, the denial of petitioners’ motion for reconsideration, praying that they be allowed to file appellees’ brief, did not infringe petitioners’ right to due process as any issue that petitioners wanted to raise could and should have been contained in said motion for reconsideration.

IN VIEW OF THE FOREGOING, the petition is DENIED and the Decision of the Court of Appeals dated April 20, 1999 and its Resolution dated December 17, 1999 are hereby AFFIRMED.

SO ORDERED.

MA. ALICIA AUSTRIA-MARTINEZAssociate Justice

WE CONCUR:

(On Official Leave)REYNATO S. PUNO**

Associate JusticeChairman

ROMEO J. CALLEJO, SR.Associate Justice

DANTE O. TINGAAssociate Justice

MINITA V. CHICO-NAZARIOAssociate Justice

A T T E S T A T I O N

I attest that the conclusions in the above Decision were reached in consultation before the case was assigned to the writer of the opinion of the Court’s Division.

MA. ALICIA AUSTRIA-MARTINEZ***

Associate JusticeActing Chairman, Second Division

C E R T I F I C A T I O N

Pursuant to Section 13, Article VIII of the Constitution, and the Division Chairman’s Attestation, it is hereby certified that the conclusions in the above Decision were reached in consultation before the case was assigned to the writer of the opinion of the Court’s Division.

HILARIO G. DAVIDE, JR.Chief Justice

Footnotes

* "Loreza" in CA rollo and original records.

** On Official Leave.

*** Acting Chairman.

1 Penned by Associate Justice Conchita Carpio Morales (now Associate Justice of the Supreme Court), with Associate Justice Jainal D. Rasul (retired) and Associate Justice Bernardo P. Abesamis (retired), concurring.

2 CA Rollo, pp. 59-62.

3 Entitled "Melki Perez, Plaintiff-Appellant, vs. Spouses David and Loreza Pelayo, Defendants-Appellees," Records, pp. 30-36.

4 Ibid.

5 See Decision and Entry of Judgment, Record, pp. 30-37.

6 G.R. No. 139278, October 25, 2004.

7 Tolentino, Civil Code of the Philippines, Commentaries and Jurisprudence, Vol. IV, 5th Ed., pp. 440, 447.

8 Tolentino, Civil Code of the Philippines, Commentaries and Jurisprudence, Vol. I, 5th Ed., p. 448.

9 Records, pp. 59-62.

10 Section 3 (d), Rule 131, Rules of Court.

11 Alfredo vs. Borras, G.R. No. 144225, June 17, 2003, 404 SCRA 145; Heirs of Christina Ayuste vs. Court of Appeals, G.R. No. 118784, September 2, 1999, 313 SCRA 493.

12 G.R. NO. 112954, August 25, 2000, 339 SCRA 52.

13 Id., p. 57.

14 Rollo, pp. 12-13.

15 G.R. No. 126376, November 20, 2003, 416 SCRA 263.

16 Id., p. 272.

17 Rollo, p. 140.

18 G.R. No. 140374, November 27, 2002, 441 Phil. 386.

19 Batongbakal vs. Zafra, G.R. No. 141806, January 17, 2005; Toh vs. Court of Appeals, G.R. No. 140274, November 15, 2000, 344 SCRA 831; Bernardo vs. Court of Appeals, G.R. No. 106153, July 14, 1997, 341 Phil. 413.

Republic of the PhilippinesSUPREME COURT

Manila

FIRST DIVISION

G.R. No. 159934             June 26, 2008

METROPOLITAN BANK and TRUST COMPANY and ROGELIO T. UY, petitioners, vs.JOSE B. TAN and REY JOHN TAN, respondents.

D E C I S I O N

CARPIO, J.:

The Case

This is a petition for review on certiorari1 assailing the Decision dated 21 March 20032 and the Resolution dated 1 September 20033 of the Court of Appeals (appellate court) in CA-G.R. SP No. 68523. The appellate court reversed the Decision dated 2 April 20014 of the Regional Trial Court of Cagayan de Oro City (trial court) in Miscellaneous Case (MC) No. 2000-117.

The trial court granted Metropolitan Bank and Trust Company (Metrobank) a Writ of Possession over the properties covered by TCT No. T-134333, TCT No. 134331, and TCT No. 134332.

The Facts

The appellate court stated the facts as follows:

Petitioner Rey John Tan is the owner and actual possessor of a parcel of land situated at Carmen, Cagayan de Oro City, specifically described under Transfer Certificate of Title (TCT) No. T-37311 and registered with the Registry of Deeds of Cagayan de Oro City.

On the other hand, petitioner Jose B. Tan is also an owner of a parcel of commercial land situated at Lapasan, Cagayan de Oro City, duly registered under Transfer Certificate of Title (TCT) No. T-53267 of the Registry of Deeds of Cagayan de Oro City.

Private respondent Metropolitan Bank and Trust Company alleges that petitioner Jose B. Tan had been duly authorized, pursuant to a special power of attorney given by a [sic] Ariel Tan, to mortgage the commercial properties of the latter covered by Transfer Certificate of Title (TCT) Nos. T-42033 and T-42032, both registered with the Register of Deeds of Cagayan de Oro City, in favor of private respondent bank.

Subsequently, a petition for the extra-judicial foreclosure of Transfer Certificate of Title (TCT) Nos. T-37311, T-53267, T-42033, and T-42032, was filed by Metropolitan Bank and Trust Company and Rogelio T. Uy with the Office of the Provincial Sheriff of Misamis Oriental. The said petition was acted upon by public respondent Sheriff Albano Cuarto who then undertook to schedule the public auction sale of the aforementioned parcels of land on April 17, 1998. The said public auction was to be conducted in order to satisfy an alleged obligation of P48,311,003.39 that were all secured by real estate mortgages over the aforementioned lots. The subject parcels of land were auctioned off by public respondent Albano Cuarto, as scheduled.

Prior to the date of the auction sale, or on April 16, 1998 to be exact, petitioners Jose B. Tan and his wife, Eliza Go Tan, filed an action to "Remove Cloud of Doubt on Title, Injunction with prayer for issuance of a writ of preliminary injunction or temporary restraining order," before the Regional Trial Court of Misamis Oriental, Branch 38, docketed as Civil Case No. 98-225, entitled "JOSE B. TAN AND ELIZA GO TAN, plaintiffs, versus METROPOLITAN BANK AND TRUST COMPANY, ROGELIO T. UY and ALBANO L. CUARTO, as Sheriff IV, Office of the Provincial Sheriff of Misamis Oriental, defendants."

In a Decision, dated March 5, 2001, the court a quo rendered the following pronouncement, the dispositive portion of which is hereby quoted as follows:

a) Declaring that, because of the fact that plaintiff Eliza G. Tan did not give her consent to all the real estate mortgages annotated at the back of her title, TCT No. T-53267, of the Registry of Deeds for Cagayan de Oro, all said mortgages are null and void ab initio;

b) Declaring that, because plaintiff Jose B. Tan did not execute the real estate mortgages annotated at the back of his title, TCT No. T-53267, of the Registry of Deeds of Cagayan de Oro, all said mortgages are null and void;

c) Declaring that extra-judicial foreclosure proceedings taken by the defendant-sheriff, including the sheriff’s certificate of sale, as null and void;

d) Making permanent the writ of preliminary injunction against the defendant sheriff, and the office of the provincial Sheriff of Misamis Oriental, enjoining and restraining them, their agents, and their representatives from issuing a final certificate of sale in favor of defendant METROBANK covering the parcel of land covered by TCT No. T-53267;

e) Ordering the removal of the cloud on the title, TCT No. T- 53267, of the Registry of Deeds of Cagayan de Oro, and the cancellation of all the entries of the real estate mortgages and amendment of mortgages annotated at the back of TCT No. T-53267 of the Registry of Deeds for Cagayan de Oro City;

f) Absolving the plaintiffs spouses from financial liability for the null and void real estate mortgages;

g) Declaring the principal obligations obtained by Rey John Tan through the annulled real estate mortgages as FULLY PAID by him;

xxx       xxx       xxx

SO ORDERED.

Notwithstanding the aforementioned pronouncement of the Regional Trial Court of Misamis Oriental, Branch 38, private respondents METROBANK and Rogelio T. Uy filed, on January 20, 2001, an Ex Parte Petition for a writ of possession docketed under Miscellaneous Case No. 2000-117 before Branch 21, of the same Regional Trial Court concerning three (3) parcels of land covered by Transfer Certificates of Title (TCT) Nos. T-42033, T-42032, T-37311 which had been incidentally cancelled by Transfer Certificates of Title (TCT) Nos. T-13432 [sic], T-13431 [sic], and T-13433 [sic].

Since herein petitioners were not notified of the hearing set by the court in Miscellaneous Case No. 2000-117, private respondent METROBANK was allowed to present its evidence ex parte on February 8, 2001, before the Branch Clerk of Court of Branch 21.

On April 2, 2001, the Regional Trial Court of Misamis Oriental, Branch 21, rendered its Decision in Miscellaneous Case No. 2000-117, the dispositive portion of which reads:

WHEREFORE, petitioner having sufficiently established to the satisfaction of this Court all the allegations in its petition and finding the petition to be deserving of merit, the same is hereby granted. Accordingly, a Writ of Possession over the properties covered by TCT No. T-134333, TCT No. T-134331 and TCT No. T-134332 is hereby ordered issued in favor of the petitioner against any and all occupants/possessor of the aforementioned properties.

SO ORDERED.

On July 10, 2001, a writ of possession, in Miscellaneous Case No. 2000-117 involving the three (3) parcels of land covered by Transfer Certificates of Title (TCT) Nos. T-13432 [sic], T-13431 [sic], and T-13433 [sic], was issued by the Branch Clerk of Court, to wit:

Pursuant to the Decision of the Honorable Court, dated April 2, 2001, you are hereby commanded to place in possession the herein petitioner METROPOLITAN BANK & TRUST CO. over a parcel of land including all improvements thereon, covered by Transfer Certificates of Title Nos. T-13433 [sic], T-13431 [sic], and TCT No. T-13432 [sic] and cause REY JOHN TAN and/or any other person thereof to vacate from the premises of the said property.

The Chief of Police of Cagayan de Oro City or any of his duly authorized representatives are hereby directed to assist the Sheriff to enforce this Writ of Possession.

Witness the Hon. ARCADIO D. FABRIA presiding Judge of this Court, this 10th day of July.

On even date, or on July 10, 2001, to be exact, public respondent Sheriff IV Albano L. Cuarto issued a "NOTICE TO VACATE" to petitioner Rey John Tan regarding the three (3) lots now covered by TCT Nos. T-13433 [sic], T-134331, and T-13432 [sic].

In an attempt to forestall the implementation of the assailed writ of possession, petitioner Rey John Tan, and Ariel Tan, moved for the reconsideration of the Decision dated April 2, 2001 granting the writ prayed for, and to quash the writ of possession as well as the notice to vacate. Respondent judge granted herein petitioners time to consolidate their exhibits. Among the five (5) exhibits presented by the herein petitioners, is a copy of the Decision, dated March 5, 2001, of the Regional Trial Court of Misamis Oriental, Branch 38, declaring the alleged real estate mortgages and extra-judicial foreclosure proceedings as null and void ab initio and/or null and void.

The said Motion was denied in an Order, dated November 21, 2001, of the Regional Trial Court of Misamis Oriental, Branch 21, the dispositive portion of which reads:

WHEREFORE, premises considered, oppositors’ motion for reconsideration and motion to quash writ of possession and notice to vacate are hereby denied for want of merit. Consequently, petitioner’s motion to break open is granted. Petitioner is thus allowed to break open the foreclosed property in order for the latter to be placed in complete control and possession thereof.

SO ORDERED.

The motion for the reconsideration of the Order, dated November 21, 2001, was likewise denied in another Order of the said Court on December 13, 2001.5

Rey John Tan and Jose B. Tan (respondents) filed an appeal before the appellate court. They questioned the ruling of the trial court because in Civil Case No. 98-225, a co-equal court declared all the real estate mortgages void. They stated that a writ of possession should not issue from a void mortgage.

The Appellate Court’s Ruling

In its Decision dated 21 March 2003, the appellate court reversed the decision of the trial court in MC No. 2000-117. The appellate court stated that there is no factual and legal basis to uphold the trial court’s ruling granting the issuance of a writ of possession in favor of Metrobank because a co-equal court declared the real estate mortgages void. The appellate court ruled that the issuance of a writ of possession amounted to interference with the judgment of another court of concurrent jurisdiction. The dispositive portion of the Decision reads:

WHEREFORE, the instant petition for certiorari is GRANTED. The Decision, dated April 2, 2001, of the Regional Trial Court of Misamis Oriental, in Miscellaneous Case No. 2000-117 entitled, "In Re: Petition for Writ of Possession in TCT No. 13433 [sic], formerly registered in the name of REY JOHN TAN, TCT Nos. 13431 [sic] and T-13432 [sic] formerly registered in the name of ARIEL TAN,"granting the issuance of a writ of possession in favor of private respondents Metropolitan Bank and Trust Company and Rogelio T. Uy, is hereby REVERSED and SET ASIDE. Costs against private respondents.

SO ORDERED.6

Metrobank asked the appellate court to reconsider its decision. Metrobank stated that there was no grave abuse of discretion in the issuance of the writ of possession and that the decision in MC No. 2000-117 did not interfere with the proceedings of a co-equal court.

In resolving Metrobank’s motion for reconsideration, the appellate court took note of the general rule that the "pendency of a separate civil suit questioning the validity of the mortgage cannot bar the issuance of the writ of possession because the same is a ministerial act of the trial court." The appellate court further stated that the present case falls under the exception to the general rule because it is attended with equitable considerations. The ruling in Civil Case No. 98-225 is presumed regular, although the pronouncement of invalidity of the mortgages is not yet definitive as the ruling is still under appeal. The appellate court then amended the dispositive portion of its 21 March 2003 decision to read as follows:

WHEREFORE, under paragraph (d) of the instant petition praying for "such other relief and remedy deemed just and equitable in the premises," the Court hereby orders that the decision dated 02 April 2001 insofar as its factual and legal basis is AFFIRMED but its order directing that a writ of possession of the properties covered by TCT No. T-13433 [sic], TCT No. T-13431 [sic] and TCT No. 13432 [sic] be issued is held in abeyance until a final decision by the proper appellate court is rendered in the appeal of Civil Case No. 98-225.

SO ORDERED.7

Hence, this appeal.

The Issues

Metrobank questions the appellate court’s decision and resolution by raising procedural and substantive issues:

1. The lower court erred in not dismissing the petition on the ground that the respondents have squandered the remedy of appeal and that the extraordinary remedy of certiorari cannot be a substitute for a lost appeal.

2. The lower court erred in not dismissing the petition on the ground that respondents have two adequate remedies in Section 8, Act 3135 and in Civil Case No. 98-225.

3. The lower court erred in not dismissing the petition on the ground that the trial court did not gravely abuse its discretion.

4. The lower court erred in holding in abeyance the implementation of the writ to await the outcome of Civil Case No. 98-225.8

The Ruling of the Court

We find the petition meritorious. As the errors raised are interrelated, we shall discuss them jointly.

Issuance of a Writ of Possession

Respondents theorize that the issuance of a writ of possession rests on the validity of the mortgage. Respondents thus rely heavily on the ruling in Civil Case No. 98-225, where the trial court declared all the real

estate mortgages void and ruled that Rey John Tan had fully paid the obligations related to the real estate mortgages. The appellate court, in CA G.R. CV No. 70742, agreed with respondents’ theory.

However, our ruling in Metropolitan Bank and Trust Company v. Tan,9 promulgated on 30 November 2006, set aside the ruling of the appellate court in CA G.R. CV No. 70742 and dismissed Civil Case No. 98-225. We ruled that the respondents in that case failed to prove that the property in issue is conjugal. Moreover, we found that the debit memos represented payment only in the bank’s book of entries but did not actually involve the payment or settlement of the original obligation. We thus declared that the extrajudicial foreclosure and subsequent sale of the mortgaged property covered by the title in question are valid. Our ruling in G.R. No. 163712 knocks off a leg from respondents’ theory that the issuance of a writ of possession upon a property is dependent upon the validity of the mortgage.

Notwithstanding respondents’ theory, no discretion is left to the trial court in the issuance of a writ of possession. Sections 7 and 8 of Act 3135 read:

Section 7. In any sale made under the provisions of this Act, the purchaser may petition the [Regional Trial Court] of the province or place where the property or any part thereof is situated, to give him possession thereof during the redemption period, furnishing bond in an amount equivalent to the use of the property for a period of twelve months, to indemnify the debtor in case it be shown that the sale was made without violating the mortgage or without complying with the requirements of this Act. Such petition shall be made under oath and filed in form of an ex parte motion in the registration or cadastral proceedings if the property is registered, or in special proceedings in the case of property registered under the Mortgage Law or under section one hundred and ninety-four of the Administrative Code, or of any other real property encumbered with a mortgage duly registered in the office of any register of deeds in accordance with any existing law, and in each case the clerk of the court shall, upon the filing of such petition, collect the fees specified in paragraph eleven of section one hundred and fourteen of Act Numbered Twenty-eight hundred and sixty-six, and the court shall, upon approval of the bond, order that a writ of possession issue, addressed to the sheriff of the province in which the property is situated, who shall execute said order immediately.

Section 8. The debtor may, in the proceedings in which possession was requested, but not later than thirty days after the purchaser was given possession, petition that the sale be set aside and the writ of possession cancelled, specifying the damages suffered by him, because the mortgage was not violated or the sale was not made in accordance with the provisions hereof, and the court shall take cognizance of this petition in accordance with the summary procedure provided for in section one hundred and twelve of Act Numbered Four hundred and ninety-six; and if it finds the complaint of the debtor justified, it shall dispose in his favor of all or part of the bond furnished by the person who obtained possession. Either of the parties may appeal from the order of the judge in accordance with section fourteen of Act Numbered Four hundred and ninety-six; but the order of possession shall continue in effect during the pendency of the appeal.

The applicable law thus states that it is the court’s ministerial duty to issue a writ of possession in favor of the purchaser of the mortgaged realty during the period of redemption. The trial court committed no grave abuse of discretion as no exercise of discretion is required.10 It is ministerial upon the court to issue a writ of possession in favor of a purchaser, provided that a proper motion is filed, a bond is approved, and no third person is involved.11The pendency of an action to annul the mortgage is not a ground for non-enforcement of the writ of possession.12The ministerial duty of the trial court does not become discretionary upon the filing of a complaint questioning the mortgage.

Finally, we agree with Metrobank’s contention that the trial court’s order granting the writ of possession is final. The proper remedy for respondents is an appeal and not a petition for certiorari. As long as the court acts within its jurisdiction, any alleged errors committed in the exercise of its discretion will amount to nothing more

than mere errors of judgment, correctable by an appeal if the aggrieved party raised factual and legal issues; or a petition for review under Rule 45 of the Rules of Court if only questions of law are involved.13

WHEREFORE, we GRANT the petition. We SET ASIDE the Decision dated 21 March 2003 and the Resolution dated 1 September 2003 of the Court of Appeals in CA-G.R. SP No. 68523.

SO ORDERED.

ANTONIO T. CARPIOAssociate Justice

WE CONCUR:

REYNATO S. PUNOChief JusticeChairperson

RENATO C. CORONAAssociate Justice

ADOLFO S. AZCUNAAssociate Justice

TERESITA J. LEONARDO-DE CASTROAssociate Justice

CERTIFICATION

Pursuant to Section 13, Article VIII of the Constitution, I certify that the conclusions in the above Decision had been reached in consultation before the case was assigned to the writer of the opinion of the Court’s Division.

REYNATO S. PUNOChief Justice

Footnotes

1 Under Rule 45 of the 1997 Rules of Civil Procedure.

2 Rollo, pp. 26-36. Penned by Associate Justice Teodoro P. Regino, with Associate Justices Buenaventura J. Guerrero and Mariano C. Del Castillo, concurring.

3 Id. at 58-59. Penned by Associate Justice Buenaventura J. Guerrero, with Associate Justices Eubolo G. Verzola and Mariano C. Del Castillo, concurring.

4 CA rollo, pp. 85-86. Penned by Judge Arcadio D. Fabria.

5 Rollo, pp. 27-31.

6 Id. at 35.

7 Id. at 59.

8 Id. at 15-16.

9 G.R. No. 163712, 30 November 2006, 509 SCRA 383.

10 See De Gracia v. San Jose, 94 Phil. 623 (1954).

11 PNB v. Hon. Adil, etc., et al., 203 Phil. 492, 499 (1982).

12 PNB v. Hon. Adil, etc., et al., 203 Phil. 492 (1982).

13 San Fernando Rural Bank v. Pampanga Omnibus Development Corporation and Dominic G. Aquino, G.R. No. 168088, 4 April 2007, 520 SCRA 564.