Republic of the Philippines
SUPREME COURT
Manila
SECOND DIVISION
G.R. No. L-19998 April 22, 1977
J. M. TUASON & CO., INC., plaintiff-appellee,
vs.
VICENTE JURILLA and ESTER L. JURILLA defendants-appellants.
J. Y. Torres & A. Francisco for appellants.
Araneta, Mendoza & Papa for appellee.
BARREDO, J.:
Appeal from the decision of the Court of First Instance of Quezon City in Civil Case No. Q-5111, an accion publiciana, ordering defendants-appellants to vacate a parcel of land covered by Transfer Certificate of Title No. 37186 of the Office of the Register of Deeds of Rizal Province (now No. 1267 of the Office of the Register of Deeds of Quezon City) in the name of plaintiff-appellee and "to pay the sum of P100.00 per month from the date of the filing of the action up to the time they definitely restore possession thereof to plaintiff company and to pay the costs."
Preliminary, it must be stated that on August 14, 1962, counsel for appellants filed a "petition" asking that this case be forwarded to the Court of Appeals to enable them to raise questions of fact, but upon opposition by appellee on the ground that the record on appeal of appellants was approved by the trial Court as follows:
ORDER
When the record on appeal was called for hearing this morning, counsel for the defendants manifested that she is intending to appeal the decision of this Court to the Supreme Court purely on a question of law, and further manifested that she is waiving all her manifestations and allegations in the notice of appeal which has the effect of raising issues of facts herein, and in view of such manifestations counsel for the plaintiff withdrew his opposition to the approval of the record on appeal;
The record on appeal of the defendants is hereby approved, and let the same be transmitted to the Supreme Court, within the reglementary period, and the notice of appeal is considered amended as per manifestation of the counsel for the defendants.
SO ORDERED (Page 58, Record.)
the Court resolved on September 5, 1962 to deny said "petition". Accordingly, in this appeal, the Court will deal exclusively with questions of law.
Appellants have assigned eight (8) alleged errors thus:
I
THE TRIAL COURT ERRED IN ISSUING THE ORDER DATED DECEMBER 29, 1960 (Pp. 105-108 Rec. on Appeal) DENYING THE MOTION DATED MAY 23, 1960, (pp. 40-41 Rec. on Appeal) FILED BY THE NOW DEFENDANTS-APPELLANTS PRAYING TO INCLUDE ONE FLORENCIO DEUDOR IN THE PRESENT CASE AS THIRD PARTY DEFENDANT.
II
THE TRIAL COURT ERRED IN HOLDING THAT UNDER THE UNDISPUTED AND/OR ADMITTED FACTS IN THE PRESENT CASE DEFENDANTS-APPELLANTS VICENTE JURILLA AND ESTER L. JURILLA, SPOUSES, ARE NOT POSSESSORS AND BUILDERS IN GOOD FAITH OF THE LAND IN QUESTION AND THE PERMANENT IMPROVEMENTS CONSTRUCTED BY THEM ON THE SAME PROPERTY AND AS SUCH ARE NOT ENTITLED TO INDEMNITY FOR SAID PERMANENT IMPROVEMENTS THEY HAVE INTRODUCED IN THE LAND IN QUESTION.
III
THE TRIAL COURT ERRED IN FAILING TO DECLARE THE HEREIN DEFENDANTS-APPELLANTS, THE SPOUSES VICENTE JURILLA AND ESTER L. JURILLA, POSSESSORS IN GOOD FAITH OF THE LAND IN QUESTION AND BUILDERS IN GOOD FAITH OF THE PERMANENT IMPROVEMENT INTRODUCED THEREIN AND ARE THEREFORE ENTITLED TO INDEMNITY FOR ALL SAID IMPROVEMENTS IN THE SUM OF SEVENTY THOUSAND (P70,000.00) PESOS BEFORE THEY VACATE THE PREMISES IN QUESTION.
IV
THE TRIAL COURT ERRED IN HOLDING THAT PLAINTIFF-APPELLEE HAS INDEFEASIBLE TITLE UPON THE LAND IN QUESTION EVEN WITHOUT THE COMPROMISE AGREEMENT, ANNEX II.
V
THE TRIAL COURT ERRED IN NOT HOLDING THAT THE DEED OF SALE ANNEX "I" TRANSFERRED THE TITLE OR AT LEAST CONSTITUTES A LIEN IN FAVOR OF THE DEFENDANTS-APPELLANTS AND THAT SAID TRANSFER OR LIEN WAS ACCEPTED AND APPROVED BY THE HEREIN PLAINTIFF-APPELLEE BY VIRTUE OF THE COMPROMISE AGREEMENT ANNEX "II" AND HAD STEPPED INTO THE SHOES OF FLORENCIO DEUDOR. THE IMMEDIATE PREDECESSOR OF THE APPELLANS HEREIN AND HAD ASSUMED THE CONCOMITANT OBLIGATIONS CREATED BY THE DEED OF SALE ANNEX "I" IN FAVOR OF THE HEREIN DEFENDANTS-APPELLANTS.
VI
THE TRIAL COURT ERRED IN FAILING TO ORDER THE PLAINTIFF-APPELLEE TO ACCEPT THE TENDER OR OFFER OF PAYMENTS MADE BY THE HEREIN DEFENDANTS-APPELLANTS TO PAY IN FULL THE PRICE OF THE LAND IN QUESTION AS STIPULATED IN THE DEED OF SALE ANNEX "I" EXECUTED BY FLORENCIO DEUDOR WHO SOLD FOR VALUABLE CONSIDERATIONS THE LAND IN QUESTION TO THE HEREIN DEFENDANTS-APPELLANTS.
VII
THE TRIAL COURT FURTHER ERRED IN NOT ORDERING THE PLAINTIFF-APPELLEE TO EXECUTE THE FINAL DEED OF SALE OF THE PROPERTY IN QUESTION IN FAVOR OF DEFENDANTS-APPELLANTS UPON FULL PAYMENT OF THE CONSIDERATION STATED IN THE DEED OF SALE ANNEX "I" AND TO TRANSFER THE CORRESPONDING CERTIFICATE OF TITLE IN THE NAME OF THE APPELLANTS, THE SPOUSES VICENTE JURILLA AND ESTER L. JURILLA.
VIII
THE TRIAL COURT ERRED IN ORDERING THE DEFENDANTS-APPELLANTS TO VACATE PREMISES IN QUESTION AND TO PAY THE SUM OF ONE HUNDRED (P100.00) PESOS PER MONTH FROM THE DATE OF THE FILING OF THE PRESENT ACTION UP TO THE TIME APPELLANTS RESTORE THE POSSESSION TO THE PLAINTIFF-APPELLEE AND TO PAY THE COSTS.
In their first assignment of error, appellants contend that the trial court erred in not granting their motion for leave to file a third-party complaint against one Florencio Deudor from whom they allegedly acquired the land in question. The motion was first denied because, according to the trial court, it was prematurely filed before appellants had filed their answer. When the motion was reiterated after the filing of the answer, the trial court also reiterated its denial, holding that what appellants were actually, attempting to do was to join a new party as defendant to their counterclaim and, furthermore there was no showing that "plaintiff in this case desires to assert a claim against the would be third-party defendant."
Assuming there is some degree of plausibility in appellants' position that the filing of their proposed third-party should have been allowed, we hold that at this stage, it would be very impractical to correct whatever error might have been committed by the trial court. Obviously, such error, if any, cannot be raised for the first time in an appeal of the main case. Anyway, the denial of permission to a defendant to file a third-party complaint, even if erroneous, does not have the effect of depriving the court of jurisdiction to proceed with the trial and judgment of the case as between the original parties. Whatever claim for contribution, indemnity, subrogation or any other relief said defendant may in fact be entitled to is not lost because of the refusal of the trial court to allow the filing of a third- party complaint, for it may still be enforced in an independent suit. Hence, appellants' first assignment of error must be overruled.
In their second, third and fourth assignments of error, appellants maintain that the trial court should have held that appellee's title over the land in dispute is not indefeasible and that said appellants were possessors and builders in good faith entitled to indemnity of permanent improvements they have made on said land.
In respect to these contentions. the trial court held:
The facts of the present case are simple. Plaintiff's ownership of the land object of this litigation is admitted by the defendants and supported by Transfer Certificate of Title No. 37186-Rizal (now No. 1267 — Quezon City) marked as Exhibit A, of the Office of the Registry of Deeds of Quezon City. It is also a fact that in 1949, defendants took possession of a portion of said property with an area of 1,500 square meters and constructed therein a house and other improvements without plaintiff's consent or knowledge (See Exh. B-1). Hence, plaintiff claims rents for the area occupied by the defendants at the rate of P450.00 per month.
On the other hand, defendants claim that said portion of the property occupied by them was acquired by them by virtue of an alleged deed of sale executed by Florencio Deudor in their favor in 1949 (See Exh. 1). They also submitted the "Compromise Agreement" approved by the Hon. Judge Hermogenes Caluag, Civil Case No. Q-135 etc. (Exh. 5). They also claim that they have improvements introduced in the sum of P60,000.00, but the Tax Declaration (Exh. 12) of the said property was only assessed at P17,360.00. They further claim that defendants are builders in good faith.
The question before the court is whether plaintiff or defendants, is or are, the owners of the portion of property in question and as to whether the defendants built their improvements in good faith or otherwise. To these two propositions, hinges the determination of their rights.
The records disclosed that plaintiff corporation has Transfer Certificate of Title No. 37686-Rizal (now No. 1267-Q.C.). While defendants based their rights on the alleged Testimonial Title (Exh. 6), it is observed that plaintiff's title is indefeasible and against the whole world, while that of the defendants is not and could not even be considered an imperfect title, as well known in Land Registration (Act No. 496). Evidently, the clause (sic) of one of the two titles is not hard to determine. The fact that defendants admit not only in their pleading (See Exh. C-3) but also in open court that plaintiff corporation is the owner of the property in question and that its title is an incontrovertible one, the right of the plaintiff to recover possession of the lot in question cannot be seriously questioned by defendant and its right thereto is imprescriptible. Atun et al v. Nuñez et al. G.R. No. L-8018, (October 26, 1955; J.M. Tuason & Co., Inc. v. Bolonos, G.R. No. L-4935, May 28, 1945; Eugenio v. Perdido, G.R. No. L-7083, May 19, 1955, Manlapaz et al v. Llorente, 48 Phil. 298).
The next issue is whether defendants are builders in good faith. Let us examine the record of this case, whether defendants could invoke that they were builders in good faith. At the time they bought the property from the Deudor, they did not inquire whether the said Deudor was a registered owner of the property. Besides, they never registered the deed of sale (Exh. 1) in the Office of the Registry of Deed of Quezon City, as testified to by Atty. Jurilla while on record. In order that defendants may be called buyers in good faith, it must be shown by clear and convincing evidence that upon buying the property, they were not aware of any flaw in their title or made of acquisition.
Art. 526, N.C.C. — He is deemed a possessor in good faith who is not aware of any flaw which invalidates it.
He is deemed a possessor in bad faith, who possesses in any case contrary to the foregoing.
Mistake upon a doubtful or difficult question of law may be on the basis of good faith.
The fact that in 1950 defendant Jurilla tendered to the Bulacan Subdivision the balance of the consideration of P4,500.00 (See Exh. 1) and refused to accept the tender, is a clear indication that notice to Vicente Jurilla, who is a lawyer, that the party from whom he was supposed to have bought the property was not the owner thereof and could not, therefore, transmit title to him.
The conclusions of fact of His Honor contained in these portions of the appealed decision may not be controverted, since, as We have pointed out earlier, this appeal is limited to questions of law. And in the light of the facts thus found by His Honor, We cannot say that the legal conclusions derived therefrom have no basis in law.
Appellants argue on pp. 25 to 26 of their brief this wise:
It may be argued however that in 1914 or 21 years after the issuance of the Informacion Posesoria in 1893 plaintiff-appellee or its predecessors in interest claimed to have obtained certificate of title of a big tract of land including the land in question under the land registration law or Act 496. Nevertheless we respectfully submit that the "Informacion Posesoria" covering the land in question conferred absolute and indefeasible title to the Deudors under the Spanish Mortgage Law and that the issuance of a certificate of title under the Land Registration Law 20 years thereafter could not defeat the title upon the Deudors considering that upon the issance of the alleged certificate of title in favor of the plaintiff-appellee the actual and adverse possessor of the property in question were the Deudors and not the plaintiff-appellee or its immediate predecessors.
Surely, appellants' reliance on the so-called "Informacion Posesoria" of their vendor, Florencio Deudor, cannot hold water. Nothing is better settled — indeed, it is axiomatic — in the law and jurisprudence in this jurisdiction relative to land registration, than that a Torrens title is indefeasible and incontrovertible as against any right or title in favor of any party existing prior to the issuance thereof no annotated on the title. In fact, in their answer filed in the court below, appellants, by making a general denial of the appellee's allegation that it is the holder of a Torrens title over the land in dispute, have virtually admitted the ownership thereof in appellee, albeit they claimed that they had acquired the same for valuable consideration from Florencio Deudor whose right over the same, according to them, was recognized by appellee in the compromise settlement in Civil Case No. Q-135 entitled Florencio Deudor et al. vs. J. M. Tuason et al. Consequently, the real issues for Our determination are whether or not there was in fact any such and whether or not appellants' right to the land in question by virtue of the sale made to them by Deudor has really been recognized by appellee, which are the very issues raised in the rest of the assignments of error in appellants' brief.
Actually, the fundamental affirmitive defense of appellants seem to be a little hazy. In their answer to the complaint below, there is the following allegation:
5. That defendants vigorously deny the allegations in paragraph 5 of plaintiff's complaint. The truth is that by virtue of the compromise agreement marked Annex "II", the plaintiff J.M. Tuason & Co., Inc., had stepped into the shoes of the vendor Florencio Deudor with respect to the land in question covered by the deed of sale Annex "I", not only of the rights and interest of said Florencio Deudor but also the concomitant obligations inherent thereto then legally existing and forceable at the time of the execution of the compromise agreement and approved by a competent court as evidenced by the decision marked Annex "III" hereunto attached and made part of the present answer. That what the defendants are herein asserting against the plaintiff J.M. Tuason & Co., Inc. is the compliance of the obligations by the said plaintiff which said plaintiff (J.M. Tuason & Co., Inc.,) had assumed for and in behalf of the vendor Florencio Deudor in that deed of sale Annex "I" by virtue of the compromise agreement Annex "II" and approved by the court as evidenced by the decision Annex "III." (Pp. 46- 47, Rec. on Appeal.)
On the other hand, on pp. 33-34 of their brief, they contend thus:
It may be argued further that plaintiff-appellee has succeeded or stepped into the shoes of Florencio Deudor (Deudors) by virtue of the Compromise Agreement Annex "II".
It must be noted however that when Deudor and plaintiff-appellee executed the Compromise Agreement Annex "II", Deudor had already sold conveyed and transferred his title, possession and whatever rights and claims upon the land in question in favor of the defendants-appellants. Consequently Deudor could not have transferred, sold or conveyed to the plaintiff-appellee by virtue of the Compromise Agreement whatever rights or interest upon the land in question previously conveyed for valuable consideration to defendants-appellants by virtue of the deed of absolute sale Annex "I".
As We see it, it is apparently the view of appellants that appellee by obligating itself in the compromise agreement, wherein the Deudors expressly admitted the indefeasibility of appellee's title over the land in controversy, to pay a large sum of money to the Deudors, said appellee had done so by way of payment of an agreed purchase price of the rights of ownership that the Deudors still had over the said lands. We do not find the terms of the compromise agreement to be in that sense. As it appears to Us, appellee entered into the compromise agreement confident of its position that its Torrens title over the property in question is unassailable and the monetary consideration therein stipulated was for no other purpose than to buy peace of mind, what with the numerous and protracted litigations it had to either institute or defend against holders of supposed Spanish grants or titles being pitted against its registered title, notwithstanding they were not brought out during the registration proceedings. Such, to Us, is the clear import of the following provisions of the compromise agreement:
FIRST — That the OWNERS own a tract of land situated in Quezon City and covered by Transfer Certificate of Title Nos. 37685, 37686, 37677, 37678, 37679, 37680, 37683, of the Register of Deeds of Q.C. containing an area of approximately nine hundred (900) hectares, which they have subdivided and have sold and offered for sale by installment since 1938 to the public under the trade name "Santa Mesa Heights Subdivision";
SECOND — That within the perimeter of said land is an area measuring fifty (50) quinones, over which the DEUDORS, have claimed possessory rights by virtue of what purports to be an abstract of an "informacion posesoria" covering said latter property, which recites that at the time of the issuance thereof in 1893, the records of the Register of Deeds of Manila (South District) showed that said property was registered in the name of the old Telesforo Deudor, predecessors in interest of the present, DEUDORS who are parties hereto. The relative position and area of the land claimed by the DEUDORS in relation to the property of the OWNERS covered by Transfer Certificate of Title No. (as above) above-mentioned, is shown in the sketch hereto attached as Annex "A" and made, part hereof;
THIRD — That said DEUDORS have been in possession of the land in question and claim to be the owners thereof and during the period of said possession have sold their rights to various third persons;
FOURTH — That in the middle of 1950, the DEUDORS, under a mistaken impression of the nature of their rights in said property, began the following suits against the OWNERS in the Court of First Instance of Quezon City: (a) Case No. Q-135, Deudor et al vs. Tuason; (b) Case No Q-183, Fulgencio vs. Tuason; (c) Case No. Q-174, Misericordia vs. Tuason; (d) Case No. 139 Agustin de Torres vs. Tuason; Case No, Q-177 Agripino Pascual vs. Tuason;
FIFTH — That after examining the various documents evidencing the title to said lands, the DEUDORS have decided to, as they hereby recognize the complete absolute and indefeasible title in fee simple of the OWNER over the said property, and hereby renounce, cede and quitclaim into and in favor of the OWNERS any right, title or interest of whatever nature they may have had in the past or may now have or may have in and to said property in the future;
SIXTH — That for and in consideration of the foregoing renunciation, cession and quitclaim, and of the improvement which the DEUDORS have made on said property, and of their undertaking to help maintain the OWNERS possession of said property and other obligations assumed by the DEUDORS under this agreement, the OWNERS hereby promise to pay said DEUDORS in the manner herein specified, the sum of ONE MILLION TWO HUNDRED AND ONE THOUSAND AND SIXTY THREE PESOS (P1,201,063.00) ... (Pp. 62-64, Record on Appeal.)
As can be seen, there is nothing in the aforequoted terms of the agreement from which anyone can gather that appellee ever recognized or acknowledged any superior right or title, much less a transferable one, of the Deudors, contrary to the contention of appellants. In fact, in so far as appellants are concerned, there is the specific stipulation in paragraph 7 to the following effect:
SEVENTH — That the sales of the possessory rights claimed by the DEUDORS, are described in the list submitted by them to the OWNERS which are attached hereto marked Annexes "B" and "C" and made a part hereof. Whatever amounts may have been collected by the DEUDORS on account thereof, shall be deducted from the total sum of Pl,201,063.00 to be paid to them. It shall be the joint and solidary obligations of the DEUDORS to make the buyers of the lots purportedly sold by them recognize the title of the OWNERS over the property purportedly bought by them and to make them sign whenever possible, new contracts of purchase for said property at the current prices and terms specified by the OWNERS in their sales of lots in their subdivision known as "Sta. Mesa Heights Subdivision" The DEUDORS hereby advise the OWNERS that the buyers listed in Annex "B" herein with the annotation "continue" shall buy the lots respectively occupied by them and shall sign new contracts, but the sums already paid by them to the DEUDORS amounting to P134,922.84 (subject to verification by the Court) shall be credited to the buyers and shall be deduced from the sums to be paid to the DEUDORS by the OWNERS. The DEUDORS also advise the OWNERS that the buyers listed in Annex "C" herein with the annotation "Refund" have decided not to continue with their former contracts of purchase with the DEUDORS and the sum already paid by them to the DEUDORS and totalling P101,182.42 (subject to verification by the Court) shall be refunded to them by the OWNERS and deducted from the sum that may he due the DEUDORS from the OWNERS. (Pp. 65-66. Record on Appeal.)
As far as We can gather from the record, the appellants are among those listed in the Annex B referred to in the paragraph.
In the light of these circumstances, it is not to be wondered that in its answer to appellants' counterclaim insisting on their alleged right to acquire the land in controversy pursuant to the terms of their purchase from Deudor, appellee alleged:
2. That plaintiff refused the tender of payment of defendants because the same was not in accordance with the current price of the lot and because defendants refused to enter into a new contract of purchase with plaintiff, contrary to the terms of the compromise agreement by virtue of which they were making such tender. (See par. 7 of Compromise Agreement.) (Page 101, Record on Appeal.)
In short, We cannot find any basis in the record for upholding the claim of appellants articulated in their answer below as follows:
6. That plaintiff J. M. Tuason & Co., is in estoppel to question the right, title, interest, and possession of the defendants herein in the land now in question covered by the deed of sale Annex "I" inasmuch that in the compromise agreement Annex "II" and approved by a competent court (Annex "III"), the said plaintiff J. M. Tuason & Co., Inc. has acknowledged that the defendant Ester L. Jurilla is one of the purchasers of Florencio Deudor; that said Ester L. Jurilla could buy said lot evidenced by Annex "I", the land now in question, from the plaintiff J. M. Tuason & Co., Inc., the lot which Florencio Deudor has agreed to sell to said Ester L. Jurilla now defendants; that the plaintiff J. M. Tuason & Co., Inc., in accepting the renunciation and quit-claim by Florencio Deudor in favor of the said plaintiff J. M. Tuason & Co., Inc., the latter knew of the commitments and obligations of Florencio Deudor in favor of the defendant Ester L. Jurilla as shown by her being included in the list made part of the compromise agreement of those purchasers of lots when Florencio Deudor was still in possession; and that plaintiff J. M. Tuason & Co., Inc., by reason of the compromise Annex "II" had also assumed certain obligation with regard to the defendant Ester L. Jurilla, recognizing her as a purchaser who made partial payments and continue to buy.
7. That because of the foregoing facts, the plaintiff J. M. Tuason & Co., Inc., had stepped into the shoes of the vendor Florencio Deudor in that deed of sale Annex "I", not only of the rights and interests of said Florencio Deudor, but also the concomitant obligations inherent thereto then legally existing and enforceable at the time of the execution of the compromise agreement Annex "II" and approved by a competent court (Annex "III").
8. That after the rendition of the judgment Annex "III" the defendants spouses Vicente Jurilla and Ester L. Jurilla tendered and offered payment to the plaintiff J. M. Tuason & Co., Inc., in compliance with the terms and conditions stipulated in the deed of sale Annex "I", but said plaintiff J. M. Tuason & Co., Inc., refused and continue to refuse to receive the payment or installments stipulated in the said deed of sale unless the defendants spouses herein would execute and sign a new contract with the plaintiff J. M. Tuason & Co., Inc., and to pay a very high and exhorbitant price of SEVENTY PESOS (P70.00) per square meter for the same land covered by the same deed of sale, contrary to and in violation of the terms and conditions agreed upon in the repeatedly mentioned deed of sale.
9. That by virtue of the compromise agreement, the plaintiff J. M. Tuason & Co., Inc., had stepped into the shoes of the vendor Florencio Deudor with respect to the land in question covered by the deed of sale Annex "I", not only of the rights and interests of said Florencio Deudor but also the concomitant obligations interent thereto then legally existing and enforceable at the time of the execution of the compromise agreement and approved by the Court. (Pp. 47-50, Rec. on Appeal.)
On the contrary, what can be readily deduced from the above discussion is that, since appellants are invoking the supposed compromise agreement they are referring to (which appellee claims was subsequently rescinded), they are the ones actually in estoppel to insist that appellee should abide by the terms of the sale to them of the land in dispute by Deudor. As contended by appellee, under the seventh paragraph of the compromise agreement, all that appellee has recognized with reference to the sale made by Deudors to appellants is that from the monetary consideration to be paid by appellee to the Deudors, the down-payment which appellants had paid to Florencio Deudor would be deducted and virtually considered as paid to appellee and that the balance that appellants would have to pay to appellee would depend on whatever agreement may be entered into between them and appellee, without regard to the terms of appellants' purchase from Deudor. And as rightly contended by appellee, since appellants are unwilling to enter into new negotiations with it, they have no right to continue in possession of the land in question.
IN VIEW OF ALL THE FOREGOING, the judgment of the trial court is affirmed, with costs against appellants.
Fernando (Chairman), Antonio, Aquino and Concepcion Jr., JJ., concur.
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