Republic of the Philippines
SUPREME COURT
Manila
FIRST DIVISION
G.R. No. 97929 December 17, 1991
BENJAMIN DY, petitioner,
vs.
HON. COURT OF APPEALS, BIENVENIDO MANALO AND PARAMOUNT DEVELOPMENT BANK, respondents.
Gregorio M. Albino for petitioner.
Adelaida J. Rivera for Bienvenido Manalo.
Belasa, Reyes & Associates for Urban Development Bank.
CRUZ, J.:
The original controversy was between the private respondents only. It was complicated when the petitioner herein entered the picture as intervenor and claimed ownership of the properties in dispute.
These properties were two lots located in Pandan, Angeles City, each consisting of 180 square meters. They are designated as Lots 2 and 3 of Block 8 of the subdivision plan (LRC) Psd 31467.
It appears that on June 30, 1983, Bienvenido Manalo purchased Lot 2 for P9,000.00 from Paramount Development Bank, the herein other private respondent. The bank expressly warranted valid title to and peaceful possession of the property and that it was free from all liens and encumbrances. On August 1, 1983, the Deed of Absolute Sale
1 was duly registered and TCT No. 61529 in the Registry of Deeds of Angeles City was issued in the name of Manalo.
Also on June 30, 1983, Manalo and Paramount entered into another agreement pursuant to which the latter committed itself to sell Lot 3 to Manalo for the sum of P9,000.00. P3,000.00 was to be paid in advance and the balance in specified installments. The Contract to Sell
2 stipulated that the mortgagor of Lot 3 having defaulted, Paramount would institute foreclosure proceedings and allow Manalo to take possession of the lot upon its purchase thereof at the auction sale. The bank also agreed to execute a Deed of Absolute Sale once it acquired title to the lot and upon full payment of the balance by Manalo.
Manalo alleges that when he went to occupy the said lots pursuant to the above-mentioned contracts, he found that they had been fenced by Benjamin Dy, who claimed to be the owner of the properties. Manalo then demanded from Paramount that it eject Dy pursuant to its express warranty under the Deed Absolute Sale. He also informed the bank that he would su pend the amortizations on Lot 3 until the land was cleared of occupants.
The bank having failed to comply with Manalo's demand, the latter filed a complaint against it in the Regional Trial Court Angeles City. Manalo demanded that the defendant make good its warranty under the Deed of Absolute Sale, eject the occupants of Lot 3, and execute a Deed of Absolute Sale thereof upon his full payment of the agreed purchase price. He also demanded actual, moral and exemplary damages as well as litigation expenses, including attorney's fees.
In its answer, the defendant denied the claims of the plaintiff and set up special and affirmative defenses.
Enter now the petitioner, as plaintiff-intervenor.
Benjamin Dy averred that the real owner of Lots 2 and 3 wa he and none other, having purchased them on February 2, 1972 from his father, Dy Hong, for P14,000.00. Dy Hong had acquired these lots from the Doña Agripina Subdivision on September 4, 1964, as evidenced by two receipts issued to him by the seller. The intervenor claimed he had been in possession o the lots since 1964 and that both Manalo and the bank knew he was the owner of these properties.
After trial, Judge Cesar V. Alejandria rendered judgment
3 in favor of Manalo, to whom Dy was ordered to surrender the object lots. The defendant bank was required to execute in Manalo's favor a Deed of Absolute Sale over Lot 3 if or once it had already acquired title thereto, upon payment by Manalo of the purchase price in full. The defendant was also sentenced to pay the plaintiff damages in the amount of P10,000.00 an attorney's fees in the amount of P5,000.00, plus the costs.
The trial court held that the defendant was bound to place plaintiff in peaceful possession of Lot 2 in accordance with th ex ress warrant in the Deed of Absolute Sale.
Regarding Lot 3, the decision held that the plaintiff had the right to suspend payment of the balance of the purchase price because the conditions of the contract violated Art. 1461 of the Civil Code, and especially since the land was occupied by Dy. It added that unless the bank could transfer title and peaceful possession of the lot to Manalo, as promised, it should refund the P3,000.00 advance payment, with interest, and pay Manalo damages.
As for Dy, the trial court said that his evidence of ownership was insufficient, consisting as it did only of the two receipts and the deed of sale from his father. No deed of sale from the Doña Agripina Subdivision was submitted. The deed of sale signed by his father, who supposedly acquired the land from the subdivision, was by itself alone a "worthless document." There was no proof either that the disputed lots belonged to the subdivision as the evidence of record showed that the land was originally owned by one Eusebio Lopez, who mortgaged it to Paramount.
The defendant and the intervenor both appealed the decision to the Court of Appeals, which affirmed it in toto on April 10, 1989.
4 The intervenor then filed this petition for review with this Court on the following submissions:
1. The RTC erred in assuming jurisdiction over the case as only the Housing and Land Use Regulatory Board has the authority and exclusive jurisdiction over the case due to the nature of the action.
2. Without the approval of the HLURB, the mortgage of the subdivision lots in favor of the Bank is void and any subsequent transfer to other persons, including the Bank and Manalo, is likewise null and void.
3. The mortgage of the subdivision lots to the Bank or its predecessor-in-interest by the owner is null and void pursuant to a decision of the Court dated November 11, 1981, involving the Fatima Subdivision and Philippine Savings Bank, because a bank should know that when the property was mortgaged to it, lots had been sold or were being sold to the public, and should the company fail to liquidate the loan, the lot buyers would be affected.
4. Petitioner is the owner of the two lots. Article 1358 does not state that the sale is void and non-existing just because the sale was not done in a public instrument. The requirements of said article are intended only to insure enforcement of the contract.
5. Manalo was in bad faith when he purchased the lots from the Bank because he knew that petitioner had already purchased the lots from the subdivision.
It is contended by the petitioner that the nature of the action places it under the jurisdiction of the Housing and Land Use Regulatory Board, conformably to PD 957 as amended by PD 1344, providing as follows:
Section 1. In the exercise of its function to regulate the real estate trade and business and in addition to its powers provided for in Presidential Decree No. 957, the National Housing Authority shall have exclusive jurisdiction to hear and decide cases of the following nature:
A. Unsound real estate business practices.
B. Claims involving refund and other claims filed by subdivision, lot or condominium buyer against the project owner, develope dealer, broker or salesman; and
C. Cases involving specific performance of contractual and statutory obligations filed by buyers of subdivision, lot or condominium unit against the owner, developer, dealer, broker or salesman.
Exclusive jurisdiction over these cases was originally vested in the National Housing Authority but was transferred by EO 648 dated February 7, 1981, to the Human Settlements Regulatory Commission, which was renamed Housing and Land Use Regulatory Board by EO 90 on December 17, 1986.
The above-quoted provision clearly shows that the petitioner's contention is untenable. Civil Case No. 4209 was an action for specific performance brought by Manalo as vendee of the lots to enforce the warranty contained in the Deed of Absolute Sale and to compel performance of the Contract to Sell by Paramount as vendor. The bank sold Lot 2 as mortgagee-owner after having acquired title thereto by virtue of a foreclosure sale an promised to sell Lot 3 under certain conditions in its capacity a mortgagee. It was not acting as subdivision owner, developer, broker or salesman, nor was it engaged in the real estate business when it entered into the two contracts with Manalo. Hence, PD 957 as amended. is not applicable. What is applicable is Section 19 of BP 129, which vests in the Regional Trial Courts exclusive original jurisdiction over civil actions involving title to or possession of real property or any interest therein.
It must be added that the attack on the jurisdiction of the trial court was made by the petitioner for the first time only when the case was already in the Court of Appeals. In Tijam v. Sibonghanoy,
5 the Court said that "we frown upon the "undesirable practice" of a party submitting his case for decision and then accepting the judgment only if favorable, and attacking it for lack of jurisdiction, when adverse."
In his second and third assignments of error, the petitioner alleges that the mortgages constituted over the lots in favor of the bank are null and void for lack of "approval by the National Housing Authority pursuant to Section 18 of PD 957. He also invokes the decision of the Court in a case "involving the Fatima Subdivision and the Philippine Savings Bank" but does not give any citation of that case. The argument is that if the mortgages in favor of the bank are void, then the foreclosure sales and the subsequent transfers of the lots are likewise void.
Section 18 of PD 957 provides as follows:
Section 18. Mortgages — No mortgage on any unit or lot shall be made by the owner or developer without prior written approval of the authority. Such approval shall not be granted unlws it is shovrn that the proceeds of the mortgage loan shall be used for the development of the condominium or subdivision project and effective measures have been provided to ensure such utilization. The loan value of each lot or unit covered by the mortgage shall be determined and the buyer thereof, if any, shall be notified before the release of the loan. The buyer may, at his option, pay his installment for the lot or unit directly to the mortgagee who shall apply the payments to the corresponding mortgage indebtedness secured by the particular lot or unit being paid for, with a view to enabling said buyer to obtain title over the lot or unit promptly after full payment thereof.
As we have already held that the Deed of Absolute Sale and the Contract to Sell do not involve subdivision lots, this section is clearly not applicable to the mortgages executed in favor of Paramount. In fact, it has been shown that the lots were mortgaged to the bank by one Eusebio Lopez and not by the Dora Agripina Subdivision as the petitioner contends. In any event, there is nothing in the said provision which states that mortgage executed without the approval of the NHA (now th HLRUB) is null and void.
We have no copy of the supposed Fatima Subdivision decision nor does the petitioner tell us where to find it, as he should. It does not matter much, though, for from what he tells us about it, it involves a subdivision lot and so does not apply to the case before us.
The fourth and fifth assignments of errors will be jointly discussed as these involve the issue of ownership of the lots in question.
We affirm the conclusion of the respondent court that petitioner has not proved that he is the owner of the lots. His evidence on this matter consisted only of the deed of sale executed and signed by his father, the two receipts supposedl issued by the Doña Agripina Subdivision, and his own testimony. As observed by the trial court, it has not even been shown that at the time of the allgged sale in favor of the petitioner father, the lots were owned by the Doña Agripina Subdivision.
The two receipts allegedly issued by the subdivision are private documents. In proving their due execution and genuinness, it is not sufficient that the witness state in a general manner that the person whose signature appears thereon the one who executed the document. The testimony of an eye witness authenticating a private document must be positive, categorically stating that the document was actually eye-witness by the person whose name is subscribed thereto.
6 The Court notes that in the case at bar, the details surrounding execution of the petitioner's documentary evidence were even narrated.
Regarding Lot 2, it should be noted that the Deed of Absolute Sale dated June 30, 1983, was duly registered, resulting in issuance of TCT No. 61529 in Manalo's name. Under Section of PD 1529, the act of registration is the operative act to convey or affect the land insofar as third persons are concerned.
7 Section 44 of the same law provides that every registered own receiving a certificate of title in pursuance of a decree of registration shall hold the same free from all encumbrances except those noted in said certificate and those specifically mentioned by law. This rule applies to every subsequent purchaser of registered land taking a certificate of title in good faith.
The petitioner contends that Manalo is a purchaser in bad faith as he knew Dy owned the lots in question before he bought it. He argues that such knowledge of the unregistered sale is equivalent to registration as held in the cases of Winkleman v. Veluz, 43 Phil. 604, and Gustilo v. Maravilla, 48 Phil. 442.
That is indeed the doctrine. Nevertheless, the Court has carefully reviewed the transcript of stenographic notes and has found nothing to substantiate the petitioner's gratuitous conclusions. On the contrary, Manalo testified that he was not aware that there were occupants of the lots when he entered into the contracts with Planters, and that it was only when he went to clear the properties that he came to know of Dy's adverse claim. The trial court believed him, and so do we, relying on its factual finding. We agree that as Manalo came to know about the petitioner's possession and claim of ownership over the two lots only after he had already bought the land, he cannot be considered a purchaser in bad faith.
It is clear to the Court that the challenged decision is not flawed by reversible error but, on the contrary, conforms to the evidence of record and the applicable law and jurisprudence.
ACCORDINGLY, the petition is DENIED, with costs against the petitioner.
SO ORDERED.
Narvasa, C.J., Griño-Aquino and Medialdea, JJ., concur.
Footnotes
1 Exhibit A.
2 Exhibit C.
3 Rollo, p. 29.
4 Penned by Nocon, P. J., with Paras and Cacdac, Jr., JJ., concurring.
5 23 SCRA 29.
6 Nolan v. Salas, 7 Phil. 1.
7 Egao v. Court of Appeals, 174 SCRA 484.
The Lawphil Project - Arellano Law Foundation
