Republic of the Philippines
SUPREME COURT
THIRD DIVISION
G.R. No. 146531. March 18, 2005
DOMINGO R. MANALO, Petitioners,
vs.
PAIC SAVINGS BANK and THERESE V. VARGAS, Respondents.
D E C I S I O N
SANDOVAL-GUTIERREZ, J.:
Before us is a petition for review on certiorari under Rule 45 of the 1997 Rules of Civil Procedure, as amended, assailing the Decision1 dated December 21, 2000 of the Court of Appeals in CA-G.R. SP No. 60966, "Domingo R. Manalo vs. PAIC Savings Bank, represented by the Liquidator/Receiver, PDIC, and Therese Villanueva Vargas."
The factual antecedents as borne by the records are:
On July 19, 1983, S. Villanueva Enterprises, Inc., represented by its president, Therese Villanueva Vargas, impleaded as a respondent, obtained a ₱3,000,000.00 loan from PAIC Savings and Mortgage Bank, also a respondent. As security for the loan, respondents mortgaged two (2) lots situated in Pasay City covered by Transfer Certificate of Title (TCT) No. 6076 of the Registry of Deeds, same city.
However, respondent Vargas failed to pay the loan. Consequently, the mortgage was foreclosed and the lots were sold at public auction to respondent bank, being the highest bidder.
On December 4, 1984, a Certificate of Sale2 was issued to respondent bank and eventually registered with the Registry of Deeds of Pasay City.
On October 14, 1991 or seven years later, respondent Vargas filed with the Regional Trial Court (RTC), Branch 116, Pasay City, a complaint for annulment of mortgage and extrajudicial foreclosure against respondent bank, docketed as Civil Case No. R-8477. In due course, the RTC rendered a Decision dated July 22, 1993 dismissing the complaint for lack of merit. On appeal, the Court of Appeals, in a Decision dated October 28, 1996, affirmed the RTC Decision, sustaining the legality of the mortgage and the foreclosure proceedings. The Decision of the Appellate Court then became final and executory.
Meantime or on June 22, 1992, respondent bank filed with the RTC, Branch 112, Pasay City, a petition for issuance of a writ of possession, docketed as Civil Case No. 9011-P. After hearing, or on April 2, 1998, the court granted the petition and issued a writ of possession.
Earlier or on December 23, 1992, respondent Vargas sold to Armando Angsico the lots for ₱18,000,500.00. Then on August 24, 1994, respondent Vargas leased to Domingo R. Manalo, petitioner, a portion of the same lots consisting of 450 square meters for a period of ten (10) years with a monthly rental of ₱22,500.00. Later, or on June 29, 1997, Angsico assigned and transferred to petitioner all his rights to the property as shown by a Deed of Assignment and Transfer of Rights.
On May 7, 1998, petitioner filed with the RTC, Branch 231, Pasay City, a complaint for specific performance and damages, docketed as Civil Case No. 98-0868. Impleaded as defendants are respondent bank, its liquidator and/or receiver PDIC, and respondent Vargas. In his complaint, petitioner alleged that he has legal interest in the subject lots, having initially leased a portion of the same from respondent Vargas and then purchased the whole area from Angsico. He prayed that the trial court issue a writ of mandamus compelling respondent bank (1) to allow him to redeem and/or repurchase the subject lots for ₱18,000,000.00; and (2) to release to him TCT No. 6076.
Instead of filing an answer, respondent bank filed a motion to dismiss the complaint on the following grounds: (1) the trial court has no jurisdiction over the subject property; and (2) the complaint fails to state a sufficient cause of action. Respondent bank averred that petitioner has no legal interest in the subject lots since as early as December 4, 1985, the title thereto was consolidated in its name when respondent Vargas, petitioner’s predecessor-in-interest, failed to exercise her right of redemption.
On September 29, 1998, the RTC issued an Order denying respondent bank’s motion to dismiss the complaint. Thus, respondent bank, on October 7, 1998, filed its answer alleging as affirmative defenses that the complaint failed to state a cause of action and that the trial court has no jurisdiction over the case.
On September 4, 2000, the RTC rendered a Decision dismissing the complaint for "lack of an enforceable cause of action," thus:
"WHEREFORE, in the light of the aforementioned reasons, for lack of an enforceable cause of action, the case is hereby DISMISSED with costs against the plaintiff.
SO ORDERED."
On appeal, the Court of Appeals rendered the assailed Decision dated December 21, 2000 affirming the RTC Decision and holding that petitioner’s complaint failed to state a cause of action, thus:
"To begin with, the present petition for Mandamus on appeal should have been outrightly dismissed considering that such extraordinary remedy under Rule 65 is not available under the facts obtaining. Mandamus is a writ issued in order to compel the performance, when refused, of a ministerial duty, this being its main objective. It does not lie to require anyone to fulfill a contractual obligation or to compel a course of conduct, nor to control or review the exercise of discretion. Petitioner must show a clear legal right to the thing demanded with the corresponding imperative duty of the respondent to perform the act required. It never issues in doubtful cases. The writ will not issue to compel anything to which the petitioner is not entitled by law. Mandamus does not confer power nor impose duties. It simply commands to exercise a power already possessed and to perform a duty already imposed (Tangonan vs. Paño,137 SCRA 245 [1985]; University of San Agustin vs. Court of Appeals, 230 SCRA 761 [1994]).
"At bar, we cannot see any legal justification to compel PAIC Bank to accept the proposed ₱18,000,000.00 redemption money and to release the subject title. This is not the idea of a ministerial duty under the law.
"Essentially, the case at hand could be one for specific performance, as what the court a quo said in the first paragraph of the challenged decision.
x x x
"In the case at bar, what succinctly appears on records is the indubitable fact that appellant has no cause of action against PAIC Bank. It may be true that earlier the motion to dismiss of PAIC Bank on this point was denied by the court a quo. Yet, such resolution did not preclude the trial court to later on declare, after trial, that indeed there was no cause of action, especially so when the defense of lack of cause of action is averred in the answer as one of the affirmative defenses.
"Under the Rules of Court, a cause of action is defined as an act of omission of one party in violation of the legal right of the other which causes the latter injury (Rebodillo vs. Court of Appeals, 170 SCTA 800 [1989]). It is composed of: (1) the plaintiff’s primary right and defendant’s corresponding primary duty, whatever may be the subject to which they relate to his person, character, property or contract; and (2) the delict or wrongful act or omission of the defendant, by which the primary right and duty have been violated. The cause of action is determined not by the prayer of the complaint but by the facts alleged (Nicanor de Guzman, Jr. vs. Court of Appeals, 192 SCRA 507 [1990]).
"Here, the absence of cause of action of the appellant becomes more apparent when we consider the following:
(a) Logic and common sense dictate that one can only sell what he owns and the buyer acquires only what the seller can offer. On June 29, 1997, when Angsico sold the lot to Manalo, Angsico was not the owner of the subject property simply because at the time he (Angsico) purchased the same property from Vargas and/or S. Villanueva on December 23, 1992, said sellers were no longer the lawful owners of the property. As correctly pointed out by the appellees, after the expiration of the one (1) year redemption period and no redemption was made on December 5, 1985, PAIC Bank ipso facto became the legal owner in fee simple of the subject lot and its improvements, being the highest bidder in the auction sale and the vendee in the Sheriff’s Certificate of Sale duly registered a year before and which entitles it to the issuance of a new certificate of title in his name (People’s Financing Corp. vs. Court of Appeals, 192 SCRA 34 [1990]; Sumerariz vs. Development Bank of the Philippines, 21 SCRA 1374 [1967]).
x x x
"One last word, after failing to avail of the right of redemption, the mortgaged property became an acquired asset of the mortgagee – PAIC Bank. Like any ordinary property owner, PAIC Bank has the right to enjoy all the attributes of ownership, among others, to sell the property for whatever price it may deem reasonable and in favor of whomsoever it chooses to sell it. This prerogative to enter into lawful contract constitutes one of the liberties of the people of the State. If that right be struck down or arbitrarily interfered with, there is a substantial inferment of the liberty of the people under the Constitution. To enter into a contract freely and without restraint is one of the liberties guaranteed to the citizens of the country and should not be lightly interfered with. On that very same reason, courts cannot force party litigants to enter into a contract, without violating the fundamental law.
"IN VIEW OF THE FOREGOING, this appeal is ordered DISMISSED.
SO ORDERED."
Thus, the instant petition for review on certiorari. Basically, petitioner ascribes to the Court of Appeals the following error:
"IN HOLDING THAT THE PETITIONER FAILED TO ESTABLISH A CAUSE OF ACTION AND THAT MANDAMUS IS NOT THE CORRECT REMEDY."
In its comment, respondent bank contends that both the courts below did not err in dismissing petitioner’s action because mandamus does not lie to enforce contractual obligations.
We hold that mandamus is not the proper recourse to enforce petitioner’s alleged right of redemption. To begin with, mandamus applies as a remedy only where petitioner’s right is founded clearly in law and not when it is doubtful.3 In varying language, the principle echoed and reechoed is that legal rights may be enforced by mandamus only if those rights are well-defined, clear and certain.4
On December 4, 1985 or when respondent Vargas failed to exercise her right of redemption within the one (1) year redemption period, respondent bank ipso facto became the absolute owner of the lots. Surprisingly, however, on December 23, 1992, she sold the property for ₱18,000,500.00 to Angsico, who eventually transferred his rights to petitioner. Not only that, on August 24, 1994, respondent Vargas still leased to petitioner a portion of the subject lots.
Verily, when respondent bank became the owner of the lots on December 4, 1985, respondent Vargas could no longer legally transfer, cede and convey the property to petitioner.
Moreover, mandamus cannot be availed of as a remedy to enforce the performance of contractual obligations. In Commission on Elections vs. Quijano-Padilla,5 we held:
"No rule of law is better settled than that mandamus does not lie to enforce the performance of contractual obligations. As early as 1924, Justice Street, in Quiogue vs. Romualdez, already set forth the justification of this rule, thus:
‘Upon the facts above stated we are of the opinion that the writ of mandamus is not the appropriate, or even an admissible remedy. It is manifest that whatever rights the petitioner may have, upon the facts stated, are derived from her contract with the city; and no rule of law is better settled than that mandamus never lies to enforce the performance of private contracts. . . . The petitioner's remedy, if any she has, is by an original action in the Court of First Instance to compel the city to pay the agreed price or to pay damages for the breach of contract.’
x x x
‘It was not intended to aid a plaintiff in the enforcement of a mere contract right, or to take the place of the other remedies provided by law for the adjudication of disputed claims. Looking at the case from the standpoint of appellant, it involves nothing more than an ordinary breach of contract. If, as contended, the appellant had a valid contract with the school board, it also had an adequate remedy at law to recover damages for its breach; and to permit the writ of mandamus to be used for the purpose of enforcing a mere contract right would be a wide departure from the settled practice in respect to the character of cases in which relief by mandamus may be obtained.
x x x."
WHEREFORE, the petition is DENIED. The assailed Decision dated December 21, 2000 of the Court of Appeals in CA-G.R. SP No. 60966 is hereby AFFIRMED.
Costs against petitioner.
SO ORDERED.
Panganiban, (Chairman), Corona, Carpio-Morales, and Garcia, JJ., concur.
Footnotes
1 Penned by Justice Conrado M. Vasquez, Jr. and concurred in by Justice Presbitero J. Velasco, Jr., now Court Administrator, and Justice Juan Q. Enriquez, Jr., Annex "C", Petition for Review, Rollo at 179-186.
2 This Certificate of Sale was inscribed on TCT No. 6076 as Entry No. 84-10092.
3 Garces vs. Court of Appeals, 259 SCRA 99 (1996), cited in Commission on Elections vs. Quijano-Padilla, G.R. No. 151992, September 18, 2002, 389 SCRA 353, 366.
4 JRS Business Corporation vs. Montesa, 23 SCRA 190 (1968), cited in Commission on Elections vs. Quijano-Padilla, id.
5 Ibid. at 364, citing Quiogue vs. Romualdez, 46 Phil. 337 (1924), Florida Central & Peninsular R. Co. vs. State ex rel Tavares, 20 L.R.A., 419, and Tabigue vs. Duvall, 16 Phil. 324 (1910).
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