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PHILIPPINE SUPREME COURT DECISIONS

EN BANC

[G.R. No. L-21783. March 25, 1970.]

PACIFIC FARMS, INC., Plaintiff-Appellee, v. SIMPLICIO G. ESGUERRA, ET AL., Defendants, CARRIED LUMBER COMPANY, Defendant-Appellant.


SYLLABUS


1. REMEDIAL LAW; DISMISSAL OF COMPLAINT; NO IDENTITY OF ISSUE WITH EJECTMENT, INSTANT CASE.— The theory that the issues in this case for ownership of building are identical to those litigated in the ejectment case, which has been appealed to the same court and may have been assigned to another branch thereof cannot justify the order of dismissal appealed from. The issue in the ejectment case, insofar as plaintiff herein is concerned, is a procedural one-whether the City Court could decide it without passing upon the question whether plaintiff had ceased to be the owner of its Market Building, which is beyond the jurisdiction of said court — whereas the case at bar involves the merits of that question, namely, whether plaintiff is still the owner of such building. Similarly, the issue in the land registration case is, likewise, one of procedure or jurisdiction — whether the court may, under the provisions of Section 112 of Act No. 496, pass upon the question of ownership over the building, which is claimed on the one hand, by Ocampo and, on the other, by plaintiff herein.

2. CIVIL LAW; LEASE; LEASE CONTRACT ALLEGEDLY SIMULATED; ISSUES NOT SUSCEPTIBLE OF DETERMINATION IN EJECTMENT CASE OR LAND REGISTRATION CASE.— The alleged simulation of the lease contract between Ocampo and Mrs. Yap, the question whether there had been a direct contract of lease between Ocampo and plaintiff herein, whether Ocampo and Mrs. Yap had illegally and fraudulently conspired to deprive the plaintiff of his title to the Market Building, and, for this purpose, made it appear falsely that Mrs. Yap had not turned over to Ocampo the rentals paid to her by the plaintiff, in order to clear the way for the inscription, in TCT No. 36387 of Manila, of Ocampo’s alleged title to said building, and for plaintiff’s ejectment therefrom, are obviously not susceptible of determination, either in the ejectment case or in the land registration case, pursuant to Section 112 of Act 496.

3. REMEDIAL LAW; PROVISIONAL REMEDIES; INJUNCTIONS; BONDS; INADEQUACY OF BOND; REMEDY.— As regards the alleged great damage caused to Ocampo by the issuance of the writ of preliminary injunction and the alleged inadequacy of plaintiff’s bond therefore, it is obvious that the lower court should have merely required the plaintiff to increase the amount of said bond to such sum as may be deemed proper to protect sufficiently the rights of Ocampo.

4. ID.; PROCEDURE; INDISPENSABLE PARTIES; STOCKHOLDERS OF CORPORATION NOT INDISPENSABLE PARTIES.— The stockholders of plaintiff corporation are not indispensable parties in the instant case for ownership of a building owned by the corporation, their interest being amply represented by plaintiff.

5. ID.; CIVIL ACTIONS; DISMISSAL NOT PROPER; PROPER PROCEDURE IN INSTANT CASE.— If Branch XI of the Court cannot annul an order of Branch IV or other branches of the same court, what the trial court should have done was, not to dismiss this case, but to order that the same be assigned to the branch handling the land registration and/or the appeal in the ejectment case. After all, plaintiff herein had nothing to do with the assignment thereof, made by somebody else, to a branch other than that handling the land registration case or the appeal in the ejectment case.

6. ID.; ID.; PLEADING AND PRACTICE; FAILURE TO ATTACH TO COMPLAINT CERTIFIED COPIES OF JUDGMENT OR ORDERS ASSAILED, NOT FATAL.— Plaintiff’s failure to attach to the complaint in this case certified copies of the judgment and orders assailed therein constituted, at most, an insubstantial defect of form, insofar as the motion to dismiss is concerned, the same having hypothetically admitted the truth of the allegations of said complaint. Considering that the Rules of Court should be construed liberally in order to promote the ends of justice, the lower court should have merely ordered the plaintiff to submit the requisite copies, instead of dismissing the case.


R E S O L U T I O N


CASTRO, J.:


Subject of this resolution is a motion filed by the plaintiff-appellee Pacific Farms, Inc. for reconsideration of our decision of November 29, 1969.

Briefly stated, the plaintiff-appellee’s first argument is that it should not have been found liable for the payment of the unpaid portion of the procurement price of the lumber and construction materials furnished by the appellant to its predecessor-in-interest, the Insular Farms, Inc., because it was a purchaser for value and in good faith of the six buildings in question. The flaw in this argument lies in its assumption that the reason we held the appellee liable is that it was not a buyer in good faith and for value, which is incorrect. When we applied article 447 of the Civil Code by analogy to this case, we did so on the assumption that the plaintiff-appellee was in good faith. Thus, after quoting said article, we stated:jgc:chanrobles.com.ph

"Although it does not appear from the records of this case that the land upon which the six buildings were built is owned by the appellee, nevertheless, that the appellee claims that it owns the six buildings constructed out of the lumber and construction materials furnished by the appellant, is indubitable. Therefore, applying article 44 by analogy, we perforce consider the buildings as the principal and the lumber and construction materials that went into their construction as the accessory. Thus the appellee, if it does own the six buildings, must bear the obligation to pay for the value of the said materials; the appellant — which apparently has no desire to remove the materials, and, even if it were minded to do so, cannot remove them without necessarily damaging the buildings — has the corresponding right to recover the value of the unpaid lumber and construction materials." (Decision, pp. 4-5; Italics supplied)

Indeed, because we assumed that the appellee was in good faith, we did not pronounce it liable for the reparation of damages but only for the payment of the unpaid price of the lumber and construction materials due to the appellant as unpaid furnisher thereof. Based on this same assumption, we likewise held that the appellant has no right to remove the materials but only to recover the value of the unpaid lumber and construction materials. Thus, since the appellee benefited from the accession, i.e., from the lumber and materials that went into the construction of the six buildings, it should shoulder the compensation due to the appellant as unpaid furnisher of materials, pursuant to the rule we cited in our decision that compensation should be borne by the person who has been benefited by the accession.

Under the overall environmental circumstances of the case, considering that although the appellee was in a better position to protect its own interest it took no action to intervene in the suit filed by the appellant against the Insular Farms, Inc. or to hold the latter to account therefor, notwithstanding that it concededly acquired knowledge, after its purchase from the Insular Farms, Inc., on March 21, 1958 of the six buildings in question; of the filing and pendency of the appellant’s suit for payment of the unpaid balance of the price of the lumber and construction materials delivered to the Insular Farms, Inc. and used in the construction of the said buildings, the Court believes that its decision upholding the sheriff’s sale of the six buildings but granting the appellee the option of redeeming the same by paying to the appellant the unpaid balance with interest owing to it as supplier of the construction materials, is completely in consonance with justice and equity.

ACCORDINGLY, the plaintiff-appellee’s motion for reconsideration dated December 12, 1969 is hereby denied.

Concepcion, C.J., Reyes, J.B.L., Dizon, Makalintal, Zaldivar, Fernando, Teehankee, Barredo and Villamor, JJ., concur.

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