SECOND DIVISION
G.R. No. 200009, January 23, 2017
SPRING HOMES SUBDIVISION CO., INC., SPOUSES PEDRO L. LUMBRES AND REBECCA T. ROARING, Petitioners, v. SPOUSES PEDRO TABLADA, JR. AND ZENAIDA TABLADA, Respondent.
D E C I S I O N
PERALTA, J.:
Before the Court is a petition for review on certiorari under Rule 45 of the Rules of Court seeking to reverse and set aside the Decision1 dated May 31, 2011 and Resolution2 dated January 4, 2012 of the Court of Appeals (CA) in CA-G.R. CV No. 94352 which reversed and set aside the Decision3 dated September 1, 2009, of the Regional Trial Court (RTC), Branch 92, Calamba City.
The factual antecedents are as follows.
On October 12, 1992, petitioners, Spouses Pedro L. Lumbres and Rebecca T. Roaring, (Spouses Lumbres) entered into a Joint Venture Agreement with Spring Homes Subdivision Co., Inc., through its chairman, the late Mr. Rolando B. Pasic, for the development of several parcels of land consisting of an area of 28,378 square meters. For reasons of convenience and in order to facilitate the acquisition of permits and licenses in connection with the project, the Spouses Lumbres transferred the titles to the parcels of land in the name of Spring Homes.4
On January 9, 1995, Spring Homes entered into a Contract to Sell with respondents, Spouses Pedro Tablada, Jr. and Zenaida Tablada, (Spouses Tablada) for the sale of a parcel of land located at Lot No. 8, Block 3, Spring Homes Subdivision, Barangay Bucal, Calamba, Laguna, covered by Transfer Certificate of Title (TCT) No. T-284037. On March 20, 1995, the Spouses Lumbres filed with the RTC of Calamba City a complaint for Collection of Sum of Money, Specific Performance and Damages with prayer for the issuance of a Writ of Preliminary Attachment against Spring Homes for its alleged failure to comply with the terms of the Joint Venture Agreement.5 Unaware of the pending action, the Spouses Tablada began constructing their house on the subject lot and thereafter occupied the same. They were then issued a Certificate of Occupancy by the Office Building Official. Thereafter, on January 16, 1996, Spring Homes executed a Deed of Absolute Sale in favor of the Spouses Tablada, who paid Spring Homes a total of P179,500.00, more than the P157,500.00 purchase price as indicated in the Deed of Absolute Sale.6 The title over the subject property, however, remained with Spring Homes for its failure to cause the cancellation of the TCT and the issuance of a new one in favor of the Spouses Tablada, who only received a photocopy of said title.
Subsequently, the Spouses Tablada discovered that the subject property was mortgaged as a security for a loan in the amount of over P4,000,000.00 with Premiere Development Bank as mortgagee and Spring Homes as mortgagor. In fact, since the loan remained unpaid, extrajudicial proceedings were instituted.7 Meanwhile, without waiting for trial on the specific performance and sum of money complaint, the Spouses Lumbres and Spring Homes entered into a Compromise Agreement, approved by the Calamba RTC on October 28, 1999, wherein Spring Homes conveyed the subject property, as well as several others, to the Spouses Lumbres.8 By virtue of said agreement, the Spouses Lumbres were authorized to collect Spring Homes' account receivables arising from the conditional sales of several properties, as well as to cancel said sales, in the event of default in the payment by the subdivision lot buyers. In its capacity as mortgagee, Premiere Development Bank was included as a party in the Compromise Agreement.9
In the exercise of the power granted to them, the Spouses Lumbres started collecting deficiency payments from the subdivision lot buyers. Specifically, they sent demand letters to the Spouses Tablada for the payment of an alleged outstanding balance of the purchase price of the subject property in the amount of P230,000.00. When no payment was received, the Spouses Lumbres caused the cancellation of the Contract to Sell previously executed by Spring Homes in favor of the Spouses Tablada. On December 22, 2000, the Spouses Lumbres and Spring Homes executed a Deed of Absolute Sale over the subject property, and as a result, a new title, TCT No. T-473055, was issued in the name of the Spouses Lumbres.10
On June 20, 2001, the Spouses Tablada filed a complaint for Nullification of Title, Reconveyance and Damages against Spring Homes and the Spouses Lumbres praying for the nullification of the second Deed of Absolute Sale executed in favor of the Spouses Lumbres, as well as the title issued as a consequence thereof, the declaration of the validity of the first Deed of Absolute Sale executed in their favor, and the issuance of a new title in their name.11 The Sheriffs Return dated August 1, 2001 indicated that while the original copy of the complaint and the summons were duly served upon the Spouses Lumbres, summons was not properly served upon Spring Homes because it was reportedly no longer existing as a corporate entity.12
On August 14, 2001, the Spouses Lumbres filed a Motion to Dismiss the case against them raising as grounds the non-compliance with a condition precedent and lack of jurisdiction of the RTC over the subject matter. They alleged that the Spouses Tablada failed to avail of conciliatory proceedings, and that the RTC has no jurisdiction since the parties, as well as property in question, are all located at Calamba City, and that the action instituted by the Spouses Tablada praying for the nullification of the Compromise Agreement actually corresponds to a nullification of a judgement issued by a co-equal trial court. The Spouses Tablada opposed by alleging that Spring Homes holds office at Paraiiaque City, falling under the exception from the requirement of barangay conciliatory proceedings and that the action they filed was for nullification of title issued to the Spouses Lumbres as a result of a double sale, which is rightly under the jurisdiction of the trial court. They also emphasized that as non-parties to the Compromise Agreement, the same is not binding upon them. The Motion to Dismiss was eventually denied by the trial court on October 2, 2001.13
Interestingly, on even date, the Spouses Lumbres filed an ejectment suit of their own before the Municipal Trial Court in Cities (MTCC) of Calamba City demanding that the Spouses Tablada vacate the subject property and pay rentals due thereon. The MTCC, however, dismissed the suit ruling that the Spouses Lumbres registered their title over the subject property in bad faith. Such ruling was reversed by the RTC which found that there was no valid deed of absolute sale between the Spouses Tablada and Spring Homes. Nevertheless, the CA, on appeal, agreed with the MTCC and reinstated the decision thereof. This was affirmed by the Court in Spouses Lumbres v. Spouses Tablada 14 on February 23, 2007.
Meanwhile, on the nullification and reconveyance of title suit filed by the Spouses Tablada, the RTC noted that Spring Homes has not yet been summoned. This caused the Spouses Tablada to move for the discharge of Spring Homes as a party on the ground that the corporation had already ceased to exist. The Spouses Lumbres, however, opposed said motion claiming that Spring Homes is an indispensable party.15 The RTC ordered the motion to be held in abeyance until the submission of proof on Spring Homes' corporate status. In the meantime, trial ensued. Eventually, it was shown that Spring Homes' certificate of registration was revoked on September 29, 2003.16
On September 1, 2009, the RTC rendered its Decision dismissing the Spouses Tablada's action for lack of jurisdiction over the person of Spring Homes, an indispensable party.17 According to the trial court, their failure to cause the service of summons upon Spring Homes was fatal for Spring Homes was an indispensable party without whom no complete determination of the case may be reached.18 In support thereof, the RTC cited the pronouncement in Uy v. CA, et. al.19 that the absence of an indispensable party renders all subsequent actuations of the court null and void for want of authority to act not only as to the absent parties but even as to those present.20 In the instant case, the Spouses Tablada prayed that the Deed of Absolute Sale executed by Spring Homes in favor of the Spouses Lumbres be declared null and void and that Spring Homes be ordered to deliver the owner's duplicate certificate of title covering the subject lot. Thus, without jurisdiction over Spring Homes, the case could not properly proceed.21 The RTC added that the Spouses Tablada's subsequent filing of the motion to discharge does serve as an excuse for at that time, the certificate of registration of Spring Homes had not yet been cancelled or revoked by the Securities and Exchange Commission (SEC). In fact, the assumption that it was already dissolved when the suit was filed does not cure the defect, because the dissolution of a corporation does not render it beyond the reach of courts considering the fact that it continues as a body corporate for the winding up of its affairs.22
In its Decision dated May 31, 2011, however, the CA reversed and set aside the RTC Decision finding that Spring Homes is not an indispensable party. It held that Spring Homes may be the vendor of the subject property but the title over the same had already been issued in the name of the Spouses Lumbres. So any action for nullification of the said title causes prejudice and involves only said spouses, the registered owners thereof. Thus, the trial court may very well grant the relief prayed for by the Spouses Lumbres.23 In support thereof, the appellate court cited the ruling in Seno, et. al. v. Mangubat, et. al.24 wherein it was held that in the annulment of sale, where the action was dismissed against defendants who, before the filing of said action, had sold their interests in the subject land to their co-defendant, the said dismissal against the former, who are only necessary parties, will not bar the action from proceeding against the latter as the remaining defendant, having been vested with absolute title over the subject property.25 Thus, the CA maintained that the RTC's reliance on Uy v. CA is misplaced for in said case, it was imperative that an assignee of interests in certain contracts be impleaded, and not the assignor, as the RTC interpreted the ruling to mean. Thus, the doctrine in Uy actually bolsters the finding that it is the Spouses Lumbres, as assignee of the subject property, and not Spring Homes, as assignor, who are the indispensable parties.26
Moreover, considering that the RTC had already concluded its trial on the case and the presentation of evidence by both parties, the CA deemed it proper to proceed to rule on the merits of the case. At the outset, the appellate court noted that the ruling of the Court in Spouses Lumbres v. Spouses Tablada back in 2007 cannot automatically be applied herein for said ruling involves an ejectment case that is effective only with respect to the issue of possession and cannot be binding as to the title of the subject property.
This notwithstanding, the CA ruled that based on the records, the first sale between Spring Homes and the Spouses Tablada must still be upheld as valid, contrary to the contention of the Spouses Lumbres that the same was not validly consummated due to the Spouses Tablada's failure to pay the full purchase price of P409,500.00. According to the appellate court, the first Deed of Absolute Sale clearly indicated that the consideration for the subject property was P157,500.00.27 The Spouses Lumbres' argument that such Deed of Absolute Sale was executed only for the purpose of securing a loan from PAG-IBIG in favor of the Spouses Tablada was unsubstantiated. In fact, even the second Deed of Absolute Sale executed by Spring Homes in favor of the Spouses Lumbres, as well as several receipts presented, indicated the same amount of P157,500.00 as purchase price. As for the amount of P409,500.00 indicated in the Contract to Sell executed between Spring Homes and the Spouses Tablada, the CA adopted the findings of the Court in Spouses Lumbres v. Spouses Tablada in 2007 and held that the amount of P409,500.00 is actually composed not only of the subject parcel of land but also the house to be constructed thereon. But since it was proven that it was through the Spouses Tablada's own hard-earned money that the house was constructed, there existed no balance of the purchase price in the amount of P230,000.00 as the Spouses Lumbres vehemently insist, viz.:
Further, the spouses Lumbres alleged that what was legal and binding between Spring Homes and plaintiffs-appellants [spouses Tablada] was the Contract to Sell which, in part, reads:chanRoblesvirtualLawlibrary3. That the SELLER, for and in consideration of the payments and other terms and conditions hereinafter to be designated, has offered to sell and the BUYER has agreed to buy certain parcel of land more particularly described as follows:chanRoblesvirtualLawlibrary
Blk. No. P- 111 Lot No. Area Sq. Meter Price Per sq. Meter Total Selling Price 3 8 105 P1,500 42 6,000 P409,500
Similar to the ruling of the Supreme Court in Spouses Lumbres v. Spouses Tablada, despite there being no question that the total land area of the subject property was One Hundred Five (105) square meters, there appears in the said contract to sell a numerical value of Forty Two (42) square meters computed at the rate of Six Thousand Pesos (6,000.00) per square meter. We agree with the findings of the Supreme Court in this regard that the Forty Two (42) square meters referred only to the land area of the house to be constructed in the subject property. Since the spouses Lumbres failed to disprove the plaintiffs-appellants [spouses Tablada] claim that it was through their own hard earned money that enabled them to fund the construction and completion of their house and not Spring Homes, there existed no balance of the purchase price to begin with. It is important to note that what the plaintiffs-appellants [spouses Tablada] bought from Spring Homes was a vacant lot. Nowhere in the Deed of Absolute Sale executed between plaintiffs-appellants [spouses Tablada] and Spring Homes was it indicated that the improvements found thereon form part of the subject property, lest, that any improvements existed thereto. It was only through the plaintiffs-appellants (spouses Tablada] own efforts that a house was constructed on the subject property.28
WHEREFORE, in view of the foregoing premises, the instant appeal is hereby GRANTED. The assailed Decision dated September 1, 2009 in Civil Case No. 3117-2001-C is hereby ANNULLED AND SET ASIDE. Accordingly, the Register of Deeds of Calamba, Laguna, is hereby directed to cancel Transfer Certificate of Title No. T-473055 registered in the name of the defendants-appellees spouses Pedro L. Lurnbres and Rebecca T. Roaring Lurnbres and, in lieu thereof, issue a new one in the name of plaintiffs-appellants.
SO ORDERED. 31
I. THE COURT OF APPEALS ERRED IN NOT DISMISSING THE APPEAL FOR LACK OF JURISDICTION OF THE TRIAL COURT OVER THE PERSON OF SPRING HOMES AS AN INDISPENSABLE PARTY.II. THE COURT OF APPEALS ERRED IN ORDERING THAT RESPONDENTS, NOT PETITIONERS, WERE PURCHASERS OF THE PROPERTY IN GOOD FAITH, WHICH IS NOT IN ACCORD WITH ESTABLISHED FACTS, LAW, AND JURISPRUDENCE.
Based on the Constmction Agreement, PEA entered into it in its capacity as Project Manager, pursuant to the PFTA. According to the provisions of the PFTA, upon the formation of the HPMC, the PEA would turn over to the HPMC all the contracts relating to the Heritage Park. At the time of the filing of the CIAC Case on May 31, 2001, PEA ceased to be the Project Manager of the Heritage Park Project, pursuant to Section 11 of the PFTA. Through a Deed of Assignment, PEA assigned its interests in all the existing contracts it entered into as the Project Manager for Heritage Park to HPMC. As early as March 17, 2000, PEA officially turned over to HPMC all the documents and equipment in its possession related to the Heritage Park Project. Petitioner was duly informed of these incidents through a letter dated March 13, 2000. Apparently, as of the date of the filing of the CIAC Case, PEA is no longer a party-in-interest. Instead, it is now CIAC Case, PEA is no longer a party-in-interest. Instead, it is now private respondent HPMC, as the assignee, who stands to be benefited or injured by the judgment in the suit. In its absence, there cannot be a resolution of the dispute of the parties before the court which is effective, complete or equitable. We thus reiterate that HPMC is an indispensable party.44
The first issue We need to resolve is whether or not defendants Andres Evangelista and Bienvenido Mangubat are indispensable parties. Plaintiffs contend that said defendants being more dummies of defendant Marcos Mangubat and therefore not real parties in interest, there is no room for the application of Sec. 7, Rule 3 of the Revised Rules of Court.
x x x x
In the present case, there are no rights of defendants Andres Evangelista and Bienvenido Mangubat to be safeguarded if the sale should be held to be in fact an absolute sale nor if the sale is held to be an equitable mortgage. Defendant Marcos Mangubat became the absolute owner of the subject property by virtue of the sale to him of the shares of the aforementioned defendants in the property. Said defendants no longer have any interest in the subject property. However, being parties to the instrument sought to be reformed, their presence is necessary in order to settle all the possible issues of tile controversy. Whether the disputed sale be declared an absolute sale or an equitable mortgage, the rights of all the defendants will have been amply protected. Defendants-spouses Luzame in any event may enforce their rights against defendant Marcos Mangubat.46
In claiming their right of possession over the subject lot, petitioners made much of the judicially approved Compromise Agreement in Civil Case No. 2194-95-C, wherein Spring Homes' rights and interests over the said lot under its Contract to Sell with the respondents were effectively assigned to them. Petitioners argue that out of the whole P409,500.00 purchase price under the respondents Contract to Sell with Spring Homes, the respondents were able to pay only P179,500.00, leaving a balance of P230,000.00.
Upon scrutiny, however, the CA astutely observed that despite there being no question that the total land area of the subject lot is 105 square meters, the Contract to Sell executed and entered into by Spring Homes and the respondent spouses states:chanRoblesvirtualLawlibrary3. That the SELLER, for and in consideration of the payments and other terms and conditions hereinafter to be designated, has offered to sell and the BUYER has agreed to buy certain parcel of land more particularly described as follows:chanRoblesvirtualLawlibrary
Blk. No. P- 111 Lot No. Area Sq. Meter Price Per sq. Meter Total Selling Price 3 8 105 P1,500 42 6,000 P409,500
The two deeds of absolute sale as well as the respondents' Tax Declaration No. 019-1342 uniformly show that the land area of the property covered by TCT No. T-284037 is 105 square meters.The parties never contested its actual land area.
However, while there is only one parcel of land being sold, which is Lot 8, Blk. 3, paragraph "1" above of the Contract to Sell speaks of two (2) land areas, namely, "105" and "42," and two (2) prices per square meter, to wit: "P1,500" and "P6,000."As correctly observed by the CA:chanRoblesvirtualLawlibraryIt does not require much imagination to understand why figures "3," "8," "105" and "P1,500" appear in the paragraph "1" of the Contract to Sell. Certainly "3" stands for "Blk. No.," "8" stands for "Lot No.," "105" stands for the land area and "P1,500" stands for the price per square meter. However, this Court is perplexed as regards figures "42" and "6,000" as they are not accompanied by any "Blk. No." and/or "Lot No." In other words, while there is only one parcel of land being sold, paragraph "1" of the Contract to Sell contains two land areas and two prices per square meter. There is no reason for the inclusion of land area in the computation when it was established beyond cavil that the total area being sold is only 105 square meters. Likewise, there is no explanation why there is another rate for the additional 42 square meters, which was pegged at P6,000 per square meter, while that of 105 square meters was only P1,500.00.
The CA could only think of one possible explanation: the Contract to Sell refers only to a single lot with a total land area of 105 square meters. The 42 square meters mentioned in the same contract and therein computed at the rate of 116,000 per square meter refer to the cost of the house which would be constructed by the respondents on the subject lot through a Pag-Ibig loan. The land area of the house to be constructed was pegged at 42 square meters because of the following restrictions in the Contract to Sell:chanRoblesvirtualLawlibrary
9. The lot(s) subject matter of this contract are subject to the following restrictions:chanRoblesvirtualLawlibrary
a) Any building which may be constructed at anytime in said lot(s) must be strong x x x. Said building must not be constructed at a distance of less than (2) meters from any boundaries of the lot(s).
b) The total area to be voted to buildings or structures shall not exceed eighty percent (80%) of the total area of the lot(s).50
Looking at the above-quoted portion of the Contract to Sell, the CA found merit in the respondents' contention that the total selling price of P409,500 includes not only the price of the lot but also the cost of the house that would be constructed thereon. We are incline to agree. The CA went on to say:chanRoblesvirtualLawlibraryIt could be argued that the contract to sell never mentions the construction of any house or building on the subject property. Had it been the intention of the parties that the total selling price would include the amount of the house that would be taken from a loan to be obtained from Pag Ibig, they could have specified so. However, one should not lose sight of the fact that the contract to sell is an accomplished form. [Respondents,] trusting Spring Homes, could not be expected to demand that another contract duly reflective of their agreements be utilized instead of the accomplished form. The terms and conditions of the contract may not contemplate the inclusion of the cost of the house in the total selling price, but the entries typewritten thereon sufficiently reveal the intentions of the parties.
The position of the [respondents] finds support in the documents and subsequent actuations of Bertha Pasic, the representative of Spring Homes. [Respondents] undeniably proved that they spent their own hard earned money to construct a house thereon after their Pag-Ibig loan did not materialize. It is highly unjust for the [respondents] to pay for the amount of the house when the loan did not materialize due to the failure of Spring Homes to deliver the owner's duplicate copy of TCT No. T 284037.
x x x x
If the total selling price was indeed P409,500.00, as [petitioners] would like to poster, said amount should have appeared as the consideration in the deed of absolute sale dated January 15, 1996. However, only P157,500.00 was stated. The amount stated in the Deed of Absolute Sale dated January 15, 1996 was not only a portion of the selling price, because the Deed of Sale dated December 22, 2000 also reflected P157,500.00 as consideration. It is not shown that [petitioners] likewise applied for a loan with Pag-Ibig. The reasonable inference is that the consistent amount stated in the two Deeds of Absolute Sale was the true selling price as it perfectly jibed with the computation in the Contract to Sell.
We find the CA's reasoning to be sound. At any rate, the execution of the January 16, 1996 Deed of Absolute Sale in favor of the respondents effectively rendered the previous Contract to Sell ineffective and canceled. Furthermore, we find no merit in petitioners' contention that the first sale to the respondents was void for want of consideration. As the CA pointed out in its assailed decision:chanRoblesvirtualLawlibraryOther than the [petitioners'] self-serving assertion that the Deeds of Absolute Sale was executed solely for the purpose of obtaining a Pag-Ibig loan, no other concrete evidence was tendered to justify the execution of the deed of absolute sale. They failed to overcome the clear and convincing evidence of the [respondents] that as early as July 5, 1995 the latter had already paid the total amount of P179,500.00, much bigger than the actual purchase price for the subject land.51
Art. 1544. If the same thing should have been sold to different vendees, the ownership shall be transferred to the person who may have first taken possession thereof in good faith, if it should be movable property.
Should it be immovable property, the ownership shall belong to the person acquiring it who in good faith first recorded it in the Registry of Property.
Should there be no inscription, the ownership shall pertain to the person who in good faith was first in the possession, and, in the absence thereof, to the person who presents the oldest title, provided there is good faith. (Emphasis supplied)
Endnotes:
* Designated Additional Member per Special Order No. 2416, dated January 4, 2017.
1 Penned by Associate Justice Isaias Dicdican, with Associate Justices Ricardo R. Rosario and Edwin D. Sorongon, concurring; rollo, pp. 60-79.
2Id. at 81-82.
3 Penned by Judge Alberto F. Serrano; id. at 387-398.
4Id. at 62.
5Id.
6Id.
7Id. at 63.
8Id.
9Id.
10Id. at 64.
11Id.
12Id.
13Id. at 65.
14 545 Phil. 471 (2007).
15Rollo, p. 66.
16Id.
17Id. at 398.
18Id. at 392.
19 527 Phil. 117, 128 (2006).
20Rollo, p. 393.
21Id.
22Id. at 394-396.
23Id. at 71.
24 240 Phil. 121 (1987).
25Rollo, pp. 71-72.
26Id. at 72.
27Id. at 74.
28Id. at 75-76.
29Id. at 76-77.
30Id. at 78.
31Id. at 79.
32Id. at 21.
33Id. at 23.
34Id. at 27.
35Id. at 40.
36Id. at 43.
37Id. at 41.
38 SECTION 7. Compulsory joinder of indispensable parties.- Parties-in-interest without whom no final determination can be had of an action shall be joined either as plaintiffs or defendants.
39 621 Phil. 212, 221 (2009).
40Id.
41Id.
42 504 Phil. 634, 640-641 (2005).
43Supra note 19.
44Id. (Emphasis supplied).
45Supra note 24.
46Id. (Emphasis supplied).
47 719 Phil. 241, 253 (2013).
48Seno, et. al. v. Mangubat, et. al., supra note 24.
49Supra note 14.
50Id. (Emphasis supplied).
51Id. (Emphasis supplied).
52Id.
53 711 Phil. 644, 658 (2013).
54Id.
55Id.
56Supra note 14.
57 621 Phil. 126, 146 (2009).
58Id.
59Id.