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PHILIPPINE SUPREME COURT DECISIONS

SECOND DIVISION

[G.R. No. 179675, June 01 : 2011]

SPOUSES JUANITO MAHUSAY AND FRANCISCA MAHUSAY,PETITIONERS, VS. B.E. SAN DIEGO, INC., RESPONDENT.

D E C I S I O N


NACHURA, J.:

The instant petition assails the Resolution1 dated September 11, 2007 of the Court of Appeals (CA), denying petitioners’ Motion to Delete and Withdraw Resolution of October 11, 2004, which allegedly amended and modified the original Decision of the CA promulgated on December 20, 2001.

The antecedent facts are, as follows:

Petitioner spouses Juanito and Francisca Mahusay purchased several lots in Aurora Subdivision, Malabon, Metro Manila, owned by respondent B.E. San Diego, Inc. The transactions were covered by two (2) contracts: Contract to Sell No. 831,2 executed on May 14, 1973, for the total price of P33,000.00; and Contract to Sell No. 8743 dated August 1, 1975, for the price of P197,040.00, plus interest of 12% per annum, payable in monthly installments. Due to petitioners’ nonpayment of the monthly amortizations since October 1978, respondent was constrained to file a case for cancellation of contracts. The case was dismissed by the trial court for lack of jurisdiction. Thereafter, a Compromise Agreement was entered into by the parties on October 13, 1989, whereby petitioners agreed to pay respondent the remaining balance of the purchase price of all the lots in the manner and under the terms agreed upon by the parties. Petitioners failed to comply with the terms embodied in the Compromise Agreement; thus, on April 18, 1990, respondent filed a Complaint for Specific Performance with the Regional Trial Court (RTC), Branch 73, Malabon, docketed as Civil Case No. 1433-MN. 4

On November 29, 1995, the RTC ruled in favor of respondent, ordering petitioners to comply with the provisions of the Compromise Agreement, and to pay the amounts of P1,000,000.00 as actual damages and P50,000.00 as attorney's fees. 5

Petitioners appealed the decision to the CA on two grounds: (1) it was the Housing and Land Use Regulatory Board and not the RTC which had jurisdiction over the subject matter of the action; and (2) the Compromise Agreement was unenforceable because it was only Francisca Mahusay who signed the Agreement on October 13, 1989, without the consent of her husband Juanito Mahusay.

In its Decision dated December 20, 2001, the CA upheld the jurisdiction of the RTC. The CA ratiocinated that respondent's action was one for Specific Performance with Damages, which is in the nature of ordinary money claims filed by the unpaid seller against the buyer, that should be litigated in the regular court. Besides, petitioners were estopped from questioning the court's jurisdiction since, by the act of filing an answer and other pleadings, they were deemed to have submitted themselves to the jurisdiction of the court.6 The CA, however, saw merit in the contention that the Compromise Agreement dated October 13, 1989 was not valid considering that it was entered into by petitioner Francisca Mahusay alone. Since the Agreement involved the conjugal properties of petitioners, Francisca could not bind her husband, who never gave his consent to the Agreement.

But the CA noted that petitioners never denied the execution of the contracts to sell and they admitted the debts owing to respondent. Thus, it ruled that petitioners should pay respondent the unpaid amortizations for the lots they purchased from it. The dispositive portion of the CA Decision reads, as follows:

WHEREFORE, premises considered[,] the appealed Decision dated November 29, 1995, Regional Trial Court of Malabon, Branch 73, in Civil Case No. 1433-MN is hereby AFFIRMED with MODIFICATION, declaring the Agreement on October 13, 1989 or Exhibit C

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