THIRD DIVISION
G.R. No. 215006, January 11, 2021
ARAKOR CONSTRUCTION AND DEVELOPMENT CORPORATION, Petitioner, v. TERESITA G. STA. MARIA, ALFREDO N. GADDI, FERNANDO N. GADDI, JR., MARILYN G. MALIXI, EVANGELINE G. GOLICRUZ, LILIAN G. FRANCISCO, LILIBETH G. PAGUIO AND THE LATE EFREN N. GADDI, HIS HEIRS, JENNY, ALLAN, JOEFFREY AND FELY ALL SURNAMED GADDI, Respondents.
D E C I S I O N
HERNANDO, J.:
This Petition for Review1 on Certiorari assails the January 13, 2014 Decision2 and October 17, 2014 Resolution3 of the Court of Appeals (CA) in CA-G.R. CV No. 98704, affirming the November 16, 2011 Decision4 of the Regional Trial Court (RTC) of Dinalupihan, Bataan, Branch 5, in Civil Case No. DH-474-9S which granted the Complaint for Annulment of Deeds of Absolute Sale and Transfer Certificates of Title filed by herein respondents.
The Antecedents:
The Spouses Fernando Gaddi, Sr. (Fernando Sr.) and Felicidad Nicdao Gaddi (Felicidad) (collectively Spouses Gaddi) owned the five contested parcels of land located in Hermosa, Bataan and described in TCT Nos. T-92141, T-92142, T-92143, T-92144, and T-100713.5
Felicidad died intestate6 on November 18, 1985, and was survived by Fernando Sr. and her eight children, herein respondents, namely: Teresita G. Sta. Maria (Teresita), Alfredo N. Gaddi (Alfredo), Fernando N. Gaddi, Jr. (Fernando Jr.), Marilyn G. Malixi (Marilyn), Evangeline G. Golicruz (Evangeline), Efren N. Gaddi (Efren), Lilian G. Francisco (Lilian) and Lilibeth G. Paguio (Lilibeth) (collectively the Gaddis). Felicidad's heirs inventoried her properties but they did not initiate its partition; thus, the parcels of land remained in the name of the Spouses Gaddi.7
On February 7, 1996, Fernando Sr. passed away, followed by Efren on May 8, 1998. After the deaths of Fernando, Sr. and Efren, Atty. Greli Legaspi (Atty. Legaspi), the president of petitioner Arakor Construction and Development Corporation (Arakor), informed the Gaddis that their parents had already sold the contested five parcels of land to Arakor for P400,000.00 as evidenced by two undated Deeds of Absolute Sale8 and that the titles to the properties have already been transferred to Arakor's name.9
Thus, the Gaddis10 filed a Complaint11 for Annulment of Deed[s] of Absolute Sale and Transfer Certificates of Title against Arakor. They alleged that the two contracts of sale were forged and the conveyance of the properties was fraudulent since Felicidad could not have signed the documents and given her consent thereon since she has been dead for seven years before the alleged execution of the said contracts.12
Arakor13 denied employing fraud. It contended that the Deeds of Absolute Sale were already signed and notarized when Fernando Sr. and Efren delivered them to the office of Atty. Legaspi on September 8, 1992. Atty. Legaspi also disclaimed any knowledge about the death of Felicidad.14
In addition, Arakor alleged that Teresita, Evangeline, Marilyn and Lilibeth had already assigned their rights to Fernando Sr. through the two Joint Waiver of Claim and/or Right15 dated February 1992. Efren, Alfredo, Lilian and Fernando Jr. likewise executed a Joint Waiver of Claims and/or Right16 on October 28, 1992. Thus, full ownership and title over the contested properties had been consolidated in favor of Fernando Sr. at the time of the sale. Thus, the signature of Felicidad in the Deeds of Absolute Sale is no longer material in determining the sale's validity.17
Moreover, Arakor averred that the Gaddis' claims are barred by prescription since the company has been in open, continuous and lawful possession of the properties as the owner thereof since September 1992.18
During trial, Atty. Legaspi recounted that after giving the payment to Fernando Sr. and Efren,19 he (Atty. Legaspi) took possession of the properties and even hired two watchers but he still allowed Fernando Sr. and Efren to harvest the crops therein.20 Sometime in the early part of 1993, Fernando Sr. and Efren gave him copies of the waivers of the Gaddis21 which they executed purportedly for taxation purposes.22 He insisted that he had no idea about the demise of Felicidad passing and that he only found out about her death when the waivers were delivered to him.23
On rebuttal, Fernando Jr. insisted that during the lifetime of Felicidad, the Gaddis formed a family corporation in order to consolidate the properties under the said company through the waivers. However, only one property was transferred since Efren sold all the others.24 He maintained that the family company did not authorize Fernando Sr. and Efren to sell the properties.25
Ruling of the Regional Trial
Court:
In its November 16, 2011 Decision,26 the RTC declared the Deeds of Absolute Sale as void for being fictitious because Felicidad had already passed away when the documents were executed.27 Additionally, it ruled that Arakor, represented by Atty. Legaspi, was not a buyer in good faith.28 It thus ordered the Gaddis to return to Arakor the amount of P400,000.00 with interest, chargeable to Fernando Sr.'s estate.29 The dispositive portion of the trial court's Decision reads:
WHEREFORE, premises considered, judgment is hereby rendered as follows:
1. Ordering the annulment of the sale in (sic) executed between defendant Arakor Construction and Development Corporation and Spouses Gaddi of the properties in litigation;
2. Ordering the Register of Deeds for the Province of Bataan to cancel Transfer Certificate of Title Nos. T-154980; T-154981; T-154982; T-154983; and 154979 registered in the name of Arakor Construction and Development Corporation;
3. Ordering the Register of Deeds for the Province of Bataan to reinstate Transfer Certificate of Title Nos. T-92141; T-92142; T-92143; and T-92144 in the name of Spouses Fernando Q. Gaddi and Felicidad N. Gaddi and Transfer Certificate of Title No. T-100713 in the name of Spouses Fernando Q. Gaddi and Felicidad Nicdao;
4. Ordering the defendant Arakor Construction and Development Corporation to cause the reconveyance of the properties to herein plaintiffs;
5. Ordering the plaintiffs to return to the defendant the amount of P400,000.00 representing the total amount of consideration in the two (2) Deeds of Sale executed by Spouses Gaddi and Arakor, which were declared void by the Court, with interest at 6% per annum from the time of the filing of the complaint until the finality of this Decision and 12% per annum thereafter until full payment, chargeable to the Estate of Fernando Gaddi[,] Sr.; and
6. Ordering the defendant to pay the costs of suit.
SO ORDERED.30
1. As for Arakor, the five parcels of land located in the Municipality of Hermosa, Bataan, described in TCT Nos. T-92141, T-92142, T-92143, T-92144 and TCT No. T-100713; and
2. Initially, the Gaddis tried to establish that there was no sale that actually transpired between their parents and Arakor and that the subject lots were actually payment for the P400,000.00 Efren owed to Atty. Legaspi. However, since the Gaddis failed to adduce evidence proving such claim, their bare allegation will not suffice, hence, the amount of P400,000.00 representing the purchase price in the two Deeds of Sale must be returned, plus interests, chargeable to the estate of Fernando Sr.39
I. THE HONORABLE COURT OF APPEALS SERIOUSLY ERRED IN NOT HOLDING THAT THE DEEDS OF ABSOLUTE SALE ARE NOT VOID PER SE IN SO FAR AS THE DISPOSITION OF THE RIGHTS AND INTERESTS OF FERNANDO GADDI, SR. ON THE DISPUTED PROPERTIES [ARE CONCERNED].
II. THE HONORABLE COURT OF APPEALS SERIOUSLY ERRED IN NOT HOLDING THAT AT THE TIME OF THE DEMISE OF FELICIDAD GADDI, FERNANDO GADDI, SR. WAS ALREADY THE OWNER OF THE PROPERTIES IN LITIGATION BY OPERATION OF LAW TO THE EXTENT OF ½ PORTION THEREOF AS HIS SHARE IN THE CONJUGAL PROPERTY, AND BY THE WAIVERS/RENUNCIATION OF RIGHTS EXECUTED BY THE RESPONDENTS HE HAS THEREBY CONSOLIDATED FULL TITLE AND OWNERSHIP OF THE PROPERTIES UNDER LITIGATION BEFORE AND AFTER THE SALE OF THE PROPERTY TO DEFENDANT ARAKOR.
III. THE HONORABLE COURT OF APPEALS SERIOUSLY ERRED IN NOT HOLDING THAT BY THE WAIVER OF RIGHTS OF THE RESPONDENTS IN FAVOR OF THEIR FATHER, PRIOR TO AND/OR AFTER THE DATE OF THE DEEDS OF ABSOLUTE SALE, THEY HAVE NO MORE INTEREST ON THE PROPERTY AND ARE THEREFORE ESTOPPED FROM QUESTIONING THE VALIDITY OF THEIR FATHER'S DISPOSITION OF THE PROPERTIES IN FAVOR OF ARAKOR.
IV. THE HONORABLE COURT OF APPEALS COMMITTED SERIOUS ERRORS IN NOT HOLDING THAT THERE BEING A CONSOLIDATION OF OWNERSHIP AND TITLE IN THE SOLE PERSON OF FERNANDO GADDI, SR., THERE EXIST[S] NO LEGAL OBSTACLE IN THE TRANSMISSION OF HIS TITLE AND OWNERSHIP TO ARAKOR WITH RESPECT TO HIS ½ PORTION OF THE PROPERTY IN LITIGATION BY OPERATION OF LAW, AND TO THE OTHER ½ PORTION OF THE LITIGATED PROPERTY BY REASON OF THE WAIVERS OF THE RESPONDENTS AS HEIRS OF FELICIDAD GADDI.
V. THE HONORABLE COURT OF APPEALS SERIOUSLY ERRED IN NOT HOLDING THAT ARAKOR CONSTRUCTION AND DEVELOPMENT CORPORATION IS A PURCHASER IN GOOD FAITH AND FOR VALUE.
VI. THE HONORABLE COURT OF APPEALS SERIOUSLY ERRED IN NOT HOLDING THAT THE RESPONDENTS HAVE NO CAUSE OF ACTION AGAINST THE DEFENDANT.
VII. THE HONORABLE COURT OF APPEALS SERIOUSLY ERRED IN NOT HOLDING THAT THE RESPONDENTS ARE IN ESTOPPEL TO QUESTION THE DEED OF ABSOLUTE SALE EXECUTED BY FERNANDO GADDI, SR.
VIII. THE HONORABLE COURT OF APPEALS COMMITTED SERIOUS ERRORS IN NOT HOLDING THAT UNDER THE PRINCIPLE OF 'IN PARI DELICTO', THE COMPLAINT SHOULD HAVE BEEN DISMISSED BY THE COURT A QUO.43
In Bautista v. Silva, the Court erected a standard to determine the good faith of the buyers dealing with a seller who had title to and possession of the land but whose capacity to sell was restricted, in that the consent of the other spouse was required before the conveyance, declaring that in order to prove good faith in such a situation, the buyers must show that they inquired not only into the title of the seller but also into the seller's capacity to sell. Thus, the buyers of conjugal property must observe two kinds of requisite diligence, namely: (a) the diligence in verifying the validity of the title covering the property; and (b) the diligence in inquiring into the authority of the transacting spouse to sell conjugal property in behalf of the other spouse.77
[I]n the absence of an express stipulation as to the rate of interest that would govern the parties, the rate of legal interest for loans or forbearance of any money, goods or credits and the rate allowed in judgments shall no longer be twelve percent (12%) per annum — as reflected in the case of Eastern Shipping Lines and Subsection X305.1 of the Manual of Regulations for Banks and Sections 4305Q.1, 4305S.3 and 4303P.1 of the Manual of Regulations for Non-Bank Financial Institutions, before its amendment by BSP-MB Circular No. 799 — but will now be six percent (6%) per annum effective July 1, 2013. It should be noted, nonetheless, that the new rate could only be applied prospectively and not retroactively. Consequently, the twelve percent (12%) per annum legal interest shall apply only until June 30, 2013. Come July 1, 2013 the new rate of six percent (6%) per annum shall be the prevailing rate of interest when applicable.
x x x x
Nonetheless, with regard to those judgments that have become final and executory prior to July 1, 2013, said judgments shall not be disturbed and shall continue to be implemented applying the rate of interest fixed therein.
To recapitulate and for future guidance, the guidelines laid down in the case of Eastern Shipping Lines are accordingly modified to embody BSP-MB Circular No. 799, as follows:
I. When an obligation, regardless of its source, i.e., law, contracts, quasi-contracts, delicts or quasi-delicts is breached, the contravenor can be held liable for damages. The provisions under Title XVIII on "Damages" of the Civil Code govern in determining the measure of recoverable damages.
II. With regard particularly to an award of interest in the concept of actual and compensatory damages, the rate of interest, as well as the accrual thereof, is imposed, as follows:cralawred1. When the obligation is breached, and it consists in the payment of a sum of money, i.e., a loan or forbearance of money, the interest due should be that which may have been stipulated in writing. Furthermore, the interest due shall itself earn legal interest from the time it is judicially demanded. In the absence of stipulation, the rate of interest shall be 6% per annum to be computed from default, i.e., from judicial or extrajudicial demand under and subject to the provisions of Article 1169 of the Civil Code.
2. When an obligation, not constituting a loan or forbearance of money, is breached, an interest on the amount of damages awarded may be imposed at the discretion of the court at the rate of 6% per annum. No interest, however, shall be adjudged on unliquidated claims or damages, except when or until the demand can be established with reasonable certainty. Accordingly, where the demand is established with reasonable certainty, the interest shall begin to run from the time the claim is made judicially or extrajudicially (Art. 1169, Civil Code), but when such certainty cannot be so reasonably established at the time the demand is made, the interest shall begin to run only from the date the judgment of the court is made (at which time the quantification of damages may be deemed to have been reasonably ascertained). The actual base for the computation of legal interest shall, in any case, be on the amount finally adjudged.
3. When the judgment of the court awarding a sum of money becomes final and executory, the rate of legal interest, whether the case falls under paragraph 1 or paragraph 2, above, shall be 6% per annum from such finality until its satisfaction, this interim period being deemed to be by then an equivalent to a forbearance of credit.
And, in addition to the above, judgments that have become final and executory prior to July 1, 2013, shall not be disturbed and shall continue to be implemented applying the rate of interest fixed therein.90 (Citations omitted.)
Endnotes:
1Rollo, pp. 3-47.
2 Id. at 48-60; penned by Associate Justice Agnes Reyes-Carpio and concurred in by Associate Justices Noel G. Tijam and Priscilla J. Baltazar-Padilla (now retired members of the Court).
3 Id. at 62-63.
4 Id. at 141-151; penned by Executive Judge Jose Ener S. Fernando.
5 Id. at 49, 92-97.
6 Id. at 107.
7 Id. at 49.
8 Id. at 98-101.
9 Id. at 102-106.
10 Efren's heirs, Jenny, Allan, Jeoffrey and Fely, were joined as plaintiffs to represent their father.
11Rollo, pp. 65-68.
12 Id. at 49-50.
13 Id. at 70-82.
14 Id. at 50.
15 Id. at 120-121, 123-124.
16 Id. at 125.
17 Id. at 50.
18 Id.
19 TSN, May 17, 2006, p. 8.
20 Id. at 8-9.
21 Id. at 10.
22 Id. at 13.
23 Id. at 30.
24 TSN, February 23, 2010, pp. 4-5, 7-8.
25 TSN, August 10, 2010, p. 7.
26Rollo, pp. 141-151.
27 Id. at 148-149.
28 Id. at 150-151.
29 Id. at 151.
30 Id.
31 Id. at 152-167.
32 Id. at 169.
33 Id. at 170-208; records, pp. 400-401, 406.
34Rollo, pp. 48-60.
35 Id. at 57.
36 Id. at 57-58.
37 Id. at 58-59.
38 Id.
39 Id. at 59-60.
40 Id. at 235-262.
41 Id. at 62-63.
42 Id. at 3-46.
43 Id. at 13-14.
44 Id. at 15.
45 Id. at 19.
46 Id. at 21.
47 Id. at 23.
48 Id. at 25.
49 Id. at 26-27.
50 Id. at 28.
51 Id. at 30.
52 Id. at 35-37.
53 Id. at 37.
54 Id. at 38-40.
55 Id. at 40.
56 Id. at 279-280.
57 Id. at 280-282.
58 Id. at 287.
59 Id. at 290.
60 RULES OF COURT, Rule 2, § 2.
61See: CIVIL CODE, Arts. 782, 886-888, 980-982.
62Rollo, p. 120.
63 Id. at 121.
64 Id. at 123.
65 Id. at 122.
66 Id. at 124.
67 Id. at 125.
68 RULES OF COURT, Rule 133, § (1).
69Rollo, pp. 126-128.
70Tolentino v. Spouses Latagan, 761 Phil. 108, 131 (2015) citing Heirs of Luga v. Sps. Arciaga, 670 Phil. 294 (2011).
71Heirs of Arao v. Heirs of Eclipse, G.R. No. 211425, November 19, 2018 citing Heirs of Ingjug-Tiro v. Spouses Casals, 415 Phil. 665, 673-674 (2001).
72 Tolentino v. Spouses Latagan, supra note 70 at 132, citing Consolidated Rural Bank, Inc. v. Court of Appeals, 489 Phil. 320-339 (2005).
73Heirs of Arao v. Heirs of Eclipse, supra, citing Gambito v. Bacena, G..R. No. 225929 (Resolution), January 24, 2018.
74Id., citing Pabalan v. Santarin, 441 Phil. 462, 471 (2002).
75Malabanan v. Malabanan, Jr., G.R. No. 187225, March 6, 2019 citing Hemedes v. Court of Appeals, 374 Phil. 692 (1999).
76 644 Phil. 26 (2010).
77 Id. at 39, citing Bautista v. Silva, 533 Phil. 627 (2006).
78Mendoza v. Fermin, 738 Phil. 429, 444 (2014) citing Meneses v. Venturozo, 675 Phil. 641, 586 (2011).
79 CIVIL CODE, Article 1410.
80Heirs of Arao v. Heirs of Eclipse, supra note 71.
81 Id.
82See Garcia v. Guimoc, G.R. No. 237315, April 23, 2018.
83Gonzalo v. Tarnate, Jr., 724 Phil. 198, 200 (2014).
84Delos Santos v. Abejon, 807 Phil. 720, 731 (2037) citing Development Bank of the Philippines v. CA, 319 Phil. 447, 454-455 (1995).
85 See Tan, Jr. v. Hosana, 780 Phil. 258, 272 (2016) citing Gonzalo v. Tarnate, Jr., 724 Phil. 198-209 (2014)."Unjust enrichment exists 'when a person unjustly retains a benefit at the loss of another, or when a person retains money or property of another against the fundamental principles of justice, equity, and good conscience.' The prevention of unjust enrichment is a recognized public policy of the State and is based on Article 22 of the Civil Code."
86Tan, Jr. v. Hosana, supra at 268.
87Pineda v. Zuñiga Vda. de Vega, G.R. No. 233774, April 10, 2019, citing Jurado, Desiderio P., COMMENTS AND JURISPRUDENCE ON OBLIGATIONS AND CONTRACTS (1987 Ninth Revised Edition), p. 54.
88Rollo, p. 65.
89 716 Phil. 267, 280 (2013), See Bangko Sentral ng Pilipinas Monetary Board Circular No. 799, Series of 2013.
90 Id. at 280-283.