131 Phil.
756
[ G.R. No. L-23497. April 26, 1968 ]
J.M. TUASON & CO., INC., petitioner, vs. ESTRELLA VDA. DE LUMANLAN, and
THE COURT OF APPEALS (FIFTH DIVISION), respondents.
DECISION
REYES, J.B.L., Acting C.J.:
J.M. Tuason & Co., Inc. petitioned for a review by certiorari of the decision issued by the Court of Appeals
(Fifth Division) in its case CA-G.R. No. 27259-R, reversing the judgment rendered by the Court of First
Instance of Rizal (Civil Case No. Q-4243) that ordered defendant (now respondent) Estrella Vda. de
Lumanlan to vacate the lot occupied by her in Sta. Mesa Heights Subdivision, barrio Tatalon, Quezon City,
and to remove therefrom the house and other structures constructed thereon, paying P240.00 a month until
restoration of the premises to plaintiff.
The facts are stated in the decision of the Court of Appeals (accepted by both parties) in this wise:
“... That in the complaint filed in this case by plaintiff, J.M. Tuason & Co., Inc., hereinafter
called Tuason, on 30 April, 1959, the basis is that it being the registered owner of the property
known as Santa Mesa Heights Subdivision, situated at barrio North Tatalon, Quezon City, herein
defendant sometime in April, 1949 unlawfully entered into possession of 800 square meters, and
therein constructed his house so that plaintiff prayed for ejectment and damages for the
occupancy; and defendant in her answer set forth affirmative defense that on 12 March, 1949,
she had bought the property she was occupying from one Pedro Deudor, and that in a
compromise agreement between Pedro and Tuason on 10 March 1953, approved by the Court of
First Instance of Quezon City, she was one of the buyers therein recognized, so that she asked
that her rights be recognized and the complaint dismissed; but on the basis of the evidence
presented by both parties in the trial, Lower Court sustained plaintiff, holding that Tuason being
the registered owner, and the question being purely one of possession, therefore, defendant's said
evidence was 'completely immaterial’ . . ..” (Page 2 of Decision, Annex ‘A’ of Petition.)
Upon the facts thus stated, the Fifth Division of the Court of Appeals held that, pursuant to this Supreme
Court’s ruling in Evangelista vs. Deudor, L-12826, September 10, 1959, the Compromise Agreement (Exh.
2) between the petitioner Tuason & Co. and the Deudors constituted a valid defense against the possessory
action filed by Tuason & Co.; that under paragraph 7 of said Compromise Agreement, petitioner bound and
committed itself to sell to respondent Lumanlan the lot occupied by her at a reasonable price; that said
respondent had a right to compel petitioner to accept payment for the lot in question; and that the
compromise agreement legalized the possession of respondent.
These pronouncements are assailed by the petitioner in this appeal as legally incorrect and contrary to the
decisions of this Court.
The terms of the compromise agreement between the heirs of Telesforo Deudor and J.M. Tuason & Co.
have been taken cognizance of in many decisions of this Court (Evangelista vs. Deudor.yam. cit; Deudor vs.
J.M. Tuason & Co., L-13768, May 30, 1961, andL-20805, Oct. 31,1963; J.M. Tuason vs. Jaramillo, et al.,
L-18932-34, Sept. 30, 1963; J.M. Tuason vs. Macalindong, L-15398, Dec. 29, 1962 and others). The
Deudors had therein recognized the registered site of Tuason & Co. over the lands claimed by them, and
received payment of certain sums of money; but as the Deudors had, prior to the compromise, sold their
possessory rights to various persons, paragraph seventh of the compromise agreement (Case Q-135 of the
court of origin) provided:
“That the sales of the possessory rights claimed by the DEUDORS, are described in the lists
submitted by them to the OWNERS which are attached hereto marked Annexes ‘B’ and ‘C and
made part hereof. Whatever amounts may have been collected by the DEUDORS on account
thereof, shall be deducted from the total sum of P1,201,063.00 to be paid to them. It shall be the
joint and solidary obligation of the DEUDORS to make the buyer of the lots purportedly sold by
them to recognize the title of the OWNERS over the property purportedly bought by them, and
to make them sign, whenever possible, new contracts of purchase for said property at the current
prices and terms specified by the OWNERS in their sales of lots in their subdivision known at
'Sta. Mesa Heights Subdivision.’ The DEUDORS HEREBY advise of the OWNERS that the
buyer listed in Annex 'B' herein with the annotation 'continue' shall buy the lots respectively
occupied by them and shall sign contracts, but the sums already paid by them to the DEUDORS
amounting to P134.922.84 (subject to verification by the Court) shall be credited to the buyers
and shall be deducted from the sums to be paid to the DEUDORS by the OWNERS. The
DEUDORS also advise the OWNERS that, the buyers listed in Annex 'C herein with the
annotation ‘Refund’ have decided not to continue with their former contracts or purchases with
the DEUDORS and the sums already paid by them to the DEUDORS TOTALLING
P101,182.42 (subject to verification by the Court) shall be refunded to them by the OWNERS
and deducted from the sums that may be due to the DEUDORS from the OWNERS J.M. Tuason
& Co., Inc. vs. Jaramillo, L-18932, Sept. 30, 1963);”
Careful analysis of this paragraph of the compromise agreement will show that while the same created “a
sort of contractual relation" between the J.M. Tuason & Co., Inc., and the Deudor vendees (as ruled by this
Court in Evangelista vs. Dendor, ante), the same in no way obligated Tuason & Co. to sell to those buyers
the lots occupied by them at the price stipulated with the Deudors, but at ”the current prices and terms
specified by the OWNERS (Tuason) in their sales of lots in their subdivision known as 'Sta. Mesa Heights
Subdivision’.” This is what is expressly provided. Further, paragraph plainly imports that these buyers of
the Deudors must “recognize the title of the OWNERS (Tuason) over the property purportedly bought by
them” from the Deudors, and “sign, whenever possible, new contracts of purchase for said property”; and, if
and when they do so, “the sums paid by them to the Deudors .... shall be credited to the buyers.” All that
Tuason & Co. agreed to, therefore, was to grant the Deudor buyers preferential right to purchase “at current
prices and terms” the lots occupied by them, upon their recognizing the title of Tuason & Co., Inc., and
signing new contracts therefor; and to credit them for the amounts they had paid to the Deudors.
Nowhere in her answer did the respondent Estrella Vda. de Lumanlan claim that she had signed a new
contract with J. M. Tuason & Co., Inc. for the purchase of the lot occupied. What is worse, instead of
recognizing the title of the owners (Tuason & Co.) as required by the oftmentioned compromise agreement,
she charged in paragraph 6 of her special defense (Rec. on Appeal, p. 10) that “Pedro Deudor and his co-
owners and the plaintiff herein . . . conspired together and helped each other. . . .by entering into a supposed
Compromise” whereby “Pedro Deudor and his co-owners renounced, ceded, waived and quitclaimed all
their rights, title and interest in the property including the land sold to herein defendant, in favor of the
plaintiff J. M. Tuason & Co., Inc., in consideration of the sum of P1,201,063.00, without the knowledge and
consent, and much less the intervention of the herein defendant.” In other words, the respondent Lumanlan
in her answer repudiated and assailed the compromise between the Deudors and J.M. Tuason & Co. How
then can she now claim to take advantage and derive rights from that compromise?
Without the compromise agreement, Lumanlan must justify her possession on the basis of a pretended
superiority of the Deudors' old Spanish information posesoria over Tuason’s Certificate of Title No. 1267,
traceable back to the original Certificate of Title No. 735 of Rizal, issued under the Registration Act No.
496. But, as ruled by this Court in previous cases, Lumanlan is by now barred from assailing the decree of
registration in favor of Tuason & Co., Inc.’s predecessors twenty years after its issuance (Tiburcio vs.
PHHC, L-13429, Oct. 31, 1959; Tuason & Co. vs. Bolaños, 95 Phil. 107; Tuason & Co. vs. Santiago, 99
Phil. 622-623; Tuason & Co. vs. Macalindon, supra: Tuason & Co. vs. Jaramillo, L-16827, Jan. 31, 1963).
It is thus apparent that no legal basis exists for the pronouncement in the appealed decision that Tuason &
Co. had committed itself to sell to Lumanlan the lot occupied by her at a reasonable price, or that the
compromise agreement legalized the possession of the respondent, since the latter does not rely on the
compromise but, on the contrary, she assails it.
The Court of Appeals ruled that the price to be paid by Lumanlan to Tuason & Co., Inc., is governed by
Article 1474 of the new Civil Code of the Philippines, which provides that:
“Where the price cannot be determined in accordance with the preceding articles, or in any other
manner, the contract is inefficacious. However, if the thing or any part thereof has been
delivered to and appropriated by the buyer, he must pay a reasonable price therefore. What is a
reasonable price is a question of fact dependent on the circumstances of each particular case.”
Since there has been no contract between petitioner Tuason & Co., and respondent Lumanlan for the sale of
the lot occupied by the latter, and by paragraph 7 of the Compromise Agreement (assuming that respondent-
appellee still has the right to invoke the same, and seek refuge thereunder), Tuason & Co. did not consider
itself bound by the sales made by the Deudors, but demanded that the Deudor buyers should sign new
contracts with it at current prices specified for the sales of lots in “Sta. Mesa Heights Subdivision” (ante)
the aforequoted Article 1474 can have no bearing on the case, Lumanlan not being a buyer from Tuason
&Co.
As to Lumanlan’s allegation in her counterclaim that she should be deemed a builder in good faith, a similar
contention has been rejected in Tuason & Co. vs. Macalindong, L-15398, December 29, 1962, where We
ruled that there being a presumptive knowledge of the Torrens titles issued to Tuason & Co. and its
predecessors in interest since 1914, the buyer from Deudors (or from their transferees) cannot, in good
conscience, say now that she believed her vendor had rights of ownership over the lot purchased. The
reason given by the Court is that —
“Had he investigated before buying and before building his house on the questioned lot, he
would have been informed that the land is registered under the Torrens system in the name of
J.M. Tuason & Co., Inc. If he failed to make the necessary inquiry, appellant is now bound
conclusively by appellee’s Torrens title (Sec. 51, Act 496; Emas vs. Zuzuarregui, 35 Phil. 144)"
(Tuason & Co, Inc. vs. Macalindong, ante).
Lumanlan had chosen to ignore the Torrens title of Tuason & Co., Inc. and relied instead upon the Deudors'
claim of ownership perhaps because such course appeared to her as more advantageous; hence, she has only
herself to blame for the consequences now that the Deudors' claim has been abandoned by the Deudors
themselves, and cannot pretend good faith. The Court of First Instance, therefore, did not err in holding that
she was not a rightful possessor and sentencing her to vacate.
Respondent could have asked that she recover or be credited with the amounts paid by her to the Deudors,
but as no claim to such credit was ever advanced by her in the trial Court, no pronouncement can be made
thereon in this appeal. Equity demands, however, that her right to claim such return, or to have the amount
offset against the sums she was sentenced to pay, should be, as it is, reserved.
WHEREFORE, the decision of the Court of Appeals is reversed and that of the Court of First Instance
reinstated. Costs against respondent, Estrella Vda. de Lumanlan.
Dizon, Makalintal, Bengzon, J.P., Zaldivar, Sanchez, Ruiz Castro and Fernando, JJ., concur.
Judgment reversed.
Source: Supreme Court E-Library | Date created: May 19, 2015
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