Philippine Supreme Court Resolutions


Philippine Supreme Court Resolutions > Year 2011 > June 2011 Resolutions > [G.R. No. 156636 : June 15, 2011] LUTHER S. NERI AND REYNALDO B. TATOY, PETITIONERS, V. OLIVEROS DIGDIGAN JR., ET AL., RESPONDENTS.:




THIRD DIVISION

[G.R. No. 156636 : June 15, 2011]

LUTHER S. NERI AND REYNALDO B. TATOY, PETITIONERS, V. OLIVEROS DIGDIGAN JR., ET AL., RESPONDENTS.

Sirs/Mesdames:

Please take notice that the Court, Third Division, issued a Resolution dated 15 June 2011 which reads as follows: 

G.R. No. 156636 � LUTHER S. NERI and REYNALDO B. TATOY, Petitioners, v. OLIVEROS DIGDIGAN JR., ET AL., Respondents. 

R E S O L U T I O N 

Carrnelita Digdigan and her late husband, Oliveros Digdigan, were the registered owners of a parcel of land with an area of 300 square meters located at No. 4321 Lotus Street, Sun Valley Subdivision, Para�aque City, Metro Manila and the improvements thereon. The parcel of land was covered by Transfer Certificate of Title No. (62396) 53313 of the Registry of Deeds of Para�aque City.

On April 5, 1994, petitioner Reynaldo B. Tatoy initiated in the Office of the Clerk of Court and Ex Officio Sheriff of the Regional Trial Court (RTC) in Makati City an application for the extrajudicial foreclosure of the real estate mortgage constituted on May 15, 1985 over the parcel of land covered by TCT No. (62396) 53313, claiming that Carmelita had not paid the obligation secured by the mortgage in favor of his client, Luther S. Neri. In due course, on April 8, 1994, Atty. Engracio M. Escasinas, Jr., Clerk of Court VIII and Ex Officio Sheriff of Makati City, issued a notice of sale setting on May 11, 1994 the public auction of the parcel of land.

On April 20, 1994, Carmelita�s counsel Atty. Joaquin G. Chung, Jr., requested Atty. Escasinas, Jr. in writing to cancel the notice of sale on the ground that the deed of real estate mortgage in question was false. She cited the letter of Atty. Evangeline G. Cenizal dated February 7, 1994 to the Registrar of Deeds of Para�aque City denying that she (Atty. Cenizal) had notarized the deed of real estate mortgage in question, and the certification issued by the Records Officer of the Notarial Section of the RTC in Manila stating that the deed of real estate mortgage was not included in her notarial report for the month of May 1985.

Thereafter, on April 29, 1994, Carmelita and her children, namely: Oliveros Jr., Douglas, Emmanuel, Jessilyn, Peter Paul, Exequiel, and Alexander, who are all the respondents herein, filed in the RTC in Makati City a complaint against Neri, Atty. Tatoy, and Atty. Escasinas, Jr. to seek the declaration of the non-existence of the deed of real estate mortgage dated May 15, 1985 and damages. The respondents denied knowing Neri, and alleged in their complaint the falsity of the deed of real estate mortgage based on Atty. CenizaFs denial of the notarial acknowledgment, and on the certification of the Records Officer of the Notarial Section of the RTC in Manila. They sought the issuance of a temporary restraining order (TRO) and writ of preliminary injunction to enjoin the scheduled public auction of their property.

On May 5, 1994, the RTC issued a TRO enjoining the defendants (including the petitioners) from proceeding with the public auction of the property, and setting the hearing on the application for a writ of preliminary injunction on May 10, 1994.

On May 23, 1994, the RTC granted the application for the writ of preliminary injunction upon a bond fixed at P50,000.00. The writ of preliminary injunction issued on May 31, 1994.

On May 25, 1994, Atty. Escasinas, Jr. filed his answer, averring that it was not the function of his office as the Clerk of Court and. Ex Officio Sheriff to determine the genuineness of the deed of real estate mortgage, and that his duty in extrajudicial foreclosure of a mortgage was ministerial in nature.

On their part, the petitioners filed on June 16, 1994 a motion to dismiss, citing as grounds that the respondents, except Carmelita, had no personality to sue, and that the complaint stated no cause of action. After the respondents opposed the motion to dismiss, the RTC denied the motion to dismiss on July 1, 1994 because the grounds did not; appear to be indubitable.

Thereafter, the respondents filed a motion to declare the petitioners in default for failure to file their answer. The RTC granted their motion on September 19, 1994.

The petitioners filed their motion to lift order of default and to admit Answer, claiming that they had not received the order issued on July 1, 1994, which had; remained unclaimed in the Post Office; that in the first week of July 1994, their counsel had gone to the RTC to inquire on the status of the motion to dismiss but the clerk-in-charge of civil cases had not been around then; that in the second week of July 1994, their counsel had left for Iloilo to attend the wake and burial of a relative, thereby failing to, secure a copy of the order dated July 1, 1994 due to his not being informed by the clerk of his law office about the postal notices considering that; only he, as addressee, could sign for; that such circumstances constituted honest mistake or excusable negligence warranting the lifting of the order of default; and that they had a meritorious defense.

The plaintiffs filed their opposition.

On February 27, 1995, the RTC denied the motion to lift order of default and to admit answer.

Upon the denial of the petitioners� motion for reconsideration on June 7, 1995, the respondents' evidence was received ex parte.

On July 5, 1996, the RTC rendered its decision in favor of the respondents,[1]  to wit; 

Plaintiff Carmelita Digdigan, the supposed mortgagor, denied having any knowledge of or participation in the execution of the Deed of Real Estate Mortgage in question. In a letter dated April 20, 1994, said plaintiff, thru counsel, requested defendant Escasinas to cancel the notice of sale on the ground that the deed of mortgage was false (Exh. P). To support such claim, plaintiff Emmanuel C. Digdigan executed on February 8, 1994 an affidavit (Exh. Q), stating that a certification had been issued by the Office of the Clerk of Court Regional Trial Court, Manila, certifying, among others; that an instrument entitled 'DEED OF REAL ESTATE MORTGAGE' between Carmelita C. Digdigan (Mortgagor) and Luther Neri (Mortgagee) allegedly notarized by Atty. Evangeline G. Cenizal on May 15, 1985 under Doc. No. 473, Page No. 96, Book No. XIII, Series of 1985 is not one of those documents on file in the notarial report submitted to this Office by Atty. Evangeline G. Cenizal for the month of May 1985 (Exh. A). It was likewise stated in the same affidavit that in a letter dated February 7, 1994, addressed to the Register of Deeds of Para�aque, Metro Manila, Atty. Evangeline G. Cenizal denied having signed and notarized the said Deed of Real Estate Mortgage (Exh. B). 

Moreover, the first page of the questioned document is unsigned by defendant Tatoy who appears to be one of the witnesses and bears no imprint on the notarial seal. 

From the evidence adduced, the Court finds that plaintiffs have sufficiently proved their cause of action against the defendants and are, therefore, entitled to relief. 

x x x 

WHEREFORE, judgment is hereby rendered:

(1) Declaring the subject Deed of Real Estate Mortgage inexistent; 

(2) Making the writ of preliminary injunction permanent; and 

(3) Ordering the defendants Luther S. Neri and Reynaldo B. Tatoy to pay plaintiffs P 25,000.00 as attorney's fees and the costs of suit

SO ORDERED.

Aggrieved, the petitioners appealed, asserting that the RTC erred in declaring the deed of real estate mortgage null and void for being a forgery; that the RTC denied them dup process by refusing to lift the order of default despite their motion to lift order of default and to admit answer; that the RTC erred in making the writ of injunction permanent.

On August 27, 2002, the CA promulgated its decision affirming the RTC,[2]  by holding that the absence of the counsel who was personally handling their case could not excuse the petitioners, who were then represented by the law firm of R.D. Bagatsing and Associates; that under the settled rule that "when a client employs the services of a law firm, he does not employ the services of the lawyer who is assigned to personally handle the case (, but r)ather, he employs the entire law firm;�[3] and that Carmelita could not be legally liable to pay anything to Neri considering that she had not received the amount of P100,000.00 from Neri, but from a certain Emma Estampador.

After the CA denied on January 13, 2003 their motion for reconsideration, the petitioners came to the Court by petition for review on certiorari.

The petitioners submit the following issues:

  1. WHETHER OR NOT THE ASSUMED NULLITY OF A REAL ESTATE MORTGAGE FOR HAVING BEEN NOTARIZED BY ONE WITHOUT AUTHORITY ALSO RENDERED NULL AND VOID THE PRINCIPAL OBLIGATION OF A LOAN AS ADMITTED HAVING BEEN RECEIVED.
     
  2. WHETHER OR NOR THE FINDING OF THE TRIAL COURT THAT APPELLEE, CARMELITA DIGDIGAN HAD RECEIVED THE SUM OF P100,000.00 HAS BEEN DULY PROVED AS IS NOW DENIED BY THE COURT A QUO IN DENYING THE MOTION FOR RECONSIDERATION.
     
  3. WHETHER OR NOT THE ADMITTED RECEIPT OF P100,000.00 BE RETURNED TO APPELLANT NERI AFTER HAVING BEEN GIVEN BY HIS ATTORNEY-IN-FACT EMMA ESTAMPADOR AS STATED IN THE QUESTIONED DECISION BY WAY OF LAW AND EQUITY/UNJUST ENRICHMENT AT THE EXPENSE OF ANOTHER. 

The petitioners argue that the nullity of the real estate mortgage, an accessory contract to the loan, did not render the principal contract of loan null and void; that it is of common knowledge that persons other than the notary public perform the sealing of deeds and that the notarial seal in the deed of real estate mortgage was the official seal of Atty. Cenizal stamped by her employee; and that assuming the real estate mortgage was a nullity, the obligation of P100,000.00 should be paid to the petitioners to prevent their unjust enrichment.

In their comment, the respondents counter that the issues raised are not pure questions of law; that the findings of facts by the CA are final and conclusive and cannot be reviewed on appeal by the Supreme Court, and that the appeal is only a dilatory tactic of the petitioners.

The petitioners filed a reply, contending that the respondents' comment was off tangent; and that they did not assail the declaration of the nullity of the real estate mortgage but were only seeking the return of the amount of P100,000.00, or at least P80,000.00, plus interest from 1985.

The petition has no merit.

It is notable that the petitioners admitted the nullity of the real estate mortgage in their reply. Such admission, being a judicial admission under Section 4, Rule 129 of the Rules of Court, which provides: 

Section 4. Judicial Admissions. - An admission, verbal or written, made by a party in the course of the proceedings in the same case, does not require proof. The admission may be contradicted only by showing that it was made through palpable mistake or that no such admission was made.

eliminated the need to consider and resolve the question of validity of the deed of real estate mortgage in this appeal.

The only remaining issue is whether or not the respondents were under any legal obligation to pay the amount of P100,000.00 to Neri.

We affirm the decision of the CA, which correctly ruled out any legal obligation on the part of Carmelita and her children in favor of Neri. Indeed, the records showed that Carmelita received P100,000.00 not from Neri but from Emma Estampador (TSN, May 13, 1994, p. 19). Without any showing that Estampador was acting in behalf of Neri, the CA correctly found and ruled that the respondents had no personal liability towards the petitioners.

WHEREFORE, the Court denies the petition for review, and affirms the decision promulgated on August 27, 2002.

SO ORDERED.

Very truly yours,

(Sgd.) LUCITA ABJELINA-SORIANO
 
Clerk of Court

Endnotes:


[1] Records, pp. 261-264.

[2] Rollo, pp. 17-30. 

[3] Id., p. 26.




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