October 2011 - Philippine Supreme Court Resolutions
Philippine Supreme Court Resolutions
[G.R. No. 195945 : October 17, 2011]
VICTOR R. DIDULO, SUBSTITUTED BY HIS HEIRS, REPRESENTED BY ROMEO R. DIDULO V. DEVELOPMENT BANK OF THE PHILIPPINES
G.R. No. 195945 (VICTOR R. DIDULO, substituted by his heirs, represented by ROMEO R. DIDULO v. DEVELOPMENT BANK OF THE PHILIPPINES). - On June 6, 2011, the Court issued a Resolution denying the petitioners' (heirs of Victor R. Didulo) petition for review on certiorari on the ground that no certification against forum shopping was attached to the petition and due to Romeo R. Didulo's alleged failure to present proof of his authority to sign the verification on behalf of his co-petitioners. However, petitioners ask a reconsideration of this resolution since both documents were attached as "Annex A" in the Notice to File Petition for Review on Certiorari and Motion for Extension of Time to File the Petition dated March 10, 2011.
Finding merit in the petitioners� motion for reconsideration, the resolution of June 6, 2011 is hereby set aside.
The Factual Antecedent
The present petition for review stems from a case for injunction filed by Victor against the Development Bank of the Philippines (DBP). Both Victor and the DBP were claiming rights over a property originally owned by Manolo Itum and Aleta Itum.
Aleta, a former employee of the DBP, applied for a housing loan with the latter to (1) redeem the property in question which, was foreclosed by the Davao Savings Loan Association; and (2) build a house on the lot. The DBP required Aleta to sign a conditional sale agreement with the undertaking to construct a house to secure payment. The property was titled in favor of the DBP. Later, Aleta offered to sell the property to Victor who, in a Memorandum of Agreement (MOA), put into writing his acceptance of the offer. Thereafter, Victor made improvements on the property and continued to make monthly payments to Aleta (as agreed upon in the MOA).
For almost five years, Aleta paid the DBP through monthly salary deductions. However, on September 24, 1986, Aleta's employment was terminated by the DBP. Thereafter, the DBP rescinded the contract and gave notice to Victor to either lease or vacate the premises. Victor did not heed the demand, and, on March 31, 1987, the DBP put the house and lot for sale. This prompted Victor to file a case of injunction before the RTC. The RTC granted a temporary restraining order.
The RTC ruled that Victor had made substantial payments to Aleta and made considerable improvements on the property. According to the RTC, it would be unfair if the DBF were to retain ownership without compensating Victor. Finally, the RTC declared that the ''parties could still ventilate their respective claims in a proper case, so that a full blown trial could be had.�[1] Meanwhile, the status quo should be maintained.
On appeal, the Court of Appeals (CA) reversed the RTC, holding that the contract between Aleta and the DBF was a contract of sale and not an equitable mortgage. Thus, "DBF, as the registered owner of the property, has all the right to enjoy and dispose of it without any other limitations."[2] At the time the MOA was entered into between Aleta and Victor, the DBF had become the absolute owner of the property. The CA also noted the DBP's lack of privity with the MOA. Finally, the CA found that none of the legal requisites for the grant of a writ of injunction was present in the case. Victor had not established a clear and unmistakable right to continue to possess the property after the DBP's rescission of the conditional sale agreement. Whatever claims Victor may have against Aleta for the construction of improvements on the property and the amounts he paid, have yet to be litigated and adjudicated.
Before this Court, the petitioners urge the Court to reverse the CA's ruling based on the following grounds: (I) the contract between the DBP and Aleta was an equitable mortgage; (2) Victor had a clear and unmistakable right to be protected through a writ of injunction; (3) the DBP was not entitled to unilaterally rescind the contract with Aleta; and (4) Victor was a builder in good faith and, thus, is entitled to the protective relief of an injunction.
The only issue relevant for the resolution of the present petition is the propriety of issuing a writ of injunction against the DBP's plan to sell the property. On this score, the petitioners' submissions fail to convince us of their merits.
In Lim v. CA,[3] the Court held that �[t]he requisites for preliminary injunctive relief are: (a) the invasion of right sought to be protected is material and substantial; (b) the right of the complainant is clear and unmistakable; and (c) there is an urgent and paramount necessity for the writ to prevent serious damage." The Court further stated:
As such, a writ of preliminary injunction may be issued only upon clear showing of an actual existing right to be protected during the pendency of the principal action. The twin requirements of a valid injunction are the existence of a right and its actual or threatened violations. Thus, to be entitled to an injunctive writ, the right to be protected and the violation against that right must be shown.[4] (emphasis and underscoring ours)
In this case, the petitioners failed to prove a clear and unmistakable right to the injunctive relief. The petitioners' submission hinges on the theory that the contact between the DBP and Aleta was an equitable mortgage. Whether this position is correct is irrelevant for two reasons: first, Aleta, not Victor, is the proper party to assert that claim because Victor was not privy to that contract; and second, even if it is an equitable mortgage, Aleta is only granted the right to redeem the property. Here, Aleta did not exercise her right to redeem the property pursuant to Article 1606, in relation to Article 1601, of the Civil Code. Thus, as matters now stand, the DBP is the owner of the property.
Further, the Court cannot give credence to the petitioners' claim that Victor was a builder in good faith. Based on the evidence presented in this case, Victor could not be considered a builder in good faith, based on the records before us, since he knew of the arrangement between the DBP and Aleta. In order to be considered in good faith, he must have not been aware that there was a flaw in Aleta's title.[5] Victor practically admitted that he knew of the arrangement between the DBP and Aleta in his petition. He stated that "[s]ince the actual transaction between Aleta and DBP xxx was one of loan with equitable mortgage, ownership of the subject property did not pass on to DBP.�[6] By alleging that the contract was one of equitable mortgage, he admitted to being aware of the "set-up" between the DBP and Aleta. We find it unusual that a person with legal knowledge and experience would not demand a Contract of Sale or a Deed of Sale if he had known that the vendor was the owner of the property he was buying. Therefore, Victor knew or, at least, must have known that Aleta had no clear title to the property that she could transfer at the time of the MOA.
WHEREFORE, after reconsidering the original denial of this case for procedural defects, the Court resolves to DENY the petition for lack of merit; no substantial arguments were validly raised to warrant a reversal of the assailed March 31, 2010 decision of the Court of Appeals in CA-G.R. CV No. 70388-MIN.
SO ORDERED.
Very truly yours,
((Sgd.) MA. LUISA L. LAUREA
Division Clerk of Court
Endnotes:
[1] Rollo, p. 48.
[2] Id. at 61.
[3] G.R. No. 134617, February 13, 2006, 482 SCRA 326. 331.
[4] Ibid
[5] See e.g. Arangote v. Maglunob, G.R. No. 178906, February 18, 2009, 579 SCRA 620, 643.
[6] Rollo, p. 33.
[*] Perez. J., on official leave; Perlas-Bernabe, J., designated as Acting Member of the Second Division per Special Order No. 1114 dated October 3, 2011.
