Chapter XV Involuntary Dealings with Registered Lands attached, yet the fact was that he was no longer the
the fact was that he was no longer the owner thereof as it was already
(Exclude Subsections 21-36 )
BERNARDO VALDEVIESO, petitioner, vs. CANDELARIO DAMALERIO AND
AUREA C. DAMALERIO, respondents.
DECISION
CHICO-NAZARIO, J.:
Before this Court is a Petition for Review under Rule 45 of the Rules of Court,
seeking to set aside the 25 September 1997 Decision and the 10 February 1998
Resolution of the Court of Appeals in CA-G.R. SP No. 43082 entitled, Candelario
Damalerio and Aurea Damalerio v. Honorable Antonio S. Alano, et al.[1]
There is no dispute as to the following facts:
On 05 December 1995, Bernardo Valdevieso (petitioner) bought from spouses
Lorenzo and Elenita Uy a parcel of land consisting of 10,000 square meters, more or
less, located at Bo. Tambler, General Santos City, and covered by Transfer Certificate
of Title (TCT) No. T-30586.[2]
The deed of sale was not registered, nor was the title of the land transferred to
petitioner.[3]
On 07 December 1995, the said property was immediately declared by
petitioner for taxation purposes as Tax Declaration No. l6205 with the City Assessors
Office.[4]
It came to pass that on 19 April 1996, spouses Candelario and Aurea Damalerio
(respondents) filed with the Regional Trial Court (RTC) of General Santos City, a
complaint for a sum of money against spouses Lorenzo and Elenita Uy docketed as
Civil Case No. 5748 with application for the issuance of a Writ of Preliminary
Attachment.[5]
On 23 April 1996, the trial court issued a Writ of Preliminary Attachment by virtue
of which the property, then still in the name of Lorenzo Uy but which had already been
sold to petitioner, was levied. The levy was duly recorded in the Register of Deeds of
General Santos City and annotated upon TCT No. T-30586.[6]
On 06 June 1996, TCT No. T-30586 in the name of Lorenzo Uy was cancelled
and, in lieu thereof, TCT No. T-74439 was issued in the name of petitioner.[7] This new
TCT carried with it the attachment in favor of respondents.
On 14 August 1996, petitioner filed a third-party claim in Civil Case No. 5748 to
discharge or annul the attachment levied on the property covered by TCT No. T-
74439 on the ground that the said property belongs to him and no longer to Lorenzo
and Elenita Uy.[8]
In a resolution dated 21 October 1996, the trial court ruled for the petitioner.
[9]
Citing Manliguez v. Court of Appeals[10] and Santos v. Bayhon,[11] it held that the levy
of the property by virtue of attachment is lawful only when the levied property
indubitably belongs to the defendant. Applying the rulings in the cited cases, it opined
that although defendant Lorenzo Uy remained the registered owner of the property
sold earlier to petitioner, hence, the writ of attachment was unlawful.
Respondents sought reconsideration thereof which was denied by the trial court
in a resolution dated 03 January 1997.[12]
From the unfavorable resolution of the trial court in the third-party claim,
respondents appealed to the Court of Appeals. The appellate court reversed the
resolution and by judgment promulgated on 25 September 1997, it declared that an
attachment or levy of execution, though posterior to the sale, but if registered before
the sale is registered, takes precedence over the sale. [13] The writ of attachment in
favor of the respondents, being recorded ahead of the sale to petitioner, will therefore
take precedence.
Petitioner moved for reconsideration but this was denied by the Court of Appeals
in its Resolution of 10 February 1998.[14]
Hence, this Petition for Review on Certiorari.
The sole issue in this case is whether or not a registered writ of attachment on
the land is a superior lien over that of an earlier unregistered deed of sale.
Petitioner maintains that he has a superior right over the questioned property
because when the same was attached on 23 April 1996, this property was no longer
owned by spouses Uy against whom attachment was issued as it was already sold to
petitioner on 05 December 1995. The ownership thereof was already transferred to
petitioner pursuant to Article 1477[15] in relation to Article 1498[16] of the Civil Code.
Dismissing the allegation that he slept on his rights by not immediately
registering at least an adverse claim based on his deed of sale, petitioner avers that
he promptly worked out for the transfer of registration in his name. The slight delay in
the registration, he claims was not due to his fault but attributable to the process
involved in the registration of property such as the issuance of the Department of
Agrarian Reform clearance which was effected only after compliance with several
requirements.
Considering the peculiar facts and circumstances obtaining in this case,
petitioner submits it would be in accord with justice and equity to declare him as
having a superior right to the disputed property than the respondents.
Respondents maintain the contrary view. They aver that registration of a deed of
sale is the operative act which binds the land and creates a lien thereon. Before the
registration of the deed, the property is not bound insofar as third persons are
concerned. Since the writ of attachment in favor of respondents was registered earlier
than the deed of sale to petitioner, respondents were of the belief that their registered
writ of attachment on the subject property enjoys preference and priority over
petitioners earlier unregistered deed of sale over the same property. They also
contend that Articles 1477 and 1498 of the Civil Code as cited by petitioner are not
applicable to the case because said provisions apply only as between the parties to
the deed of sale. These provisions do not apply to, nor bind, third parties, like
respondents, because what affects or binds third parties is the registration of the
instrument in the Register of Deeds. Furthermore, respondents argue that petitioner
cannot invoke equity in his favor unless the following conditions are met: (a) the
absence of specific provision of a law on the matter; and (b) if the person who invokes
it is not guilty of delay. Both conditions have not been met, however, since there is a
law on the subject matter, i.e., Section 51 of Presidential Decree No. 1529, and that
petitioner allegedly slept on his rights by not immediately registering an adverse claim
based on his deed of sale.
We agree with the respondents.
The law applicable to the facts of this case is Section 51 of P.D. No. 1529. Said
Section provides:
Sec. 51. Conveyance and other dealings by registered owner. - An owner of
registered land may convey, mortgage, lease, charge, or otherwise deal with the
same in accordance with existing laws. He may use such forms of deeds, mortgages,
leases or other voluntary instruments as are sufficient in law. But no deed, mortgage,
lease, or other voluntary instrument, except a will purporting to convey or affect
registered land, shall take effect as a conveyance or bind the land, but shall operate
only as a contract between the parties and as evidence of authority to the Register of
Deeds to make registration.
The act of registration shall be the operative act to convey or affect the land insofar as
third persons are concerned, and in all cases under this Decree, the registration shall
be made in the office of the Register of Deeds for the province or city where the land
lies.
It is to be noted that though the subject land was deeded to petitioner as early
as 05 December 1995, it was not until 06 June 1996 that the conveyance was
registered, and, during that interregnum, the land was subjected to a levy on
attachment. It should also be observed that, at the time of the attachment of the
property on 23 April 1996, the spouses Uy were still the registered owners of said
property. Under the cited law, the execution of the deed of sale in favor of petitioner
was not enough as a succeeding step had to be taken, which was the registration of
the sale from the spouses Uy to him. Insofar as third persons are concerned, what
validly transfers or conveys a persons interest in real property is the registration of the
deed. Thus, when petitioner bought the property on 05 December 1995, it was, at that
point, no more than a private transaction between him and the spouses Uy. It needed
to be registered before it could bind third parties, including respondents. When the
registration finally took place on 06 June 1996, it was already too late because, by
then, the levy in favor of respondents, pursuant to the preliminary attachment ordered
by the General Santos City RTC, had already been annotated on the title.
The settled rule is that levy on attachment, duly registered, takes preference
over a prior unregistered sale.[17] This result is a necessary consequence of the fact
that the property involved was duly covered by the Torrens system which works under
the fundamental principle that registration is the operative act which gives validity to
the transfer or creates a lien upon the land.[18]
The preference created by the levy on attachment is not diminished even by the
subsequent registration of the prior sale. This is so because an attachment is a
proceeding in rem.[19] It is against the particular property, enforceable against the
whole world. The attaching creditor acquires a specific lien on the attached property
which nothing can subsequently destroy except the very dissolution of the attachment
or levy itself.[20] Such a proceeding, in effect, means that the property attached is an
indebted thing and a virtual condemnation of it to pay the owners debt. [21] The lien
continues until the debt is paid, or sale is had under execution issued on the
judgment, or until the judgment is satisfied, or the attachment discharged or vacated
in some manner provided by law.
Thus, in the registry, the attachment in favor of respondents appeared in the
nature of a real lien when petitioner had his purchase recorded. The effect of the
notation of said lien was to subject and subordinate the right of petitioner, as
purchaser, to the lien. Petitioner acquired ownership of the land only from the date of
the recording of his title in the register, and the right of ownership which he inscribed
was not absolute but a limited right, subject to a prior registered lien of respondents, a
right which is preferred and superior to that of petitioner.[22]
Anent petitioners reliance on the rulings laid down in Manliguez v. Court of
Appeals and Santos v. Bayhon, we find the same to be misplaced. These cases did
not deal at all with the dilemma at hand, i.e. the question of whether or not a
registered writ of attachment on land is superior to that of an earlier unregistered
deed of sale. In Santos, what was involved were machinery and pieces of equipment
which were executed upon pursuant to the favorable ruling of the National Labor
Relations Commission. A third party claimed that the machinery were already sold to
her, but it does not appear in the facts of the case if such sale was ever
registered. Manliguez is similar to Santos, except that the former involved buildings
and improvements on a piece of land. To stress, in both cited cases, the registration
of the sale, if any, of the subject properties was never in issue.
As to petitioners invocation of equity, we cannot, at this instance, yield to such
principle in the presence of a law clearly applicable to the case. We reiterate that this
Court, while aware of its equity jurisdiction, is first and foremost, a court of law.
[23]
While equity might tilt on the side of one party, the same cannot be enforced so as
to overrule positive provisions of law in favor of the other.[24] Equity cannot supplant or
contravene the law.[25] The rule must stand no matter how harsh it may seem. Dura
lex sed lex.
WHEREFORE, the appealed Decision of the Court of Appeals in CA-G.R. SP
No. 43082 dated 25 September 1997, and its Resolution dated 10 February 1998, are
hereby AFFIRMED. No costs.
SO ORDERED.
THE PHILIPPINE COTTON G.R. No. 130389
CORPORATION,
Petitioner-Appellant,
Present:
PUNO, C.J., Chairperson,
- versus - SANDOVAL-GUTIERREZ,
CORONA,
AZCUNA, and
LEONARDO- DE CASTRO, JJ.
NARAINDAS GAGOOMAL and
ENGRACIO ANG,
Respondents-Appellees,
CHINA BANKING CORPORATION, Promulgated:
Intervenor-Appellee. February 11, 2008
x ---------------------------------------------------------------------------------------- x
DECISION
AZCUNA, J.:
This is a petition for review on certiorari[1] assailing the Decision[2] of the
Court of Appeals (CA) promulgated on August 29, 1997 in CA-G.R. CV No. 50332.
The facts of record would indicate that Pacific Mills, Inc. (Pacific Mills)
originally owned five parcels of land covered by Transfer Certificates of Title (TCT)
Nos. 136640, 136441, 222370 and 134249. These properties were subsequently
purchased by respondents on an installment basis from Pacific Mills on July 19, 1979.
[3]
On June 23, 1983, petitioner filed a collection case against Pacific Mills
before the Regional Trial Court (RTC) of Pasig, Branch 162 on the ground of alleged
failure to fulfill its obligation under a contract of loan. After hearing, the trial court
issued a writ of preliminary attachment in favor of petitioner. Thereafter, on August 17,
1983, the writ of preliminary attachment was annotated on TCT Nos. 136640, 136441,
222370 and 134249.
On December 27, 1985, the RTC of Pasig rendered a decision ordering
Pacific Mills to pay its obligation under the loan agreement plus interest, penalty
charges, attorneys fees and costs of suit. On appeal, the CA affirmed the decision of
the trial court. Not satisfied with the judgment of the appellate court, Pacific Mills filed
a petition for review before this Court.
During the pendency of the appeal or on June 11, 1988, the Quezon City
Hall was razed by fire thereby destroying the records of the Registry of Deeds of
Quezon City, including the TCTs of Pacific Mills.
Sometime in 1992, Pacific Mills filed a petition for reconstitution of the
burned TCTs through administrative reconstitution, in accordance with Republic Act
No. 6732.[4]On March 23, 1992, the Registry of Deeds of Quezon City issued to
Pacific Mills the reconstituted TCTs, namely: No. RT-55702 (for TCT No. 136640), No.
RT-55704 (for TCT No. 134249), No. RT-55703 (for TCT No. 136441) and No. RT-
55705 (for TCT No. 222370). However, the aforesaid alleged annotations of the
preliminary attachment in favor of petitioner were not incorporated in the reconstituted
TCTs, but annotated therein was the sale made by Pacific Mills to respondents and
their payment in full. On even date, the reconstituted TCTs were cancelled in favor of
the respondents. Respondents were given the following clean TCT Nos. 56683[5] (for
RT-55703), 56684[6] (for RT-55702), 56685[7] (for RT-55704) and 56686[8] (for RT-
55705).
On February 8, 1993, petitioner wrote the Registry of Deeds of Quezon City
requesting for the annotation of the notice of levy, and, subsequently, the annotation
of a favorable decision of this Court rendered on August 3, 1992, on the new TCTs
issued to respondents.
On February 10, 1993, Samuel C. Cleofe, the Quezon City Register of
Deeds, informed respondents that the letter-request for re-annotation of notice of levy
had been entered in the Primary Entry Book 574/Volume 24, and asked them to
surrender their owners duplicate copies of TCT Nos. 56683 to 56686.[9]
Immediately upon receipt of the said letter, respondents verified the original
copies of titles in the possession of the Registry of Deeds and discovered that the
following annotations were included at the back of the titles: Request for Re-
Annotation of Notice of Levy and Letter Request for Annotation of Entry of Judgment
of Supreme Court.
Thereafter, respondents filed on March 3, 1993, a Petition for the
Cancellation of Annotations in Land Titles before the RTC of Quezon City, Branch
100, docketed as Civil Case No. Q-6056(93). Later on, petitioner was impleaded as
an additional respondent, while China Banking Corporation filed a complaint-in-
intervention for being a mortgagee of the real properties, together with all the
improvements thereon.
On March 29, 1995, the trial court rendered judgment in favor of
respondents. The dispositive portion of the decision reads:
WHEREFORE, premises above considered, there being
no justification for the Quezon City Register of Deeds in making
the annotation on petitioners original TCT Nos. 56683 (RT-55703),
56684 (RT-55702), 56685 (RT-55748) and 56686 (RT-55705), said
respondent is hereby ordered to DELETE therefrom the said
annotation request for annotation and the annotated Supreme
Court decision against the Pacific Mills, Inc. and to desist from its
request for petitioners to submit their owners duplicate of titles to
annotate such request of the Philippine Cotton Corporation.
There being no justiciable issue in the complaint-in-
intervention, let the annotations of a mortgage executed by
petitioners on December 18, 1992 in favor of intervenor China
Banking Corporation remain on petitioners subject TCTs.
 SO ORDERED.[10]
The trial court ratiocinated that:
Under the circumstances, respondent [the Registry of
Deeds of Quezon City] should and could have properly refused
such request instead of immediately annotating it. In the same
light, The Register of Deeds may likewise properly refuse
registration of an order attachment when it appears that the title
involved is not in the name of the defendant and there is no
evidence submitted to indicate that the said defendant has any
present or future interest in the property covered by the
titles. (Gotauco vs. Register of Deeds of Tayabas, 59 Phil. 756,
1934 and Geonanga vs. Hodges, 55 O.G. p. 2891, April 21, 1958).
(Underscoring Supplied)[11]
Unsatisfied with the outcome of the case, petitioner filed a notice of appeal
before the CA, contending that:
THE REGISTER OF DEEDS OF QUEZON CITY HAS THE
AUTHORITY TO RE-ANNOTATE THE NOTICE OF LEVY AND TO
ANNOTATE THE ENTRY OF JUDGMENT OF THE SUPREME
COURT ON TRANSFER CERTIFICATES OF TITLE NOS. 56683,
56684, 56685 AND 56686, ALL ISSUED IN THE NAME OF THE
PETITIONERS-APPELLEES AS A RESULT OF AN
ADMINISTRATIVE RECONSTITUTION OF TITLES.[12]
In its August 29, 1997 decision, the appellate court dismissed the appeal
because the issue raised by the petitioner was a pure question of law, over which the
CA had no jurisdiction.
Hence, this petition.
Petitioner presents the following assignment of errors:
FIRST ERROR
THE LOWER COURT ERRED IN NOT SUSTAINING THE
AUTHORITY OF THE QUEZON CITY REGISTER OF DEEDS TO
VALIDLY RE-ANNOTATE THE INCUMBRANCE/LIENS AND
ANNOTATE THE SUPREME COURT DECISION ON THE
ADMINISTRATIVELY RECONSTITUTED TRANSFER
CERTIFICATES OF TITLES (TCTs) IN FAVOR OF PETITIONER-
APPELLANT.
SECOND ERROR
THE LOWER COURT, IN CONSEQUENCE THEREOF, LIKEWISE
ERRED IN ORDERING THE QUEZON CITY REGISTER OF
DEEDS TO DELETE THE ANNOTATION THAT READS:
REQUEST FOR ANNOTATION AND THE ANNOTATED
SUPREME COURT DECISION AGAINST PACIFIC MILLS, INC.,
FROM PETITIONERS ORIGINAL TCT NOS. 96683 [sic] (RT-
55703), 56684 (RT-55702), 56685 (RT-55748) AND 56686 (RT-
55705) AND TO DESIST FROM REQUESTING
RESPONDENTS/APPELLEES TO SUBMIT THEIR OWNERS
DUPLICATE OF TITLES FOR ANNOTATION OF PETITIONER
PHILIPPINE COTTON CORPORATIONS REQUEST.[13]
Petitioner asserts that a cursory reading of Section 71 of Presidential
Decree No. 1529 shows that it is the ministerial duty of the Register of Deeds, in the
matter of an attachment or other liens in the nature of involuntary dealing in registered
land, to send notice by mail to a registered owner requesting him to produce his
duplicate certificate so that a memorandum of attachment or other lien may be made
thereon. This provision, according to petitioner, actually applies whenever a writ of
attachment has been issued by a court of competent jurisdiction after hearing on the
issuance of the said writ. The notice of attachment not having been dissolved, it was
ministerial on the part of the Register of Deeds to record the notice on the TCTs he
issued.
Petitioner would persuade this Court that it is the ministerial duty of the
Register of Deeds to record any encumbrance or lien on respondents existing TCTs.
It cites, as proof of its supposition, Sections 10 and 71 of the Property Registration
Decree (P.D. No. 1529), which are quoted as follows:
Section 10. General functions of Registers of Deeds. The
office of the Register of Deeds constitutes a public repository of
records of instruments affecting registered or unregistered lands
and chattel mortgages in the province or city wherein such office is
situated.
It shall be the duty of the Register of Deeds to
immediately register an instrument presented for registration
dealing with real or personal property which complies with all the
requisites for registration. He shall see to it that said instrument
bears the proper documentary and science stamps and that the
same are properly cancelled. If the instrument is not registrable,
he shall forthwith deny registration thereof and inform the
presentor of such denial in writing, stating the ground or reason
therefor, and advising him of his right to appeal by consulta in
accordance with Section 117 of this Decree.
xxx
Section 71. Surrender of certificate in involuntary
dealings. If an attachment or other lien in the nature of involuntary
dealing in registered land is registered, and the duplicate
certificate is not presented at the time of registration, the Register
of Deeds, shall, within thirty-six hours thereafter, send notice by
mail to the registered owner, stating that such paper has been
registered, and requesting him to send or produce his duplicate
certificate so that a memorandum of the attachment or other lien
 may be made thereon. If the owner neglects or refuses to comply
within a reasonable time, the Register of Deeds shall report the
matter to the court, and it shall, after notice, enter an order to the
owner to produce his certificate at a time and place named
therein, and may enforce the order by suitable process.
(Underscoring supplied)
The Court is not in accord with the stance of petitioner. Section 10 of P.D.
No. 1529 merely involves the general functions of the Register of Deeds, while
Section 71 thereof relates to an attachment or lien in a registered land in which the
duplicate certificate was not presented at the time of the registration of the said
lien or attachment.
A special law specifically deals with the procedure for the reconstitution
of Torrens certificates of title lost or destroyed. Under Section 4 of Act No. 26:[14]
Liens and other encumbrances affecting a destroyed or
lost certificate of title shall be reconstituted from such of the
sources hereunder enumerated as may be available, in the
following order:
(a) Annotations or memoranda appearing on the
owners, co-owners, mortgagees or lessees
duplicate;
(b) Registered documents on file in the registry
of deeds, or authenticated copies thereof
showing that the originals thereof had been
registered; and
(c) Any other document which, in the
judgment of the court, is sufficient and
proper basis for reconstituting the liens or
encumbrances affecting the property covered by
the lost or destroyed certificate of title.
(Underscoring supplied)
Furthermore, Sections 8 and 11 of the same Act provide for the procedure
for the notation of an interest that did not appear in the reconstituted certificate of title,
mandating that a petition be filed before a court of competent jurisdiction:
Section 8. Any person whose right or interest was duly
noted in the original of a certificate of title, at the time it was lost or
destroyed, but does not appear so noted on the reconstituted
certificate of title, which is subject to the reservation provided in
the preceding section, may, while such reservation subsists, file a
petition with the proper Court of First Instance for the annotation
of such right or interest on said reconstituted certificate of title, and
the court, after notice and hearing, shall determine the merits of
the petition and render such judgment as justice and equity may
require. The petition shall state the number of the reconstituted
certificate of title and the nature, as well as a description, of the
right or interest claimed. (Underscoring supplied)
xxx
Section 11. Petitions for reconstitution of registered
interests, liens and other encumbrances, based on sources
enumerated in sections 4(b) and/or 4(c) of this Act, shall be filed,
by the interested party, with the proper Court of First Instance. The
petition shall be accompanied with the necessary documents and
shall state, among other things, the number of the certificate of
title and the nature as well as a description of the interest, lien or
encumbrance which is to be reconstituted, and the court, after
publication, in the manner stated in section nine of this Act, and
hearing shall determine the merits of the petition and render such
judgment as justice and equity may require. (Underscoring
supplied)
Clearly, therefore, it is not the ministerial function of the Register of Deeds to
record a right or an interest that was not duly noted in the reconstituted certificate of
title. As a matter of fact, this task is not even within the ambit of the Register of Deeds
job as the responsibility is lodged by law to the proper courts. The foregoing quoted
provisions of the law leave no question nor any doubt that it is indeed the duty of the
trial court to determine the merits of the petition and render judgment as justice and
equity may require.
This conclusion is bolstered by Chapter X,[15] Section 108 of P.D. No. 1529,
which provides:
Sec. 108. Amendment and alteration of certificates. No
erasure, alteration, or amendment shall be made upon the
registration book after the entry of a certificate of title or of a
memorandum thereon and the attestation of the same by the
Register of Deeds, except by order of the proper Court of
First Instance. A registered owner or other person having an
interest in registered property, or, in proper cases, the
Register of Deeds with the approval of the Commissioner of
Land Registration, may apply by petition to the court upon
the ground that the registered interests of any description,
whether vested, contingent, expectant inchoate appearing on
the certificate, have terminated and ceased; or that new interest
not appearing upon the certificate have arisen or been
created; or that an omission or error was made in entering
the certificate or any memorandum thereon, or on any
duplicate certificate; or that the name of any person on the
certificate has been changed; or that the registered owner has
married, or, if registered as married, that the marriage has been
terminated and no right or interest of heirs or creditors will thereby
be affected, or that a corporation which owned registered land and
has been dissolved has not yet conveyed the same within three
years after its dissolution; or upon any other reasonable ground;
and the court may hear and determine the petition after notice
 to all parties in interest, and may order the entry or cancellation
of a new certificate, the entry or cancellation of a memorandum
upon a certificate, or grant any other relief upon such terms and
conditions, requiring security or bond if necessary, as it may
consider proper: Provided, however, That this section shall not be
construed to give the court authority to reopen the judgment or
decree of registration, and that nothing shall be done or ordered
by the court which shall impair the title or other interest of a
purchaser holding a certificate for value and in good faith, or
his heirs and assigns, without his or their written consent. Where
the owners duplicate certificate is not presented, a similar petition
may be filed as provided in the preceding section,

All petitions or motions filed under this section as well as

under any other provision of this Decree after original registration
shall be filed and entitled in the original case in which the decree
or registration was entered. (Underscoring supplied)

The courts intervention in the amendment of the registration book after the
entry of a certificate of title or of a memorandum thereon is categorically stated in the
Property Registration Decree and cannot be denied by the mere allegations of
petitioner. Hence, the contentions that the Register of Deeds may validly re-annotate
the incumbrance/liens and annotate the Supreme Court decision on the
administratively reconstituted transfer certificates of titles (TCTs) have no basis in law
and jurisprudence.

Petitioner further submits that the issuance of the TCTs to respondents is

fraudulent. It suggests that under Sections 69 and 73 of P.D. No. 1529, any person
whose interest does not appear on a reconstituted title may file a request directly with
the Register of Deeds.
As correctly observed by respondents, P.D. No. 1529 principally pertains to
the registration of property, while R.A. No. 26 is a special law on the procedure for the
reconstitution of Torrens certificates of title that were lost or destroyed. Specifically,
Section 69[16] of P.D. No. 1529 refers to an attachment that arose after the issuance of
a certificate of title; while Section 71 [17] of the same law pertains to the registration of
the order of a court of an attachment that was continued, reduced, dissolved or
otherwise affected by a judgment of the court. Undoubtedly, the foregoing provisions
find no application in the present case since petitioner insists that its interest was
annotated prior to the reconstitution of the disputed certificates of title.

WHEREFORE, the petition is DENIED. The Decision of the Court of Appeals

in CA-G.R. CV No. 50332, dated August 29, 1997, and the Decision of the Regional
Trial Court of Quezon City, Branch 101, in Civil Case No. Q-6056(93), [18] are
hereby AFFIRMED.

No costs.

SO ORDERED.
G.R. No. L-27587 February 18, 1970
AMADO CARUMBA, petitioner,
vs.
THE COURT OF APPEALS, SANTIAGO BALBUENA and ANGELES BOAQUIÑA
as Deputy Provincial Sheriff, respondents.
Luis N. de Leon for petitioner.
Reno R. Gonzales for respondents.
REYES, J.B.L., J.:
Amado Carumba petitions this Supreme Court for a certiorari to review a decision of
the Court of Appeals, rendered in its Case No. 36094-R, that reversed the judgment
in his favor rendered by the Court of First Instance of Camarines Sur (Civil Case
4646).
The factual background and history of these proceedings is thus stated by the Court
of Appeals (pages 1-2):
On April 12, 1955, the spouses Amado Canuto and Nemesia
Ibasco, by virtue of a "Deed of Sale of Unregistered Land with
Covenants of Warranty" (Exh. A), sold a parcel of land, partly
residential and partly coconut land with a periphery (area) of 359.09
square meters, more or less, located in the barrio of Santo
Domingo, Iriga, Camarines Sur, to the spouses Amado Carumba
and Benita Canuto, for the sum of P350.00. The referred deed of
sale was never registered in the Office of the Register of Deeds of
Camarines Sur, and the Notary, Mr. Vicente Malaya, was not then
an authorized notary public in the place, as shown by Exh. 5.
Besides, it has been expressly admitted by appellee that he is the
brother-in-law of Amado Canuto, the alleged vendor of the property
sold to him. Amado Canuto is the older brother of the wife of the
herein appellee, Amado Carumba.
On January 21, 1957, a complaint (Exh. B) for a sum or money was
filed by Santiago Balbuena against Amado Canuto and Nemesia
Ibasco before the Justice of the Peace Court of Iriga, Camarines
Sur, known as Civil Case No. 139 and on April 15, 1967, a decision
(Exh. C) was rendered in favor of the plaintiff and against the
defendants. On October 1, 1968, the ex-officio Sheriff, Justo V.
Imperial, of Camarines Sur, issued a "Definite Deed of Sale (Exh.
D) of the property now in question in favor of Santiago Balbuena,
which instrument of sale was registered before the Office of the
Register of Deeds of Camarines Sur, on October 3, 1958. The
aforesaid property was declared for taxation purposes (Exh. 1) in
the name of Santiago Balbuena in 1958.
The Court of First instance, finding that after execution of the document Carumba had
taken possession of the land, planting bananas, coffee and other vegetables thereon,
declared him to be the owner of the property under a consummated sale; held void
the execution levy made by the sheriff, pursuant to a judgment against Carumba's
vendor, Amado Canuto; and nullified the sale in favor of the judgment creditor,
Santiago Balbuena. The Court, therefore, declared Carumba the owner of the litigated
property and ordered Balbuena to pay P30.00, as damages, plus the costs.
The Court of Appeals, without altering the findings of fact made by the court of origin,
declared that there having been a double sale of the land subject of the suit
Balbuena's title was superior to that of his adversary under Article 1544 of the Civil
Code of the Philippines, since the execution sale had been properly registered in
good faith and the sale to Carumba was not recorded.
We disagree. While under the invoked Article 1544 registration in good faith prevails
over possession in the event of a double sale by the vendor of the same piece of land
to different vendees, said article is of no application to the case at bar, even if
Balbuena, the later vendee, was ignorant of the prior sale made by his judgment
debtor in favor of petitioner Carumba. The reason is that the purchaser of
unregistered land at a sheriff's execution sale only steps into the shoes of the
judgment debtor, and merely acquires the latter's interest in the property sold as of
the time the property was levied upon. This is specifically provided by section 35 of
Rule 39 of the Revised Rules of Court, the second paragraph of said section
specifically providing that:
Upon the execution and delivery of said (final) deed the purchaser,
redemptioner, or his assignee shall be substituted to and acquire all
the right, title, interest, and claim of the judgment debtor to the
property as of the time of the levy, except as against the judgment
debtor in possession, in which case the substitution shall be
effective as of the time of the deed ... (Emphasis supplied)
While the time of the levy does not clearly appear, it could not have been made prior
to 15 April 1957, when the decision against the former owners of the land was
rendered in favor of Balbuena. But the deed of sale in favor of Canuto had been
executed two years before, on 12 April 1955, and while only embodied in a private
document, the same, coupled with the fact that the buyer (petitioner Carumba) had
taken possession of the unregistered land sold, sufficed to vest ownership on the said
buyer. When the levy was made by the Sheriff, therefore, the judgment debtor no
longer had dominical interest nor any real right over the land that could pass to the
purchaser at the execution sale.1 Hence, the latter must yield the land to petitioner
Carumba. The rule is different in case of lands covered by Torrens titles, where the
prior sale is neither recorded nor known to the execution purchaser prior to the
levy;2 but the land here in question is admittedly not registered under Act No. 496.
WHEREFORE, the decision of the Court of Appeals is reversed and that of the Court
of First Instance affirmed. Costs against respondent Santiago Balbuena.
 RURAL BANK OF STA. BARBARA [PANGASINAN], INC.,
Petitioner,
- versus -
THE MANILA MISSION OF THE CHURCH OF JESUS CHRIST OF
LATTER DAY SAINTS, INC.,
Respondent.
This is a Petition for Review on Certiorari under Rule 45 of the Rules of
Court seeking to set aside the Decision [1] dated 29 July 1997 of the Court of Appeals
in CA-G.R. SP No. 41042 affirming the Orders dated 9 October 1995 and 27 February
1996 of the Regional Trial Court (RTC), Branch 43, of Dagupan City, in Civil Case No.
D-10583.
Spouses Tomas and Maria Soliven (spouses Soliven) were the registered
owners, under Transfer Certificate of Title (TCT) No. T-125213, of a parcel of land
located in Barangay Maninding, Sta. Barbara, Pangasinan (subject property). On 18
May 1992, the spouses Soliven sold the subject property to respondent Manila
Mission of the Church of Jesus Christ of Latter Day Saints, Inc. (Manila
Mission). However, it was only on 28 April 1994 when TCT No. T-125213 in the name
of the spouses Soliven was cancelled, and TCT No. 195616 was issued in the name
of respondent.
In the meantime, on 15 April 1993, petitioner Rural Bank of Sta. Barbara
(Pangasinan), Inc. filed with the RTC a Complaint against the spouses Soliven for a
sum of money, docketed as Civil Case No. D-10583. The Complaint of petitioner
included a prayer for the issuance of a Writ of Preliminary Attachment.
In an Order dated 7 May 1993, the RTC ordered the issuance of the Writ of
Attachment petitioner prayed for, to wit:
WHEREFORE, let a Writ of Attachment be issued against
all the properties of [Spouses Soliven] not exempt from execution
or so much thereof as may be sufficient to satisfy the [herein
petitioners] principal claim of P338,000.00 upon filing of [petitioners]
bond in the amount of P100,000.00.[2]
Upon the filing by petitioner of the required bond, the RTC issued the Writ of
Attachment on 21 May 1993. Acting on the authority of said Writ, Sheriff
Reynaldo C. Daray attached the subject property, which was then still
covered by TCT No. T-125213 in the name of the spouses Soliven. The Writ
of Attachment was annotated on TCT No. T-125213 on 24 May 1993. Thus,
when TCT No. T-125213 of the spouses Soliven was cancelled and TCT No.
195616 of petitioner was issued on 28 April 1994, the annotation on the Writ
of Attachment was carried from the former to the latter.
While Civil Case No. D-10583 was still pending before the RTC, respondent
executed an Affidavit claiming title and ownership over the subject property, and
requested the Ex-Officio Provincial and City Sheriff to release the said property from
attachment. The Sheriff, however, advised respondent to file a motion directly with the
RTC.
On 16 March 1995, respondent filed with the RTC, in Civil Case No. D-
10583, a Motion to Release Property from Attachment, to which petitioner, in turn,
filed an Opposition. After hearing, the RTC issued an Order on 9 October
1995 discharging the subject property from attachment. The RTC decreed in said
Order:
WHEREFORE, the Court hereby directs the Ex-Officio Provincial Sheriff of
Pangasinan and City Sheriff of Dagupan to discharge and release the subject land
from attachment and orders the notice of attachment on T.C.T. No. 195616 of the
Register of Deeds of Pangasinan be cancelled.[3]
Petitioner filed a Motion for Reconsideration of the 9 October 1995 Order of
the RTC, arguing that it had a better right over the subject property and that
the filing by respondent with the RTC, in Civil Case No. D-10583, of a Motion
to Release Property from Attachment, was the improper remedy. In an Order
dated 27 February 1996, the RTC denied the Motion for Reconsideration of
petitioner for lack of merit.
On 12 April 1997, petitioner filed a Petition for Certiorari with this Court, alleging that
the RTC committed grave abuse of discretion, amounting to lack or excess of
jurisdiction, in canceling the Writ of Attachment and ordering the release of the
subject property. The Petition was docketed as G.R. No. 124343. In a Resolution
dated 27 May 1997, this Court referred the case to the Court of Appeals for
appropriate action.
The Court of Appeals docketed the Petition for Certiorari as CA-G.R. SP No.
41042. On 29 July 1997, the Court of Appeals issued the assailed Decision
dismissing the Petition.
Hence, petitioner again comes before this Court via the present Petition for
Review, contending that the Court of Appeals erred in not finding grave abuse of
discretion on the part of the RTC when the latter directed the release of the subject
property from attachment. Petitioner insists that it has a better right to the subject
property considering that: (1) the attachment of the subject property in favor of
petitioner was made prior to the registration of the sale of the same property to
respondent; and (2) respondent availed itself of the wrong remedy in filing with the
RTC, in Civil Case No. D-10583, a Motion to Release Property from Attachment. We
shall discuss ahead the second ground for the instant Petition, a matter of procedure,
since its outcome will determine whether we still need to address the first ground, on
the substantive rights of the parties to the subject property.
Propriety of the Motion to
Release Property from
Attachment
According to petitioner, the Motion to Release Property from Attachment filed by
respondent before the RTC, in Civil Case No. D-10583, is not the proper remedy
under Section 14, Rule 57 of the Rules of Court,[4] which provides:
SEC. 14. Proceedings where property claimed by third
person.If the property attached is claimed by any person other than
 the party against whom attachment had been issued or his agent,
and such person makes an affidavit of his title thereto, or right to
the possession thereof, stating the grounds of such right or title,
and serves such affidavit upon the sheriff while the latter has
possession of the attached property, and a copy thereof upon the
attaching party, the sheriff shall not be bound to keep the property
under attachment, unless the attaching party or his agent, on
demand of the sheriff, shall file a bond approved by the court to
indemnify the third-party claimant in a sum not less than the value
of the property levied upon. In case of disagreement as to such
value, the same shall be decided by the court issuing the writ of
attachment. No claim for damages for the taking or keeping of the
property may be enforced against the bond unless the action
therefor is filed within one hundred twenty (120) days from the date
of the filing of the bond.
The sheriff shall not be liable for damages for the taking or
keeping of such property, to any such third-party claimant, if such
bond shall be filed. Nothing herein contained shall prevent such
claimant or any third person from vindicating his claim to the
property, or prevent the attaching party from claiming damages
against a third-party claimant who filed a frivolous or plainly
spurious claim, in the same or a separate action.
When the writ of attachment is issued in favor of the
Republic of the Philippines, or any officer duly representing it, the
filing of such bond shall not be required, and in case the sheriff is
sued for damages as a result of the attachment, he shall be
represented by the Solicitor General, and if held liable therefor, the
actual damages adjudged by the court shall be paid by the National
Treasurer out of the funds to be appropriated for the purpose.
Petitioner argues that, pursuant to the aforequoted section, the remedy of a
third person claiming to be the owner of an attached property are limited to the
following: (1) filing with the Sheriff a third-party claim, in the form of an affidavit, per the
first paragraph of Section 14; (2) intervening in the main action, with prior leave of
court, per the second paragraph of Section 14, which allows a third person to vindicate
his/her claim to the attached property in the same x x x action; and (3) filing a separate
and independent action, per the second paragraph of Section 14, which allows a third
person to vindicate his/her claim to the attached property in a separate action.
Respondent explains that it tried to pursue the first remedy, i.e., filing a third-
party claim with the Sheriff. Respondent did file an Affidavit of Title and Ownership
with the Sheriff, but said officer advised respondent to file a motion directly with the
RTC in the main case. Respondent heeded the Sheriffs advice by filing with the RTC,
in Civil Case No. D-10583, a Motion to Release Property from Attachment. The Court
of Appeals recognized and allowed said Motion, construing the same as an invocation
by respondent of the power of control and supervision of the RTC over its officers,
which includes the Sheriff.
We agree with the Court of Appeals on this score. The filing by respondent
of the Motion to Release Property from Attachment was made on the advice of the
Sheriff upon whom respondent served its Affidavit of Title and
Ownership. Respondent should not be faulted for merely heeding the Sheriffs advice.
Apparently, the Sheriff, instead of acting upon the third-party claim of respondent on
his own, would rather have some direction from the RTC. Indeed, the Sheriff is an
officer of the RTC and may be directed by the said court to allow the third-party claim
of respondent. Therefore, the filing of the Motion in question can be deemed as a
mere continuation of the third-party claim of respondent, in the form of its Affidavit of
Title and Ownership, served upon the Sheriff, in accord with the first paragraph of
Section 14, Rule 57 of the Rules of Court.
Alternatively, we may also consider the Motion to Release Property from
Attachment, filed by respondent before the RTC, as a Motion for Intervention in Civil
Case No. D-10583, pursuant to the second paragraph of Section 14, Rule 56, in
relation to Rule 19 of the Rules of Court. Respondent, to vindicate its claim to the
subject property, may intervene in the same case, i.e., Civil Case No. D-10583,
instituted by petitioner against the spouses Soliven, in which the said property was
attached. Respondent has the personality to intervene, as it is so situated as to be
adversely affected by a distribution or other disposition of property in the custody of
the court or of an officer thereof.[5] The RTC, in acting upon and granting the Motion to
Release Property from Attachment in its Order dated 9 October 1995, is deemed to
have allowed respondent to intervene in Civil Case No. D-10583.
Moreover, it may do petitioner well to remember that rules of procedure are
merely tools designed to facilitate the attainment of justice. They were conceived and
promulgated to effectively aid the court in the dispensation of justice. Courts are not
slaves to or robots of technical rules, shorn of judicial discretion. In rendering justice,
courts have always been, as they ought to be, conscientiously guided by the norm
that on the balance, technicalities take a backseat to substantive rights, and not the
other way around.Thus, if the application of the Rules would tend to frustrate rather
than promote justice, it is always within the power of the Court to suspend the rules,
or except a particular case from its operation.[6] Hence, even if the Motion to Release
Property from Attachment does not strictly comply with Section 14, Rule 56 of the
Rules of Court, the RTC may still allow and act upon said Motion to render
substantive justice.
This leads us to the substantive issue in this case, on which between the
two transactions should be given priority: the previous yet unregistered sale of the
subject property by the spouses Soliven to respondent, or the subsequent but duly
annotated attachment of the same property by petitioner.
Previous yet unregistered
sale versus subsequent but
duly annotated attachment
Petitioner does not dispute the allegation of respondent that the subject property was
sold by the spouses Soliven to respondent on 18 May 1992, before petitioner
instituted Civil Case No. D-10583 against the spouses Soliven on 15 April 1993; the
RTC ordered the issuance of the Writ of Attachment on 7 May 1993; and the
attachment of the subject property pursuant to the Writ on 27 May 1993.

Neither did petitioner offer evidence to counter the following documents
presented by respondent establishing the fact of the sale of the subject property to
the latter by the spouses Soliven: (1) the notarized Deed of Sale dated 18 May 1992;
(2) BPI Managers Check No. 010685 dated 8 May 1992 in the sum of P42,500.00 to
represent the tender of payment of capital gains tax; (3) BIR Official Receipt No.
0431320 dated 18 May 1992 of BPI Check No. 010625 for the payment of the sum
of P8,5000.00; and (4) a letter dated 11 August 1992 of Manila Missions former
counsel, Lim Duran & Associates, to the Revenue District Officer, District 7, Bureau of
Internal Revenue, relative to its request for the reconsideration/condonation of the
assessment of the capital gains tax on its purchase of the subject property.
Petitioner, however, invokes jurisprudence wherein this Court in a number of
instances allegedly upheld a subsequent but duly annotated attachment, as opposed
to a previous yet unregistered sale of the same property. Petitioner particularly calls
our attention to the following paragraph in Ruiz, Sr. v. Court of Appeals[7]:
[I]n case of a conflict between a vendee and an attaching creditor,
an attaching creditor who registers the order of attachment and the
sale of the property to him as the highest bidder acquires a valid
title to the property, as against a vendee who had previously bought
the same property from the registered owner but who failed to
register his deed of sale. This is because registration is the
operative act that binds or affects the land insofar as third persons
are concerned. It is upon registration that there is notice to the
whole world.
In the more recent case Valdevieso v. Damalerio,[8] we have expounded on
our foregoing pronouncement in Ruiz.
On 5 December 1995, therein petitioner Bernardo Valdevieso (Valdevieso)
bought a parcel of land from spouses Lorenzo and Elenita Uy (spouses Uy), the
registered owners thereof. On 19 April 1996, therein respondents, spouses
Candelario and Aurea Damalerio (spouses Damalario), filed a Complaint against the
spouses Uy for a sum of money before the RTC of General Santos City. On 23 April
1996, the RTC issued a Writ of Preliminary Attachment by virtue of which the subject
parcel of land was levied. The levy was duly recorded in the Register of Deeds, and
annotated on the TCT of the spouses Uy over the subject parcel of land. It was only
on 6 June 1996 that the TCT in the name of the spouses Uy was cancelled, and a
new one issued in the name of Valdevieso. As in the case at bar, the annotation on
the attachment was carried over to Valdeviesos TCT.Valdevieso filed a third-party
claim before the RTC seeking to annul the attachment. In a resolution, the RTC ruled
in Valdeviesos favor, but the Court of Appeals reversed said RTC resolution. On
appeal, we adjudged:
The sole issue in this case is whether or not a registered writ of attachment
on the land is a superior lien over that of an earlier unregistered deed of sale.
xxxx
The settled rule is that levy on attachment, duly
registered, takes preference over a prior unregistered sale. This
result is a necessary consequence of the fact that the property
involved was duly covered by the Torrens system which works
under the fundamental principle that registration is the operative act
which gives validity to the transfer or creates a lien upon the land.
The preference created by the levy on attachment is not
diminished even by the subsequent registration of the prior sale.
This is so because an attachment is a proceeding in rem. It is
against the particular property, enforceable against the whole
world. The attaching creditor acquires a specific lien on the
attached property which nothing can subsequently destroy except
the very dissolution of the attachment or levy itself. Such a
proceeding, in effect, means that the property attached is an
indebted thing and a virtual condemnation of it to pay the owners
debt. The lien continues until the debt is paid, or sale is had under
execution issued on the judgment, or until the judgment is satisfied,
or the attachment discharged or vacated in some manner provided
by law.
Thus, in the registry, the attachment in favor of
respondents appeared in the nature of a real lien when petitioner
had his purchase recorded. The effect of the notation of said lien
was to subject and subordinate the right of petitioner, as purchaser,
to the lien. Petitioner acquired ownership of the land only from the
date of the recording of his title in the register, and the right of
ownership which he inscribed was not absolute but a limited right,
subject to a prior registered lien of respondents, a right which is
preferred and superior to that of petitioner.[9]
It is settled, therefore, that a duly registered levy on
attachment takes preference over a prior unregistered sale.
Nonetheless, respondent argues that there is a special circumstance in the
case at bar, which should be deemed a constructive registration of the sale of the
subject property in its favor, preceding the attachment of the same property by
petitioner.
Knowledge of previous yet
unregistered sale
In Ruiz, the very case cited by petitioner, we made a qualification of the
general rule that a duly annotated attachment is superior to an unregistered prior
sale. In fact, we resolved Ruiz in favor of the vendee in the unregistered prior sale,
because knowledge of the unregistered sale by the attaching creditor is deemed
equivalent to registration. We explained in Ruiz:
But where a party has knowledge of a prior existing interest which is
unregistered at that time he acquired a right to the same land, his
knowledge of that prior unregistered interest has the effect of
registration as to him. Knowledge of an unregistered sale is equivalent to
registration. As held in Fernandez v. Court of Appeals [189 SCRA 780
(1990)],

Section 50 of Act No. 496 (now Sec. 51
of P.D. 1529), provides that the registration of the
deed is the operative act to bind or affect the land
insofar as third persons are concerned. But
where the party has knowledge of a prior existing
interest which is unregistered at the time he
acquired a right to the same land, his knowledge
of that prior unregistered interest has the effect of
registration as to him. The torrens system cannot
be used as a shield for the commission of fraud
(Gustillo v. Maravilla, 48 Phil. 442). As far as
private respondent Zenaida Angeles and her
husband Justiniano are concerned, the non-
registration of the affidavit admitting their sale of a
portion of 110 square meters of the subject land
to petitioners cannot be invoked as a defense
because (K)nowledge of an unregistered sale is
equivalent to registration (Winkleman v. Veluz, 43
Phil. 604).
This knowledge of the conveyance to Honorato Hong can
not be denied. The records disclose that after the sale, private
respondent was able to introduce improvements on the land such
as a concrete two-door commercial building, a concrete fence
around the property, concrete floor of the whole area and G.I.
roofing. Acts of ownership and possession were exercised by the
private respondent over the land. By these overt acts, it can not
therefore be gainsaid that petitioner was not aware that private
respondent had a prior existing interest over the land.[10]
In the case at bar, respondent averred in its Motion to Release Property
from Attachment that the construction of a church edifice on the subject property was
about to be finished at the time the Writ of Preliminary Attachment was implemented
on 24 May 1993, and that the construction of the church was actually completed by
mid-1993.Respondent asserts that since petitioner did not deny these allegations,
much less adduce evidence to the contrary, then the latter tacitly recognized the
construction of the church.
Petitioner contends, on the other hand, that respondent failed to present
evidence to prove the fact that a church had already been constructed on the subject
property by the time the said property was attached, thus, constituting notice to
petitioner of the claim or right of respondent to the same.
Was there, at the time of the attachment, knowledge on the part of petitioner
Rural Bank of the interest of respondent Manila Mission on the subject property?
If the allegation of respondent Manila Mission anent the building of the
chapel even before the issuance of the writ of attachment is true, this case would be
similar to Ruizwhere the vendee of the subject property was able to introduce
improvements. However, respondent Manila Mission presented no evidence of the
building of the chapel other than its bare allegation thereof. More importantly, even
assuming for the sake of argument that the chapel was indeed being built at the time
of the attachment of the property, we cannot simply apply Ruiz and conclude that this
confirms knowledge of a previous conveyance of the property at that time. In Ruiz,
the attaching party was the wife of the vendor of the subject property, whom she sued
for support. It was thus very probable that she knew of the sale of the property to the
vendee therein, considering that the vendee had already introduced improvements
thereon. In the case at bar, there is no special relationship between petitioner Rural
Bank and the spouses Soliven sufficient to charge the former with an implied
knowledge of the state of the latters properties. Unlike in the sale of real property, an
attaching creditor is not expected to inspect the property being attached, as it is the
sheriff who does the actual act of attaching the property.
Neither did respondent Manila Mission present any evidence of knowledge
on the part of petitioner Rural Bank of the prior existing interest of the former at the
time of the attachment. Respondent Manila Mission merely argues that there was a
tacit recognition on the part of petitioner Rural Bank of the construction of the chapel
when the latter did not deny this allegation in its Opposition to the Motion to
Discharge Property from Attachment.
The Motion, however, merely mentions the construction of the chapel and
does not charge petitioner Rural Bank with knowledge of the construction. There was,
therefore, nothing to deny on the part of petitioner Rural Bank, as the mere existence
of such construction at that time would not affect the right of petitioner Rural Bank to
its lien over the subject property. Also, the mention in the Motion of the construction of
the chapel would have the effect of being a notice of an adverse third-party claim only
at the time of such Motion. Since such notice, which was deemed in Ruiz as
constructive registration of the sale, was effected only after the attachment of the
subject property, it could not affect the validity of the attachment lien.
In sum, our decisions in Ruiz v. Court of Appeals and Valdevieso v. Damalerio oblige
us to rule that the duly registered levy on attachment by petitioner Rural Bank takes
preference over the prior but then unregistered sale of respondent Manila
Mission. There was likewise no evidence of knowledge on the part of petitioner Rural
Bank of any third-party interest in the subject property at the time of the
attachment. We are, therefore, constrained to grant the instant Petition for Review
and nullify the Orders of the RTC discharging the subject property from attachment.
Nevertheless, respondent Manila Mission would not be left without remedy. It could
file a counter-bond pursuant to Section 12, Rule 57[11] of the Rules of Court in order to
discharge the attachment. If respondent Manila Mission fails to do the same and the
property ends up being subjected to execution, respondent can redeem the property
and seek reimbursement from the spouses Soliven.
WHEREFORE, the instant Petition for Review on Certiorari is
hereby GRANTED. The Decision dated 29 July 1997 of the Court of Appeals in CA-
G.R. SP No. 41042 affirming the Orders of
the Regional Trial Court of Dagupan City dated 9 October 1995 and 27 February
1996 issued in Civil Case No. D-10583 is hereby REVERSED and SET ASIDE. No
pronouncement as to costs.
SO ORDERED.
G.R. No. 169263 September 21, 2011
CITY OF MANILA, Petitioner,
vs.
MELBA TAN TE, Respondent.
DECISION
PERALTA, J.:
In this Petition for Review,1 the City of Manila assails the April 29, 2005 Decision2 of
the Court of Appeals in CA-G.R. CV No. 71894, as well as the August 12, 2005
Resolution,3 in the said case denying reconsideration.
The assailed decision affirmed the June 13, 2001 Order 4 of the Regional Trial Court of
Manila, Branch 24 issued in Civil Case No. 00-99264 – one for expropriation filed by
petitioner, the City of Manila. The said Order, in turn, granted the motion to dismiss
the complaint that was filed by respondent Melba Tan Te, in lieu of an answer.
The facts follow.
On March 15, 1998, then Manila City Mayor Joselito L. Atienza approved Ordinance
No. 7951 – an expropriation measure enacted on February 3, 1998 by the city council
– authorizing him to acquire by negotiation or expropriation certain pieces of real
property along Maria Clara and Governor Forbes Streets where low-cost housing
units could be built and then awarded to bona fide residents therein. For this purpose,
the mayor was also empowered to access the city’s funds or utilize funding facilities
of other government agencies.5 In the aggregate, the covered property measures
1,425 square meters, and includes the 475-square-meter lot owned by respondent
Melba Tan Te.6
The records bear that respondent had acquired the property from the heirs of
Emerlinda Dimayuga Reyes in 1996, and back then it was being occupied by a
number of families whose leasehold rights had long expired even prior to said sale. In
1998, respondent had sought before the Metropolitan Trial Court of Manila, Branch 15
the ejectment of these occupants from the premises. The favorable ruling in that case
evaded execution; hence, the court, despite opposition of the City of Manila, issued a
Writ of Demolition at respondent’s instance.7 It appears that in the interim between the
issuance of the writ of execution and the order of demolition, the City of Manila had
instituted an expropriation case8 affecting the same property. Respondent had moved
for the dismissal of that first expropriation case for lack of cause of action, lack of
showing of an ordinance authorizing the expropriation, and non-compliance with the
provisions of Republic Act (R.A.) No. 7279, otherwise known as the Urban
Development and Housing Act of 1992.9 The trial court found merit in the motion and
dismissed the complaint without prejudice.10
On November 16, 2000, petitioner11 filed this second Complaint12 for expropriation
before the Regional Trial Court of Manila, Branch 24.13 This time, it attached a copy of
Ordinance No. 7951 and alleged that pursuant thereto, it had previously offered to
purchase the subject property from respondent for ₱824,330.00. 14 The offer was
contained in a letter sent to respondent by the City Legal Officer on May 21,
1999,15 but respondent allegedly failed to retrieve it despite repeated
notices,16 thereby compelling petitioner to institute the present expropriation
proceedings after depositing in trust with the Land Bank of the Philippines
₱1,000,000.00 cash, representing the just compensation required by law to be paid to
respondent.17
Respondent did not file an answer and in lieu of that, she submitted a Motion to
Dismiss18 and raised the following grounds: that Ordinance No. 7951 was an invalid
expropriation measure because it violated the rule against taking private property
without just compensation; that petitioner did not comply with the requirements of
Sections 919 and 1020 of R.A. No. 7279; and that she qualified as a small property
owner and, hence, exempt from the operation of R.A. No. 7279, the subject lot being
the only piece of realty that she owned.
Petitioner moved that it be allowed to enter the property, but before it could be
resolved, the trial court issued its June 13, 2001 Order21 dismissing the
complaint. First, the trial court held that while petitioner had deposited with the bank
the alleged ₱1M cash in trust for respondent, petitioner nevertheless did not submit
any certification from the City Treasurer’s Office of the amount needed to justly
compensate respondent for her property. Second, it emphasized that the provisions of
Sections 9 and 10 of R.A. No. 7279 are mandatory in character, yet petitioner had
failed to show that it exacted compliance with them prior to the commencement of this
suit. Lastly, it conceded that respondent had no other real property except the subject
lot which, considering its total area, should well be considered a small property
exempted by law from expropriation. In view of the dismissal of the complaint,
petitioner’s motion to enter was rendered moot and academic.22
Petitioner interposed an appeal to the Court of Appeals which, finding no merit
therein, dismissed the same.23Petitioner sought reconsideration,24 but it was denied.25
In this Petition,26 petitioner posits that the trial court’s dismissal of its complaint was
premature, and it faults the Court of Appeals for having failed to note that by such
dismissal it has been denied an opportunity to show previous compliance with the
requirements of Sections 9 and 10 of R.A. No. 7279 as well as to establish that
respondent actually owns other realty apart from the subject property. Besides,
continues petitioner, whether or not it had truly complied with the requirements of the
law is a matter which can be determined only after a trial of the case on the merits
and not, as what happened in this case, at the hearing of the motion to dismiss.27
Respondent, for her part, points out that Ordinance No. 7951 is an invalid
expropriation measure as it does not even contain an appropriation of funds in its
implementation. In this respect, respondent believes that the ₱1M cash deposit
certified by the bank seems to be incredible, since petitioner has not shown any
certification from the City Treasurer’s Office on the amount necessary to implement
the expropriation measure. More importantly, she believes that the dismissal of the
complaint must be sustained as it does not allege previous compliance with Sections
9 and 10 of R.A. No. 7279 and, hence, it does not present a valid cause of
action.28 She theorizes that the expropriation for socialized housing must abide by the
priorities in land acquisition and the available modes of land acquisition laid out in the
law, and that expropriation of privately-owned lands avails only as the last
resort.29 She also invokes the exemptions provided in the law. She professes herself
to be a small property owner under Section 3 (q),30 and claims that the subject
property is the only piece of land she owns where she, as of yet, has not been able to
build her own home because it is still detained by illegal occupants whom she had
already successfully battled with in the ejectment court.31
In its Reply, petitioner adopts a different and bolder theory. It claims that by virtue of
the vesture of eminent domain powers in it by its charter, it is thereby not bound by
the requirements of Sections 9 and 10 of R.A. No. 7279. It also asserts its right to
immediately enter the subject property because not only is its complaint supposedly
sufficient in form and substance but also because it has already deposited ₱1M cash
with the bank in trust for respondent. It reiterates that the dismissal of its complaint
constitutes a denial of due process because all the issues propounded by
respondent, initially in her motion to dismiss and all the way in the present appeal,
must be resolved in a full-blown trial.
Prefatorily, the concept of socialized housing, whereby housing units are distributed
and/or sold to qualified beneficiaries on much easier terms, has already been
included in the expanded definition of "public use or purpose" in the context of the
State’s exercise of the power of eminent domain. Said the Court in Sumulong v.
Guerrero,32citing the earlier case of Heirs of Juancho Ardona v. Reyes:33
The public use requirement for a valid exercise of the power of eminent domain is a
flexible and evolving concept influenced by changing conditions.
The taking to be valid must be for public use. There was a time where it was felt that
a literal meaning should be attached to such a requirement. Whatever project is
undertaken must be for the public to enjoy, as in the case of streets or parks.
Otherwise, expropriation is not allowable. It is not anymore. As long as the purpose of
the taking is public, then the power of eminent domain comes into play. x x x The
constitution in at least two cases, to remove any doubt, determines what is public use.
One is the expropriation of lands to be divided into small lots for resale at cost to
individuals. The other is in the transfer, through the exercise of this power, of utilities
and other enterprise to the government. It is accurate to state then that at present
whatever may be beneficially employed for the general welfare satisfies the
requirement of public use.
The term "public use" has acquired a more comprehensive coverage. To the literal
import of the term signifying strict use or employment by the public has been added
the broader notion of indirect public benefit or advantage. x x x
The restrictive view of public use may be appropriate for a nation which circumscribes
the scope of government activities and public concerns and which possesses big and
correctly located public lands that obviate the need to take private property for public
purposes. Neither circumstance applies to the Philippines. We have never been a
laissez-faire state. And the necessities which impel the exertion of sovereign power
are all too often found in areas of scarce public land or limited government resources.
Specifically, urban renewal or development and the construction of low-cost housing
are recognized as a public purpose, not only because of the expanded concept of
public use but also because of specific provisions in the Constitution. x x x The 1987
Constitution [provides]:
The State shall promote a just and dynamic social order that will ensure the prosperity
and independence of the nation and free the people from poverty through policies that
provide adequate social services, promote full employment, a rising standard of living
and an improved quality of life for all. (Article II, Section 9)
The State shall, by law and for the common good, undertake, in cooperation with the
private sector, a continuing program for urban land reform and housing which will
make available at affordable cost decent housing and basic services to
underprivileged and homeless citizens in urban centers and resettlement areas. x xx
In the implementation of such program the State shall respect the rights of small
property owners. (Article XIII, Section 9)
Housing is a basic human need. Shortage in housing is a matter of state concern
since it directly and significantly affects public health, safety, the environment and in
sum, the general welfare. The public character of housing measures does not change
because units in housing projects cannot be occupied by all but only by those who
satisfy prescribed qualifications. A beginning has to be made, for it is not possible to
provide housing for all who need it, all at once.
Population growth, the migration to urban areas and the mushrooming of crowded
makeshift dwellings is a worldwide development particularly in developing countries.
So basic and urgent are housing problems that the United Nations General Assembly
proclaimed 1987 as the "International Year of Shelter for the Homeless" "to focus the
attention of the international community on those problems." The General Assembly is
seriously concerned that, despite the efforts of Governments at the national and local
levels and of international organizations, the driving conditions of the majority of the
people in slums and squatter areas and rural settlements, especially in developing
countries, continue to deteriorate in both relative and absolute terms." [G.A. Res.
37/221, Yearbook of the United Nations 1982, Vol. 36, p. 1043-4]
In light of the foregoing, the Court is satisfied that "socialized housing" falls
within the confines of "public use."34
Congress passed R.A. No. 7279,35 to provide a comprehensive and continuing urban
development and housing program as well as access to land and housing by the
underprivileged and homeless citizens; uplift the conditions of the underprivileged and
homeless citizens in urban areas by making available decent housing at affordable
cost; optimize the use and productivity of land and urban resources; reduce urban
dysfunctions which affect public health, safety and ecology; and improve the
capability of local governments in undertaking urban development and housing
programs and projects, among others.36 Accordingly, all city and municipal
governments are mandated to inventory all lands and improvements within their
respective locality and identify lands which may be utilized for socialized housing and
as resettlement sites for acquisition and disposition to qualified
beneficiaries.37 Section 10 thereof authorizes local government units to exercise the
power of eminent domain to carry out the objectives of the law, but subject to the
conditions stated therein and in Section 9.38
It is precisely this aspect of the law which constitutes the core of the present
controversy, yet this case presents a serious procedural facet – overlooked by both
the trial court and the Court of Appeals – which needs foremost attention ahead of the
issues propounded by the parties.
Expropriation is a two-pronged proceeding: first, the determination of the authority of
the plaintiff to exercise the power and the propriety of its exercise in the context of the
facts which terminates in an order of dismissal or an order of condemnation affirming
the plaintiff's lawful right to take the property for the public use or purpose described
in the complaint and second, the determination by the court of the just compensation
for the property sought to be expropriated.39
Expropriation proceedings are governed by Rule 67 of the Rules of Court. Under the
Rules of Court of 1940 and 1964, where the defendant in an expropriation case
conceded to the plaintiff’s right to expropriate (or where the trial court affirms the
existence of such right), the court-appointed commissioners would then proceed to
determine the just compensation to be paid. 40 Otherwise, where the defendant had
objections to and defenses against the expropriation of his property, he was required
to file a single motion to dismiss containing all such objections and defenses.41
This motion to dismiss was not covered by Rule 15 which governed ordinary motions,
and was then the required responsive pleading, taking the place of an answer, where
the plaintiff’s right to expropriate the defendant’s property could be put in issue.42 Any
relevant and material fact could be raised as a defense, such as that which would
tend to show that the exercise of the power to condemn was unauthorized, or that
there was cause for not taking defendant’s property for the purpose alleged in the
petition, or that the purpose for the taking was not public in character. With that, the
hearing of the motion and the presentation of evidence would follow. The rule is
based on fundamental constitutional provisions affecting the exercise of the power of
eminent domain, such as those that seek to protect the individual property owner from
the aggressions of the government.43 However, the rule, which was derived from the
practice of most American states, proved indeed to be a source of confusion because
it likewise permitted the filing of another motion to dismiss, such as that referred to in
Rule 16, where the defendant could raise, in addition, the preliminary objections
authorized under it.44
The Supreme Court, in its en banc Resolution in Bar Matter No. 803 dated April 8,
1997, has provided that the revisions made in the Rules of Court were to take effect
on July 1, 1997. Thus, with said amendments, the present state of Rule 67 dispenses
with the filing of an extraordinary motion to dismiss such as that required before in
response to a complaint for expropriation. The present rule requires the filing of an
answer as responsive pleading to the complaint. Section 3 thereof provides:
Sec. 3. Defenses and objections. — If a defendant has no objection or defense to the
action or the taking of his property, he may and serve a notice or appearance and a
manifestation to that effect, specifically designating or identifying the property in which
he claims to be interested, within the time stated in the summons. Thereafter, he shall
be entitled to notice of all proceedings affecting the same.
If a defendant has any objection to the filing of or the allegations in the complaint, or
any objection or defense to the taking of his property, he shall serve his answer within
the time stated in the summons. The answer shall specifically designate or identify
the property in which he claims to have an interest, state the nature and extent of the
interest claimed, and adduce all his objections and defenses to the taking of his
property. No counterclaim, cross-claim or third-party complaint shall be alleged or
allowed in the answer or any subsequent pleading.
A defendant waives all defenses and objections not so alleged but the court, in the
interest of justice, may permit amendments to the answer to be made not later than
ten (10) days from the filing thereof. However, at the trial of the issue of just
compensation, whether or not a defendant has previously appeared or answered, he
may present evidence as to the amount of the compensation to be paid for his
property, and he may share in the distribution of the award.45
The defendant in an expropriation case who has objections to the taking of his
property is now required to file an answer and in it raise all his available defenses
against the allegations in the complaint for eminent domain. While the answer is
bound by the omnibus motion rule under Section 8,46 Rule 15, much leeway is
nevertheless afforded to the defendant because amendments may be made in the
answer within 10 days from its filing.1âwphi1 Also, failure to file the answer does not
produce all the disastrous consequences of default in ordinary civil actions, because
the defendant may still present evidence on just compensation.47
At the inception of the case at bar with the filing of the complaint on November 16,
2000, the amended provisions of Rule 67 have already been long in force. Borre v.
Court of Appeals48 teaches that statutes which regulate procedure in the courts apply
to actions pending and undetermined at the time those statutes were passed. And in
Laguio v. Gamet,49 it is said that new court rules apply to proceedings which take
place after the date of their effectivity.
In the case of Robern Development Corporation v. Quitain, 50 a similar motion to
dismiss was filed by the private property owner, petitioner therein, in an expropriation
case filed by the National Power Corporation (NPC), alleging certain jurisdictional
defects as well as issues on the impropriety of the expropriation measure being
imposed on the property. The trial court in that case denied the motion inasmuch as
the issues raised therein should be dealt with during the trial proper. On petition
for certiorari, the Court of Appeals affirmed the trial court’s denial of the motion to
dismiss. On appeal, the Supreme Court affirmed the Court of Appeals, but declared
that under the amended provisions of Section 3, Rule 67, which were already in force
at about the time the motion to dismiss had been submitted for resolution, all
objections and defenses that could be availed of to defeat the expropriator’s exercise
of the power of eminent domain must be contained in an answer and not in a motion
to dismiss because these matters require the presentation of evidence. Accordingly,
while the Court in that case sustained the setting aside of the motion to dismiss, it
nevertheless characterized the order of dismissal as a nullity. Hence, it referred the
case back to the trial court and required the NPC to submit its answer to the
complaint within 10 days from the finality of the decision.

Thus, the trial court in this case should have denied respondent’s motion to dismiss
and required her to submit in its stead an answer within the reglementary period.
This, because whether petitioner has observed the provisions of Sections 9 and 10 of
R.A. No. 7279 before resorting to expropriation, and whether respondent owns other
properties than the one sought to be expropriated, and whether she is actually a small
property owner beyond the reach of petitioner’s eminent domain powers, are indeed
issues in the nature of affirmative defenses which require the presentation of
evidence aliunde.51 Besides, Section 1, Rule 16 of the Rules of Court does not
consider these matters grounds for a motion to dismiss, and an action can be
dismissed only on the grounds authorized by this provision.52

The Court declared in Robern Development Corporation, thus:

Accordingly, Rule 16, Section 1 of the Rules of Court, does not consider as grounds
for a motion to dismiss the allotment of the disputed land for another public purpose
or the petition for a mere easement of right-of-way in the complaint for expropriation.
The grounds for dismissal are exclusive to those specifically mentioned in Section 1,
Rule 16 of the Rules of Court, and an action can be dismissed only on a ground
authorized by this provision.

To be exact, the issues raised by the petitioner are affirmative defenses that should
be alleged in an answer, since they require presentation of evidence aliunde. Section
3 of Rule 67 provides that "if a defendant has any objection to the filing of or the
allegations in the complaint, or any objection or defense to the taking of his property,"
he should include them in his answer. Naturally, these issues will have to be fully
ventilated in a full-blown trial and hearing. It would be precipitate to dismiss the
Complaint on such grounds as claimed by the petitioner. Dismissal of an action upon
a motion to dismiss constitutes a denial of due process if, from a consideration of the
pleadings, it appears that there are issues that cannot be decided without a trial of the
case on the merits.

Inasmuch as the 1997 Rules had just taken effect when this case arose, we believe
that in the interest of substantial justice, the petitioner should be given an opportunity
to file its answer to the Complaint for expropriation in accordance with Section 3, Rule
67 of the 1997 Rules of Civil Procedure.x x x53

WHEREFORE, the Petition is hereby GRANTED. The Order of the Regional Trial
Court of Manila, Branch 24 in Civil Case No. 00-99264 dated June 13, 2001, as well
as the April 29, 2005 Decision of the Court of Appeals in CA-G.R. CV No. 71894
affirming said order, and the August 12, 2005 Resolution therein which denied
reconsideration, are hereby SET ASIDE. The case is hereby REMANDED to the trial
court for further proceedings. Respondent is DIRECTED to file her Answer to the
complaint within ten (10) days from the finality of this Decision.

SO ORDERED.
G.R. No. 120132 December 4, 1995
CRISANTA GALAY, ET AL., petitioners,
vs.
COURT OF APPEALS and VIRGINIA WONG, represented by her Administrator,
ATTY. REYNALDO B. HERNANDEZ, respondents.
FRANCISCO, J.:
In an effort to uplift the living conditions in the poorer sections of the communities in
urban areas, the legislature enacted Republic Act No. 7279 otherwise known as the
"Urban Development and Housing Act of 1992", envisioned to be the antidote to the
pernicious problem of squatting in the metropolis. Nevertheless, the courts continue
to be swamped with cases arising from disputes in the proper implementation of the
aforementioned legislation, particularly on matters involving the eviction, demolition
and resettlement of squatters. The present suit is among such cases.
The instant petition for review on certiorari seeks to annul the decision of respondent
Court of Appeals dated September 20, 1994 in CA-G.R. SP No. 33761 entitled
"Crisanta Galay, et al. vs. Judge Mariano I. Bacalla and Virginia Wong, represented
by her Administrator, Atty. Reynaldo B. Hernandez". Petitioners claim that the assailed
decision was based on an unauthorized compromise agreement to which they never
consented nor had any knowledge thereof.
Material hereto are the following antecedents:
Private respondent Virginia Wong, as represented by her Administrator and Attorney-
in fact, Reynaldo B. Hernandez filed an ejectment suit (Civil Case No. 38-5830)
against herein petitioners, who were alleged to have been illegally occupying private
respondents' 405 square meter lot located in Quezon City which is covered by
Transfer Certificate of Title No. 51589 of the Registry of Deeds of Quezon City.
Although petitioners do not claim ownership over the subject premises, they however
disputed private respondents' claim of ownership and alleged that they have been in
possession of the property in question since 1972 by virtue of the tolerance and
permission of the alleged real owner, Dr. Alejo Lopez.
On August 3, 1992, judgment was rendered by the Metropolitan Trial Court of Quezon
City, Branch 38, ordering the ejectment of the petitioners from the disputed premises.1
Upon appeal to the Regional Trial Court of Quezon City, Branch 83, the decision of
the Metropolitan Trial Court was affirmed in toto.2
Still not satisfied, petitioners proceeded to the Court of Appeals and filed a petition for
review, but the petition was dismissed outright for failure to state the material dates to
show that the petition was filed on time and for not being accompanied by certified
true copies of the disputed decision.3
No further appeal was interposed by petitioner, hence, the judgment became final.
This prompted private respondent to file a Motion for Issuance of an Alias Writ of
Execution which was granted by the Metropolitan Trial Court in its order dated March
25, 1994,4 taking into account that the judgment has already become final and
executory.
In an attempt to prevent the execution of the judgment and their consequent eviction,
petitioners filed a complaint for Injunction with Preliminary Injunction and Temporary
Restraining Order before the Regional Trial Court at Quezon City, Branch
216,5 alleging that herein private respondent must first comply with the mandatory
requirements of Section 28(c) of R.A. 7279 regarding eviction and demolition by court
order.
In its order dated April 5, 1994,6 the lower court denied the prayer for the issuance of
a restraining order as the act sought to be enjoined was pursuant to a lawful order of
the court.
Thereafter, petitioners again sought recourse from the Court of Appeals via Petition
for Certiorari with Preliminary Injunction and Temporary Restraining Order, claiming
that the latter order was tainted with grave abuse of discretion for being arbitrary,
unjust and oppressive, and reiterating that they cannot be evicted unless there is
compliance with Section 28(c) of R.A. 7279.7
On April 28, 1994, respondent Court of Appeals gave due course to the petition and
granted petitioners' prayer for preliminary injunction, enjoining the ejection of
petitioners until further orders from the court.8
On July 18, 1994, counsel for private respondent filed a Motion To Lift And/Or
Dissolve Preliminary Injunction, contending among others that the Urban Poor Affairs
Office [People's Bureau] has already been notified, as mandated by RA 7279, and
that more than 45 days had already lapsed since the notice was made in April, 1994.
Thus, private respondent has substantially complied with the requirements of RA
7279 and therefore the enforcement of the final judgment and ejectment of petitioners
is in order.9 Objecting to private respondent's motion, petitioners argued that RA 7279
requires not only the 45-day notice, but also the relocation of petitioners and the grant
of financial assistance to them prior to their relocation. Furthermore, petitioners
maintain that there is no extreme urgency for petitioners' eviction on account of
private respondent's affluence. 10
The case was subsequently set for hearing and oral argument, after which,
respondent court rendered the assailed decision on September 20, 1994 ordering as
follows:
WHEREFORE, pursuant to RA 7279, the People's Bureau is
hereby ordered to relocate the herein petitioners from subject lot of
private respondent not later than October 30, 1994. Should the
 relocation of petitioners be not finished on or before October 30,
1994, the People's Bureau shall pay petitioners a daily allowance of
P145.00 for every day of delay of relocation but in no case shall
such allowance last for more than sixty (60) days.
Petitioners are hereby ordered to vacate the premises in question
not later than October 30, 1994, on which date the private
respondent shall have the right to take over possession thereof
and, if necessary, to ask for a writ of execution for the
implementation of this disposition. No pronouncement as to costs.
SO ORDERED. 11
On October 25, 1994, a new counsel entered his appearance for petitioners and filed
a motion to set aside the aforequoted decision. 12 As initially mentioned, petitioners
assert that the assailed decision was rendered based on a compromise agreement to
which they never gave their consent nor authorized their former counsel to enter into,
and for which reason said former counsel has withdrawn his appearance as counsel
of record.
Petitioners contend that the judgment of respondent Court of Appeals was indeed
based on a compromise agreement which is evident from the following portions of the
decision:
xxx xxx xxx
When the case was called for hearing on September 14, 1994, as
scheduled, both parties were represented. Atty. Rogelio Directo
stood up for the People's Bureau (Urban Poor Affairs Office). And
the parties, including the said representative of the People's
Bureau, agreed that petitioners herein are all qualified to avail of
the protection and benefits under RA 7279 and through counsel,
manifested their willingness and readiness to be relocated in
accordance with said law. It was likewise agreed by all concerned
that should petitioners be not relocated within the period of 45 days,
from September 15 to October 30, 1994, the People's Bureau shall
pay them an allowance of P145.00, equivalent to the minimum
wage, per day of delay of relocation, until their actual transfer to the
relocation site to be designated for them. It is understood, however,
that the daily allowance for petitioners shall be for a period not
exceeding sixty (60) days, starting October 31, 1994. In other
words, should the delay of relocation of petitioners be for more than
sixty (60) days, they shall only be entitled to the daily allowance of
P145.00 per day of delay of relocation for not more than sixty (60)
days.
It was likewise agreed that on October 31, 1994, whether
petitioners shall have been relocated or not, the private respondent
shall then be entitled to the execution and implementation of this
judgment, and to cause the ejectment of petitioners from subject
property litigated upon. (Emphasis supplied).13
In its Resolution dated May 4, 1995, respondent Court of Appeals denied petitioners'
Motion to Set Aside Decision 14and reiterated that the assailed decision dated
September 20, 1994 was a decision based on the merits and not upon a compromise
agreement.
Hence, the instant petition.
Petitioners adamantly argue that the decision of respondent court dated September
20, 1994 was based on an unauthorized compromise agreement, sans their
knowledge, consent and authority. Additionally, petitioners interpose the following
issues: 1) whether there can be eviction and demolition without actual relocation; 2)
can the petitioners be considered as homeless and underprivileged?; and 3) whose
duty is it to relocate them?
A compromise is a bilateral act or transaction that is expressly acknowledged as a
juridical agreement by the Civil Code. It is defined in Article 2208 of the Code as "a
contract whereby the parties by making reciprocal concessions, avoid a litigation or
put an end to one already commenced". 15 Thus, a judgment upon a compromise is a
judgment embodying a compromise agreement entered into by the parties in which
they make reciprocal concessions in order to terminate a litigation already instituted.16
In the present suit, the assailed decision, far from being a judgment based on a
compromise agreement, is undoubtedly a decision rendered entirely on the merits.
Contrary to petitioners' assertion, the dispositive portion of the decision is very explicit
in exclusively adverting to RA 7279 as the basis for the judgment. Nowhere did it
appear nor can it be inferred therefrom that respondent court's disposition took into
account any agreement or concessions made by the parties that is indicative of a
judgment on a compromise. A scrutiny of the assailed portions of the decision
allegedly embodying the compromise agreement revealed that the same are nothing
but admissions made by the parties intended to clarify the applicable provisions of RA
7279. In fact the said admissions are expressly laid out in Section 28(c) (8) of RA
7279 and thus could not have been the subject of any compromise agreement as the
same are already provided in the law.
Further negating petitioners' contention are the following ratiocinations made by
respondent court in denying the Motion to Set Aside Decision, with which we are in
complete accord:
After a careful study, We find movant's stance barren of merit. Our
Decision promulgated on September 20, 1994 in this case was not
rendered as a Judgment by Compromise. It resolved the petition on
the merits, after the lawyers of the parties and the representative of
the Urban Poor Affairs Office agreed on the applicability of Rep. Act
No. 7279 to petitioner's situation. As a result of such development
of the case, Our judgment granted petitioners more than what they
have came here for. All they prayed for was to hold in abeyance
 execution of subject final and executory Decision of the Quezon
Metropolitan Trial Court, ordering their ejectment; until after the
expiration of forty-five (45) days from date of notice of their
ejectment to the Urban Poor Affairs Office. But the judgment in
question has recognized not only petitioner's right not to be ejected
sans the 45-day notice to the Urban Poor Affairs Office, but also the
right to a daily allowance of P145.00 for each day of delay or
relocation, for a period of not more than sixty (60) days, should
there be a delay in their relocation, as mandated by law.17
Finally, in a desperate move to prolong the execution of the decision ordering their
eviction, petitioners invoke the principle of social justice and plead that as
underprivileged and homeless citizen, their eviction and demolition of their homes
cannot be effected unless there is adequate relocation. Moreover, petitioners maintain
that private respondent is also duty bound to share in the task of relocating them.
The contentions are without merit. It is beyond dispute that the ejectment suit against
petitioners has already been resolved with finality way back on February 16, 1994
when the petitioners' appeal was dismissed outright by the Court of Appeals and they
did not interpose any further appeal therefrom. The subsequent proceedings merely
sought to enforce the decision ordering their ejectment from the disputed premises,
which petitioners however, repeatedly tried to thwart by invoking non-compliance with
Section 28(c) of RA 7279. Thus, upon compliance by private respondent with the
requirements of the aforesaid law, particularly on the notice to the People's Bureau
(Urban Poor Affairs Office) and the expiration of 45 days from said notice, petitioners'
right to remain in the subject lot ceased. Resultingly, petitioners' eviction must now
proceed in accordance with Section 28(c) (8), to wit:
. . . Provided, however, That in cases of eviction and demolition
pursuant to a court order involving underprivileged and homeless
citizens, relocation shall be undertaken by the local government
unit concerned and the National Housing Authority with the
assistance of other government agencies within forty-five (45) days
from service of notice of final judgment by the court, after which
period the said order shall be executed: Provided, further, That
should relocation not be possible within the said period, financial
assistance in the amount equivalent to the prevailing minimum daily
wage multiplied by sixty (60) days shall be extended to the affected
families by the local government unit concerned.
Anent petitioners' claim that private respondent must also share the responsibility of
relocating petitioners, the same is also without any basis. The aforecited provision is
very explicit that the task of relocating the homeless and the underprivileged shall be
the responsibility of the local government unit concerned and the National Housing
Authority with the assistance of the other government agencies. Although private
individuals are not prohibited from taking part in the relocation, there is nothing in the
law either that compels them to undertake such task on a mandatory basis,
otherwise, such obligation should have been included in the provision, either
expressly or impliedly. Thus, petitioners attempt to further burden private respondent
with their relocation is unwarranted.
Equally unpersuasive is petitioners' plea for social justice. In previous cases, this
Court has emphasized that "never is it justified to prefer the poor simply because they
are poor, or to reject the rich simply because they are rich, for justice must always be
served, for poor and rich alike, according to the mandate of the law." 18 In the same
vein, it has been held that "the policy of social justice is not intended to countenance
wrongdoing simply because it is committed by the underprivileged. At best it may
mitigate the penalty but it certainly will not condone the offense. Compassion for the
poor is an imperative of every humane society but only when the recipient is not a
rascal claiming an undeserved privilege." 19
Further militating against petitioners' appeal for compassion is the fact that only
recently, President Ramos himself, in the exercise of his veto power, vetoed a
congress-approved measure 20 intended to extend the moratorium on the demolition
of squatter colonies throughout the country. The President's action was intended to
curtail the negative influences to general growth and development in urban areas
brought about by the problem of squatting and to prevent the legitimate landowners
from being unduly deprived of the immediate use of their properties.
In closing, we find it fitting to advert to the following pronouncements made in the
case of Martires vs. Court of Appeals 21 :
While we sympathize with the millions of our people who are unable
to afford the basic necessity of shelter, let alone the comforts of a
decent home, this sympathy cannot extend to squatting, which is a
criminal offense. Social justice cannot condone the violation of law
nor does it consider that very wrong to be a justification for priority
in the enjoyment of a right. This is what the petitioner wants us to
grant him. But we cannot heed his unjust plea because the rule of
law rings louder in our ears.
WHEREFORE, in view of the foregoing considerations, the instant petition is hereby
DENIED for lack of merit.
SO ORDERED.