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Ophelia Tuatis v. Spouses Eliseo and Visminda Escol; Court of Appeals, RTC Branch 11, Sindangan, Zamboanga Del Norte and its Sheriff Facts: • Tuatis filed a Complaint for Specific Performance against respondent Visminda alleging that sometime in November 1989, Visminda as seller and Tuatis as buyer entered into a Deed of Sale of a Part of a Registered Land by Installment upon a piece of real property located at Poblacion, Sindangan, Zamboanga Del Norte, with an area of 300 square meters more or less, for and in consideration of P10,000. • The said of Deed of Sale stated the schedule of payments to be made by Tuatis in the following wise: P3000 as downpayment, P4000 on/before 31 December 1989 and P3000 on/before 31 January 1990. In No. 4 of the stipulations in the Deed of Sale, it was stated that should Tuatis fail to pay the remaining balance within the period of three months from the period stipulated in the contract, she shall return the land to Visminda who, in turn, shall return all the amounts paid thus far. • Tuatis claimed that she has paid P3000 as downpayment, another P3000 on 19 December 1989, P1000 on 27 February 1990 and the remaining P3000 in the presence of Eric Selda, a clerk in the law office of one Atty. Selda evidenced by a certification executed by Eric on 26 May 1996. In the meantime, Tuatis already took possession of the subject property and constructed a residential building thereon. • In 1996, Tuatis requested Visminda to sign a prepared absolute deed of sale but the latter refused contending that the purchase price had not yet been fully paid. Tuatis contended that Visminda failed and refused to sign the absolute deed of sale without any valid reason. Visminda countered that except for the downpayment and the P1000 installment paid to her, Tuatis made no other payments despite repeated verbal demands upon the latter. • The RTC rendered a decision in Visminda’s favor stating that No. 4 of the stipulations applies in this case because the evidence shows that the price had not been fully paid. The RTC further stated that Tuatis constructed the building in bad faith because she knew that Visminda was still the absolute owner of the land. On the other hand, Visminda was also in bad faith because she allowed Tuatis to construct the said building and occupy it without any opposition on her part; hence, the rights of the parties are governed by Art. 448 1 of the Civil Code. The RTC decreed the dismissal of Tuatis’ Complaint for lack of 1 Art 448: “The owner of the land on which anything has been built, sown or planted in good faith, shall have the right to appropriate as his own the works, sowing or planting, after payment of the indemnity provided for in articles 546 and 548, or to oblige the one who built or planted to pay the price of the land, and the one who sowed, the proper rent. However, the builder or planter cannot be obliged to buy the land if its value is considerably more than that of the building or trees. In such case, he shall pay reasonable rent, if the owner of the land does not choose to appropriate the building or trees after proper indemnity. The parties shall agree upon the terms of the lease and in case of disagreement, the court shall fix the terms thereof. (361a)

063. Tuatis v Escol.doc

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Ophelia Tuatis v. Spouses Eliseo and Visminda Escol; Court of Appeals, RTC Branch 11, Sindan-gan, Zamboanga Del Norte and its Sheriff

Facts:

• Tuatis filed a Complaint for Specific Performance against respondent Visminda alleging that sometime in November 1989, Visminda as seller and Tuatis as buyer entered into a Deed of Sale of a Part of a Regis-tered Land by Installment upon a piece of real property located at Poblacion, Sindangan, Zamboanga Del Norte, with an area of 300 square meters more or less, for and in consideration of P10,000.

• The said of Deed of Sale stated the schedule of payments to be made by Tuatis in the following wise: P3000 as downpayment, P4000 on/before 31 December 1989 and P3000 on/before 31 January 1990. In No. 4 of the stipulations in the Deed of Sale, it was stated that should Tuatis fail to pay the remaining balance within the period of three months from the period stipulated in the contract, she shall return the land to Vis-minda who, in turn, shall return all the amounts paid thus far.

• Tuatis claimed that she has paid P3000 as downpayment, another P3000 on 19 December 1989, P1000 on 27 February 1990 and the remaining P3000 in the presence of Eric Selda, a clerk in the law office of one Atty. Selda evidenced by a certification executed by Eric on 26 May 1996. In the meantime, Tuatis already took possession of the subject property and constructed a residential building thereon.

• In 1996, Tuatis requested Visminda to sign a prepared absolute deed of sale but the latter refused contend-ing that the purchase price had not yet been fully paid. Tuatis contended that Visminda failed and refused to sign the absolute deed of sale without any valid reason. Visminda countered that except for the downpay-ment and the P1000 installment paid to her, Tuatis made no other payments despite repeated verbal de-mands upon the latter.

• The RTC rendered a decision in Visminda’s favor stating that No. 4 of the stipulations applies in this case because the evidence shows that the price had not been fully paid. The RTC further stated that Tuatis con-structed the building in bad faith because she knew that Visminda was still the absolute owner of the land. On the other hand, Visminda was also in bad faith because she allowed Tuatis to construct the said building and occupy it without any opposition on her part; hence, the rights of the parties are governed by Art. 4481 of the Civil Code. The RTC decreed the dismissal of Tuatis’ Complaint for lack of merit, the return by Tuatis of physical possession of the subject property to Visminda, and the return by Visminda of the P4,000.00 she re-ceived from Tuatis.

• Tuatis raised the case on appeal to the CA. However, the CA dismissed the appeal for failure of Tuatis to serve and file her appellant’s brief within the period allowed. The RTC decision became final and executory. Visminda then filed a Motion for Issuance of Writ of Execution before the RTC which was granted.

• Tuatis thereafter filed before the RTC a Motion to Exercise Right under Article 448 of the Civil Code praying that the RTC issue an order allowing her to buy the subject property from Visminda opining that while she in-deed have the obligation to pay the price of the property, such should not be imposed if the value of the property was considerably more than the value of the building constructed thereon. She alleged that her building was valued at P502,073 while the entire 4.0144 hectare land of which the subject 300 square meter property was a part was only about P27,000. Tuatis maintained that she then had the right to choose be-tween being indemnified for the value of her residential building or buying the parcel of land.

• The Writ of Execution earlier granted was enforced prompting Tuatis to file with the CA a Petition for Certio-rari, Prohibition and Mandamus seeking the annulment of the order granting the Writ of Execution. The CA dismissed outright Tuatis’ petition for failure to completely pay the required docket fees, to attach a certified true or authenticated copy of the assailed RTC Order and to indicate the place of issue of her counsel’s IBP and PTR Official Receipts. Tuatis’ Motion for Reconsideration and Motion for Leave to File a Second Motion for Reconsideration were likewise denied by the CA. Hence, the instant petition principally arguing that Art. 448 must be applied in this case.

1 Art 448: “The owner of the land on which anything has been built, sown or planted in good faith, shall have the right to appropriate as his own the works, sowing or planting, after payment of the indemnity provided for in articles 546 and 548, or to oblige the one who built or planted to pay the price of the land, and the one who sowed, the proper rent. However, the builder or planter cannot be obliged to buy the land if its value is con-siderably more than that of the building or trees. In such case, he shall pay reasonable rent, if the owner of the land does not choose to appropriate the building or trees after proper indemnity. The parties shall agree upon the terms of the lease and in case of disagreement, the court shall fix the terms thereof. (361a)

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Preliminary Procedural Issue: Did the CA act with grave abuse of discretion amounting to lack or excess of jurisdiction in dismissing outright her petition and, likewise, her subsequent motions for reconsideration/motion for leave to file a second motion for reconsideration? (Yes)

Principal Issue: Should Art. 448 be applied in the instant case? (Yes)

Ruling and Reasoning: Petition granted; RTC Resolution granting the Writ of Execution, the Writ itself and the actions undertaken by the respondent Sheriff to enforce the Writ are annulled and set aside; RTC is di-rected to conduct further proceedings to determine the proper application of Art. 448 upon Visminda Escol’s choice of option under the same provision.

Tuatis’ procedural/technical lapses must be excused

• It is true that Tuatis committed several procedural mistakes violative of Sec. 3, Rule 46 of the Rules of Court that would have, ordinarily, warranted the dismissal of her Petition before the CA. However, while the last paragraph of the said Section states that non-compliance with any of the requirements set forth therein shall constitute sufficient ground for the dismissal of the petition, the Court said that it doesn’t mean that dis-missal is automatic in each instance of non-compliance.

• Rules of procedure are intended to promote, rather than frustrate the ends of justice. It is a far bet-ter and more prudent course of action for the court to excuse a technical lapse and afford the parties a review of the case on appeal to attain the ends of justice rather than dispose of the case on techni-cality and cause a grave injustice to the parties.

• In this case, the Court finds that the Court of Appeals committed grave abuse of discretion in focus-ing on the procedural deficiencies of Tuatis’ Petition and completely turning a blind eye to the merits of the same. The peculiar circumstances of the present case and the interest of substantial justice justify the setting aside, pro hac vice, of the procedural defects of Tuatis’ Petition

Article 448 must be applied

• The court noted that while the RTC stated that the rights of the parties in this case are governed by Art. 448, the dispositive of its decision failed to make an adjudication on their rights under the said provision. The decretal part of the judgment was limited to implementing No. 4 of the stipulations in the Deed of Sale by or-dering Tuatis to return physical possession of the land and Visminda to return the P4000 she received as payment.

• Despite the fact that the aforementioned decision had already become final and executory, the court stated that where there is an ambiguity caused by an omission or a mistake in the dispositive portion of the deci-sion, the Court may clarify such an ambiguity by an amendment even after the judgment has become final. Therefore, even after the RTC Decision dated 29 April 1999 had already become final and executory, this Court cannot be precluded from making the necessary amendment thereof, so that the fallo will conform to the body of the said decision. The court stressed that is is not changing or reversing any findings of fact and law of the RTC decision; that it is simply clarifying the obviously deficient decretal portion of the decision.

• Taking into consideration the provisions of the Deed of Sale by Installment and Article 448 of the Civil Code, Visminda has the following options:

• Under the first option, Visminda may appropriate for herself the building on the subject property after indemnifying Tuatis for the necessary and useful expenses the latter incurred for said building, as provided in Article 546 of the Civil Code. In Pecson v. CA, the Court pronounced that the amount to be refunded to the builder under Art. 546 should be the current market value of the improvement in order to prevent unjust enrichment. Until Visminda appropriately indemnifies Tuatis for the building constructed by the latter, Tuatis may retain possession of the building and the subject property.

• Under the second option, Visminda may choose not to appropriate the building and, instead, oblige Tuatis to pay the present or current fair value of the land. The P10,000.00 price of the subject property, as stated in the Deed of Sale on Installment executed in November 1989, shall no longer

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apply, since Visminda will be obliging Tuatis to pay for the price of the land in the exercise of Vis-minda’s rights under Article 448 of the Civil Code, and not under the said Deed.

• Still under the second option, if the present or current value of the land, the subject property herein, turns out to be considerably more than that of the building built thereon, Tuatis cannot be obliged to pay for the subject property, but she must pay Visminda reasonable rent for the same. Visminda and Tuatis must agree on the terms of the lease; otherwise, the court will fix the terms.

• Necessarily, the RTC should conduct additional proceedings. Initially, the RTC should determine which of the aforementioned options Visminda will choose. Subsequently, the RTC should ascertain: (a) under the first option, the amount of indemnification Visminda must pay Tuatis; or (b) under the second option, the value of the subject property vis-à-vis that of the building, and depending thereon, the price of, or the reason-able rent for, the subject property, which Tuatis must pay Visminda.

• There is no basis for Tuatis’ demand that, since the value of the building she constructed is considerably higher than the subject property, she may choose between buying the subject property from Visminda and selling the building to Visminda for P502,073.00. The court highlighted that the options under Art. 448 are available to Visminda as the owner of the property.

• The rule that the choice under Art. 448 belongs to the owner of the land is in accord with the principle of accession, i.e., that the accessory follows the principal and not the other way around. Even as the option lies with the landowner, the grant to him, nevertheless, is preclusive. The landowner cannot refuse to exercise either option and compel instead the owner of the building to remove it from the land.