SECOND DIVISION
[G.R. No. 129887. February 17, 2000]
TALA REALTY
SERVICES CORPORATION, petitioner, vs. BANCO FILIPINO SAVINGS and
MORTGAGE BANK, respondent.
D E C I S I O N
DE LEON, JR., J.:
Before us is a petition for review of the
Decision[1] of the Court of Appeals dated July 18, 1997,
upholding the dismissal[2] of the complaint for ejectment filed by petitioner
Tala Realty and Services Corp. (hereafter, Tala Realty) against respondent
Banco Filipino Savings and Mortgage Bank (hereafter, Banco Filipino) on the
ground of expiration of monthly lease on a parcel of land with a building
thereon in Poblacion, Urdaneta, Pangasinan where respondent Banco Filipino
established a branch office (hereinafter referred to us the Urdaneta branch).
The subject property is covered by TCT No. 124643 and currently registered in
the name of Banco Filipino.
The General Banking Act[3] regulates the number of branches that a bank may
operate. Under said law, a bank is allowed to own the land and the improvements
thereon used as branch sites but only up to a maximum of fifty percent (50%) of
its net worth.
In 1979, private respondent Banco Filipino
had reached the allowable limit in branch site holdings but contemplated
further expansion of its operations. Consequently, it unloaded some of its
holdings to petitioner Tala Realty. Banco Filipino thereafter leased the same
branch sites from Tala Realty which was conceived and organized precisely as a
transferee corporation by the major stockholders[4] of respondent Banco Filipino.
The board of directors of respondent Banco
Filipino authorized negotiations for the sale of some of its branch sites to
petitioner Tala Realty, through Board Resolutions dated February 20, 1979,
April 17, 1979 and August 18, 1981.
On August 25, 1981, respondent Banco
Filipino sold eleven (11) of its branch sites to petitioner Tala Realty; in the
process it executed eleven (11) separate deeds of sale. The Urdaneta branch was
among those sold to Tala Realty.
On the same date, Tala Realty and Banco
Filipino executed contracts of lease covering all the branch sites subject of
the sale.
Private respondent Banco Filipino asserts
ownership over the Urdaneta branch as well as the other branches conveyed to
petitioner Tala Realty. It commenced an action in the Securities and Exchange
Commission (SEC) for the reconveyance of said branches on the ground that Tala
Realty is a mere trustee of the bank. The present controversy, however, stems
from an ejectment case filed by Tala Realty against Banco Filipino when they disagreed
over the period of their lease agreement covering the Urdaneta branch.
Private respondent Banco Filipino relies on
a lease contract with a twenty (20)-year term renewable for another period of
twenty (20) years while petitioner Tala Realty claims that the lease is covered
by an eleven (11)-year term renewable for another period of nine (9) years.
Except for the term of the lease, the two contracts are essentially identical
in their terms and conditions. Both contracts were executed on August 25, 1981
with the payment of rentals commencing on September 1, 1981. Tala Realty
insists that the eleven (11)-year lease contract amended the twenty (20)-year
lease contract.
Since petitioner Tala Realty’s eleven
(11)-year contract allegedly expired in August 1992, it claims to have extended
the lease on a month-to-month basis under the rental rates of the expired
eleven (11)-year contract. It tried to negotiate with private respondent Banco
Filipino to increase the amount of rent in a letter dated February 10, 1993.
Aside from increased rents, the letter proposed conditions on the payment of
goodwill, deposit, rental escalation and advance rental.
On June 22, 1993, petitioner Tala Realty
informed private respondent Banco Filipino that the new rates will be retroactive
to September 1, 1992[5].
Banco Filipino must have found such terms
unreasonable, prompting it to reject the letter proposal. Tala Realty reacted
by sending a letter dated April 14,1994 with the following tenor: (1) that at
the end of April, the lease contract will not be renewed; (2) that Banco
Filipino must pay the unpaid rentals; and (3) that it had until April 30,1994
to vacate the premises in case of failure to pay said rentals. Banco Filipino
did not comply with such demands.
Consequently, on November 22, 1994
petitioner Tala Realty filed an ejectment case[6] in the Municipal Trial Court (MTC) of Urdaneta,
Pangasinan against private respondent Banco Filipino with a prayer for the
payment of unpaid rents in the amount of P632,985.00 as of September 30,1994.
The MTC dismissed the case upon finding Tala
Realty’s lease contract with an eleven (11)-year term, to be spurious and thus
inexistent. It held that Banco Filipino’s lease contract with a twenty
(20)-year term was valid and subsisting, making legitimate and effective its
possession of the Urdaneta branch site.
Petitioner Tala Realty appealed[7] the MTC decision to the Regional Trial Court (RTC),
which, however, affirmed the same. Tala Realty also elevated its cause[8] to the Court of Appeals, but it was similarly
rebuffed in the decision of the appellate court dated July 18, 1997.
Hence, this petition. The following issues,
"I. THE
HONORABLE COURT OF APPEALS ERRED IN LAW IN DECIDING MATTERS EXTRANEOUS TO
ISSUES IN EJECTMENT SUITS;
II. THE HONORABLE
COURT OF APPEALS MISINTERPRETED AND MISAPPLIED THE REFUGIA v. COURT OF APPEALS
CASE;
III. THE HONORABLE
COURT OF APPEALS COMMITTED NUMEROUS ERRORS IN LAW IN RELYING ON A SUPERSEDED
LEASE CONTRACT AND DISREGARDING AMENDMENT THERETO;
IV. THE HONORABLE
COURT OF APPEALS MANIFESTLY OVERLOOKED CERTAIN RELEVANT FACTS NOT DISPUTED BY
THE PARTIES AND WHICH, IF PROPERLY CONSIDERED, WOULD JUSTIFY A DIFFERENT
CONCLUSION; [and]
V. THE HONORABLE
COURT OF APPEALS COMMITTED AN ERROR IN LAW IN NOT HOLDING THAT RESPONDENT
FAILED TO PUT UP ANY VALID DEFENSE TO THE COMPLAINT FOR EJECTMENT."[9]
raised by petitioner Tala Realty, however,
do not convince this Court. The petition must be as it is hereby denied.
First. Petitioner Tala Realty contends that the municipal trial court has no
jurisdiction to decide the issue of ownership in an ejectment case.
Nothing is more settled than the rule that
ejectment is solely concerned with the issue of physical or material possession
of the subject land or building. However, if the issue of possession depends on
the resolution of the issue of ownership which is sufficiently alleged in the
complaint, the municipal trial court may resolve the latter[10] although the resulting judgment would be conclusive
only with respect to the possession but not the ownership of the property[11].
In the instant case, the issue of ownership
was not even addressed, there being no need to do so as the ejectment case
hinged on the question concerning the two (2) lease contracts of the contending
parties.
Second. Petitioner Tala Realty insists that its eleven (11)-year lease
contract controls. We agree with the MTC and the RTC, however, that the eleven
(11)-year contract is a forgery because (1) Teodoro O. Arcenas, then Executive
Vice-President of private respondent Banco Filipino, denied having signed the
contract; (2) the records of the notary public who notarized the said contract,
Atty. Generoso S. Fulgencio, Jr., do not include the said document; and (3) the
said contract was never submitted to the Central Bank as required by the
latter’s rules and regulations[12].
Clearly, the foregoing circumstances are
badges of fraud and simulation that rightly make any court suspicious and wary
of imputing any legitimacy and validity to the said lease contract.
Executive Vice-President Arcenas of private
respondent Banco Filipino testified that he was responsible for the daily
operations of said bank. He denied having signed the eleven (11)-year contract
and reasoned that it was not in the interest of Banco Filipino to do so[13]. That fact was corroborated by Josefina C. Salvador,
typist of Banco Filipino’s Legal Department, who allegedly witnessed the said
contract and whose initials allegedly appear in all the pages thereof. She
disowned the said marginal initials.[14]
The Executive Judge of the RTC supervises a
notary public by requiring submission to the Office of the Clerk of Court of
his monthly notarial report with copies of acknowledged documents thereto
attached. Under this procedure and requirement of the Notarial Law, failure to
submit such notarial report and copies of acknowledged documents has dire
consequences including the possible revocation of the notary’s notarial
commission.
The fact that the notary public who
notarized petitioner Tala Realty’s alleged eleven (11)-year lease contract did
not retain a copy thereof for submission to the Office of the Clerk of Court of
the proper RTC militates against the use of said document as a basis to uphold
petitioner’s claim. The said alleged eleven (11)-year lease contract was not
submitted to the Central Bank whose strict documentation rules must be complied
with by banks to ensure their continued good standing. On the contrary, what
was submitted to the Central Bank was the twenty (20)-year lease contract.
Granting arguendo that private
respondent Banco Filipino deliberately omitted to submit the eleven (11)-year
contract to the Central Bank, we do not consider that fact as violative of the res
inter alios acta aliis non nocet[15] rule in evidence. Rather, it is an indication of said
contract’s inexistence.
It is not the eleven (11)-year lease
contract but the twenty (20)-year lease contract which is the real and genuine
contract between petitioner Tala Realty and private respondent Banco Filipino.
Considering that the twenty (20)-year lease contract is still subsisting and
will expire in 2001 yet, Banco Filipino is entitled to the possession of the
subject premises for as long as it pays the agreed rental and does not violate
the other terms and conditions thereof[16].
Finally. Petitioner Tala Realty contends that private respondent Banco Filipino
must also be ejected for non-payment of rental. There is no dispute, however,
that the unpaid rentals demanded by Tala Realty are based on a new rate which
it unilaterally imposed and to which Banco Filipino did not agree.
Incidentally, it also appeared that although
the parties had started negotiating for a new rental rate, the records show
that no new agreement materialized. The rights and obligations of the
petitioner, as lessor, and the respondent, as lessee, continue to be governed
by the twenty (20)-year lease contract.
WHEREFORE, the instant petition is hereby DISMISSED. Costs
against petitioner.
SO ORDERED.
Bellosillo, (Chairman), Mendoza, and Quisumbing JJ., concur.
Buena, J., on leave.
[1] Penned by Associate Justice Ruben T. Reyes and concurred in by Associate Justices Fermin A. Martin and Omar U. Amin, Rollo, pp. 367-388.
[2] By the Municipal Trial Court of Urdaneta, Pangasinan, in a decision penned by Judge Orlando Ana F. Siapno dated July 17, 1995, in Civil Case No. 4099, Rollo, pp. 257-263. This was appealed to the Regional Trial Court of Urdaneta, Pangasinan, Branch 46, presided by Judge Joven F. Costales, who, in turn, dismissed the appeal in a decision dated January 22, 1996.
[3] Republic Act No. 337; Sections 25 and 34 of which
provides, viz.:
"Sec. 25. Any commercial bank may
purchase, hold and convey real estate for the following purposes:
(a) such as shall be necessary for its
immediate accommodation in the transaction of its business: Provided, however,
that the total investment in such real estate and improvements thereof,
including bank equipment, ,shall not exceed fifty percent (50%) of net worth
xxx xxx."
"Sec. 34. Savings and mortgage bank may purchase, hold and convey real estate under the same conditions as those governing commercial banks as specified in Section twenty-five of this Act."
[4] Antonio Tiu, Tomas B. Aguirre, Nancy Ty and Pedro B. Aguirre.
[5] Decision of the Municipal Trial Court, p. 1, Rollo, p. 257.
[6] Docketed as Civil Case No. 4097.
[7] Docketed as Civil Case No. U-6024.
[8] Docketed as CA-G.R. SP No. 40524.
[9] Petition dated August 13, 1997, pp. 10-11, Rollo, pp. 16-17.
[10] Refugia v. Court of Appeals, 258 SCRA 347,366 (1996).
[11] Sec. 18, Rule 70, 1997 Rules of Civil Procedure.
[12] Rollo, pp. 383-384.
[13] Rollo, p. 384.
[14] Id., p. 385.
[15] Section 28, Rule 130, Revised Rules of Court provides,
viz.:
"Sec. 28. Admission by third party – The
rights of a party cannot be prejudiced by an act, declaration, or omission of
another, except as hereinafter provided.";
Compania General de Tabacos v Ganson 13 Phil. 472,477 (1909).
[16] Art. 1673, New Civil Code.