Republic
of the
Supreme Court
SECOND DIVISION
|
REPUBLIC OF THE Petitioners, - versus - EMILIO G. LA’O, Respondent. |
|
G.R. No. 141941 Present: PUNO, J., Chairman* SANDOVAL-GUTIERREZ,** AZCUNA, and GARCIA, JJ. Promulgated: May 4, 2006 |
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D E C I S I O N
GARCIA, J.:
In this petition
for review,[1]
petitioners Republic of the Philippines, the Office of the Government Corporate
Counsel and the Government Service Insurance System seek the reversal of the Decision[2]
and Resolution[3] dated
September 30, 1998 and February 02, 2000, respectively, of the Court of Appeals
(CA) in CA-G.R. SP No.44348, affirming
an earlier decision[4]
of the Regional Trial Court of Manila, in its Civil Case No. 95-72874, which in
turn affirmed the decision[5] dated
December 5, 1994 of the Metropolitan Trial Court of Manila in an ejectment suit
thereat commenced by herein respondent Emilio G. La’o against the petitioners.
Involved in the
controversy are three (3) parcels of land registered in the name of the Government Service Insurance System (GSIS)
under Transfer of Certificate of Title (TCT) No. 108252 of the Registry of
Deeds of Manila and the five-storey
Government Corporate Counsel Centre (Centre, for brevity) standing thereon. The
property in question is located at the corner of Mabini/Arquiza Sts., Ermita,
On May 10, 1982, another lease-purchase agreement[7]
(the second Agreement, hereafter) involving the same property was executed,
this time between and among the GSIS, as owner, the Republic and the herein respondent
Emilio La’o, as buyer, wherein the Republic waived its rights under the RP-GSIS
Agreement. The following are among the
salient provisions of the second Agreement:
1. The cancellation of
the RP-GSIS Agreement effective upon approval of the second Agreement by the
President of the
2. GSIS shall sell the Centre to La’o for P2
Million, P200,000.00 down and the balance payable in 15 annual installments
with interest and giving La’o the right to take immediate possession of the Centre’s
ground floor and to sublease the same; and
3.
In consideration of the waiver thus given by the Republic, GSIS and La’o would allow
the OGCC to lease the second to fifth floors of the Centre and the rear parking
area “at the rental rate of P100,000.00 a year, until the GSIS shall have
completed the construction of a new building at the Manila Bay reclaimed area
or made available acquired property of GSIS acceptable to the OGCC” (Lease
Agreement, Annex “B”, Rollo, p.65). The
term of the lease shall be at least five (5) years from the effectivity of the
agreement renewable for another two (2) years at the Republic’s option.
Pursuant to the second
Agreement, respondent La’o paid the GSIS the 1982 to 1987 installments. For its part, the OGCC, for the Republic, paid
La’o the agreed monthly rentals of P8,333.33, the last payment of which
was, per records, for the month of
As later
developments show, the Republic did not manifest its intent to exercise its option
to extend the agreed five (5) year lease on the Centre, which was to terminate
on
Following the
OGCC’s refusal, despite demand, to pay its monthly rental obligations and to
vacate the premises, respondent La’o filed an ejectment suit against the herein
petitioners before the Metropolitan Trial Court (MeTC) of
For its part,
petitioner OGCC asseverates that the second lease-agreement has no force and
effect, not having been formally approved by the President of the
In a Decision
dated
WHEREFORE, judgment is hereby rendered in favor of the plaintiff [La’o] ordering:
1. defendants GSIS, Republic thru GSIS and all other occupants claiming right under them to vacate the aforesaid leased premises, and surrender possession thereof to plaintiff [La’o];
2. defendants the Republic thru OGCC to pay the monthly rent of P8,333.33 reckoned from February 1987 until they vacate the leased premises;
3. defendants the Republic thru OGCC to pay plaintiff [La’o] attorney’s fees in the amount of P20,000.00; and the costs of the suit; and
4. the counterclaims of defendants GSIS and the Republic thru OGCC are dismissed for lack of merit.[11] (Words in bracket added.)
On appeal, the RTC
of Manila, Branch 29, in its Decision of
In the herein assailed
decision dated
WHEREFORE,
the instant petition for review is hereby DENIED for lack of merit. The
decision of the Regional Trial Court, Branch 29,
SO ORDERED.[12]
In time,
petitioners moved for reconsideration but their motion was denied by the CA in
its equally assailed Resolution of
I
xxx WHEN IT
RULED/AFFIRMED THAT THE MeTC HAS JURISDICTION OVER THE INSTANT CASE DESPITE THE
FACT THAT THERE WAS NO VALID DEMAND LETTER TO VACATE AS REQUIRED BY … THE
REVISED RULES OF COURT.
II
xxx WHEN IT
RULED/AFFIRMED THAT RESPONDENT HAS A CAUSE OF ACTION AGAINST PETITIONERS
DESPITE THE FACT THAT: A) RESPONDENT AGREED TO ALLOW PETITIONER OGCC TO
CONTINUE OCCUPYING THE SUBJECT PREMISES UNTIL A NEW BUILDING SHALL HAVE BEEN
CONSTRUCTED IN THE MANILA BAY RECLAIMED AREA BY PETITIONER GSIS FOR PETITIONER OGCC;
xxx.
III
xxx WHEN IT
RULED/AFFIRMED THE VALIDITY OF THE SECOND LEASE-PURCHASE AGREEMENT DATED MAY
10, 1982, DESPITE THE FACT THAT SAID LEASE-PURCHASE AGREEMENT IS GROSSLY
DISADVANTAGEOUS TO THE GOVERNMENT.[13]
Petitioners, with respect
to their third
assignment of error,
stated the observation that the
RTC of Manila,
Branch 41, per its Decision dated
September 14, 1998 in Civil Case No. 89-48662
had already struck down
the second lease-purchase
agreement as a nullity ab initio,
the same being
prohibited by law, giving as it did respondent La’o unwarranted benefits or is
grossly disadvantageous to the
government. Attached as “Annex “H”[14]
of the Petition is a copy of the
It cannot be
overemphasized that respondent’s right to physical possession as an incident to
his claim of ownership over the property in question and the corresponding duty
of petitioners to respect such right
hinges on the validity of the second Agreement, subject of Civil Case No. 89-48662. Valid,
and assuming that the full lease-purchase price has been paid, the second
Agreement invests respondent with dominion over the Centre and all rights
flowing from ownership. If invalid, then
respondent has absolutely nothing to support his claim of ownership and his
right to physical and de jure possession
thereof.
As it were,
the September 14, 1998 Decision of the Manila RTC in Civil Case No. 89-48662 was affirmed in toto by the CA per its Decision of June 27, 2003, as reiterated
in a resolution of November 10, 2003, in CA-G.R. CV No. 62580. Therefrom, respondent went to this Court on a
petition for review in G.R. No. 160719 entitled “Emilio Gonzales La’o v. Republic of the
The
foregoing clearly shows that the second [lease-purchase] contract caused undue
injury to the government, gave [respondent La’o] unwarranted benefits and was
grossly disadvantageous to the government. The disquisition of the CA is
sufficiently exhaustive and convincing considering that in civil cases like
this one, the party with the burden of proof (in this case, the respondents
[Republic, et al.] needs only to
establish its case by a preponderance of evidence.
The act of entering into the second contract was a
corrupt practice and was therefore unlawful. It was a contract expressly
prohibited by RA 3019. As a result, it was null and void from the beginning
under Art 1409(7) of the Civil Code. (Words in bracket added; citations
omitted.)
In net effect, the underlying
ejectment suit filed
by the respondent can no longer prosper,
his right of
action being anchored on a contract which, for
all intents and purposes,
has no legal
existence and effect
from the start.
A void or
inexistent contract is equivalent
to nothing; it is
absolutely wanting in civil effects; it cannot
be the basis
of actions to enforce
compliance.[15] So it must be
for the second Agreement.
Given the
foregoing perspective, there is hardly any need to delve further on the issues
tendered in this recourse.
WHEREFORE, the instant petition is hereby GRANTED. Accordingly, the assailed decision
and resolution dated September 30, 1998 and February 02, 2002 of the Court of
Appeals in CA-G.R. No. SP No. 44348 are
NULLIFIED and SET ASIDE. The basic complaint of respondent Emilio G. La’o for ejectment
is accordingly DISMISSED.
SO ORDERED.
CANCIO C. GARCIA
Associate Justice
WE
CONCUR:
(On Leave)
REYNATO S. PUNO
Associate Justice
Chairperson
|
ANGELINA SANDOVAL-GUTIERREZ Associate Justice |
RENATO C. CORONA Associate Justice |
ADOLFO S. AZCUNA
Associate Justice
A T T E S T A T I O N
I attest that the conclusions in the
above decision were reached in consultation before the case was assigned to the
writer of the opinion of the Court’s Division.
ANGELINA SANDOVAL-GUTIERREZ
Associate Justice
Acting Chairperson, Second Division
C E R T I F I C A T I O N
Pursuant to Article VIII, Section 13 of the Constitution, and
the Division Chairperson's Attestation, it is hereby certified that the
conclusions in the above decision were reached in consultation before the case
was assigned to the writer of the opinion of the Court.
ARTEMIO V. PANGANIBAN.
Chief Justice
* On leave.
** Acting Chairperson.
[1] Under
Rule 45 of the Rules of Court.
[2] Penned by Associate Justice Omar
U. Amin (ret.), with Associate Justices Jorge S. Imperial (ret.) and Hector L. Hofileña (ret.), concurring;
Rollo, pp. 34-42.
[3] Penned by Associate Justice
Rodrigo V. Cosico, with Associate Justices Eugenio S. Labitoria and Elvi John
Asuncion, concurring;
[4]
[5]
[6] Annex “D” of Petition,
[7] Annex “E” of Petition,
[8]
[9]
[10]
[11]
[12]
[13]
[14]
[15] Tolentino,
Commentaries and Jurisprudence on the
Civil Code of the