THIRD
DIVISION
|
ESTATE OF LINO OLAGUER, Represented by
Linda O. Olaguer, and LINDA O. MONTAYRE, Petitioners, - versus
- EMILIANO M. ONGJOCO, Respondent. |
|
G.R. No. 173312 Present: YNARES-SANTIAGO, J., Chairperson, AUSTRIA-MARTINEZ,
CHICO-NAZARIO, NACHURA, and
REYES, JJ. Promulgated: August 26, 2008 |
x- - - - - - - - - - - - - -
- - - - - - - - - - - - - - - - - - - -
- - - - - - - - - - - - - - - - -x
CHICO-NAZARIO, J.:
Assailed in
this Petition for Review on Certiorari[1]
is the Decision[2] of
the Court of Appeals dated
The relevant
factual antecedents of the case, as found by the trial court and adapted by the
Court of Appeals, are as follows:
The plaintiffs Sor Mary Edith Olaguer,
Aurora O. de Guzman, Clarissa O. Trinidad, Lina Olaguer and Ma. Linda O.
Montayre are the legitimate children of the spouses Lino Olaguer and defendant
Olivia P. Olaguer.
Lino Olaguer died on
On
In the order of the probate court dated
April 4, 1961, some properties of the estate were authorized to be sold to pay
obligations of the estate. Pursuant to
this authority, administrators Olivia P. Olaguer and Eduardo Olaguer on P]25,000 Pesos, twelve (12) parcels of land, particularly, Lots
4518, 4526, 4359, 8750, 7514, 6608, 8582, 8157, 7999, 6167, 8266, and 76 with a total area of 99
hectares. (Exhibit “A” – Deed of Sale
notarized by defendant Jose A. Olaguer)
This sale of twelve (12) parcels of land
to Pastor Bacani was approved by the Probate Court on December 12, 1962. (Exhibit “15”)
The
following day, P]12,000.00 Pesos, one of the twelve (12) lots
he bought the day before, particularly,
Simultaneously, on the same day December
13, 1962, Pastor Bacani sold back to Olivia Olaguer and Eduardo Olaguer the
other eleven (11) parcels he bought from them as follows:
To Olivia Olaguer – Four (4) parcels for 10,700 Pesos,
particularly Lots 4518, 4526, 4359, 8750 with a total area of 84 hectares.
(Exhibit “E” – Deed of Sale notarized by Felipe A. Cevallos, Sr.)
To Eduardo Olaguer – Seven (7) parcels of land for
2,500 Pesos, particularly Lots 7514, 6608, 8582, 8157, 7999, 6167, and 8266
with a total area of 15 hectares.
(Exhibit “C” – Deed of Sale notarized by defendant Jose A. Olaguer)
Relying upon the same order of April 4,
1961 but without prior notice or permission from the Probate Court, defendants
Olivia P. Olaguer and Eduardo Olaguer on November 1, 1965 sold to Estanislao
Olaguer for 7,000 Pesos, ten (10) parcels of land, particularly, (a) TCT No. T-4011
– Lot No. 578, (b) TCT No. T-1417 –
This sale to Estanislao Olaguer was
approved by the Probate Court on November 12, 1965.
After the foregoing sale to Estanislao
Olaguer, the following transactions took place:
1) On
July 7, 1966, defendant Olivia P. Olaguer executed a Special Power of Attorney
notarized by Rodrigo R. Reantaso (Exhibit “T”) in favor of defendant Jose A.
Olaguer, authorizing the latter to “sell, mortgage, assign, transfer, endorse
and deliver” the properties covered by TCT No. 14654 for Lot 76 6/13 share
only, T-13983, T-14658, T-14655, T-14656, and T-14657.
2)
On July 7, 1966, Estanislao Olaguer executed a Special Power of Attorney
in favor of Jose A. Olaguer (Exhibit “X”) notarized by Rodrigo R. Reantaso
authorizing the latter to “sell, mortgage, assign, transfer, endorse and
deliver” the properties covered by TCT No. T-20221, T-20222, T-20225 for
By virtue of this Special Power of
Attorney, on March 1, 1967, Jose A. Olaguer as Attorney-in-Fact of Estanislao
Olaguer mortgaged Lots 7589, 7593 and 7396 to defendant Philippine National
Bank (PNB) as security for a loan of 10,000 Pesos. The mortgage was foreclosed by the PNB on
3)
On October 29, 1966, Estanislao Olaguer executed a General Power of
Attorney notarized by Rodrigo R. Reantaso (Exhibit “Y”) in favor of Jose A.
Olaguer, authorizing the latter to exercise general control and supervision
over all of his business and properties, and among others, to sell or mortgage
any of his properties.
4)
On December 29, 1966, Estanislao Olaguer sold to Jose A. Olaguer for
15,000 Pesos, (Exhibit “UU”) the ten (10) parcels of land (Lots 578, 4521,
4522, 1557, 1676, 8635, 8638, 7589, 7593 and 7396) he bought from Olivia P.
Olaguer and Eduardo Olaguer under Exhibit “D”.
5)
On March 16, 1968, Estanislao Olaguer sold to Jose A. Olaguer for 1 Peso
and other valuable consideration Lot No. 4521 – TCT No. T-20223 and
6)
On June 5, 1968, Estanislao Olaguer sold Lot No. 8635 under TCT No.
T-20225, and
7)
On May 13, 1971, Jose A. Olaguer in his capacity as Attorney in-Fact of
Estanislao Olaguer sold to his son Virgilio Olaguer for 1 Peso and other
valuable consideration Lot No. 1557 – TCT No. 20221 and Lot No. 1676 – TCT No.
20222. The deed of sale was notarized by
Otilio Sy Bongon.
8)
On July 15, 1974, Jose A. Olaguer sold to his son Virgilio Olaguer Lot
No. 4521 and Lot No. 4522 for 1,000 Pesos.
Deed of
9)
On September 16, 1978 Virgilio Olaguer executed a General Power of
Attorney in favor of Jose A. Olaguer notarized by Otilio Sy Bongon (Exhibit
“V”) authorizing the latter to exercise general control and supervision over
all of his business and properties and among others, to sell or mortgage the
same.
Olivia P. Olaguer and Eduardo Olaguer were
removed as administrators of the estate and on February 12, 1980, plaintiff Ma.
Linda Olaguer Montayre was appointed administrator by the Probate Court.
Defendant Jose A. Olaguer died on January
24, 1985. (Exhibit “NN”) He was survived by his children, namely the
defendants Nimfa Olaguer Taguay, Corazon Olaguer Uy, Jose Olaguer, Jr.,
Virgilio Olaguer, Jacinto Olaguer, and Ramon Olaguer.
Defendant Olivia P. Olaguer died on August
21, 1997 (Exhibit “OO”) and was survived by all the plaintiffs as the only
heirs.
The decedent Lino Olaguer have had three
marriages. He was first married to
Margarita Ofemaria who died April 6, 1925.
His second wife was Gloria Buenaventura who died on July 2, 1937. The third wife was the defendant Olivia P. Olaguer.
Lot
No. 76 with an area of 2,363 square meters is in the heart
of the Poblacion of Guinobatan, Albay.
The deceased Lino Olaguer inherited this property from his parents. On it was erected their ancestral home.
As
already said above, Lot No. 76 was among the twelve (12) lots sold for
25,000 Pesos, by administrators Olivia P. Olaguer and Eduardo Olaguer to Pastor
Bacani on December 12, 1962. The sale
was approved by the probate court on December 12, 1962.
But, the following day, December 13, 1962
Pastor Bacani sold back the same 12 lots to Olivia P. Olaguer and Eduardo
Olaguer for 25,200 Pesos, as follows:
a) Lot No. 76 was sold back to Olivia
P. Olaguer and Eduardo Olaguer for 12,000 Pesos, in the proportion of [6/13]
and [7/13] respectively. (Exhibit “B”)
b) 4 of the 12
lots namely, Lots 4518, 4526, 4359, and 8750 were sold back to Olivia Olaguer
for 10,700 Pesos. (Exhibit “E”)
c) 7 of the 12 lots namely, Lots 7514, 6608, 8582, 8157,
7999, 6167, and 8266 were sold back to Eduardo Olaguer for 2,500 Pesos.
(Exhibit “C”)
d)
e) It appears from Plan (LRC) Psd-180629
(Exhibit “3”) that defendant Jose A. Olaguer caused the subdivision survey of
Lot 76 into eleven (11) lots, namely, 76-A, 76-B, 76-C, 76-D, 76-E, 76-F,
76-G, 76-H, 76-I, 76-J, and 76-K, sometime on April 3, 1972. The subdivision survey was approved on
October 5, 1973. After the approval of
the subdivision survey of Lot 76, a subdivision agreement was entered into on
November 17, 1973, among Domingo Candelaria, Olivia P. Olaguer, Domingo O. de
la Torre and Emiliano M. [Ongjoco].
(records, vol. 2, page 109).
This
subdivision agreement is annotated in TCT No. 14654 (Exhibit “14” – “14-d”) as follows:
|
Owner |
Lot No. |
Area in sq. m. |
TCT No. |
Vol. |
Page |
|
Domingo Candelaria |
76-A |
300 |
T-36277 |
206 |
97 |
|
Olivia P. Olaguer |
76-B |
200 |
T-36278 |
“ |
98 |
|
- do - |
76-C |
171 |
T-36279 |
“ |
99 |
|
- do - |
76-D |
171 |
T-36280 |
“ |
100 |
|
- do - |
76-E |
171 |
T-36281 |
“ |
101 |
|
- do - |
76-F |
171 |
T-36282 |
“ |
102 |
|
- do - |
76-G |
202 |
T-36283 |
“ |
103 |
|
Domingo O. de la Torre |
76-H |
168 |
T-36284 |
“ |
104 |
|
- do - |
76-I |
168 |
T-36285 |
“ |
105 |
|
- do - |
76-J |
168 |
T-36286 |
“ |
106 |
|
Emiliano M. [Ongjoco] |
76-K |
473 |
T-36287 |
“ |
107 |
After
Lot 76 was subdivided as aforesaid, Jose A. Olaguer as attorney-in-fact of
Olivia P. Olaguer, sold to his son Virgilio Olaguer Lots 76-B, 76-C, 76-D,
76-E, 76-F, and 76-G on January 9, 1974 for 3,000 Pesos. (Exhibit
“G”) The deed of absolute sale was
notarized by Otilio Sy Bongon.
Lots
76-B and 76-C were consolidated and then subdivided anew and
designated as Lot No. 1 with an area of 186 square meters and Lot No.
2 with an area of 185 square meters of the Consolidation Subdivision Plan
(LRC) Pcs-20015. (Please sketch plan marked as Exhibit “4”,
records, vol. 2, page 68)
On
January 15, 1976, Jose A. Olaguer claiming to be the attorney-in-fact of his
son Virgilio Olaguer under a general power of attorney Doc. No. 141,
Page No. 100, Book No. 7, Series of 1972 of Notary Public Otilio Sy Bongon,
sold Lot No. 1 to defendant Emiliano M. [Ongjoco] for 10,000 Pesos per the
deed of absolute sale notarized by Otilio Sy Bongon. (Exhibit
“H”) The alleged general power of attorney however was not presented or
marked nor formally offered in evidence.
On
September 7, 1976, Jose A. Olaguer again claiming to be the attorney-in-fact of
Virgilio Olaguer under the same general power of attorney referred to in
the deed of absolute sale of Lot 1, sold Lot No. 2 to Emiliano M. [Ongjoco]
for 10,000 Pesos. (Exhibit “I”)
The deed of absolute sale was notarized by Otilio Sy Bongon.
On
July 16, 1979, Jose A. Olaguer as attorney-in-fact of Virgilio Olaguer under a
general power of attorney Doc. No. 378, Page No. 76, Book No. 14, Series of
1978 sold Lot No. 76-D to Emiliano M. [Ongjoco] for 5,000 Pesos. The deed of absolute sale is Doc. No. 571,
Page No. 20, Book No. 16, Series of 1979 of Notary Public Otilio Sy Bongon. (Exhibit “K”)
The
same Lot No. 76-D was sold on October 22, 1979 by Jose A. Olaguer as
attorney-in-fact of Virgilio Olaguer under a general power of attorney Doc. No.
378, Page No. 76, Book No. 14, Series of 1978 of Notary Public Otilio Sy Bongon
sold Lot No. 76-D to Emiliano M. [Ongjoco] for 10,000 Pesos. The deed of absolute sale is Doc. No. 478,
Page No. 97, Book NO. XXII, Series of 1979 of Notary Public Antonio A.
Arcangel. (Exhibit “J”)
On
July 3, 1979, Jose A. Olaguer as attorney-in-fact of Virgilio Olaguer sold Lots
76-E and 76-F to Emiliano M. [Ongjoco] for 15,000 Pesos. The deed of absolute sale is Doc. No. 526,
Page No. 11, Book No. 16, Series of 1979 of Notary Public Otilio Sy Bongon. (Exhibit “M”)
The same Lots 76-E and 76-F were sold on
October 25, 1979, by Jose A. Olaguer as attorney-in-fact of Virgilio Olaguer
under the same general power of attorney of 1978 referred to above to Emiliano
M. [Ongjoco] for 30,000 Pesos. The deed
of absolute sale is Doc. No. 47, Page No. 11, Book No. XXIII, Series of 1972 of
Notary Public Antonio A. Arcangel. (Exhibit “L”)
On
July 2, 1979 Jose A. Olaguer as attorney-in-fact of Virgilio Olaguer sold Lot
No. 76-G to Emiliano M. [Ongjoco] for 10,000 Pesos. The deed of sale is Doc. No. 516, Page No. 9,
Book No. 16, Series of 1979 of Notary Public Otilio Sy Bongon. (Exhibit “N”)
The
same Lot 76-G was sold on February 29, 1980 by Jose A. Olaguer as
attorney-in-fact of Virgilio Olaguer under the same general power of attorney
of 1978 referred to above to Emiliano M. [Ongjoco] for 10,000 Pesos. The deed of absolute sale is Doc. No. l02,
Page No. 30, Book No. 17, Series of 1980 of Notary Public Otilio Sy Bongon. (Exhibit “O”)[5]
(Emphases ours.)
Thus, on
Docketed as Civil Case No. 6223, the
action named as defendants the spouses Olivia P. Olaguer and Jose A. Olaguer;
Eduardo Olaguer; Virgilio Olaguer; Cipriano Duran; the Heirs of Estanislao O.
Olaguer, represented by Maria Juan Vda. de Olaguer; and the Philippine National
Bank (PNB).
In the original complaint, the plaintiffs
therein alleged that the sales of the following properties belonging to the
Estate of Lino Olaguer to Estanislao Olaguer were absolutely simulated or fictitious,
particularly: Lots Nos. 578, 1557, 1676, 4521, 4522, 8635, 8638, 7589, 7593,
and 7396. In praying that the sale be
declared as null and void, the plaintiffs likewise prayed that the resulting Transfer
Certificates of Title issued to Jose Olaguer, Virgilio Olaguer, Cipriano Duran
and the PNB be annulled.
Defendant
PNB claimed in its Answer,[8]
inter alia, that it was a mortgagee
in good faith and for value of Lots Nos. 7589, 7593 and 7396, which were
mortgaged as security for a loan of P10,000.00; the mortgage contract
and other loan documents were signed by the spouses Estanislao and Maria Olaguer
as registered owners; the proceeds of the loan were received by the mortgagors
themselves; Linda Olaguer Montayre had no legal capacity to sue as
attorney-in-fact; plaintiffs as well as Maria Olaguer were in estoppel; and the
action was already barred by prescription.
PNB set up a compulsory counterclaim for damages, costs of litigation
and attorney’s fees. It also filed a
cross-claim against Maria Olaguer for the payment of the value of the loan plus
the agreed interests in the event that judgment would be rendered against it.
Defendants
Olivia P. Olaguer, Jose A. Olaguer and Virgilio Olaguer, in their Answer,[9]
denied the material allegations in the complaint. They maintained that the sales of the
properties to Pastor Bacani and Estanislao Olaguer were judicially approved;
the complaint did not state a sufficient cause of action; it was barred by
laches and/or prescription; lis pendens
existed; that the long possession of the vendees have ripened into acquisitive
prescription in their favor, and the properties no longer formed part of the
Estate of Lino Olaguer; until the liquidation of the conjugal properties of
Lino Olaguer and his former wives, the plaintiffs were not the proper parties
in interest to sue in the action; and in order to afford complete relief, the other
conjugal properties of Lino Olaguer with his former wives, and his capital
property that had been conveyed without the approval of the testate court
should also be included for recovery in the instant case.
Defendant
Maria Juan Vda. de Olaguer, representing the heirs of Estanislao Olaguer, in
her Answer,[10]
likewise denied the material allegations of the complaint and insisted that the
plaintiffs had no valid cause of action against the heirs of the late
Estanislao Olaguer, as the latter did not participate in the alleged transfer
of properties by Olivia P. Olaguer and Eduardo Olaguer in favor of the late
Estanislao Olaguer.
Defendant
Cipriano Duran claimed, in his Answer,[11]
that the complaint stated no cause of action; he was merely instituted by his
late sister-in-law Josefina Duran to take over the management of Lots Nos. 8635
and 8638 in 1971; and the real party-in-interest in the case was the
administrator of the estate of Josefina Duran.
On 11
January 1995, an Amended Complaint[12]
was filed in order to implead respondent Emiliano M. Ongjoco as the transferee
of Virgilio Olaguer with respect to portions of Lot No. 76, namely Lots Nos. 1,
2, 76-D, 76-E, 76-F, and 76-G.
In his
Answer with Counterclaim and Motion to Dismiss,[13]
respondent Ongjoco denied the material allegations of the amended complaint and
interposed, as affirmative defenses the statute of limitations, that he was a
buyer in good faith, that plaintiffs had no cause of action against him, and
that the sale of property to Pastor Bacani, from whom Ongjoco derived his
title, was judicially approved.
On
In their Answer,[15]
the heirs of Estanislao Olaguer reiterated their claim that Estanislao Olaguer
never had any transactions or dealings with the Estate of Lino Olaguer; nor did
they mortgage any property to the PNB.
On 5 August
1998, the heirs of Estanislao Olaguer and petitioner Ma. Linda Olaguer Montayre
submitted a compromise agreement,[16]
which was approved by the trial court.
On
In a
Decision[19]
dated 13 July 2001, the RTC ruled in favor of the plaintiffs. The pertinent portions of the decision provide:
The entirety of the evidence adduced
clearly show that the sale of the 12 lots to Pastor Bacani pursuant to Exhibit
“A” and the sale of the 10 lots to Estanislao Olaguer pursuant to Exhibit “D”
were absolutely simulated sales and thus void ab initio. The two deeds of
sales Exhibits “A” and “D” are even worse than fictitious, they are completely
null and void for lack of consideration and the parties therein never intended
to be bound by the terms thereof and the action or defense for the declaration
of their inexistence does not prescribe.
(Art. 1410, Civil Code) Aside
from being simulated they were clearly and unequivocally intended to deprive
the compulsory heirs of their legitime x x x.
The deeds of sale, Exhibits “A” and “D”
being void ab initio, they are deemed as non-existent and the approval thereof
by the probate court becomes immaterial and of no consequence, because the
approval by the probate court did not change the character of the sale from
void to valid x x x.
x x x x
Defendant Jose A. Olaguer simulated the
sales and had them approved by the probate court so that these properties would
appear then to cease being a part of the estate and the vendee may then be at
liberty to dispose of the same in any manner he may want. They probably believed that by making it
appear that the properties were bought back from Pastor Bacani under a
simulated sale, they (Olivia Olaguer and Eduardo Olaguer) would appear then as
the owners of the properties already in their personal capacities that disposals
thereof will no longer require court intervention. x x x.
x x x x
[Jose
A. Olaguer] had Olivia P. Olaguer execute a Special Power of Attorney (Exhibit
“T”) authorizing him (Jose A. Olaguer) to sell or encumber the properties
allegedly bought back from Pastor Bacani which Jose A. Olaguer did with respect
to the 6/13 share of Olivia P. Olaguer on Lot No. 76 by selling it to his son
Virgilio for only 3,000 Pesos, then caused Virgilio to execute a power of
attorney authorizing him to sell or encumber the 6/13 share which he did by
selling the same to defendant Emiliano M. [Ongjoco].
Virgilio Olaguer however executed an
affidavit (Exhibit “CC”) wherein he denied having bought any property from the
estate of Lino Olaguer and that if there are documents showing that fact he
does not know how it came about. x x x.
The
1972 power of attorney referred to by Jose A. Olaguer as his authority for the
sale of Lots 1 and 2 (formerly lots 76-B and 76-C) was not presented nor
offered in evidence.
There
are two deeds of sale over
There
are two deeds of sale over Lots 76-E and 76-F (Exhibits “M” and “L”) in
favor of defendant Emiliano M. [Ongjoco] with different dates of execution,
different amount of consideration and different Notary Public.
There
are two deeds of sale over Lot 76-G (Exhibits “N” and “O”) in favor of
Emiliano M. [Ongjoco] with different dates of execution with the same amount of
consideration and the same Notary Public.
While
Lot 76-D was allegedly sold already to Emiliano M. [Ongjoco] in 1979,
yet it was still Jose A. Olaguer who filed a petition for the issuance of a
second owner’s copy as attorney in fact of Virgilio Olaguer on August 8, 1980
(Exhibit “SS”) and no mention was made about the sale.
Under
these circumstances, the documents of defendant Emiliano M. [Ongjoco] on lots
76 therefore, in so far as the portions he allegedly bought from Jose A.
Olaguer as attorney in fact of Virgilio Olaguer suffers seriously from
infirmities and appear dubious.
Defendant
Emiliano M. [Ongjoco] cannot claim good faith because according to him, when
these lots 76-[B] to 76-G were offered to him his condition was to transfer the
title in his name and then he pays. He
did not bother to verify the title of his vendor. x x x.
So
with respect to the sale of Lots 76-B to 76-G, Emiliano M. [Ongjoco] has no
protection as innocent purchaser for good faith affords protection only to
purchasers for value from the registered owners. x x x. Knowing that he was
dealing only with an agent x x x, it behooves upon defendant Emiliano M. [Ongjoco]
to find out the extent of the authority of Jose A. Olaguer as well as the title
of the owner of the property, because as early as 1973 pursuant to the
subdivision agreement, (records, vol. 2, page 109 and Exhibit “14” and “14-d”)
he already knew fully well that Lots 76-B to 76-G he was buying was owned by
Olivia P. Olaguer and not by Virgilio Olaguer.
x x x x
With respect to the 10 lots sold to [Eduardo]
Olaguer (Exhibit “D”) Jose A. Olaguer had Estanislao Olaguer execute a power of
attorney (Exhibit “X”) authorizing him (Jose A. Olaguer) to sell or encumber
the 10 lots allegedly bought by Estanislao from the estate. With this power of attorney, he mortgaged lots
7589, 7593 and 7398 to the PNB. He sold
lots 1557 and 1676 to his son Virgilio Olaguer.
While under Exhibit “UU” dated December 29, 1966, he bought the 10
parcels of land, among which is lots 4521 and 4522 from Estanislao Olaguer,
yet, on March 16, 1968, he again bought lots 4521 and 4522 (records, vol. 1,
page 38) from Estanislao Olaguer. While
lots 8635 and 8638 were among those sold to him under Exhibit “UU”, it appears
that he again bought the same on June 5, 1968 under Exhibit “F”.
The heirs of Estanislao Olaguer however
denied having bought any parcel of land from the estate of Lino Olaguer. Estanislao Olaguer’s widow, Maria Juan vda.
de Olaguer, executed an affidavit (Exhibit “BB”) that they did not buy any
property from the estate of Lino Olaguer, they did not sell any property of the
estate and that they did not mortgage any property with the PNB. She repeated this in her deposition. (records, vol. 2, page 51) This was
corroborated by no less than former co-administrator Eduardo Olaguer in his
deposition too (Exhibit “RRRR”) that the sale of the 10 parcels of land to
Estanislao Olaguer was but a simulated sale without any consideration. x x x.
x x x x
A partial decision was already rendered by
this court in its order of
Defendant Cipriano Duran was dropped from
the complaint per the order of the court dated
The
dispositive portion of the above decision was, however, amended by the trial
court in an Order[20]
dated
WHEREFORE, premises considered, decision
is hereby rendered in favor of the plaintiffs as follows:
1)
The deed of sale to Pastor Bacani (Exhibit “A”) and the deed of sale to
Estanislao Olaguer (Exhibit “D”) are hereby declared as null and void and
without force and effect and all the subsequent transfers and certificates
arising therefrom likewise declared null and void and cancelled as without
force and effect, except as herein provided for.
2) Lot Nos. 4518, 4526, 4359 and 8750 are
hereby ordered reverted back to the estate of Lino Olaguer and for this
purpose, within ten (10) days from the finality of this decision, the heirs of
Olivia P. Olaguer (the plaintiffs herein) [sic] are hereby ordered to execute the necessary document of reconveyance,
failure for which, the Clerk of Court is hereby ordered to execute the said
deed of reconveyance.
3) Lot Nos. 7514, 6608, 8582, 8157, 7999,
6167 and 8266 are hereby ordered reverted back to the estate of Lino Olaguer
and for this purpose, within ten (10) days from the finality of this decision,
defendant Eduardo Olaguer is hereby ordered to execute the necessary document
of reconveyance, failure for which, the Clerk of Court is hereby ordered to
execute the said deed of reconveyance.
4)
Lots 1 and 2, Pcs-20015, and Lots 76-D, 76-E, 76-F and 76-G, Psd-180629
sold to Emiliano M. [Ongjoco] are hereby ordered reverted back to the estate of
Lino Olaguer. For this purpose, within
ten (10) days from the finality of this decision, defendant Emiliano M. [Ongjoco]
is hereby ordered to execute the necessary deed of reconveyance, otherwise, the
Clerk of Court shall be ordered to execute the said reconveyance and have the
same registered with the Register of Deeds so that new titles shall be issued
in the name of the estate of Lino Olaguer and the titles of Emiliano [Ongjoco]
cancelled.
5)
The parties have acquiesced to the sale of the 7/13 portion of
6)
Lots 578, 1557, 1676, 4521, 4522, 8635, 8638, are hereby reverted back
to the estate of Lino Olaguer and for this purpose, the Clerk of [Court] is
hereby ordered to execute the necessary deed of reconveyance within ten days
from the finality of this decision and cause its registration for the issuance
of new titles in the name of the Estate of Lino Olaguer and the cancellation of
existing ones over the same.
7)
While the mortgage with the defendant PNB is null and void, Lots 7589,
7593 and 7396 shall remain with the Republic of the
Both the petitioners
and respondent filed their respective Notices of Appeal[21]
from the above decision. The case was
docketed in the Court of Appeals as CA-G.R. CV No. 71710.
In their Plaintiff-Appellant’s
Brief[22]
filed before the Court of Appeals, petitioner Estate argued that the trial
court erred in not ordering the restitution and/or compensation to them of the
value of the parcels of land that were mortgaged to PNB, notwithstanding the
fact that the mortgage was declared null and void. Petitioners maintain that the PNB benefited
from a void transaction and should thus be made liable for the value of the
land, minus the cost of the mortgage and the reasonable expenses for the
foreclosure, consolidation and transfer of the lots.
Ongjoco, on
the other hand, argued in his Defendant-Appellant’s Brief[23]
that the trial court erred in: declaring as null and void the Deeds of Sale in
favor of Pastor Bacani and Eduardo Olaguer and the subsequent transfers and
certificates arising therefrom; ordering the reconveyance of the lots sold to
him (Ongjoco); and failing to resolve the affirmative defenses of prescription,
the authority of Olivia and Eduardo to dispose of properties formerly belonging
to the estate of Lino Olaguer, recourse in a court of co-equal jurisdiction,
and forum shopping.
Petitioner Linda
O. Montayre was likewise allowed to file a Brief[24]
on her own behalf, as Plaintiff-Appellee and Plaintiff-Appellant.[25]
She refuted therein the assignment of errors made by Defendant-Appellant Ongjoco
and assigned as error the ruling of the trial court that the lots mortgaged to the
PNB should remain with the Republic of the
On 27
February 2006, the Court of Appeals rendered the assailed Decision, the dispositive
portion of which reads:
WHEREFORE, premises considered, the
appealed Decision is hereby MODIFIED, in that Paragraph 4 of the amended
decision is hereby Ordered Deleted, and the questioned sales to
defendant-appellant Emiliano M. Ongjoco are UPHELD.[26]
In denying
the appeal interposed by petitioners, the appellate court reasoned that the
claim for the value of the lots mortgaged with the PNB were not prayed for in
the original Complaint, the Amended Complaint or even in the Re-Amended
Complaint. What was sought therein was
merely the declaration of the nullity of the mortgage contract with PNB. As the relief prayed for in the appeal was
not contained in the complaint, the same was thus barred.
The Court
of Appeals also ruled that the evidence of petitioners failed to rebut the
presumption that PNB was a mortgagee in good faith. Contrarily, what was proven was the fact that
Olivia Olaguer and Jose A. Olaguer were the persons responsible for the
fraudulent transactions involving the questioned properties. Thus, the claim for restitution of the value
of the mortgaged properties should be made against them.
As regards
the appeal of respondent Ongjoco, the appellate court found the same to be
meritorious. The said court ruled that
when the sale of real property is made through an agent, the buyer need not
investigate the principal’s title. What
the law merely requires for the validity of the sale is that the agent’s
authority be in writing.
Furthermore, the evidence adduced by petitioners was ruled to
be inadequate to support the conclusion that Ongjoco knew of facts indicative
of the defect in the title of Olivia Olaguer or Virgilio Olaguer.
Petitioners
moved for a partial reconsideration[27]
of the Court of Appeals’ decision in order to question the ruling that
respondent Ongjoco was a buyer in good faith.
The motion was, however, denied in a Resolution[28]
dated 29 June 2006.
Aggrieved,
petitioners filed the instant Petition for Review on Certiorari under Rule 45 of the Revised Rules of Court, raising the
following assignment of errors:
I.
THE COURT OF APPEALS COMMITTED AN ERROR IN LAW WHEN IT
RULED, ON SPECULATION, THAT RESPONDENT EMILIANO M. ONGJOCO WAS A BUYER IN GOOD
FAITH OF THE PROPERTIES OF THE ESTATE OF LINO OLAGUER, DESPITE THE EXISTENCE OF
FACTS AND CIRCUMSTANCES FOUND BY THE TRIAL COURT THAT OUGHT TO PUT EMILIANO M.
ONGJOCO ON NOTICE THAT THE PETITIONERS-APPELLANTS HAVE A RIGHT OR INTEREST OVER
THE SAID PROPERTIES, AND CONTRARY TO PREVAILING JURISPRUDENCE.
II.
THE COURT OF APPEALS COMMITTED AN ERROR IN LAW WHEN IT
DISREGARDED THE CLEAR FINDINGS OF FACTS AND CONCLUSIONS MADE BY THE TRIAL
COURT, IN THE ABSENCE OF ANY STRONG AND COGENT REASONS TO REVERSE THE SAID
FINDINGS, CONTRARY TO PREVAILING JURISPRUDENCE.[29]
Essentially,
the question that has been brought before us for consideration is whether or
not, under the facts and circumstances of this case, respondent Ongjoco can be
considered an innocent purchaser for value.
Petitioners
agree with the pronouncement of the trial court that respondent Ongjoco could
not have been a buyer in good faith since he did not bother to verify the title
and the capacity of his vendor to convey the properties involved to him. Knowing that Olivia P. Olaguer owned the
properties in 1973 and that he merely dealt with Jose A. Olaguer as an agent in
January 1976, Ongjoco should have ascertained the extent of Jose’s authority,
as well as the title of Virgilio as the principal and owner of the properties.
Petitioners likewise cite the
following incidents that were considered by the trial court in declaring that
respondent was a buyer in bad faith, namely:
(1) that Virgilio Olaguer executed an affidavit,[30]
wherein he denied having bought any property from the estate of Lino Olaguer,
and that if there are documents showing that fact, he does not
know how they came about; (2) that the power of attorney referred to by Jose A.
Olaguer as his authority for the sale of Lots 1 and 2 (formerly Lots 76-B and
76-C) was not presented or offered in evidence; (3) that there are two deeds of
sale[31]
over Lot 76-D in favor of Ongjoco; (4) that there are two deeds of sale[32]
over Lots 76-E and 76-F in favor of Ongjoco; (5) that there are two deeds of
sale[33]
over Lot 76-G in favor of Ongjoco; and (6) that while Lot 76-D was already sold
to Ongjoco in 1979, it was still Jose A. Olaguer as attorney in fact of
Virgilio Olaguer who filed on 8 August 1980 a petition for the issuance of a
second owner’s copy[34]
of the title to the property, and no mention was made about the sale to
Ongjoco.
Respondent
Ongjoco, on the other hand, invokes the ruling of the Court of Appeals that he
was an innocent purchaser for value. His
adamant stance is that, when he acquired the subject properties, the same were
already owned by Virgilio Olaguer.
Respondent insists that Jose A. Olaguer was duly authorized by a written
power of attorney when the properties were sold to him (Ongjoco). He posits that this fact alone validated the
sales of the properties and foreclosed the need for any inquiry beyond the
title to the principal. All the law
requires, respondent concludes, is that the agent’s authority be in writing in
order for the agent’s transactions to be considered valid.
Respondent
Ongjoco’s posture is only partly correct.
According
to the provisions of Article 1874[35]
of the Civil Code on Agency, when the sale of a piece of land or any interest
therein is made through an agent, the authority of the latter shall be in
writing. Absent this requirement, the
sale shall be void. Also, under Article
1878,[36] a
special power of attorney is necessary in order for an agent to enter into a
contract by which the ownership of an immovable property is transmitted or
acquired, either gratuitously or for a valuable consideration.
We
note that the resolution of this case, therefore, hinges on the existence of
the written power of attorney upon which respondent Ongjoco bases his good
faith.
When
Lots Nos. 1 and 2 were sold to respondent Ongjoco through Jose A. Olaguer, the
Transfer Certificates of Title of said properties were in Virgilio’s name.[37] Unfortunately for respondent, the power of
attorney that was purportedly issued by Virgilio in favor of Jose Olaguer with
respect to the sale of Lots Nos. 1 and 2 was never presented to the trial
court. Neither was respondent able to
explain the omission. Other than the
self-serving statement of respondent, no evidence was offered at all to prove
the alleged written power of attorney.
This of course was fatal to his case.
As
it stands, there is no written power of attorney to speak of. The trial court was thus correct in
disregarding the claim of its existence.
Accordingly, respondent Ongjoco’s claim of good faith in the sale of
Lots Nos. 1 and 2 has no leg to stand on.
As
regards Lots Nos. 76-D, 76-E, 76-F and 76-G, Ongjoco was able to present a
general power of attorney that was executed by Virgilio Olaguer. While the law requires a special power of
attorney, the general power of attorney was sufficient in this case, as Jose A.
Olaguer was expressly empowered to sell any of Virgilio’s properties; and to
sign, execute, acknowledge and deliver any agreement therefor.[38] Even if a document is designated as a general
power of attorney, the requirement of a special power of attorney is met if
there is a clear mandate from the principal specifically authorizing the
performance of the act.[39] The special power of attorney can be included
in the general power when the act or transaction for which the special power is
required is specified therein.[40]
On its
face, the written power of attorney contained the signature of Virgilio Olaguer
and was duly notarized. As such, the same
is considered a public document and it has in its favor the presumption of
authenticity and due execution, which can only be contradicted by clear and
convincing evidence.[41]
No evidence
was presented to overcome the presumption in favor of the duly notarized power
of attorney. Neither was there a showing of any
circumstance involving the said document that would arouse the suspicion of
respondent and spur him to inquire beyond its four corners, in the exercise of
that reasonable degree of prudence required of a man in a similar situation. We therefore rule that respondent
Ongjoco had every right to rely on the power of attorney in entering into the
contracts of sale of Lots Nos. 76-D to 76-G with Jose A. Olaguer.
With
respect to the affidavit of Virgilio Olaguer in which he allegedly disavowed
any claim or participation in the purchase of any of the properties of the
deceased Lino Olaguer, we hold that the same is rather irrelevant. The affidavit was executed only on
Furthermore,
the fact that Lots Nos. 76-D to 76-G were sold to respondent Ongjoco twice does
not warrant the conclusion that he was a buyer in bad faith. While the said incidents might point to other
obscured motives and arrangements of the parties, the same do not indicate that
respondent knew of any defect in the title of the owner of the property.
As to the
petition filed by Jose A. Olaguer for the issuance of a second owner’s copy of
the title to Lot No. 76-D, after the property was already sold to respondent
Ongjoco, the same does not inevitably indicate that respondent was in bad
faith. It is more likely that Jose A.
Olaguer was merely compiling the documents necessary for the transfer of the
subject property. Indeed, it is to be
expected that if the title to the property is lost before the same is
transferred to the name of the purchaser, it would be the responsibility of the
vendor to cause its reconstitution.
In sum, we
hold that respondent Emiliano M. Ongjoco was in bad faith when he bought Lots
Nos. 1 and 2 from Jose A. Olaguer, as the latter was not proven to be duly
authorized to sell the said properties.
However,
respondent Ongjoco was an innocent purchaser for value with regard to Lots Nos.
76-D, 76-E, 76-F and 76-G since it was entirely proper for him to rely on the
duly notarized written power of attorney executed in favor of Jose A. Olaguer.
WHEREFORE,
premises considered, the instant petition is hereby PARTIALLY GRANTED. The assailed Decision of the Court of Appeals
dated
4) Lots 1 and 2, Pcs-20015 sold to
Emiliano M. Ongjoco are hereby ordered reverted back to the estate of Lino
Olaguer. For this purpose, within ten
(10) days from the finality of this decision, defendant Emiliano M. Ongjoco is
hereby ordered to execute the necessary deed of reconveyance, otherwise, the
Clerk of Court shall be ordered to execute the said reconveyance and have the
same registered with the Register of Deeds so that new titles shall be issued
in the name of the estate of Lino Olaguer and the titles of Emiliano Ongjoco
cancelled.
No costs.
SO
ORDERED.
|
|
MINITA V. CHICO-NAZARIOAssociate Justice |
WE
CONCUR:
CONSUELO YNARES-SANTIAGO
Associate Justice
Chairperson
Associate Justice
Associate Justice
RUBEN T. REYES
Associate Justice
ATTESTATION
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.
CONSUELO YNARES-SANTIAGO
Associate
Justice
Chairperson, Third Division
CERTIFICATION
Pursuant to Section 13, Article VIII
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’s Division.
REYNATO S. PUNO
Chief Justice
[1] Rollo, pp. 9-36
[2] Penned by Associate Justice
Eliezer R. de Los
[3] Penned by Judge Vladimir B.
Brusola; rollo, pp. 79-95.
[4] Rollo, pp. 96-97.
[5]
[6] Records, Vol. 1, pp. 1-14.
[7] The other related cases concerning the Estate of Lino Olaguer are as follows:
After
the death of Lino Olaguer on
On
On
In the order of the Executive Judge of the RTC of Legazpi City, Branch 6 dated 15 June 1983, SPECIAL PROC. NO. 528, CIVIL CASE NO. 6146 and CIVIL CASE NO. 6253 were consolidated with the instant case (CIVIL CASE NO. 6223).
On
On
On
[8] Records, Vol. 1, pp. 69-75.
[9]
[10]
[11]
[12]
[13]
[14]
[15]
[16] Records, Vol. 2, pp. 57-59.
[17]
[18]
[19] Rollo,
pp. 79-95.
[20]
[21] Records, Vol. 2, pp. 383, 386-389.
[22] CA rollo, pp. 93-113.
[23]
[24]
[25]
[26]
[27] Rollo,
pp. 67-78.
[28]
[29]
[30] Exhibit “CC,” Exhibits for the Plaintiffs, p. 52.
[31] Exhibits “J” and “K,” id. at 33-35.
[32] Exhibits “L” and “M,” id. at 36-39.
[33] Exhibits “N” and “O,” id. at 40-41.
[34] Exhibit “SS,” id. at 67-69.
[35] Art. 1874. When a sale of a piece of land or any interest therein is through an agent, the authority of the latter shall be in writing; otherwise, the sale shall be void.
[36] Art. 1878. Special powers of attorney are necessary in the following cases:
x x x x
(5) To enter into any contract by which the ownership of an immovable is transmitted or acquired either gratuitously or for a valuable consideration;
[37] Exhibits “5-a,” and “6-a-6-b,” Exhibits for the Defendants, pp. 4-5.
[38] The specific provisions of the General Power of Attorney authorizes Jose A. Olaguer, among other powers:
3. To buy or otherwise acquire, to hire or lease, and to pledge, mortgage or otherwise hypothecate, sell, assign and dispose of any and all my property, real, personal or mixed, of any kind whatsoever and wheresoever situated, or any interest therein, upon such terms and conditions and under such covenants as my said attorney shall deem fit and proper, and to execute in or other writings therefore, or in any way connected therewith or with my business or property.
[39] Bravo-Guerrero
v. Bravo, G.R. No. 152658,
[40] Veloso
v. Court of Appeals, 329 Phil. 398, 405 (1996), cited in Bravo-Guerrero v. Bravo, id.
[41] Domingo
v. Robles, G.R. No. 153743,