Republic of the Philippines
Supreme Court
Manila
|
CAROLINA
HERNANDEZ-NIEVERA, DEMETRIO P. HERNANDEZ, JR., and MARGARITA H. MALVAR, Petitioners, - versus – WILFREDO HERNANDEZ, HOME INSURANCE AND
GUARANTY CORPORATION, PROJECT MOVERS REALTY AND DEVELOPMENT CORPORATION,
MARIO P. VILLAMOR and LAND BANK OF THE PHILIPPINES,
Respondents. |
G.R.
No. 171165 Present:
CARPIO, j., Chairperson, nachura, PERALTA, ABAD,
and MENDOZA,
JJ. Promulgated: February 14, 2011 |
x---------------------------------------------------------------------------------------x
DECISION
PERALTA, J.:
This Rule 45 petition
for review assails the October 19, 2005 Decision[1] of the Court of Appeals in
CA-G.R. CV No. 83852,[2] as well as the January 11,
2006 Resolution[3]
in the same case which denied reconsideration.
The said decision had reversed and set aside the August 30, 2004
judgment[4] rendered by the Regional
Trial Court (RTC) of San Pablo City, Laguna, Branch 32 in Civil Case No.
SP-5742(2000) – one for rescission of a memorandum of agreement and declaration
of nullity of a deed of assignment and conveyance, with prayer for preliminary
injunction and damages.
The facts follow.
Project
Movers Realty & Development Corporation (PMRDC), one of the respondents
herein, is a duly organized domestic corporation engaged in real estate
development. Sometime in 1995, it
entered through its president, respondent Mario Villamor (Villamor), into
various agreements with co-respondents Home Insurance & Guaranty
Corporation (HIGC)[5]
and Land Bank of the Philippines (LBP), in connection with the construction of
the Isabel Homes housing project in Batangas and of the Monumento Plaza
commercial and recreation complex in Caloocan City. In its Asset Pool Formation Agreement, PMRDC
conveyed to HIGC the constituent assets of the two projects,[6] whereas LBP agreed to act
as trustee of the resulting Asset Pool[7] for a consideration.[8] The execution of the projects would be
funded largely through securitization, a method of sourcing development funds
by the issuance of participation certificates against the direct backing assets
of the projects,[9]
whereby LBP would act as the nominal issuer of such certificates with the Asset
Pool itself acting as the real issuer.[10] HIGC, in turn, would provide guaranty
coverage to these participation certificates in accordance with its Contract of
Guaranty with PMRDC and LBP. [11]
On November 13, 1997,
PMRDC entered into a Memorandum of Agreement (MOA) whereby it was given the
option to buy pieces of land owned by petitioners Carolina Hernandez-Nievera (Carolina),
Margarita H. Malvar (Margarita) and Demetrio P. Hernandez, Jr. (Demetrio). Demetrio, under authority of a Special Power
of Attorney to Sell or Mortgage,[12]
signed the MOA also in behalf of Carolina and Margarita. In the aggregate, the realty measured
4,580,451 square meters and was segregated by agreement into Area I and Area
II, respectively pertaining to the parcels covered by Transfer Certificate of
Title (TCT) Nos. T-3137, T-3138, T-3139 and T-3140 on the one hand, and on the
other by TCT Nos. T-3132, T-3133, T-3134, T-3135 and T-3136, all issued by the
Register of Deeds of Laguna. The MOA
materially provides:
1.
THAT, the
consideration for the sale of the parcels of land (Areas I and II) shall be
TWENTY-FIVE PESOS (Php 25.00) per square meter or a total of PESOS: ONE HUNDRED
FOURTEEN MILLION FIVE HUNDRED ELEVEN TWO HUNDRED SEVENTY (Php114,511,270.00);
1.
THAT, the VENDEE shall have the option to
purchase the above-described parcels of land within a period of twelve (12)
months from the date of this instrument and that the VENDEE shall pay the
vendor option money in the following amounts and on the dates herein specified:
Area I
PESOS: SIX
MILLION (Php6,000,000.00) payable in two (2) equal installments of PESOS: THREE
MILLION (Php3,000,000.00), the first installment due on or before November 20,
1997; the second installment due on or before December 15, 1997, both
installments to be covered by postdated checks upon signing of this Agreement.
Area II
Option money of
PESOS: EIGHT MILLION FIVE HUNDRED THOUSAND (Php8,500,000.00) payable within
thirty (30) days after conveyance to the Isabel Homes Asset Pool.
2.
THAT, should the
VENDEE exercise the option to purchase the parcels of land within the
stipulated period, the VENDEE shall complete the TWENTY-FIVE (25%) PERCENT
downpayment inclusive of the option money within the said stipulated
period. Balance of the TWENTY FIVE (25%)
PERCENT downpayment exclusive of the option money for Area I is PESOS: TEN
MILLION FOUR HUNDRED EIGHTY-TWO THOUSAND TWO HUNDRED SIXTY-TWO
(Php10,482,262.00) and for Area II is PESOS: THREE MILLION SIX HUNDRED
FORTY-FIVE THOUSAND FIVE HUNDRED FIFTY- SIX (Php3,645,556.00).
The balance of the purchase price in the amount of PESOS:
EIGHTY-FIVE MILLION EIGHT HUNDRED EIGHTY-THREE FOUR HUNDRED FIFTY-SIX
(Php85,883,456.00) shall be payable within two (2) years in eight (8) quarterly
installments covered by postdated checks.
Schedule of payments shall be as follows:
January 31, 1999 Php 10,735,432.00
April 30, 1999 10,735,432.00
July 31, 1999 10,735,432.00
October 31, 1999 10,735,432.00
January 31, 2000 10,735,432.00
April 30, 2000 10,735,432.00
July 30, 2000 10,735,432.00
October 31, 2000 10,735,432.00
3.
THAT, should the VENDEE fail to exercise its
option to purchase the said described parcels of land within the stipulated
period, the option money shall be forfeited in favor of the VENDOR and that the
VENDEE shall return to the VENDOR all the Transfer Certificates of Title
covering the said described parcels of land within a period of THIRTY (30) DAYS
from the stipulated period, FREE FROM ALL LIENS AND ENCUMBRANCES;
4.
THAT, the VENDOR, at the
request of the VENDEE, shall agree to convey the parcels of land to any bank or
financial institution by way of mortgage or to a Trustee by way of a Trust
Agreement at any time from the date of this instrument, PROVIDED, HOWEVER, that
the VENDOR is not liable for any mortgage or loans or obligations that will be
incurred by way of mortgage of Trust Agreement that the VENDEE might enter
into;
5.
It is agreed that the
VENDOR shall have the sole responsibility in the settlement of the tenants and
eviction of the tenants and eviction of the occupants of the described parcels
of land after all consideration have been fully paid by the VENDEE to the
VENDOR;
6.
THAT, all taxes
including capital gains tax, transfer tax and documentary stamps tax shall be
for the account of the VENDOR;
7.
THAT, the VENDOR
hereby warrants valid title to, and peaceful possession of the said described
parcels of land after all considerations have been fully paid.[13]
As
an implementation of the MOA, the lands within Area I were then mortgaged to
Solid Bank for which petitioners received consideration from PMRDC.[14]
Later
on, PMRDC saw the need to convey additional properties to and augment the value
of its Asset Pool to support the collateralization of additional participation
certificates to be issued.[15] Thus, on March 23, 1998, it entered with LBP
and Demetrio – the latter purportedly acting under authority of the same
special power of attorney as in the MOA – into a Deed of Assignment and
Conveyance (DAC)[16]
whereby the lands within Area II covered by TCT Nos. T-3132, T-3133, T-3134,
T-3135 and T-3136 were transferred and assigned to the Asset Pool in exchange
for a number of shares of stock which supposedly had already been issued in the
name and in favor of Demetrio. These
pieces of land are the subject of the present controversy as far as they are
affected by the explicit provision in the DAC which dispensed with the
stipulated obligation of PMRDC in the MOA to pay option money should it opt to
buy the properties.[17]
PMRDC
admittedly did not avail of its option to purchase the lands in Area II in the
twelve months that passed after the execution of the MOA. Although PMRDC delivered to petitioners
certain checks representing the money, the same however allegedly bounced.[18] Hence, on January 8, 1999, petitioners
demanded the return of the corresponding TCTs.[19] In its
January 21, 1999 letter to Demetrio, however, PMRDC, through Villamor,
stated that the TCTs could no longer be delivered back to petitioners as the
covered properties had already been conveyed and assigned to the Asset Pool
pursuant to the March 23, 1998 DAC. In
the correspondence that ensued, petitioners disowned Demetrio’s signature in
the DAC and labeled it a mere forgery.
They explained that Demetrio could not have entered into the said
agreement as his power of attorney was limited only to selling or mortgaging
the properties and not conveying the same to the Asset Pool. Boldly, they
asserted that the fraudulent execution of the DAC was made possible through the
connivance of all the respondents.[20]
With
that final word, petitioners instituted an action before the RTC of San Pablo
City, Laguna, Branch 32 for the rescission of the MOA, as well as for the
declaration of nullity of the DAC. They
prayed for the issuance of a writ of preliminary injunction and for the payment
of damages.[21]
Ruling for petitioners, the trial
court, on August 30, 2004, declared the MOA to be an option contract and
ordered its rescission. It, likewise,
declared the DAC null and void as it made a definite finding of forgery of
Demetrio’s signature as well as fraud in its execution, and accordingly,
adjudged respondents PMRDC and Villamor liable to petitioner for damages.[22] The dispositive portion of the decision
reads:
WHEREFORE, PREMISES CONSIDERED, judgment is hereby rendered
in the favor of the plaintiffs and against the defendants as follows:
1. Rescinding the
Memorandum of Agreement (MOA) executed between the plaintiffs and Project
Movers Realty [&] Development Corporation (PMRDC);
2. Declaring null
and void the Deed of Assignment and Conveyance (DAC) executed between Project
Movers Realty [&] Development Corporation, Land Bank of the Philippines and
Demetrio Hernandez whose signature is forged;
3. Ordering Transfer
Certificate of Title Nos. T-3132, T-3133, T-3134 and T-3135, all in the names
of the plaintiffs, which are in the custody of the Court, to be delivered to
plaintiffs immediately and the plaintiffs are ordered to issue a corresponding
receipt of said certificates of title signed by all the plaintiffs to be
submitted to the OIC-Branch Clerk of Court of this Court within five (5) days
from receipt of said titles;
4. Ordering
defendants Mario Villamor and Wilfredo Hernandez to pay plaintiffs, jointly and
severally, the following:
a. Actual
damages of P500,000.00;
b. Moral
damages of P200,000.00;
c.
Exemplary damages of P200,000.00;
d.
Attorney’s fees in the amount of P300,000.00;
e. And the
costs of the suit.
SO ORDERED.[23]
Aggrieved, respondents filed a notice
of appeal and elevated the matter to the Court of Appeals. On October 19, 2005, the Court of Appeals
issued the assailed Decision reversing and setting aside the trial court’s
decision as follows:
WHEREFORE,
based on the foregoing, the appeal is GRANTED.
The decision dated August 30, 2004 of the Regional Trial Court, Branch
32, San Pablo City in Civil Case No. SP-5742 (2000) is REVERSED and SET ASIDE
and a new one is entered declaring the Deed of Conveyance valid and thus, the
Transfer Certificates of Title subject of this case are ordered returned to
HIGC. No costs.
SO ORDERED.[24]
Central to the ruling of the Court of
Appeals is its contrary finding that the allegation of forgery of Demetrio’s
signature in the DAC was not established by the evidence and, hence, following
the legal presumption of regularity in the execution of notarized deeds, it
upheld the validity of the DAC.[25] The Court of Appeals noted that the
incompatibility in the terms of the MOA and the DAC clearly signified the
intention of the parties to have the MOA novated by subsequent agreement and
have the properties conveyed to the Asset Pool in exchange for PMRDC shares to
be issued to Demetrio. This, according
to the appellate court, completely changed the original obligations of PMRDC as
provided in the MOA. It noted further
that it was premature to order the release of the subject TCTs to petitioners
at this stage of the proceedings, because that would amount to an execution of
the decision.[26]
With the denial of their motion for
reconsideration,[27]
petitioners filed the instant petition for review attributing error to the
Court of Appeals in declining to rescind the MOA and declare the DAC null and
void.
Petitioners
insist that the obligation of PMRDC to deliver back the TCTs arises on its
failure to exercise the option to purchase the lands according to the terms of
the MOA, and that the deliberate refusal of PMRDC to perform such obligation
gives ground for the rescission of the MOA. This thesis is perched on petitioners’
argument that the MOA could not have possibly been novated by the DAC because first,
Demetrio’s signature therein has been forged, and second, Demetrio could
not have validly assented to the DAC in behalf of Carolina and Margarita
because his special power was limited only to selling or mortgaging the
properties and excludes conveying and assigning the said properties to the
Asset Pool for consideration.[28] They also point out that the DAC itself is
infirm insofar as it stipulated to convey the lands to the Asset Pool as the
latter supposedly is neither a registered corporation nor a partnership and
does not possess a legal personality.[29]
Commenting on the petition, PMRDC and
Villamor advance that petitioners’ allegation
of fraud and forgery are all factual matters that are inappropriate in a Rule
45 petition.[30] More importantly, they aver that the novation
of the MOA by the DAC is unmistakable as the DAC itself has made an express
reference to the MOA provisions on the payment of option money and, hence, has
expressly modified the pertinent terms thereof.[31]
HIGC
and its president, Wilfredo Hernandez, both represented by the Office of the
Government Corporate Counsel (OGCC),[32] and LBP[33] are of the same view.[34] In addition, HIGC explains that contrary to
petitioners’ belief, the transfer of the properties under the DAC is valid as
the conveyance has been made to the Asset Pool with LBP, an entity with
juridical entity, acting as trustee thereof.[35] Addressing the issue of forgery and fraud in
the execution of the DAC, HIGC maintains that these factual matters remain to
be mere allegations which nothing in the records of the case could conclusively
prove, except the self-serving testimony of petitioners themselves.[36]
The Court denies the petition.
Petitioners’
cause stems from the failure of PMRDC to restore to petitioners the possession
of the TCTs of the lands within Area II upon its failure to exercise the option
to purchase within the 12-month period stipulated in the MOA. Respondents maintain, however, that said
obligation, dependent as it is on the exercise of the option to purchase, has
altogether been expressly obliterated by the terms of the DAC whereby
petitioners, through Demetrio as attorney-in-fact, have agreed to novate the
terms of the MOA by extinguishing the core obligations of PMRDC on the payment
of option money. This seems to suggest
that with the execution of the DAC, PMRDC has already entered into the exercise
of its option except that its obligation to deliver the option money has, by
subsequent agreement embodied in the DAC, been substituted instead by the
obligation to issue participation certificates in Demetrio’s name but which,
likewise, has not yet been performed by PMRDC.
But petitioners stand against the validity of the DAC on the ground that
the signature of Demetrio therein was spurious.
Firmly
settled is the jurisprudential rule that forgery cannot be presumed from a mere
allegation but rather must be proved by clear, positive and convincing evidence
by the party alleging the same.[37] The burden to prove the allegation of forgery
in this case has not been conclusively discharged by petitioners because first, nothing in the records supports
the allegation except only perhaps Demetrio’s explicit self-serving disavowal
of his signature in open court.[38] Second,
while in fact Demetrio at the trial of the case had committed to have the
subject signature examined by an expert,[39] nevertheless, the trial had
terminated without the results of the examination being submitted in
evidence. Third, the claim of forgery, unsubstantiated as it is, becomes even
more unremarkable in light of the fact that the DAC involved in this case is a
notarized deed guaranteed by public attestation in accordance with law, such
that the execution thereof enjoys the legal presumption of regularity in the
absence of compelling proof to the contrary.[40]
Yet
the inquiry on the validity of the DAC does not terminate with the finding
alone of the genuineness of Demetrio’s signature therein, because petitioners
also stand against its validity on the ground of Demetrio’s non-authority to
execute the same. They claim that the
execution of the DAC would be beyond the power of Demetrio to perform as his
authority is limited only to selling or mortgaging the properties and does not
include assigning and conveying said properties to the Asset Pool in
consideration of shares of stocks for his lone benefit. For their part, respondents, who believe
Demetrio’s power of attorney was broad enough to effectuate a novation of
PMRDC’s core obligations in the MOA or, at
the least, implement the provisions thereof through the DAC, invoke the 4th
and 5th whereas-clauses in the DAC which, in relation to each other,
supposedly pertain to that certain provision in the MOA which authorizes the
conveyance of the properties to the Asset Pool in exchange for corporate
shares.[41]
The 4th
and 5th whereas-clauses in the DAC read as follows:
WHEREAS, on November 3, 1997, PMRDC and LANDOWNER have entered into a Memorandum
of Agreement whereby the former agreed to convey to the Isabel Homes Asset Pool
certain real properties located at Sta. Maria, Laguna;
[WHEREAS], the LANDOWNER and PMRDC
have agreed to revise and modify the said Memorandum of Agreement, whereby the
LANDOWNER shall dispense with the option money as a requisite to the sale and
purchase of the properties by PMRDC, and agreed to convey absolutely and
unqualifiedly the same properties directly to the Isabel Homes Asset Pool for
and in exchange of shares of stock or equity in PMRDC.[42]
While indeed we find no
provision in the MOA such as that alluded to in the aforequoted 4th
whereas-clause in the DAC which purportedly embodies an agreement by the
parties to assign and convey the subject properties to the Asset Pool, we
surmise that the clause could be referring to paragraph 5 of the MOA which
stipulates a commitment on the part of petitioners to give their consent to an
assignment and conveyance of the properties to the Asset Pool but only once a
request therefor is made by PMRDC. Paragraph 5 reads:
5. THAT, the VENDOR at the request of the VENDEE shall agree to convey the
parcels of land to any bank or financial institution by way of mortgage or to a
Trustee by way of a Trust Agreement at any time from the date of this
instrument, PROVIDED, HOWEVER, that the VENDOR is not liable for any
mortgage or loans or obligations that will be incurred by way of mortgage of
Trust Agreement that the VENDEE might enter into;[43]
Petitioners
profess, however, that no such request was ever intimated to them at any time
during the subsistence of the PMRDC’s right to exercise the option to buy. But respondents are quick to reason that a
request is unnecessary because Demetrio has been legally enabled by his special
power to give such consent and accordingly execute the DAC, effect a novation
of the MOA, and extinguish the stipulated obligations of PMRDC therein, or at
least that he could assent to the implementation of the MOA provisions in the
way that transpired. We agree.
Demetrio’s
special power of attorney granting the powers to sell and/or mortgage reads in
part:
1. To sell and/or
mortgage in favor of any person, corporation,
partnership, private banking or financial institution, government or
semi-government banking or financial institution for such price or amount and under such terms and conditions as our
aforesaid attorney-in-fact may deem just and proper, parcels of land more
particularly described as follows:
x x x
2. To carry out the authority aforestated, to
sign, execute and deliver such deeds, instruments and other papers that may be
required or necessary;
3. To further attain the authority herein
given, to do and perform such acts and things that may be necessary or
incidental to fully carry out the authority herein granted.[44]
It is in
the context of this vesture of power that Demetrio, representing his shared
interest with Carolina and Margarita, entered into the MOA with PMRDC. It is
likewise within this same context that Demetrio later on entered into the DAC
and accordingly extinguished the previously subsisting obligation of PMRDC to
deliver the stipulated option money and replaced said obligation with the
delivery instead of participation certificates in favor of Demetrio.
The
powers conferred on Demetrio were exclusive only to selling and mortgaging the
properties. Between these two specific powers, the power to sell is quite
controversial because it is the sale transaction which bears close resemblance
to the deal contemplated in the DAC. In fact, part of the testimony of Atty.
Danilo Javier, counsel for respondent HIGC and head of its legal department at
the time, is that in the execution of the DAC, respondents had relied on
Demetrio’s special power of attorney and also on his supposed agreement to be
paid in kind, i.e., in shares of
stock, as consideration for the assignment and conveyance of the subject
properties to the Asset Pool.[45] What petitioners miss, however, is that the
power conferred on Demetrio to sell “for such price or amount”[46] is broad enough to cover
the exchange contemplated in the DAC between the properties and the
corresponding corporate shares in PMRDC, with the latter replacing the cash
equivalent of the option money initially agreed to be paid by PMRDC under the
MOA. Suffice it to say that “price” is
understood to mean “the cost at which something is obtained, or something which
one ordinarily accepts voluntarily in exchange for something else, or the
consideration given for the purchase of a thing.”[47]
Thus, it
becomes clear that Demetrio’s special power of attorney to sell is sufficient
to enable him to make a binding commitment under the DAC in behalf of Carolina
and Margarita. In particular, it does
include the authority to extinguish PMRDC’s obligation under the MOA to deliver
option money and agree to a more flexible term by agreeing instead to receive
shares of stock in lieu thereof and in consideration of the assignment and
conveyance of the properties to the Asset Pool.
Indeed, the terms of his special power of attorney allow much leeway to
accommodate not only the terms of the MOA but also those of the subsequent
agreement in the DAC which, in this case, necessarily and consequently has
resulted in a novation of PMRDC’s integral obligations. On this score, we quote with approval the
decision of the Court of Appeals, aptly citing the case of California Bus Lines, Inc. v. State Investment House, Inc.[48] thus –
There are two ways which could
indicate, in fine, the presence of novation and thereby produce the effect of extinguishing an obligation by
another which substitutes the same. The
first is when novation has been explicitly stated and declared in unequivocal
terms. The second is when the old and
the new obligations are incompatible on every point. The test of incompatibility is whether the
two obligations can stand together, each one having its independent
existence. If they cannot, they are
incompatible, and the latter obligation novates the first. Corollarily, changes that breed
incompatibility must be essential in nature and not merely accidental. The incompatibility must take place in any of
the essential elements of the obligation such as its object, cause or principal
conditions thereof; otherwise, the change would be merely modificatory in nature
and insufficient to extinguish the original obligation.[49]
In view of the foregoing, the Court finds
no useful purpose in addressing all the other issues raised in this petition.
A
final note. Section 10, Book IV, Title
III, Chapter 3[50]
of the Revised Administrative Code of 1987 has designated the OGCC to act as
the principal law office of government-owned or controlled corporations (GOCCs)
in connection with any judicial or quasi-judicial proceeding. Yet between the two respondents GOCCs in this
case – LBP and HIGC – it is only the latter for which the OGCC has entered its
appearance. Nowhere in the records is it
shown that the OGCC has ever entered its appearance in this case as principal
legal counsel of respondent LBP, or that at the very least it has given express
conformity to the LBP legal department’s representation.[51]
In
Land Bank of the Philippines v. Martinez,[52]
citing Land Bank of the Philippines v.
Panlilio-Luciano,[53] we explained that the legal department
of LBP is not expressly authorized by its charter to appear in behalf of the
corporation in any proceeding as the mandate of the law is explicit enough to
place the said department under the OGCC’s power of control and
supervision. We held in that case:
[Section 10]
mandates the OGCC, and not the LBP Legal Department, as the principal law
office of the LBP. Moreover, it establishes the proper hierarchical
order in that the LBP Legal Department remains under the control and
supervision of the OGCC. x x x
At the same time, the
existence of the OGCC does not render the LBP Legal Department a superfluity.
We do not doubt that the LBP Legal Department carries out vital legal services
to LBP. However, the performance of such functions cannot deprive the OGCC’s
role as overseer of the LBP Legal Department and its mandate of exercising
control and supervision over all GOCC legal departments. For the purpose
of filing petitions and making submissions before this Court, such control and
supervision imply express participation by the OGCC as principal legal counsel
of LBP. x
x x
It should also be noted that the aforementioned
Section 10, Book IV, Title III, Chapter 3 of the Administrative Code of 1987
authorizes the OGCC to receive the attorney's fees adjudged in favor of their
client GOCCs, such fees accruing to a special fund of the OGCC. Evidently, the
non-participation of the OGCC in litigations pursued by GOCCs would deprive the
former of its due funding as authorized by law. Hence, this is another reason
why we cannot sustain Attys. Beramo and Berbaño's position that the OGCC
need not participate in litigations pursued by LBP.
It may strike as disruptive
to the flow of a GOCC’s daily grind to require the participation of the OGCC as
its principal law office, or the exercise of control and supervision by the
OGCC over the acts of the GOCC’s legal departments. For reasons such as
proximity and comfort, the GOCC may find it convenient to rely instead on its
in-house legal departments, or more irregularly, on private practitioners. Yet the
statutory role of the OGCC as principal law office of GOCCs is one of
long-standing, and we have to recognize such function as part of public policy.
Since the jurisdiction of the OGCC includes all GOCCs, its perspective is less
myopic than that maintained by a particular legal department of a GOCC. It is
not inconceivable that left to its own devices, the legal department of a given
GOCC may adopt a legal position inconsistent with or detrimental to other
GOCCs. Since GOCCs fall within the same governmental framework, it would be
detrimental to have GOCCs foisted into adversarial positions by their
respective legal departments. Hence, there is indubitable wisdom in having one
overseer over all these legal departments which would ensure that the legal
positions adopted by the GOCCs would not conflict with each other or the
government.
x x x Certainly, Section 10, Book IV, Title III, Chapter 3 of the
Administrative Code of 1987 can be invoked by adverse parties or by the courts
in citing as deficient the exclusive representation of LBP by its Legal
Department. Then again, if neither the adverse parties nor the courts of
jurisdiction choose to contest this point, there would be no impediment to the litigation
to maintain. x x x[54]
WHEREFORE,
the Petition is DENIED. The October 19, 2005 Decision and January 11, 2006
Resolution of
the Court of Appeals, in CA- G.R. CV No. 83852, are hereby AFFIRMED.
SO
ORDERED.
DIOSDADO M. PERALTA
Associate
Justice
WE CONCUR:
ANTONIO T. CARPIO
Associate Justice
Chairperson
ANTONIO EDUARDO B.
NACHURA ROBERTO A. ABAD
Associate
Justice Associate Justice
JOSE CATRAL MENDOZA
Associate Justice
ATTESTATION
I attest that the conclusions in the above
Decision had been reached in consultation before the case was assigned to the writer
of the opinion of the Court’s Division.
ANTONIO T. CARPIO
Associate Justice
Second
Division, Chairperson
CERTIFICATION
Pursuant to Section 13, Article VIII of the
Constitution and the Division Chairperson’s Attestation, I certify that the
conclusions in the above Decision had been reached in consultation before the
case was assigned to the writer of the opinion of the Court’s Division.
RENATO
C. CORONA
Chief Justice
[1] Penned
by Associate Justice Juan Q. Enriquez, with Associate Justices Conrado M.
Vasquez, Jr. and Vicente Q. Roxas, concurring; rollo, pp. 26-36.
[2] The
case was entitled, Carolina Hernandez-Nievera,
Demetrio P. Hernandez, Jr. and Margarita H. Malvar v.
Wilfredo F. Hernandez, Home Insurance & Guaranty Corporation,
Project Movers Realty & Development Corp., Mario P. Villamor and Land Bank
of the Philippines.
[3] Rollo,
pp. 38-39.
[4] The
judgment was signed by Judge Zorayda Herradura-Salcedo, records, Vol. I, pp.
170-202.
[5] Now known as Home Guaranty
Corporation.
[6] See
Asset Pool Formation Agreement dated May 29, 1995, folder of exhibits, pp.
48-69.
[7] See
Trust Agreement dated May 29, 1995, id. at 32-47.
[8] See
Trustee Fee Agreement dated November 15, 1995 between PMRDC and LBP, id.
at 81-84.
[9] See
Trust Agreement dated May 29, 1995, id. at 32.
[10] Asset Pool Formation Agreement, rollo,
p. 115.
[11] See
Contract of Guaranty dated May 29, 1995, folder of exhibits, pp. 70-75.
[12] See
Special Power of Attorney dated January 23, 1997; id. at 21-23.
[13] See
Memorandum of Agreement, id. at 18-19.
(Emphasis supplied.)
[14] TSN,
September 6, 2000, pp. 19-21, 40-43; TSN, September 27, 2000, p. 5.
[15] PMRDC
Board Resolution No. 7, 1998, folder of exhibits, p. 85.
[16] See
Deed of Assignment and Conveyance, id. at 25-27.
[17] Id.
at 25.
It provides:
[WHEREAS], the LANDOWNER and PMRDC have agreed to revise and modify the said
Memorandum of Agreement, whereby the
LANDOWNER shall dispense with the option money as a requisite to the sale and
purchase of the properties by PMRDC, and agreed to convey absolutely and
unqualifiedly the same properties directly to the Isabel Homes Asset Pool for
and in exchange of shares of stock or equity in PMRDC. (Emphasis supplied.)
[18] TSN, September 6, 2000, pp. 8-17.
TSN, March 8, 2001, p. 13; TSN, December 7, 2000, pp. 28, 32.
[19] Records,
Vol. I, pp. 29-30.
[20] CA rollo, pp. 202-221.
[21] Records, Vol. I,
pp. 3-13. The trial court declined to
issue a preliminary injunctive relief in view of the fact that the TCTs in
question have already been put in custodia
legis, (Records, Vol. II,
pp. 38, 84-87).
[22] Records, Vol. II, pp. 199-200.
[23] Id.
at 201-202.
[24] CA
rollo, p. 212.
[25] Id.
[26] Id.
at 210-212.
[27] CA
rollo, pp. 245-246.
[28] Rollo,
pp. 15-16.
[29] Id.
at 16-17.
[30] Id.
at 43-44.
[31] Id.
at 45.
[32] Id.
at 68-69.
[33] Represented
by its own Administrative Legal and Litigation Department; id. at 51-52.
[34] Rollo,
pp. 55-56, 86, 89-92.
[35] Id.
at 87-88.
[36] Id.
at 92-101.
[37] St. Mary’s Farm, Inc. v. Prima Real Properties, Inc., G.R. No. 158144, July 31, 2008, 560
SCRA 704, 713; Libres v. Delos Santos, G.R. No.176358, June 17, 2008, 554 SCRA 642,
655; Fernandez v. Fernandez, 416 Phil. 322, 342 (2001); R.F. Navarro & Co., Inc. v. Hon.
Vailoces, 413 Phil. 432, 442
(2001); Tenio-Obsequio v. Court of
Appeals, G.R. No. 107967, March 1, 1994, 230 SCRA 550, 558.
[38]
TSN, August 29, 2000, p. 16; TSN, September 27, 2000, pp. 10-11, 19-20.
[39]
TSN, August 29, 2000, p. 17.
[40] Libres v. Delos
Santos, supra note 37; Pan Pacific
Industrial Sales Co., Inc. v. Court of Appeals G.R. No. 125283, February 10, 2006, 482 SCRA 164.
[41] See Comment of HIGC, rollo,
p. 98.
[42]
Rollo, p. 162. (Emphasis supplied.)
[43] Folder of Exhibits, p. 19.
(Emphasis supplied.)
[44] Id. at 1-3. (Emphasis supplied.)
[45] TSN, December 7, 2000, pp. 23-34.
[46] Id.
[47] Black’s Law Dictionary, 6th ed., pp. 1188-1189.
[48] 463 Phil. 689 (2003).
[49] Rollo, p. 34.
[50] Section 10. Office of the Government Corporate Counsel. - The Office of the Government Corporate
Counsel (OGCC) shall act as the principal law office of all
government-owned or controlled corporations, their subsidiaries, other corporate
offsprings and government acquired asset corporations and shall exercise
control and supervision over all legal departments or divisions maintained
separately and such powers and functions as are now or may hereafter be
provided by law. In the exercise of such control and supervision, the
Government Corporate Counsel shall promulgate rules and regulations to
effectively implement the objectives of the Office.
The OGCC is
authorized to receive the attorney's fees adjudged in favor of their client government-owned
or controlled corporations, their subsidiaries/other corporate offsprings and
government acquired asset corporations. These attorney's fees shall accrue to a
Special fund of the OGCC, and shall be deposited in an authorized government
depository as trust liability and shall be made available for expenditure
without the need for a Cash Disbursement Ceiling, for purposes of upgrading
facilities and equipment, granting of employee's incentive pay and other
benefits, and defraying such other incentive expenses not provided for in the
General Appropriations Act as may be determined by the Government Corporate
Counsel.
[51] See Entry of Appearance with
Motion for Extension of Time to File Comment, rollo, pp. 51-52.
[52] G.R. No. 169008, August 14, 2007, 530 SCRA 158.
[53] G.R. No. 165428, July 13, 2005 (Resolution).
[54] Land Bank of the Philippines v. Martinez, supra note 52, at 164-166, citing Land Bank of the Philippines v.
Panlilio-Luciano, supra note 53.
(Emphasis supplied.)