Case Digest: Rodriguez vs. CA, G.R. No. L-29264, August 29, 1969

Succession 

Ponente:
Castro, J.:

Facts:

In 1958, Nieves Cruz authorized Atanacio Valenzuela, Maximina Victorio, and Liberate Santos to sell a parcel of land in Parañaque, Rizal, with specific conditions regarding payment and sale price.

Despite the initial agreement that the balance of the purchase price would be paid upon issuing the Torrens title, Cruz collected several payments between 1959 and 1961 totaling P27,198.60 on top of the P20,000.00 received earlier, amounting to P47,198.60.

In 1960, the registration court decreed the land's registration under the Torrens system, acknowledging partial payment of P22,000.00 made by Valenzuela, Victorio, and Santos. The Torrens title was issued, subject to the rights of Valenzuela, Victorio, and Santos over half of Cruz's share.

In 1961, Cruz subsequently sold the property to Barbara Lombos Rodriguez. She attempted to rescind the original agreement with Valenzuela, Victorio, and Santos, sending them a check for P48,338.60, which they rejected.

After Cruz died, her heirs filed a case against Valenzuela, Victorio, and Santos, seeking rescission of the original agreement and cancellation of the annotation on the title, claiming non-compliance.

CFI-Rizal: Ruled in favor of Cruz and Rodriguez, ordering the cancellation of the annotation on the title, payment of damages, and attorney's fees. It found that the subsequent sale to Rodriguez was valid and couldn't be rescinded.

CA: Reversed the trial court's decision, annulling the sale to Rodriguez, vesting title to the land in Valenzuela, Victorio, and Santos, and ordering Rodriguez to pay damages, attorney's fees, and reconvey the land to Valenzuela, Victorio, and Santos.

Issue:

WoN the petitioner is estopped from questioning the jurisdiction of the Court of Appeals in the matter of the value of the land in controversy. YES

Held:

At the time appeal was taken to the Court of Appeals. section 17(5) of the Judiciary Act of 1948, as amended, provided:

The Supreme Court shall have exclusive jurisdiction to review, revise, reverse modify or affirm on appeal, certiorari or writ of error, as the law or rules of court may provide, final judgments and decrees of inferior courts as herein provided, in —

x x x           x x x           x x x

(5) All civil cases in which the value in controversy exceeds two hundred thousand pesos, exclusive of interests and costs or in which the title or possession of real estate exceeding in value the sum of two hundred thousand pesos to be ascertained by the oath of a party to the cause or by other competent evidence, is involved or brought in question. The Supreme Court shall likewise have exclusive jurisdiction over all appeals in civil cases, even though the value in controversy, exclusive of interests and costs, is two hundred thousand pesos or less, when the evidence involved in said cases is the same as the evidence submitted in an appealed civil case within the exclusive jurisdiction of the Supreme Court as provided herein.

The petitioner would have us believe that, other than a realtor's sworn statement dated June 14, 1968, which was filed with the respondent Court together with her supplemental motion, there is nothing in the records that would indicate the value of the litigated parcel. We disagree. The "Kasunduan" (annex A to the petition) dated December 31, 1958 executed by and between Nieves Cruz and Atanacio Valenzuela, et al. fixed the value of the land (of an area of 44,634 square meters) at P1.60 per square meter. The decision (annex B) of the Court of First Instance of Rizal dated August 12, 1964 assessed the value of the land at P3.00 per square meter. The decision (annex D) dated October 4, 1967 of the respondent Court of Appeals pointed out that the consideration stated in the deed of sale of the land executed by Nieves Cruz in favor of Rodriguez, the petitioner herein, is P77,216. Moreover, until June 14, 1968, no party to the cause questioned the valuation of P3.00 per square meter made by the trial court. The records, therefore, overwhelmingly refute the petitioner's allegation. They also prove that the value of the entire parcel of land had been impliedly admitted by the parties as being below P200,000.

Granting arguendo, however, that the value of the land in controversy is in excess of P200,000, to set aside at this stage all proceedings had before the Court of Appeals in CA-G.R. 35084-R, and before this Court in L-28462, would violate all norms of justice and equity and contravene public policy. The appeal from the decision of the Court of First Instance of Rizal was pending before the respondent Court during the period from 1964 until October 4, 1967, when on the latter date it was decided in favor of the appellants and against the petitioner herein and the heirs of Nieves Cruz. Yet, the appellees therein did not raise the issue of jurisdiction. The joint petition in L-28462 afforded the petitioner herein the opportunity to question the jurisdiction of the respondent Court. Again, the value of the land in controversy, was not questioned by the petitioners, not even in their amended joint petition. It was not until June 14, 1968 that the petitioner herein filed with the respondent Court a supplemental motion wherein she raised for the first time the issue of value and questioned the validity of the final decision of the respondent Court on the jurisdictional ground that the real estate involved has a value in excess of P200,000. That the petitioner's present counsel became her counsel only in May, 1968 provides no excuse for the petitioner's failure to exercise due diligence for over three years to discover that the land has a value that would oust the respondent Court of jurisdiction. The fact remains that the petitioner had allowed an unreasonable period of time to lapse before she raised the question of value and jurisdiction, and only after and because the respondent Court had decided the case against her. The doctrine of estoppel by laches bars her from now questioning the jurisdiction of the Court of Appeals.

The learned disquisition of Mr. Justice Arsenio P. Dizon, speaking for this Court in Serafin Tijam, et al. vs. Magdaleno Sibonghanoy, et al. (L-21450, April 15, 1968), explained, in unequivocal terms, the reasons why, in a case like the present, a losing party cannot be permitted to belatedly raise the issue of jurisdiction.

A party may be estopped or barred from raising a question in different ways and for different reasons. Thus we speak of estoppel in pais, of estoppel by deed or by record, and of estoppel by laches.

Laches, in a general sense, is failure or neglect, for an unreasonable and unexplained length of time, to do that which, by exercising due diligence, could or should have been done earlier; it is negligence or omission to assert a right within a reasonable time, warranting a presumption that the party entitled to assert it either has abandoned it or declined to assert it.

The doctrine of laches or of "stale demands" is based upon grounds of public policy which requires, for the peace of society, the discouragement of stale claims and, unlike the statute of limitation is not a mere question of time but is principally a question of the inequity or unfairness of permitting a right or claim to be enforced or asserted.

It has been held that a party cannot invoke the jurisdiction of a court to secure affirmative relief against his opponent and, after obtaining or failing to obtain such relief, repudiate or question that same jurisdiction (Dean vs. Dean, 136 Or. 694, 86 A. L. R. 79). In the case just cited, by way of explaining the rule, it was further said that the question whether the court had jurisdiction either of the subject matter of the action or of the parties was not important in such cases because the party is barred from such conduct not because the judgment or order of the court is valid and conclusive as an adjudication, but for the reason that such a practice cannot be tolerated — obviously for reasons of public policy.

Furthermore, it has also been held that after voluntarily submitting a cause and encountering an adverse decision on the merits, it is too late for the loser to question the jurisdiction or power of the court (Pease vs. Rathbun-Jones, etc., 243 U.S. 273, 61 L. Ed. 715, 37 S. Ct. 283; St. Louis, etc. vs. McBride, 141 U.S. 127, 35 L. Ed. 659). And in Littleton vs. Burgess, 16 Wyo 58, the Court said that it is not right for a party who has affirmed and invoked the jurisdiction of a court in a particular matter to secure an affirmative relief, to afterwards deny that same jurisdiction to escape a penalty.

Upon this same principle is what We said in the three cases mentioned in the resolution of the Court of Appeals of May 20, 1963 (supra) — to the effect that we frown upon the "undesirable practice" of a party submitting his case for decision and then accepting the judgment, only if favorable, and attacking it for lack of jurisdiction, when adverse — as well as in Pindañgan etc. vs. Dans, et al., G.R. L-14591, September 26, 1962; Montelibano, et al. vs. Bacolod-Murcia Milling Co., Inc., G.R. L-15092; Young Men Labor Union, etc. vs. The Court of Industrial Relations, et al., G.R. No.

L-20307, Feb. 26, 1965; and Mejia vs. Lucas, 100 Phil. p. 277.

We do not here rule that where the pleadings or other documents in the records of a case state a value of a real estate in controversy, a party to the cause may not show that the true value thereof is more or is less than that stated in the records. Section 17(5) of the Judiciary Act of 1948 precisely allows a party to submit a sworn statement of such higher or lower value. This is not to say, of course, that the court is bound by a party's sworn statement, for where more than one party submit materially differing statements of value, or where a party's sworn statement conflicts with other competent evidence, the true value is to be determined by the trial court as an issue of fact before it.

The time when the issue of the value of a real estate in controversy is to be resolved is prior to, or simultaneously with, the approval of the record on appeal and appeal bond, for it is upon the perfection of the appeal that the appellate court acquires jurisdiction over the case (Rule 41, section 9). It is at this time that a party to the cause, be he the intended appellant or the intended appellee, must raise the issue of value before the trial court, for said court to allow appeal involving a question of fact either to this Court or to the Court of Appeals, depending on its finding on the value of the realty. Failure to raise this issue before the trial court amounts to a submission of the issue solely on the basis of the pleadings and evidence a quo and is equivalent to a waiver of the right to present the statement under oath or to adduce the other competent evidence referred to in section 17(b) of the Judiciary Act of 1948.

A contrary rule would be disastrous. For one thing, to allow a party to present proof of value before an appellate court would be to convert the said court to a trial court. For another thing, the value of real estate may change between the perfection of an appeal and the receipt of the record or the payment of the appellate court docket fee; hence, it is best, for stability, to have the value determined at the precise instant when the trial court must decide to which appellate court the appeal should be made and not at some uncertain time thereafter. Worse yet, to permit a party to prove before the Court of Appeals or before us, after a decision on the merits has been rendered, that a real estate in controversy exceeds, or does not exceed P200,000 in value, would be to encourage speculation by litigants; for, a losing party can be expected to raise the issue of value of the realty to show that it is in excess of P200,000 if the unfavorable judgment is rendered by the Court of Appeals, or to show that it does not exceed P200,000 if the unfavorable judgment is rendered by this Court, in an attempt to litigate the merits of the case all over again. 2

In the case at bar, the records — as of the perfection of the appeal on August 12, 1964 — show that the litigated real estate had a value not in excess of P200,000. Conformably with the Judiciary Act of 1948, therefore, the appeal from the decision of the Court of First Instance of Rizal in civil case 6901 was within the jurisdiction of the Court of Appeals.

Other issues, both of fact and of law, are raised in the pleadings. Considering our conclusion that the respondent Court had jurisdiction over the appeal, it is not necessary to discuss, much less resolve, any of those other issues. However, because the petitioner and the heirs of Nieves Cruz have hammered on the twin issues of the existence of an oral contract of sale and of the efficacy of an oral novatory contract of sale, a brief discussion of these issues would not be amiss.

The agency agreement of December 31, 1958 is not impugned by any of the parties. Nieves Cruz, however, asserted that the agency remained in force until she rescinded it on September 16, 1961 by notice to that effect to Atanacio Valenzuela, et al., tendering with the said notice the return, in check, of the sum of P48,338.60 which she had received from Atanacio Valenzuela, et al. The defendants, upon the other hand, contend that the agency agreement was novated by a contract of sale in their favor and that the balance of the purchase price was not due until after the 1962 harvest. Rodriguez, when impleaded by Atanacio Valenzuela, et al., denied that she was a buyer in bad faith from Nieves Cruz.

The parties and the lower courts are agreed that Nieves Cruz had received P20,000 from Atanacio Valenzuela, et al., by January 5, 1959 and that the payment of this total sum was in accordance with the agency agreement. The parties and the lower courts, however, are at variance on the basis or reason for the subsequent payments. The petitioner herein, the heirs of Nieves Cruz and the Court of First Instance of Rizal take the position that the payments after January 5, 1959 were received by Nieves Cruz as partial or installment payments of the purchase price on the representations of Atanacio Valenzuela, et al., that they had a buyer for the property from whom these payments came, all pursuant to the agency agreement. The respondents Atanacio Valenzuela, et al., on the other hand, assert that those amounts were paid by them, as disclosed buyers, to Nieves Cruz and her children, pursuant to a novatory verbal contract of sale entered into with Nieves Cruz, subsequent to the agency agreement and prior to the issuance of the decree of registration of July 15, 1960.

It is thus clear that the decisive issues are (a) whether or not Nieves Cruz did agree to sell to Atanacio Valenzuela, et al., the litigated parcel of land sometime after January 5, 1959, and (b) whether or not the said agreement is enforceable or can be proved under the law. The fact that Atanacio Valenzuela, et al. were agents of Nieves Cruz under the agency agreement of December 31, 1958 is not material, for if it is true that Nieves Cruz did agree to sell to her agents the real estate subject of the agency, her consent took the transaction out of the prohibition contained in article 1491(2) of the Civil Code. Neither are articles 1874 and 1878(5) and (12) of the Civil Code relevant, for they refer to sales made by an agent for a principal and not to sales made by the owner personally to another, whether that other be acting personally or through a representative.

Was there a novatory oral contract to sell entered into by Nieves in favor of Atanacio Valenzuela, et al.? In resolving this question, the respondent Court pointed to significant facts and circumstances sustaining an affirmative answer.

Cited by the Court of Appeals is the testimony of Andres Nery, a successor-in-interest of Nieves Cruz and a substitute plaintiff upon Nieves Cruz' death, to the effect that after they had gone to the defendants several times, they were told that the buyer was Salud de Leon. This witness also said, according to the transcript cited by the respondent Court, that they were paid little by little and had been paid a grand total of P48,000. The respondent Court likewise adverted to the receipts (exhibits L-12 to L-22, exhibit L-24, exhibit L-26, and exhibits 12, 12-a to 12-z-1) signed by Nieves Cruz and/or her children and concluded that on the faces of these receipts it is clear that the amounts therein stated were in payment by Atanacio Valenzuela, et al. of the land which the recipients had sold to them ("ipinagbile naming lupa sa kanila"). Of incalculable significance is the notation in the original certificate of title and in the transfer certificate of title in the name of Nieves Cruz which, in unambiguous language, recorded Nieves Cruz' sale of her interest in the land to Atanacio Valenzuela, et al. If that notation were inaccurate or false, Nieves Cruz would not have remained unprotesting for over a year after the entry of the decree of registration in July, 1960, nor would she and her children have received 13 installment payments totalling P19,963 during the period from September 9, 1960 to September 3, 1961.

Salud de Leon, it should be borne in mind, is the husband of Rogaciano F. de Leon and the daughter of the defendant Liberata Santos. It should likewise be remembered that, as remarked by the trial court, Salud de Leon testified that it was she who had the oral agreement with Nieves Cruz for the purchase by Atanacio Valenzuela, et al. of the litigated property and, as found by the respondent Court, Salud de Leon was the representative of Atanacio Valenzuela, et al., not of Nieves Cruz.

We conclude, therefore, that there is substantial evidence in the record sustaining the finding of the respondent Court that the parties to the agency agreement subsequently entered into a new and different contract by which the landowner, Nieves Cruz, verbally agreed to sell her interest in the litigated real estate to Atanacio Valenzuela, et al.

A legion of receipts there are of payments of the purchase price signed by Nieves Cruz. True, these receipts do not state all the basic elements of a contract of sale, for they do not expressly identify the object nor fix a price or the manner of fixing the price. The parties, however, are agreed — at least the plaintiff has not questioned the defendants' claim to this effect — that the object of the sale referred to in the receipts is Nieves Cruz' share in the land she co-owned with her brother Emilio and that the price therefor is P1.60 per square meter. At all events, by failing to object to the presentation of oral evidence to prove the sale and by accepting from the defendants a total of P27,198.60 after January 5, 1959, the plaintiff thereby ratified the oral contract, conformably with article 1405 of the Civil Code, and removed the partly executed agreement from the operation of the Statute of Frauds. And, finally, the sale was established and recognized in the land registration proceedings wherein the land court, in its decision, categorically stated:

[T]he applicant Nieves Cruz has likewise sold her one-half (½) undivided share to the spouses Atanacio Valenzuela and Maximina Victorio and Liberata Santos from whom she had received partial payment thereof in the sum of P22,000.00.

The pertinent certificates of title bear the annotation of the aforesaid right of Atanacio Valenzuela, et al. The final decision of the land court — to the effect that Nieves Cruz had sold her undivided share to Atanacio Valenzuela, et al., and had received a partial payment of P22,000 — is now beyond judicial review, and, because a land registration case is a proceeding in rem, binds even Rodriguez.

Rodriguez nevertheless insist that despite the rescission by the Court of Appeals of her purchase from Nieves Cruz, the said respondent Court did not order Nieves Cruz to return the P77,216 which she had received from her. While mutual constitution follows rescission of a contract (article 1385, Civil Code), the respondent Court should not be blamed for omitting to order Nieves Cruz to restore what she had received from the petitioner on account of the rescinded contract of sale. In the first place, in the pleadings filed before the trial court, Rodriguez made no claim for restitution against Nieves Cruz or her heirs. In the second place, Nieves Cruz died in the course of the proceedings below and was substituted by her heirs who, necessarily, can be held individually liable for restitution only to the extent that they inherited from her.

Nevertheless, inasmuch as rescission of the contract between Nieves Cruz and the petitioner herein was decreed by the respondent Court, the latter should be entitled to restitution as a matter of law. It is of no moment that herein petitioner did not file any cross-claim for restitution against the plaintiff, for her answer was directed to the defendants' claim which was in the nature of a third-party complaint. She was neither a co-defendant nor a co-third-party defendant with Nieves Cruz; nor were Nieves Cruz and the herein petitioner opposing parties a quo, for they joined in maintaining the validity of their contract. Section 4 of Rule 9, therefore, has no application to the petitioner's right to restitution.

We declare, consequently, that the estate of Nieves Cruz is liable to Barbara Lombos Rodriguez for the return to the latter of the sum of P77,216, less the amount which Atanacio Valenzuela, et al. had deposited with the trial court in accordance with the decision of respondent Court. We cannot order the heirs of Nieves Cruz to make the refund. As we observed above, these heirs are liable for restitution only to the extent of their individual inheritance from Nieves Cruz. Other actions or proceedings have to be commenced to determine the liability accruing to each of the heirs of Nieves Cruz.

ACCORDINGLY, the present petition for mandamus and certiorari is denied, at petitioner's cost.

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