Republic of the Philippines

SUPREME COURT
Manila
SECOND DIVISION
G.R. No. L-30351 September 11, 1974
AUREA A!E" #$% RAMON A!E" S&b't(t&te% b) t*e(r +e,#+ *e(r, OSCAR
-.RATA A!E", petitioners,
vs.
COURT O/ APPEALS #$% P.O ARC.LLA, respondents.
Domingo A. Songalia for petitioners.
Arsenio R. Reyes for respondent.

"AL0.-AR, J.:p
petition for revie! of the decision of the Court of ppeals in C.. ".R. No. #$%%&'R
(Pio rcilla, plaintiff'appellant, versus urea )a*e+, Ra,on )a*e+ and People-s
.o,esite and .ousin/ Corporation, defendants'appellees0.
1he pertinent facts or the case are as follo!s2 In 345$ respondent Pio rcilla occupied
a parcel of land, later 6no!n as 7ot 5, )loc6 E'3#8 East venue Subdivision, Dili,an,
9ue+on Cit:, o!ned b: the People-s .o,esite and .ousin/ Corporation (hereinafter
referred to as P..C0. .e fenced the lot !ith !ire, and erected a house and ,ade
so,e plantin/s thereon. .is ,oves to appl: for the ac;uisition of the lot fro, the
P..C !hen the sa,e beca,e available for disposition ca,e to nau/ht because the
e,plo:ees of the P..C !hose help he sou/ht ,erel: re/aled hi, !ith pro,ises that
the ,atter !ould be attended to. Nevertheless, his occupanc: !as ,ade a ,atter of
record !ith the P..C in connection !ith a census of occupants and s;uatters ta6en
so,e ti,e later.
Not!ithstandin/ respondent rcilla-s occupanc:, the lot !as a!arded, on Ma: %8,
34$8, to Cristeta 7. 7a;uihon pursuant to a conditional contract to sell e<ecuted b: the
P..C, sub=ect to the standard resolutor: conditions i,posed upon /rants of si,ilar
nature, includin/ the /rantee-s underta6in/ to e=ect trespassers, intruders or s;uatters
on the land, and to construct a residential house on the lot !ithin a period of one :ear
fro, the si/nin/ of the contract, non'co,pliance !ith, !hich conditions !ould result in
the contract bein/ >dee,ed annulled and cancelled>. Respondent rcilia had no notice
of this a!ard, and neither did the /rantee nor the P..C ta6e an: step to oust hi, fro,
the pre,ises occupied b: hi,. It !as onl: on pril %4, 34$# that he !as first re;uired
to leave the area aforesaid.
Mean!hile, on Ma: 4, 34$%, /rantee Cristeta 7. 7a;uihon died, survived b: her father,
)asilio 7a;uihon, !ho, on ?ul: %&, 34$%, e<ecuted a deed of ad=udication in his favor
of the ri/hts and interests thus far ac;uired b: his deceased dau/hter over the lot in
;uestion. In said deed )asilio 7a;uihon also ac6no!led/ed an indebtedness of the
deceased to herein petitioner urea V. )a*e+ in the su, of P#,888.88 and a/reed to
assi/n the ri/hts thus ad=udicated b: !a: of pa:,ent of the debt. 1he correspondin/
re;uest for the transfer of the ri/hts fro, Cristeta to )asilio 7. 7a;uihon !as ,ade b:
the latter to the P..C on u/ust 4, 34$%, !hile an undated re;uest for the approval of
the assi/n,ent of said land to urea V. )a*e+ as above stated !as si,ilarl: filed !ith
the P..C.
1he P..C referred the re;uests for transfer and for assi/n,ent to its .ead E<ecutive
ssistant, Oli,pio N. Epis, for stud:. Mr. Epis. in his ,e,orandu,, opined that,
because the /rantee failed, a,on/ others, to construct a residential house on the land
!ithin the period provided in the conditional contract, the /rantee-s ri/hts under the
contract !ere forfeited and, accordin/l:, she did not ac;uire an: ri/ht !hich could be
trans,itted upon her death to her alle/ed successor, )asilio 7a;uihon. .ence, he
reco,,ended the disapproval of the petition for transfer. It appears, ho!ever, that the
unfavorable reco,,endation of Mr. Epis !as not acted upon b: the )oard of the
P..C but, instead, !as returned b: the "eneral Mana/er to Mr. Epis !ith verbal
instructions to restud: the ,atter. fter a restud:, Mr. Epis chan/ed his opinion, and
considered the transfers fro, Cristeta 7. 7a;uihon to )asilio 7a;uihon, and fro, the
latter to urea V. )a*e+, to be proper and ,eritorious, and reco,,ended the approval
of the sa,e. 1his !as in confor,it: !ith a previous reco,,endation ,ade b: P..C-s
.o,esite Sales Supervisor, Ro,an Carrea/a, to the P..C-s "eneral Mana/er. On
Nove,ber 35, 34$%, P..C-s )oard of Directors adopted Resolution No. %88
approvin/ the transfer of ri/hts fro, )asilio 7a;uihon to urea V. )a*e+ as a
,eritorious case. 1he transfer thus approved, petitioner urea V. )a*e+ continued
pa:in/ the install,ents on the purchase price of the land.
Respondent Pio rcilia did not 6no! of the fore/oin/ develop,ents until so,eti,e in
34$# !hen he !as /iven notice to vacate the lot occupied b: hi,. .e then interposed
a protest a/ainst the a!ard and transfer to petitioner urea V. )a*e+, clai,in/ that the
ori/inal a!ardee ac;uired no ri/hts to the aforesaid lot and that the transferee !as
dis;ualified fro, ac;uirin/ lots of the P..C. Since the P..C-s )oard of Directors had
theretofore approved the transfer ob=ected to, the d,inistrative Investi/atin/
Co,,ittee, to !ho, the protest !as referred for resolution, considered itself !ithout
an: further po!er to revie! the action of the )oard, and accordin/l: dis,issed the
protest. In the ,eanti,e, petitioner urea V. )a*e+ co,pleted the install,ent
pa:,ents on the land, and on October %4, 34$@, the P..C e<ecuted the
correspondin/ deed of sale over the lot in her favor.
1hus left !ithout recourse before the P..C, respondent rcilla !ent to court !ith his
co,plaint to nullif: the a!ard of the lot in ;uestion in favor of petitioner urea V. )a*e+
and to co,pel the P..C to a!ard the sa,e to hi,, !ith pra:er for attorne:-s fees and
costs. fter trial on the ,erits, the court a quo found for petitioners and accordin/l:
decreed the dis,issal of respondent-s co,plaint, !ithout costs.
1
Respondent rcilla appealed to the Court of ppeals, !hich rendered the decision
sou/ht to be revie!ed, the dispositive portion of !hich decision reads thus2
A.EREBORE, the =ud/,ent appealed fro, is hereb: reversed and,
in lieu thereof, another is hereb: rendered declarin/ null and void the
transfer of ri/hts over and a!ard of lot 5, )loc6 )'3#8, East venue
Subdivision of appellee P..C, in favor of appellee urea )a*e+ and
orderin/ appellee People-s .o,esite and .ousin/ Corporation to
afford appellant Pio rcilla the opportunit:, !ithin thirt: (#80 da:s
fro, the finalit: of this decision, to perfect his preferential ri/ht to
purchase said lot and thereafter to e<ecute and deliver such deed
and docu,ents necessar: to consu,,ate the sale to said appellant.
See6in/ a revie! of the decision, petitioners filed the instant petition. Durin/ its
pendenc:, petitioner Ra,on )a*e+ died on March #8, 34&%, and petitioner urea
)a*e+ also died on u/ust 33, 34&%, and the ,otion to have their heir, Oscar Virata
)a*e+, substituted for the,, !as /ranted b: this Court on October 4, 34&%.
Petitioners in their )rief ,ade assi/n,ents of error, as follo!s2
3. 1hat the Court of ppeals erred in holdin/ that the respondent Pio
rcilla has the personalit: to see6 the annul,ent of the a!ard and
sale, of 7ot 5, )loc6 E'3#8, East venue Subdivision, Dili,an,
9ue+on Cit:, belon/in/ to the P..C, to the applicant Cristela 7.
7a;uihon on Ma: %8, 34$8, b: P..C, and the transfer of her ri/hts
over the lot b: her father )asilio 7a;uihon to the petitioner urea
)a*e+ in pa:,ent of the indebtedness of Cristeta 7. 7a;uihon to the
petitioner urea )a*e+ in the a,ount of P#,888.88C
%. 1he Court of ppeals erred in holdin/ that the respondent Pio
rcilla has a preferential ri/ht to purchase the lot in ;uestion, lot 5,
bloc6 E'3#8, East venue Subdivision, 9ue+on Cit:, of the People-s
.o,esite and .ousin/ CorporationC
#. 1hat the Court of ppeals erred in holdin/ that the a!ard of the lot
in ;uestion to Cristeta 7. 7a;uihon, ,ade on Ma: %8, 34$8 !as null
and void, because said a!ardee failed to construct a house in the lot
!ithin a period of one (30 :ear fro, the si/nin/ of the contract to sell
and, therefore, upon the death of Cristeta 7. 7a;uihon on Ma: 4,
34$%, she transferred no ri/hts to her father )asilio 7a;uihon and
said )asilio 7a;uihon could not validl: sell his ri/hts of the lot in
;uestion to the petitionersC
@. 1hat the Court of ppeals erred in holdin/ that the approval of the
transfer of ri/hts of the late Cristeta 7. 7a;uihon b: her father )asilio
7a;uihon to the petitioner urea )a*e+ !as due to the intercession
of the then Senator Estanislao Bernande+C and
5. 1hat the Court of ppeals erred in holdin/ that the petitioners are
not ;ualified to ac;uire the lot in ;uestion for havin/ alle/edl: a lot in
San ?uan, Ri+al.
3. rticle 3#4& of the Civil Code provides that the action for annul,ent of contracts
,a: be instituted b: all !ho are thereb: obli/ed principall: or subsidiaril:. .ence
stran/ers to the contract !ho are not bound thereb: have neither the ri/ht nor the
personalit: to brin/ an action to annul such contract. It cannot be /ainsaid that
respondent Pio rcilla !as a stran/er to, and not bound principall: or subsidiaril: b:,
the conditional contract to sell e<ecuted on Ma: %8, 34$8 b: the P..C in favor of
Cristeta 7. 7a;uihon, and the transfer of ri/hts over the sa,e lot fro, )asilio 7a;uihon
to urea V. )a*e+. .ence respondent Pio rcilla could not brin/ an action to annul the
sa,e.
1here is, ho!ever, an e<ception to the rule laid do!n in rticle 3#4&. 1his Court, in
Teves vs. People's Homesite and Housing Corporation, 7'%3@4D, ?une %&, 34$D
1
citin/
Ibae! vs. Hong"ong and S#ang#ai $an"
1
, held that >a person !ho is not a partl:
obli/ed principall: or subsidiaril: in a contract ,a: e<ercise an action for nullit: of the
contract if he is pre=udiced in his ri/hts !ith respect to one of the contractin/ parties,
and can sho! the detri,ent !hich !ould positivel: result to hi, fro, the contract in
!hich he had no intervention.> Pursuant to said doctrine, in order that respondent Pio
rcilla ,i/ht brin/ an action for the nullit: of the contracts aforesaid, he should have
been not onl: pre=udiced in his ri/hts !ith respect to one of the contractin/ parties, but
,ust have also sho!n the detri,ent !hich he !ould positivel: suffer fro, the
contracts. It beco,es, therefore, necessar: to in;uire, !hether respondent Pio rcilla-s
ri/hts !ere pre=udiced b: the aforesaid contracts, and as to !hat detri,ent, if an:, he
suffered because of those contracts.
Ahat ri/hts of respondent Pio rcilla !ere pre=udicedE 1he Court of ppeals found that
Pio rcilla >,a6es no pretense that he entered into and built his land upon appellee
P..C-s land !ith the consent of the latter.> Pio rcilia !as, therefore, a trespasser, or
a s;uatter, he bein/ a person !ho settled or located on land, in closed or uninclosed
!ith >no bona fide clai, or color of title and !ithout consent of the o!ner.>
3
.e be/an
his ,aterial possession of the lot in bad faith, 6no!in/ that he did not have a ri/ht
thereto, and it is presu,ed that his possession continued to be en=o:ed in the sa,e
character in !hich it !as ac;uired, i.e. in bad faith until the contrar: is proved.
4
nd
!hat ri/ht can a s;uatter have to the land into !hich he has intruded a/ainst the o!ner
of the landE 1he ans!er is not hard to find, s;uatter can have no possessor: ri/hts
!hatsoever, and his occupanc: of the land is onl: at the o!ner-s sufferance, his acts
are ,erel: tolerated and cannot affect the o!ner-s possession.
5
1he s;uatter is
necessaril: bound to an i,plied pro,ise, that he !ill vacate upon de,and.
1his Court, in $ernardo et al. vs. $ernardo and Court of ppeals
2
, laid do!n the
doctrine that2
In carr:in/ out its social re'ad=ust,ent policies, the /overn,ent
could not si,pl: la: aside ,oral standards, and ai, to favor
usurpers, s;uatters, and intruders, un,indful of the la!ful or
2
unla!ful ori/in and character of their occupanc:. Such a polic:
!ould perpetuate conflicts instead of attainin/ their =ust solution.
Respondent Pio rcilla, havin/ no possessor: ri/hts !hatsoever, !hat detri,ent could
be have suffered fro, the aforesaid contractsE
1he Court of ppeals, ho!ever, held that respondent Pio rcilia had a ri/ht to
purchase the lot occupied b: hi,. 1he discussion of this alle/ed ri/ht brin/s us to the
second assi/n,ent of error.
%. Ae find ,erit in petitioners- second assi/n,ent of error. Rel:in/ on the decision of
the Court of ppeals, respondent rcilia anchored his alle/ed preferential ri/ht to
purchase 7ot 5, )loc6 E'3#8 on Resolution No. 5$% of P..C-s )oard of Directors,
dated ?une %&, 34$#, !hich reads as follo!s2
(30 No preference, advanta/e or benefit shall be /iven to s;uatters in
the allocation of P..C residential lots b: reason alone of their prior
occupanc: thereof, but the: shall be treated on the sa,e footin/ as
other ;ualified applicants. S;uatters !ho are found ;ualified and
deservin/ shall be /iven preferential a!ards onl: in P..C
resettle,ent pro=ects, if the: voluntaril: co,pl: !ith P..C rules and
policies !ithout !aitin/ to be evicted thru court proceedin/s.
and on Resolution No. 55D, dated pril 3$, 34$%, !hich approved the
reco,,endations of its ctin/ 7e/al Officer. 1he reco,,endations included the
proposed >Appli%ation &orms No. $'D and No. $'B> for non'occupants and occupants
or s;uatters, respectivel:, and provided, a,on/ others, that2
($0 1he Sales and Mana/e,ent Depart,ent should have a read:
and up'to' date census of all lots occupied b: s;uatters !ithin P..C
subdivisions open for sale or a!ard, in order that lots occupied b:
s;uatters !ho are not ;ualified to bu: the sa,e, or !ho do not ,erit
an a!ard shall not be a!arded to an:bod: until the P..C has
obtained a final court decision for the eviction of such s;uatter.
(E<hibit 3')0.
It should not be lost si/ht of, ho!ever, that accordin/ to the decision of the Court of
ppeals, >1i,e there ,a: have been, perhaps, !hen occupanc: of a lot !ithout the
consent of said appellee !as not reco/ni+ed at all as basis for a clai, to a ri/ht to
purchase said lotC> and that >on the face of the evidence presented before us in this
case, !e note a clear shift in polic: in the disposition of lots of appellee P..C,> and
the shift in polic: !as evidenced b: the afore';uoted resolutions.
If the afore';uoted resolutions relied upon b: respondent rcilla !ere evidence of the
shift of polic:, then, it stands to reason that before the adoption of said resolutions, the
polic: of the P..C !as differentC other!ise, there !ould have been no reason for a
chan/e of polic:. Resolution No. 5$% !as dated ?une %&, 34$#. .ence the polic:
before ?une %&, 34$# !as different. In fact even the Court of ppeals noted that before
said date, >occupanc: of a lot> !as perhaps >not reco/ni+ed at all as a basis for a
clai, of a ri/ht to purchase said lot.> .ence at the ti,e 7ot No. 5 !as a!arded to
Cristeta 7. 7a;uihon on Ma: %8, 34$8, and at the ti,e the P..C approved the transfer
of ori/inal a!ardee-s ri/hts to herein petitioners on Nov. 35, 34$%, it !as not :et the
polic: of the P..C to reco/ni+e ,ere occupanc: of a lot as /ivin/ a ri/ht to purchase
the sa,e, for said Polic: !as adopted onl: later, i.e. on ?une %&, 34$#.
Moreover, it is not stated e<pressl: in the above';uoted resolutions, and neither can it
be necessaril: i,plied therefro,, that the occupant !as /iven a preferential ri/ht to
purchase the lot he occupied. In fact Resolution No. 5$% e<plicitl: states that althou/h
a s;uatter shall be treated on the sa,e footin/ as other ;ualified applicants, said
occupant has no preference at all b: reason of said occupanc:. In the instant case, it is
not even sho!n, althou/h it !as ta6en for /ranted, that respondent Pio rcilia !as a
;ualified applicant !ho should be treated on the Sa,e footin/ as others. 1he fact is
that said respondent never filed an application for the lot, so he cannot be a qualified
appli%ant. s;uatter found to be ;ualified and deservin/ !as to be /iven preferential
a!ard, not necessaril: to the sa,e lot he occupies but onl: in P..C resettle,ent
pro=ectsC and it does not appear that 7ot 5, )loc6 E'3#8, in ;uestion, is in a
resettle,ent pro=ect.
Burther,ore, said preferential a!ard in resettle,ent pro=ects is /ranted onl: in case
the s;uatter is not evicted throu/h court proceedin/s. In the instant case, respondent
rcilla had been e=ected fro, the lot throu/h court proceedin/s in Civil Case No. IV'
33$43 of the Cit: Court of 9ue+on Cit:. If a s;uatter !as /iven a Preferential ri/ht to
the lot he occupies, ho! co,e that the sa,e resolution No. 5$% also provided that >No
ad,inistrative case shall be entertained on the basis alone of a s;uatter-s clai, of
prior or actual occupanc: of P..C lotE>
Ae hold that the clai,, of respondent Pio rcilla to the alle/ed preferential ri/ht to
purchase 7ot 5, )loc6 E'3#8, had not been substantiated.
#. Respondent rcilla ar/ues that the a!ardee of the lot, Cristeta 7. 7a;uihon, did not
co,pl: !ith the resolutor: condition of buildin/ a houseC so, she ac;uired no ri/hts that
could be trans,itted to her father.
1his Court cannot sustain respondent-s stand.
1his Court of ppeals stated in its decision that the contract to sell, dated Ma: %8,
34$8, e<ecuted b: the P..C in favor of Cristeta 7. 7a;uihon !as.
Sub=ect to the standard resolutor: conditions i,posed upon /rants of
si,ilar nature, includin/ the /rantee-s underta6in/ to e=ect
trespassers, intruders or s;uatters on the land and to -construct a
residential house on the lot and shall co,plete the sa,e !ithin a
period of (30 :ear fro, the si/nin/ of this contract !ith no e<tension,-
3
the non'co,pliance !ith !hich results in the contract bein/ -dee,ed
annulled and cancelled (E<hibit &0.
)ecause no residential house, continued the Court of ppeals, !as ever erected b:
the a!ardee on the pre,ises F not even until she died on Ma: 4, 34$%, >she failed to
co,pl: !ith a condition of the a!ard, the non'co,pliance !ith !hich has a resolutor:
effect upon the a!ard,> such that !hen Cristeta 7. 7a;uihon died, she ac;uired no
vested ri/ht in the land, and she trans,itted nothin/ to her father, )asilio 7a;uihon,
!ho, on his part, could not have transferred an: ri/ht to petitioners )a*e+.
It is /ranted that b: virtue of the resolutor: condition, the resolution of the contract too6
place b: force of la! and that there !as no need of =udicial declaration to resolve the
contract. Civilists, ho!ever, are not a/reed on !hether the in=ured part: retains the
option of de,andin/ fulfill,ent or rescission of the obli/ation as provided in rticle
3343 or not. 1hus Collin : Capitant, Curson Ele,ental de Derecho Civil, Vol. III, p. &58
sa:s2
En la hipotesis de una clausula del contrato ;ue pronuncie una
resolucion eventual, ha: ;ue procla,ar la valide+ de tal clausula en
el Derecho espanol sie,pre ;ue no apare+ca por sus
circu,stancias co,o contraria a la le: o a las buenas costu,bres.
El efecto de tal clausula sera ;ue la resolucion se produ+ca de pleno
derecho, sin intervencion =udicialC pero entende,os ;ue, a pesar de
ella el acreedor conservara el derecho de opcion ;ue le concede el
art. 33%@ Grt. 3343 of the Civil Code of the PhilippinesH a no ser ;ue
la clausula ,is,a resulte otra cosa.
Manresa, in Co,,entaries al Codi/o Civil Espanol, 34$&, Vol. VIII, p. @3$, ho!ever,
sa:s that the stipulated resolution of the contract in case one of the parties does not
co,pl: !ith his underta6in/ is produced b: force of la!, but the option of the in=ured
part: disappears.
If the creditor could still de,and, in spite of the resolution ipso 'ure of the contract, then
the resolution !ould not be ,andator: on the creditor and the resolution !ould
produce its effect !hen the creditor notified the debtor of his decision. (1olentino, Civil
Code of the Philippines, Vol. IV, p. 3&5.0
It is certain, therefore, that the said contract to sell in the instant case !as b: virtue of
the stipulated resolutor: conditions resolved b: operation of la!. )ut the Court of
ppeals overloo6ed in the instant case the e<press provision of the contract to sell that
said resolution be%omes effe%tive only from t#e date (ritten noti%e t#ereof is sent by
t#e PHHC to t#e appli%ant. 1hus para/raph 3% of the contract to sell (E<hibit &0
provides2
3%. Should the PP7ICN1 violate, refuse or fail to co,pl: !ith an:
of the ter,s and conditions stipulated herein or default in the
pa:,ent of three ,onthl: install,ents as provided for in para/raph 3
hereof, this contract shall be dee,ed annulled and cancelled and
the CORPOR1ION shall be at libert: to dispose of said propert: to
an: other person in the sa,e ,anner as if the contract had never
been ,ade ... 1he annul,ent and cancellation and the ri/ht of the
CORPOR1ION to repossess the propert: shall beco,e effective
fro, the date !ritten notice thereof is sent b: the CORPOR1ION to
the PP7ICN1 at his last 6no!n post'office address ...
1he record does not sho!, and the decision of the Court of ppeals does not state,
that the P..C ever notified in !ritin/ the a!ardee of the cancellation of the contract to
sell. .ence, the resolution of the contract never beca,e effective. Conse;uentl:,
!hatever ri/hts the ori/inal a!ardee Cristeta 7a;uihon had over the disputed lot !ere
trans,itted upon her death to her onl: le/al and co,pulsor: heir, her father )asilio
(rt. &&&, Civil Code0 !hich ri/hts the latter could also conve: to herein petitioners.
)ut even if it be assu,ed gratia argumenti, that the ori/inal a!ardee Cristeta 7a;uihon
ac;uired no vested ri/ht to the lot upon her death because of her failure to co,pl: !ith
the resolutor: condition of constructin/ a house on the lot, and the lot had to revert to
the P..C, still it cannot be denied that the P..C !aived the effects of said resolutor:
condition !hen its )oard of Directors approved, on Nove,ber 35, 34$%, the transfer to
urea )a*e+. In consentin/ to the transfer, the P..C necessaril: !aived an: ri/ht that
,i/ht have accrued to it b: virtue of the resolution of the contract before the transfer.
Re/ardin/ the other resolutor: condition ,entioned b: the decision sou/ht to be
revie!ed, and e,phasi+ed b: private respondent, that the ori/inal a!ardee did not file
an action for e=ect,ent, it is to be noted that the a!ardee !as not obli/ed to file said
e=ect,ent suit a/ainst respondent, the latter havin/ s;uatted on the land since 345$
and the a!ard to Cristeta 7a;uihon havin/ been ,ade onl: on Ma: %8, 34$8. On this
,atter, the Constitutional Contract to Sell (E<hibit &0 e<plicitl: provides that2
#. ... 1he applicant shall underta6e the e=ect,ent of an: trespasser,
intruder or s;uatter !ho shall build on the lot or !ho shall deprive
hi, of the ri/ht to possess the sa,e fro, the date of this contract.
1he a!ardee !as obli/ed to e=ect s;uatters @@ !ho shall build on the lot ... fro, the
date of this contract.> .ence, respondent rcilla havin/ built his house or s;uatted on
the land ver: ,uch before, i.e. @ :ears before the land !as a!arded to a!ardee, the
latter !as not under contractual obli/ation to e=ect hi,.
Resolution No. 55D does not re;uire, further,ore, that the applicant for, or transferee
of, a P..C lot should reside in 9ue+on Cit:. Ahat the Resolution re;uires is that he
should have his >per,anent residence or principal place of !or6 or business in
9ue+on Cit:, Manila or suburbs ...> San ?uan, the address of petitioners herein, is
certainl: included in the ter, >suburbs.>
4
@. In support of their fourth assi/n,ent of error, that the Court of
ppeals erred in holdin/ that the approval of the transfer of the ri/hts
to the lot to petitioners !as due to the intercession of the then
Senator Estanislao Bernande+, petitioners ar/ued that the issue of
!hether the letter of Senator Bernande+ influenced the approval of
the transfer !as not assi/ned as error in respondent rcilla-s brief in
the Court of ppeals, and neither !as such influence alle/ed in the
co,plaint, hence the Court of ppeals could not decide said issueC
and that the )oard of Directors, uninfluenced b: politicians, used its
discretion in approvin/ the transfer.
Section & of Rule 53 of the Rules of Court provides that in order that a ;uestion ,a:
be considered b: the Court of ppeals, said ;uestion ,ust be stated in the assi/n,ent
of errors and it ,ust be properl: ar/ued in the brief. (1raders Insurance and Suret: Co.
vs. "olan/co, et al., 45 Phil. D%@, D#8C 1an Si Iic6 v. 1iacho, &4 Phil. $4$, $4D.0 Ae
note that there !ere onl: t!o errors assi/ned in appellant-s brief in the Court of
ppeals, na,el:2 that the trial court erred in holdin/ that (30 the clai, of plaintiff that
defendant !as dis;ualified to ac;uire lot 5 for she alread: o!ned lot in San ?uan !as
not substantiated, and (%0 there !as a valid perfected contract of sale bet!een the
P..C and the late Cristeta 7a;uihon, and bet!een the P..C and urea )a*e+ and
Ra,on )a*e+, and that the: are bound b: the ter,s and conditions thereof. .ence the
alle/ed intercession of the then Senator Estanislao Bernande+ in the transfer of ri/ht
b: )asilio 7a;uihon to petitioners, !hich !as not stated in the assi/n,ent of errors
and not ar/ued in the brief, should have not been considered b: the Court of ppeals.
Moreover, the evidence on !hich the findin/ of the Court of ppeals that the P..C
acco,,odated petitioners because of the intercession of !hoever !rote >E<hibit C,
has no evidentiar: basis, for E<hibit C !as re=ected b: the trial court >for bein/
i,,aterial, irrelevant, i,pertinent and not properl: identified (1SN, Nov. @, 34$@, p.
480.> 1he part: introducin/ it did not even as6 per,ission fro, the Court that the sa,e
be attached to the record so that the appellate court ,a: revie! the rulin/ of the trial
court (J.S. vs. Cabaraban, #$ Phil. %53, %5#'%5@C Vele+ vs. Chaves, 58 Phil. $&$, $&D'
$&40. Evidence ruled out at the trial of the case cannot be ta6en into consideration in
the decision, for that !ould infrin/e the constitutional ri/ht of the adverse part: to due
process of la! (1insa: vs. Kusa: and Kusa:, @& Phil. $#4, $@#0. Docu,ents for,in/ no
part of the proofs before the appellate court !ill not be considered in disposin/ of the
issues of an action (De Castro v. Court of ppeals, &5 Phil., D%@, D#5, citin/ Da:rit v.
"on+ale+, & Phil. 3D%C 5 Enc:c. of Evidence, @$40. lthou/h said letter !as !ritten on
stationer: bearin/ the letterhead of the then Senator Bernande+, it does not
conclusivel: follo! that it !as Senator Bernande+ hi,self !ho !rote the letter. Even
the si/nature of the letter !as >ille/ible>.
)ut assu,in/ that the letter !as !ritten b: Senator Bernande+, it cannot be i,plied
fro, the facts of the case that the transfer of ri/hts fro, )asilio 7a;uihon to petitioners
herein !as approved solel: on the stren/th of such letter, for the approval of the
transfer !as reco,,ended as >e<tre,el: ,eritorious> b: the .ead E<ecutive
ssistant (E<h. >%>0, and b: the .o,esite Sales Supervisor (E<h. B0. Neither can it be
said that the approval of the transfer b: the )oard of Directors !as vitiated b: undue
influence or that it !as ille/al. 1hat letter, even if it !as !ritten reall: b: Senator
Bernande+, could not destro: the free a/enc: of the P..C )oard of Directors, and it
could not have interfered !ith the e<ercise of )oard-s independent discretion. 1his
Court has alread: said that solicitation, i,portunit:, ar/u,ent and persuasion are not
undue influence, and a contract is not to be set aside ,erel: because one part: used
these ,eans to obtain the consent of the others. Influence obtained b: persuasion or
ar/u,ent or b: appeals to the affections is not prohibited either in la! or ,orals, and i
s not obno<ious even in courts of e;uit:. Such ,a: be ter,ed >due influence.>
(Martine+ vs. .on/6on/ and Shan/hai )an6, 35 Phil. %5%, %&8.0
5. In support of their fifth assi/n,ent of error, petitioners ar/ued that the Court of
ppeals erred in rel:in/ ,erel: on the certification of the Municipal 1reasurer of San
?uan to the effect that his office >has a record of real propert: holdin/ of Ra,on and
urea )a*e+> consistin/ of a lot located at M. ?. Paterno Street and assessed at
P#3,348.88 under 1a< Declaration No. %#D8@ of the land records of said ,unicipalit:,
for a ta< declaration is not evidence of title of propert:, and respondent rcilla did not
present an: other evidence to prove that petitioners are reall: o!ners of a lot in San
?uan, Ri+alC that even /rantin/ that the: are o!ners of a lot, still as ,aintained b: the
P..C, the: are not dis;ualified to ac;uire the lot in ;uestion as the: ,erel: stepped
into the shoes of the ori/inal purchaser Cristeta 7a;uihonC that R. . No. @4D, relied
upon b: respondent in his co,plaint in assertin/ that the a!ard of the lot to petitioner
urea )a*e+ !as null and void, is not applicable to the case and could not therefore
have been violated.
In the decision under revie!, the Court of ppeals said that to be an a!ardee of
P..C-s lots, one ,ust not >alread: o!n or hold under a contract to bu: residential lot
or lots in an: subdivision situated in ... San ?uan ... (E<hibits D'% and L0.>
Para/raph 4 of the Conditional Contract to Sell (E<hibit &0 also provides that >an:
transfer that ,a: be authori+ed or per,itted b: the CORPOR1ION shall be under the
condition that the transferee is ;ualified to ac;uire a lot under the rules and re/ulations
of the CORPOR1ION ...>
1he sole evidence sub,itted b: respondent rcilla to prove that petitioners herein
!ere dis;ualified to be transferees of the lot in ;uestion !as the certification of the
1reasurer of San ?uan (E<hibit I0 that there is a ta< declaration No. %#D8@ of the land
records of said ,unicipalit: in the na,e of Ra,on and urea )a*e+. Said 1a<
declaration is insufficient to prove o!nership. It has been held anent this ,atter that F
ssess,ent alone is of little value as proof of title. Mere ta<
declaration does not vest o!nership of the propert: in the declarant>
(Province of Ca,arines Sur vs. Director of 7ands, $@ Phil. $88, $3#
citin/ Evan/elista vs. 1aba:u:on/, & Phil., $8&C Casi,iro vs.
Bernande+, 4 Phil., 5$%C Elu,barin/ vs. Elu,barin/, 3% Phil. #D@0.
It is !ell'settled that neither ta< receipts nor declaration of o!nership for ta<ation
purposes are evidence of o!nership or of the ri/ht to possess realt: !hen not
supported b: other effective proofs. (Elu,barin/ vs. Elu,barin/, 3% Phil. #D@,
#DD#D40.
5
It has not been proven, therefore, that petitioners herein are o!ners of a lot in San
?uan, and conse;uentl: dis;ualified to be transferees of the ;uestioned lot.
R.. No. @4D, relied upon b: herein respondent in his co,plaint, in assertin/ that the
a!ard to petitioners !as null and void, is not applicable to the instant case. Said ct
authori+es cities, ,unicipalities and provinces to purchase andMor e<propriate ho,e
sites and landed estates and subdivide the, for resale at cost, and provides in Section
# that 3@ no such lot shall be sold to an: person, !ho alread: o!ns a residential lot,
and an: sale ,ade to such person shall be void.> 1he P..C not bein/ a cit:,
,unicipalit:, or province, it is apparent that ct is not applicable to the instant case.
IN VIEA OB 1.E BORE"OIN", the decision of the Court of ppeals, dated ?anuar:
4, 34$4, in C'". R. No. #$%%&'R, is set aside, and the decision of the Court of Birst
Instance of 9ue+on Cit: in Civil Case No. 9'&$&4, is affir,ed. Costs a/ainst
respondent Pio rcilla.
I1 IS SO ORDERED.
6