Lonzame v. Amores

JR., J.:

In this petition for review on certiorari petitioner seeks to annul the order of the respondent Court of First Instance of Manila, Branch XXIV, which required him to accept the tender of payment made by the private respondents for the lot known as Lot No. 19-A, after herein petitioner had already acquired the same through a sale by public auction. The following facts are either undisputed or established. Eufemia Corporal Blones was the registered owner of a parcel of land, denominated as Lot No. 19, containing an area of 276.80 square meters more or less, situated at Tondo, Manila and covered by Transfer Certificate of Title No. 98530 of the Registry of Deeds for Manila.

On February 16, 1969, Blones and the spouses Segunda Manuel and Melanio Flores entered into a "Kasunduan ng Pagbibilihan" whereby Blones sold and spouses Flores bought a portion of Lot No. 19, denominated under the subdivision plan, as Lot No. 19-A and containing an area of 131.76 square meters, in consideration of the price of P200.00 per square meter, payable as follows: P10,000.00 upon signing of the contract, P5,000.00 on February 6, 1970, and the balance on February 6, 1975. Said contract also contained stipulations which provided that upon full payment of the purchase price, the vendor would segregate the area sold to the vendees and cause to be issued another title thereon in the name of said vendees.

The contract further stipulated that possession of Lot No. 19-A passes to the vendees upon the signing of the agreement. However, the "Kasunduan ng Pagbibilihan" was not registered with the Registry of Deeds for the City of Manila.

The stipulated payments were duly complied with by the Floreses. In the meantime, on August 12, 1970, for value received, Blones executed and delivered to Conchita Trinidad and Patrocinio Trinidad, a promissory note in the sum of P24,000.00, payable twelve months after date, with interest thereon at the rate of 12% per annum. Under the terms of the promissory note, if any interest is not paid when due, then the principal, together with all unpaid interests, shall at once become due and demandable.

As security for the payment of the promissory note, Blones likewise executed a real estate mortgage on August 12, 1970, over Lot No. 19. The real estate mortgage was duly registered with the Registry of Deeds for Manila. Before the first week of February, 1974, the Floreses offered to pay the sum of P12,000.00 to cover the unpaid balance on the purchase price but Blones and her son refused to accept the same.

Instead, the two proposed to return the spouses' but the latter rejected the proposal. At this point in time, the Flores spouses discovered that Lot No. 19 had been mortgaged to Conchita and Patrocinio, both surnamed Trinidad and married to Tito Tatoy and Fernando M. Marquez respectively. As a consequence, the spouses executed an affidavit of adverse claim and registered the same in the Register of Deeds for Manila.

Thereafter, they filed an action against Blones and the mortgagees to declare null and void the mortgage executed by Blones in favor of her co-defendants-mortgagees and to compel Blones to accept P12,000.00 as purchase price for Lot No. 19-A. Blones failed to pay the principal and interest on the promissory note when they fell due. The defendants-mortgagees, therefore, filed a cross-claim against Blones in the action instituted by the spouses Flores. After hearing on November 11, 1977, the respondent court rendered a decision which partly provides the following: x x x x x x x x x "(2) Ordering defendant Eufemia Corporal Blones to accept the sum of P12,000.00 from plaintiffs Melanio Flores and Segunda Manuel as full payment of the purchase price of said Lot No. 19-A; "(3) Ordering defendant Eufemia Corporal Blones to register said Lot No. 19-A with the Land Registration Commission in the names of said plaintiffs spouses, subject, however to the real estate mortgage, Exhibit 2, until the obligation secured thereby shall have been extinguished; x x x x x x x x x "(5) Under the cross-claim, ordering cross-defendant Eufemia Corporal Blones to pay cross-plaintiffs Conchita Trinidad and Patrocinio Trinidad the sum of P24,000.00 with interest at the rate of 12% per annum from August 6, 1974, which is the date of the demand until the same is fully paid, plus an additional sum of P2,500.00 as attorney's fees, within a period of not less than ninety (90) days from the date of the service of this decision, and in default of such payment, Lot No. 19 shall be sold to realize the aforementioned sum; ...

x x x x x x x x x On November 6, 1978, the defendants-mortgagees filed a motion for execution for failure of Blones to pay them the sum of P24,000.00 within the period fixed by the court. On November 23, 1978, the court granted the motion and ordered that a writ of execution be issued foreclosing the mortgage over Lot No. 19-A and that said property be sold according to the provisions of Sections 3 and 4 of Rule 68 of the Rules of Court. On December 12, 1978, the spouses Flores filed a motion for modification praying that the order of November 23, 1978 be modified to make it appear that the coverage of the sale should be Lot No. 19, as distinguished from Lot No. 19-A. On December 15, the court granted the motion.

However, during the sale at public auction, the whole of Lot No. 19, including Lot No. 19-A, was sold since the latter had no separate title yet and under Transfer Certificate of Title No. 985, it was still part of Lot No. 19. The highest bidder was petitioner Pedro Lonzame. On the same day that the public auction was held, petitioner as the highest bidder executed an "Option to Buy"

in favor of the spouses Flores which partly provided - "x x x In fairness to Mr. Melanio Flores, as plaintiff in said case, of 1102 T. Bugallon St., Tondo, Manila, he has the option to buy a portion of the parcel of land, particularly known as Lot No. 19-A, containing an area of ONE HUNDRED THIRTY ONE & 75/100 (131.75) SQUARE METERS more or less, in the amount of (P8,000.00) Pesos (sic), Philippine Currency, within fifteen (15) days from notice hereof, after date of confirmation of the sale by the Court of First Instance of Manila, Br. XXIV. On May 28, 1979, the petitioner filed a "Motion for Confirmation of Sheriff's Sale which was granted by the court on July 26, 1979.

On September 12, 1979, the "Sheriff's Final Deed " was issued. On September 27, 1979, the spouses Flores, through a letter, tendered a check dated September 25, 1979 in the amount of P8,000.00 in favor of the petitioner pursuant to the "Option to Buy"

which the latter had executed in their favor. The petitioner, however, refused the payment, alleging that the option to buy was no longer effective and binding because the fifteen (15) day period had already expired. On November 19, 1979, the spouses Flores filed an "Amended Motion for Execution and/or for Contempt of Court,"

stating among other things that since the decision of November 11, 1977 recognized that Lot No. 19-A was sold to them although "subject, however, to the real estate mortgage Exhibit 2 until the obligation secured thereby shall have been extinguished" and since herein petitioner has apparently succeeded to the rights and interests of Blones, petitioner should now be directed to accept the amount of P8,000.00 arrived at as follows: P12,000.00 amount to be paid to Blones as balance. - 4,000.00 P2,000.00 to be paid by Blones as moral damages 2,000.00 to be paid by Blones as attorney's fees.