Estate of Virgilio Ecarma v. Tropical Homes, Inc.

THIRD DIVISION

[G.R. No. 193355. November 8, 2017.]

ESTATE OF VIRGILIO ECARMA, petitioner,vs. TROPICAL HOMES, INC., respondent.

NOTICE

Sirs/Mesdames :

Please take notice that the Court, Third Division, issued a Resolution dated November 8, 2017, which reads as follows:

"G.R. No. 193355 (ESTATE OF VIRGILIO ECARMA, Petitioner, v. TROPICAL HOMES, INC., Respondent.) — The issue concerns the enforcement of a restriction on the title of the petitioner over a subdivision lot that bars the owner from gaining access into an adjoining subdivision through the perimeter fence.

The petitioner represents the deceased lot buyer against whom the restriction is sought to be enforced. The petitioner hereby seeks the reversal of the decision promulgated on November 27, 2009, 1 whereby the Court of Appeals (CA) reversed and set aside the decision rendered on February 29, 2008 of the Regional Trial Court (RTC), Branch 274, in Parañaque City in Civil Case No. 03-027 entitled Tropical Homes, Inc., and Spouses Octavio and Violeta Guevarra v. Virgilio Ecarma, a suit for specific performance, reconveyance and damages.

The background facts, as summarized by the CA, follow:

x x x [O]n January 21, 2003, plaintiff-appellant Tropical Homes and Spouses Octavio and Violeta Guevarra (plaintiffs below) filed a complaint for specific performance, reconveyance and damages against defendant Virgilio Ecarma.

In their complaint, plaintiff Tropical Homes, the developer of Better Living Subdivision and Spouses Octavio and Violeta Guevarra, owners of a parcel of land consisting of 354 square meters, situated at Bo. La Huerta, Parañaque City (Better Living Subdivision) and covered by Transfer Certificate of Title (TCT) No. (SW-105007) 33112-A, executed a deed of sale in favor of one Rodolfo A. Navarro, Jr., for a consideration of P63,720.00. Accordingly, TCT No. 59063 was issued in the name of Navarro, Jr., subject to Entry No. 13000 Restrictions annotated therein. Entry No. 13000 Restriction refers to the terms and conditions imposed by plaintiff Tropical Homes to the buyers of parcels of land situated at Better Living Subdivision.

Subsequently, on November 25, 1993, Navarro, Jr., executed a deed of absolute sale over the said property in favor of defendant Ecarma. Accordingly, TCT No. 59063 was cancel[l]ed and TCT No. 76907 was issued in the name of defendant. In the said title, Entry No. 13000 Restrictions was likewise annotated at the back of the said title.

Plaintiffs alleged that defendant purposely purchased the said lot from Navarro Jr., in order for the former to create a right-of-way through Better Living Subdivision, and to gain access to his property adjoining the subdivision. Plaintiff alleged that defendant demolished the perimeter fence between Better Living Subdivision and the latter's other property adjoining the subdivision, which constituted a violation of restriction No. 6 of Entry No. 13000 annotated in defendant's title. Because of the said violation, on August 19, 2002, Tropical Homes, through its general manager, sent a letter to defendant calling the latter's attention of his violation of creating a right-of-way between the perimeter fence of his lot situated at Better Living Subdivision, without permission from Tropical Homes, and suggesting defendant to make internal arrangements for a right-of-way with the former. On November 28, 2002, Tropical Homes' counsel sent a letter to defendant demanding the latter to reconvey to the former the parcel of land defendant bought from Navarro. In the said letter, Tropical Homes also stated that it is willing to refund to defendant the amount of P63,720.00, which is the consideration stated in the deed of sale. However, defendant failed to comply, hence, the complaint.

Plaintiffs prayed that judgment be rendered ordering defendant, as follows: (1) to execute a deed of reconveyance over the parcel of land covered by TCT No. 76907 [which was the subject of the deed of sale] in favor of plaintiff; (2) to surrender the original owner's copy of TCT No. 76907 to plaintiff upon payment of P63,720.00 by Tropical Homes, and in case of defendant's refusal, that the proper Register of Deeds be ordered to cancel the same and issue a new title in the name of Tropical Homes; and (3) to pay P100,000.00 by way of attorney's fees.

On April 24, 2003, defendant filed his Answer with Counterclaim, denying the allegations in the complaint. By way of special and affirmative defences, defendant alleged that: the RTC has no jurisdiction over the subject matter of the complaint, since the case is within the jurisdiction of the Housing and Land Use Regulatory Board (HLURB); Tropical Homes has no personality to file the case since the proper parties are plaintiff spouses Guevarra as vendors; and plaintiffs have no cause of action against him because he never violated provision No. 6 of the deed of sale, as the subject property was never used as a right of way and is exclusively used as his residence and for his family and members of his household. Defendant prayed that the complaint be dismissed for lack of jurisdiction and lack of merit, and that Tropical Homes be ordered to pay damages to defendant.

On July 22, 2003, pre-trial conference was conducted and the parties raised the following issues for resolution of the court: (1) whether the trial court has jurisdiction over the subject matter of the case; (2) whether defendant violated Entry No. 13000 Restriction (particularly provision no. 6 of the deed of sale) annotated in his title; (3) whether plaintiffs or defendant are entitled to damages; and (4) whether plaintiffs are entitled to right of reconveyance of the subject parcel of land.

In support of the complaint, plaintiff presented Celestina Lopez who testified that: she is the chief accountant of Tropical Homes; she oversees the preparation of all the books of accounts, contracts and deeds of sale involving properties being developed by Tropical; on December 9, 1991, a certain Rodolfo Navarro, Jr. went to Tropical Home's office and purchased a parcel of land; she learned that Navarro, Jr. subsequently sold the lot to defendant Ecarma; the transfer of the said lot was subject to a restriction as evidenced by Entry No. 13000; defendant violated the said restriction, particularly paragraph 6 thereof, since defendant used the said lot to gain access to the latter's property adjacent to the subdivision lot; due to this violation, Tropical Homes sent letters to defendant calling the attention of the latter for the violation, but the latter ignored the same; and Tropical Homes is willing to pay the original purchase price and is ready to make such refund.

Testifying for defendant, Teresita Fernandez Ecarma, identified her Judicial Affidavit dated November 17, 2006 consisting of seven pages. In the judicial affidavit, Ecarma stated in substance the following: that she is the wife of defendant Virgilio Ecarma, who is already bed ridden and is suffering from a disease called lateral sclerosis; that defendant purchased the subject property in 1993 from a certain Rodolfo Navarro, Jr. who purchased the same from Octavio and Violeta Guevarra; that they bought the property as part of their residence because the same was adjacent to their house in another subdivision; that when they bought the said property, they constructed a covered structure and used the same as reception area, garage and dog house; that the subject property and their adjacent property are both secured by a concrete wall on all sides, and the two properties are separated by a concrete fence with iron grill bars and a small gate to provide access from one property to another; that the steel gate fronting Doña Soledad Avenue inside the property subject of this case is always closed; that they did not violate any restriction as alleged by Tropical Homes, considering that nobody can use or enter the property located at Better Living Subdivision, except their family and household members; that due to the filing of the complaint, they were compelled to engage the services of a lawyer; that they suffered anxiety which aggravated the illness of her husband; that Tropical Homes is seeking to recover the property alleging that defendant violated the restrictions for a sum of P63,720.00 which is unreasonably and unconscionably low considering that the present value of the property is P5 million; and that at the time she and defendant bought the property, she was aware that a restriction was annotated in the title.

On April 1, 2005, defendant filed a motion to dismiss (demurrer to evidence) for insufficiency of evidence. However, on August 31, 2005, the RTC issued an order, denying defendant's motion to dismiss and set the presentation of evidence." 2

After trial, the RTC dismissed the complaint of the respondent. 3 On the issue of jurisdiction, it upheld its competence to decide the issue because the complaint did not fall under any of the three instances mentioned in Presidential Decree No. 957, as amended, to be within the exclusive jurisdiction of the Housing and Land Use Regulatory Board (HLURB). It opined that the respondent, being the vendor referred to in the restriction, had the personality to maintain the action; that, however, the respondent did not prove its complaint by preponderance of evidence considering that there was no evidence showing that the perimeter wall that separated BF Homes Subdivision from the adjoining subdivision had been demolished by the late Virgilio Ecarma; and that there was also no evidence showing that Ecarma had purposely purchased the lot to gain access into the property located in the adjoining subdivision.

The RTC disposed thusly:

WHEREFORE, all the foregoing duly considered, judgment is hereby rendered in favor of the defendant and against the plaintiff dismissing the present case without pronouncement as to costs.

SO ORDERED. 4

The respondent appealed in due course.

As mentioned, the CA promulgated the assailed decision reversing and setting aside the dismissal of the complaint by the RTC, and ordering the petitioner to execute a deed of reconveyance in favor of the respondent upon the latter's refund of the consideration for the sale.

The CA observed that there was sufficient evidence in the record to prove that Ecarma had violated the restriction in question; that such evidence consisted of the judicial affidavit of the representative of the petitioner admitting that the late Ecarma had demolished part of the perimeter fence and had constructed a grilled gate to enable access to his lot situated inside the adjacent subdivision; that the affidavit was a judicial admission of the fact that despite the prohibition indicated in the certificate of title, the late Ecarma had removed a portion of the perimeter fence and built a gate to serve as an access point between the lot in the subdivision maintained by the petitioner and his lot inside the adjoining subdivision; and that, accordingly, the reconveyance demanded was proper.

The fallo reads:

WHEREFORE, the assailed Decision dated February 29, 2008 of the RTC, Branch 274, Parañaque City, in Civil Case No. 03-027 is REVERSED and SET ASIDE. Appellee is ordered to execute a Deed of Reconveyance or Reversion of the parcel of land covered by TCT No. 76907 in favor of appellant upon refund to appellee the consideration of the sale in the amount of P63,720.00.

SO ORDERED. 5

Hence, this appeal.

Issues

The petitioner submits that the CA erred in ruling that there was a violation by the petitioner of the restriction indicated in the title; that there was no evidence to prove that the late Ecarma had purposely bought the property in question in order to gain access to his property in the adjacent subdivision; that the restriction indicated on the property was null and void for being vague, general and ambiguous; that the respondent had no standing to maintain the action because it was not a party to the contract between Rodolfo A. Navarro, Jr., seller, and Ecarma, buyer, and thus could not demand the reconveyance of the property; and that even if reconveyance was a proper remedy, the consideration was unconscionably low considering the current market value of the property.

Did the petitioner violate the restriction annotated in the title?

Ruling of the Court

The appeal lacks merit.

The appeal presents the need to determine the factual matter of whether or not the record contained sufficient evidence to prove that the late Ecarma had purchased on purpose the lot in question and had then demolished the perimeter fence to gain access to his lot in the adjoining subdivision. Such need would have warranted the outright dismissal of the appeal on the ground that the determination of a factual matter through this mode of appeal was disallowed under the Rules of Court which limits the appeal only to questions of law. 6 The limitation is premised on the Court not being a trier of facts. 7

Yet, there are instances in which the Court may be compelled to re-examine the factual findings of the CA. Among the instances are, namely: (a) when the findings are grounded entirely on speculation, surmises or conjectures; (b) when the inference made is manifestly mistaken, absurd or impossible; (c) when there is grave abuse of discretion; (d) when the judgment is based on a misapprehension of facts; (e) when the findings of facts are conflicting; (f) when in making its findings the CA went beyond the issues of the case, or its findings are contrary to the admissions of both the appellant and the appellee; (g) when the findings are contrary to those of the trial court; (h) when the findings are conclusions without citation of specific evidence on which they are based; (i) when the facts set forth in the petition as well as in the petitioner's main and reply briefs are not disputed by the respondent; (j) when the findings of fact are premised on the supposed absence of evidence and contradicted by the evidence on record; and (k) when the CA manifestly overlooked certain relevant facts not disputed by the parties, which, if properly considered, would justify a different conclusion. 8

This case falls under at least one of the exceptional instances, that is, that the RTC and the CA arrived at different conclusions in resolving the issues. Specifically, the RTC declared that there was no sufficient evidence to establish either that the perimeter fence built by the respondent had been demolished by Ecarma, or that Ecarma had purposely purchased the lot to gain access to his lot in the adjoining subdivision, but the CA found the contrary and held that there was a judicial admission to the effect that Ecarma had demolished the perimeter fence and had built a gate to connect his lot inside the respondent's subdivision with his lot inside the adjoining subdivision. Hence, the re-examination of the record by the Court is needed in order to finally adjudicate the factual issues.

Central to the controversy is Restriction No. 6 annotated in TCT No. 76907 which reads:

xxx xxx xxx

6. The parties hereby further agree that the roads in the subdivision are made available only to the VENDEE and the members of his family who shall utilize and make use of the lot or lots so acquired for residential purposes, and not otherwise as to gain entrance to, and/or exit from the subdivision in such a manner that the VENDEE shall create a Right-of-Way through the roads of the subdivision, to have access to properties within, beyond and adjoining the subdivision. Should the VENDEE be found to have purposely purchased a lot in the subdivision to gain access to properties within, beyond or adjoining, the subdivision, be it belonging to said VENDEE or other persons, or fail to erect a hollow block or adobe fence within one (1) year from this date, ownership of herein property shall revert to the VENDOR upon refund to the VENDEE of the amount of consideration hereinabove stated. 9 (Italics supplied for emphasis)

xxx xxx xxx

Restriction No. 6 speaks of several limitations imposed on the property, namely:

(1) Utilizing the lot so acquired to gain entrance to and/or exit from the subdivision in such a manner that the vendee shall create a right of way through the roads of the subdivision;

(2) Utilizing the lot so acquired to have access to properties within, beyond or adjoining the subdivision, be it belonging to said vendee or other persons; and

(3)  Failure to erect a hollow block or adobe fence within a year from the execution of the deed of sale. 10

After re-examination, the Court considers the finding by the CA to be correct. The judicial affidavit of the surviving spouse of Ecarma categorically stated that her husband and family had demolished the perimeter fence and built a gate to enable them to have access to both their properties. Also, as the RTC noted, Ecarma had bought the lot in question specifically because of its being adjacent to his existing property inside the subdivision adjoining that of the respondent's. 11 These circumstances were all set forth in the judicial affidavit, and the statements thereon were of the character of judicial admissions that did not require proof pursuant to Section 4, 12 Rule 129 of the Rules of Court. The inference that Ecarma had acquired the property found inside the subdivision of the respondent to have it connect with his lot inside the adjoining subdivision became strong. As such, demolishing a part of the perimeter fence in order to erect the access gate was among the activities expressly prohibited by Restriction No. 6.

The respondent thereby successfully established its complaint against the petitioner by preponderance of evidence by showing that the late Ecarma had committed a violation of the second limitation under Restriction 6 stated above.

The petitioner insists that a reading of Restriction No. 6 annotated on the TCT does not immediately reveal the scope of the limitations and restrictions imposed on the property. Hence, Restriction No. 6, being ambiguous, general and vague, was null and void.

The petitioner's insistence is unacceptable. The annotation of the limitations cannot be expected to be a full catalog of all the stipulations and agreements burdening the property. It is sufficient, indeed, that the vendee dealing with the property subject of the limitations is apprised of the encumbrances imposed on the property. The limitations still apply even if what had been imprinted on the TCT were couched in general terms. Consequently, for as long as the annotation subsisted on the certificate of title, the petitioner as the vendee had the responsibility to investigate further on the annotation due to its being an encumbrance on the land itself.

Lastly, the petitioner contends that the respondent was not a real party in interest because it was not a party to the contract of sale between the late Ecarma as the vendee and Navarro as the vendor. Hence, the respondent should not be allowed to maintain the suit.

The contention lacks substance.

It is true that only real parties in interest can prosecute or defend an action. 13 In this regard, the respondent was a real party in interest entitled to maintain the suit because it would suffer prejudice from the judgment to be rendered. The initial contract of sale regarding the lot in question had been concluded between the respondent as the owner and developer, and the Spouses Octavio and Violeta Guevarra, as the vendors, and Rodolfo Navarro, Jr., as the vendee. The sale resulted in the Register of Deeds issuing TCT No. 59063 in favor of Navarro. Entry No. 13000 (that is, the restrictions) was recorded as a matter of course on Navarro's TCT No. 59063. The restrictions were burdens on the property itself. When Navarro sold the property to the late Ecarma, the vendor also transferred to the latter as his vendee all the rights and the burdens on the property. Yet again, Entry No. 13000 was endorsed on the new TCT.

Under the circumstances, and consistent with the principles of the Torrens System of land registration, the respondent had the right to insist on the restriction in question. On the part of the petitioner, the limitations registered as encumbrances on the property itself were enforceable, regardless of the number of transfers of the burdened property made thereafter.

WHEREFORE, the Court DENIES the petition for review on certiorari for its lack of merit; and ORDERS the petitioner to pay the cost of the suit.

SO ORDERED."

Very truly yours,

(SGD.) WILFREDO V. LAPITANDivision Clerk of Court

 

Footnotes

1.Rollo, pp. 12-23; penned by Associate Justice Hakim S. Abdulwahid (retired) and concurred in by Associate Justice Sesinando E. Villon and Associate Justice Michael P. Elbinias (deceased).

2.Id. at 12-17.

3.Id. at 69-79.

4.Id. at 79.

5.Id. at 23.

6. Section 1, Rule 45 of the Rules of Court.

7.Co v. Vargas, G.R. No. 195167, November 16, 2011, 660 SCRA 451, 458.

8.Angeles v. Pascual, G.R. No. 157150, September 21, 2011, 658 SCRA 23, 29.

9.Rollo, p. 20.

10.Id. at 9.

11.Id. at 73.

12. Sec. 4.Judicial admissions. — An admission, verbal or written, made by a party in the course of the proceedings in the same case does not require proof. The admission may be contradicted only by showing that it was made through palpable mistake or that no such admission was made. (2a)

13. Section 2, Rule 3 of the Rules of Court.