FIRST DIVISION
[G.R. No. 233814. December 5, 2018.]
PEPITO T. LIM AND CLARITA SANTOS, petitioners, vs.FRIEDRICH L. SANTOS, ST. BENEDICT REALTY & DEVELOPMENT, INC., AND F. GURREA CONSTRUCTION, INC., respondents.
NOTICE
Sirs/Mesdames :
Please take notice that the Court, First Division, issued a Resolution datedDecember 5, 2018which reads as follows:
"G.R. No. 233814 — Pepito T. Lim and Clarita Santos vs. Friedrich L. Santos, St. Benedict Realty & Development, Inc., and F. Gurrea Construction, Inc.
Spouses Pepito T. Lim (Lim) and Clarita Santos (petitioners) filed a Complaint 1 for Annulment of Deeds and Title, Reconveyance and Recovery of Property with Damages against Arlene W. Koa (Koa), Atty. Libby S. Tan, Friedrich L. Santos (Friedrich), St. Benedict Realty and Development, Inc. (St. Benedict) and F. Gurrea Construction, Inc. (F. Gurrea) with regard to a parcel of land with an area of 125.90 square meters, located at 1839 Dagupan Street corner Balaya Street, Manila (subject property), formerly covered by Transfer Certificate of Title (TCT) No. 219987. 2 On said subject property stands a four-storey building constructed in October 1999. 3
Sometime in 2001, petitioners decided to sell the subject property and notified their tenants to vacate the premises. When one tenant refused to heed the demand, petitioners sought the assistance of Barangay Chairman Eugene Maningas (Chairman Maningas) before whom they filed a complaint. Petitioners likewise sought Koa's assistance who was allegedly a broker as well as a then councilor of Manila District I. 4
Koa assured petitioners that she would take care of everything and that together with Chairman Maningas, would handle the selling of the subject property. Koa then asked for the original documents of the subject property. Petitioners then delivered to Koa the original and photocopies of TCT No. 219987, Declaration of Real Property, National Housing Authority (NHA) Certificate of Ownership, NHA Receipt, Real Property Tax Receipt, along with various permits. 5 CAIHTE
In April 2003, petitioners asked Koa to return the original documents because despite follow-ups, there had been no update with regard the sale of the subject property. Koa failed to return the original documents, constraining petitioners to file an Affidavit of Loss which was annotated at the back of TCT No. 219987 on June 20, 2003. Petitioners also filed a Petition for the Issuance of another Owner's Duplicate Copy of TCT No. 219987. The said petition was granted on September 25, 2003. 6
On November 20, 2003, when petitioners went to the Register of Deeds of Manila to get a certification that they had the court Order granting the Petition for the Issuance of New Title, they learned that the subject property's title had already been transferred to Koa's name 7 and it was to be sold to a certain Friedrich. They were able to obtain copies of the cancelled owner's copy of TCT No. 219987, Deed of Absolute Sale 8 between purportedly executed between Lim and Koa, an Affidavit of Recovery 9 purportedly signed by Lim, and a Deed of Real Estate Mortgage 10 between Koa and Friedrich. 11 Petitioners also learned that a Deed of Absolute Sale 12 between Koa and St. Benedict and a Deed of Absolute Sale 13 between St. Benedict and F. Gurrea involving the subject property had also been executed.
In a Decision 14 dated May 5, 2015, the Regional Trial Court (RTC) of Manila, Branch 50, ruled in favor of petitioners and held that the sale of the subject property between Lim and Koa was void. The RTC found that petitioners had established by clear, positive and convincing evidence that Lim's signatures in the Deed of Absolute Sale were forged. 15
The RTC also voided the mortgage between Koa and Friedrich, and held that Friedrich was not an innocent mortgagee for value because he failed to procure the necessary authorization from the NHA as required in the annotation inscribed at the back of the subject property's title. The RTC held that the annotation already served as a warning to Friedrich that the subject property was subject to some restrictions, and yet, he still proceeded with the execution of the Deed of Real Estate Mortgage and Deed of Absolute Sale. 16
The RTC likewise held that St. Benedict and F. Gurrea were not buyers in good faith because they failed to procure the necessary authorization from the NHA. 17 DETACa
On appeal, the Decision 18 dated February 15, 2017 of the Court of Appeals reversed and set aside the assailed RTC Decision. It noted that though the Deed of Absolute Sale between Lim and Koa was forged, the subsequent transfers remained valid as it found Friedrich as a mortgagee in good faith and St. Benedict and F. Gurrea as buyers in good faith. It also found that when Koa mortgaged the property to Friedrich, it had already been covered by TCT No. 260282 in the name of Koa, and nothing in the record indicated that Friedrich knew of any defects or flaws in Koa's title that should have put him on guard and caused him to inquire beyond it. 19 It also disagreed with the RTC as regards the authorization from NHA as it found that the said annotation was binding only on the owners even previous to petitioners. Moreover, non-compliance would not have rendered the transfer void, but merely given rise to a cause of action on the part of the NHA. 20
Petitioners then filed a Petition for Review on Certiorari21 before this Court. Pending the resolution of which, the parties entered into a Compromise Agreement on September 13, 2018.
On October 2, 2017, petitioners and respondents Friedrich, St. Benedict, and F. Gurrea filed a Joint Motion to Approve Compromise Agreement 22 for our consideration and approval, stating: HEITAD
PRELIMINARY STATEMENT
1. In order to buy peace and to put an end to the litigation between them, the parties willfully and voluntarily agreed to enter into this compromise agreement;
2. For purposes of this Compromise Agreement[,] the parties and their respective designations herein are as follows:
a. Petitioners Pepito Lim and Clarita Santos who are represented herein by Clarita Santos and Gina Santos assisted by their counsel Atty. Rolando Abing;
b. Respondents Friedrich Santos and St. Benedict Realty & Development, Inc. and all the cross claim defendants and third party defendants in the original case assisted by their counsel Atty. Rolando Borja. Collectively these respondents are designated as St. Benedict for brevity;
c. Respondent F. Gurrea Construction, Inc., herein referred to as Gurrea for brevity, is represented herein by its counsel Atty. Marven Daquilanea;
3. The obligations of each party under this compromise agreement are set out hereunder;
RESPECTIVE OBLIGATIONS OF THE PARTIES
4. The parties hereby confirm, declare and agree that while the title to the property subject of this case is registered in the name of respondent F. Gurrea Construction, Inc. (under TCT No. 282964) the parties recognize, affirm and validate the beneficial ownership thereof of St. Benedict Realty & Development, Inc.[;]
5. In consideration of the compromise agreement, the parties herein agree that the subject property be sold by the petitioners, to any interested party for a cash price at current fair market value. For this purpose[,] Gurrea shall execute the appropriate Board Resolution authorizing Gina Santos, who is the daughter and the representative of the petitioners, to sell the property to any interested party at fair market value, to sign in the documents of sale, and to receive the proceeds of the sale from the buyer;
6. Parties agree that upon approval of this compromise agreement[,] the actual physical possession of the subject property and the Owner's Duplicate Copy of the Transfer Certificate of Title No. 282964 shall be delivered to Gina Santos by respondent Gurrea in order that whatever is necessary shall be done to enable the petitioners to sell [the] property for the highest possible market price. If there are tenants or illegal occupants on the subject property, it shall be the obligation of respondent Gurrea to remove them before the delivery of the actual possession of the property to the [p]etitioners, and thereafter the [p]etitioners shall be responsible for the exclusive possession and the occupation of the property turned over to them;
7. Gina Santos is constituted as the duly[-]authorized representative of the parties who will receive the proceeds of the sale from the buyer. After her receipt of the proceeds of such sale, Gina Santos shall, without regard to the actual selling price, deliver the net amount of Two Million Two Hundred Fifty Thousand Pesos (Php2,250,000.00) to respondent St. Benedict Realty and Development, Inc. thru Friedrich L. Santos, within ten (10) days from receipt thereof[;] ATICcS
8. In addition to and separately from this net amount to be paid or delivered to St. Benedict Realty and Development, Inc., petitioners and Gina Santos shall also pay or deliver from the proceeds of the sale received from the buyer the total amount of Seven Hundred Fifty Thousand Pesos (Php750,000.00) for the expenses agreed by all the parties as the collective share of the respondents in the expenses for the sale of the property particularly for those due for the proportionate share in the capital gains tax and all other taxes due on the sale, the unpaid real property taxes up to the time of the sale, and attorney's fees. Petitioners and Gina Santos shall apply the expenses and pay for these expenses in accordance with the agreement between and among the respondents on the application of such amount[;]
9. Respondents[,] collectively referred to as St. Benedict[,] [have] settled the claims of Gurrea in a separate agreement between them as to any residual amount due to Gurrea for its crossclaims and third party claims and such claims are hereby deemed satisfied and extinguished with the submission of this compromise agreement[;]
10. Parties hereby waive and extinguish their respective claims against each other and shall hereafter desist from filing any case against each other in connection with the property subject matter hereof and any transactions relating to the transfer of ownership thereof from the petitioners up to St. Benedict Realty & Development, Inc. and eventually to its present registered owner F. Gurrea Construction, Inc. Parties agree that this Compromise Agreement is full, absolute, universal and complete settlement of any and all issues relating to and arising from the subject matter commercial building property[;] ETHIDa
Further, St. Benedict Realty and Development, Inc. and F. Gurrea Construction, Inc. hereby absolutely and irrevocably release, remise, renounce and forever discharge each other, their respective officers, employees, agents, representatives, stockholders, attorneys, heirs, assigns, successors-in-interest, parent, subsidiaries, affiliates, and their respective officers, employees, agents, representatives, stockholders, attorneys, heirs, assigns, and successors-in-interest, from any and all liabilities, claims, demands, actions and causes of action of whatever nature and kind, which may have arisen by reason of, or in any manner be connected with the construction of the three-storey building in Boracay Island for Malay Resort Holdings, Inc. and the dacion/sale of the Property by St. Benedict Realty and Development, Inc. in favor of F. Gurrea Construction, Inc.[;]
11. The representatives of the respondent corporations herein guarantee that they are duly authorized and empowered by the respective corporations to enter into this compromise agreement by virtue of the requisite Board Resolutions[;]
12. Should any of the provision/s in this compromise agreement will (sic) be stricken of (sic) as contrary to law, public order, public policy and good customs, the unaffected provisions herein should stand on its own and the parties herein maybe bound thereto[; and]
13. Non-compliance by any party of the provisions of this agreement, the same (sic) shall be a ground for issuance of a writ of execution in favor of the aggrieved party.
PRAYER
WHEREFORE, premises considered, it is most respectfully prayed of the Honorable Supreme Court that judgment be rendered on the basis of the foregoing compromise agreement.
City of Manila, September 13, 2018.
Finding that the said Compromise Agreement is not contrary to law, morals, good customs and public policy, and appears to be freely executed by petitioners and respondents, with the assistance of their respective counsels, the Court grants the prayer of the parties and hereby grants judicial approval of their Compromise Agreement.
WHEREFORE, the joint motion is GRANTED and the instant petition is hereby DISMISSED. The Compromise Agreement dated September 13, 2018 is NOTED and APPROVED, and the parties are enjoined to abide by its terms and conditions and to comply strictly and faithfully with their corresponding obligations.
The case is considered CLOSED and TERMINATED. cSEDTC
SO ORDERED."
Very truly yours,
(SGD.) LIBRADA C. BUENADivision Clerk of Court
Footnotes
1.Rollo, pp. 157-173.
2.Id. at 85-86.
3.Id. at 46.
4.Id.
5.Id.
6.Id. at 47.
7.Id. at 97-98.
8.Id. at 90-91.
9.Id. at 95.
10.Id. at 92-94.
11.Id. at 48.
12.Id. at 102-104.
13.Id. at 110-111.
14. Rendered by Judge Bibiano G. Colasito; id. at 214-238.
15.Id. at 227.
16.Id. at 231-232.
17.Id. at 232-233.
18. Penned by Associate Justice Henri Jean Paul B. Inting, concurred in by Associate Justices Marlene B. Gonzales-Sison and Ramon A. Cruz; id. at 45-64.
19.Id. at 56.
20.Id. at 58.
21.Id. at 13-39.
22.Id. at 270-276.