Eland Philippines, inc.

, Petitioner, versus azucena garcia, elino fajardo, and heir of tiburcio malabanan named teresa malabanan, Respondents G.R. No. 173289 | 2010-02-17
DECISION

PERALTA, J.: This is a Petition for Review on Certiorari under Rule 45 of the Rules of Court, seeking to reverse and set aside the decision[1] dated February 28, 2006 of the Court of Appeals (CA) in CA-G.R. CV No. 67417, which dismissed the appeal of petitioner Eland Philippines, Inc. and affirmed the Resolutions dated November 3, 1999 and June 28, 2006 of Branch 18, Regional Trial Court (RTC) of Tagaytay City. The facts of the case, as shown in the records, are the following: Respondents Azucena Garcia, Elino Fajardo, and Teresa Malabanan, the heir of Tiburcio Malabanan, filed a Complaint[2] dated March 2, 1998 for Quieting of Title with Writ of Preliminary Injunction with the RTC, Branch XVIII, Tagaytay City against petitioner Eland Philippines, Inc. Respondents claimed that they are the owners, in fee simple title, of a parcel of land identified as Lot 9250 Cad-355, Tagaytay Cadastre, Plan Ap-04-008367, situated in Barangay Iruhin, Tagaytay City, containing an area of Two Hundred Forty-Four Thousand One Hundred Twelve (244,112) square meters, by occupation and possession under the provisions of Sec. 48 (b)[3] of the Public Land Law or Commonwealth Act No. 141, as amended. For having been in continuous, public, and adverse possession as owners of the said lot for at least thirty years, respondents stated that they were not aware of any person or entity who had a legal or equitable interest or claim on the same lot until the time they were requesting that the lot be declared for tax purposes. They found out that the lot was the subject of a land registration proceeding that had already been decided by the same court[4] where their complaint was filed. They also found out that Decree No. N-217313, LRC Record No. N62686, was already issued on August 20, 1997 to the petitioner pursuant to the Decision dated June 7, 1994 of the same court. They averred that they were not notified of the said land registration case; thus, they claimed the presence of misrepresentation amounting to actual or extrinsic fraud. Thus, they argued that they were also entitled to a writ of preliminary injunction in order to restrain or enjoin petitioner, its privies, agents, representatives, and all other persons acting on its behalf, to refrain from committing acts of

dispossession on the subject lot. Summons, together with a copy of the complaint, were served on the petitioner on April 7, 1998. On April 29, 1998, petitioner filed an Entry of Appearance with Motion for Extension of Time,[5] which the trial court granted[6] for a period of ten (10) days within which to file a responsive pleading. Petitioner filed a Second Motion for Extension of Time to File Answer[7] dated April 29, 1998, which the trial court likewise granted.[8] Thereafter, petitioner filed a Motion to Dismiss[9] dated May 9, 1998, stating that the pleading asserting the claim of respondents stated no cause of action, and that the latter were not entitled to the issuance of a writ of preliminary injunction, setting the same for hearing on May 21, 1998. On the date of the hearing, the trial court issued an Order,[10] which granted the respondents ten (10) days from that day to file a comment, and set the date of the hearing on July 23, 1998. Respondents filed a Motion to Admit Comment/Opposition to Defendant Eland,[11] together with the corresponding Comment/Opposition[12] dated June 8, 1998. On the scheduled hearing of September 23, 1998, the trial court issued an Order,[13] considering the Motion to Dismiss submitted for resolution due to the non-appearance of the parties and their respective counsels. The said motion was eventually denied by the trial court in an Order[14] dated September 25, 1998, ruling that the allegations in the complaint established a cause of action and enjoined petitioner Eland to file its answer to the complaint within ten (10) days from receipt of the same. Petitioner then filed two Motions for Extension to File an Answer.[15] Petitioner, on November 9, 1998, filed a Motion for Reconsideration[16] of the trial court's Order dated September 25, 1998, denying the former's Motion to Dismiss. Again, petitioner filed a Motion for Final Extension of Time to File Answer[17] dated November 6, 1998. Respondents filed their Comment/Opposition to Motion for Reconsideration dated November 24, 1998. Subsequently, the trial court denied petitioner's motion for reconsideration in an Order[18] dated January 11, 1999. Meanwhile, respondents filed a Motion to Declare Defendant Eland in Default[19] dated November 17, 1998. On December 4, 1998 Petitioner Eland filed its Comment (on Plaintiff's Motion to Declare Defendant Eland in Default)[20] dated December 2, 1998, while respondents filed a Reply to Comment (on Plaintiff's Motion to Declare Defendant Eland in Default)[21] dated December 29, 1998. Thereafter, the trial court issued an Order[22] dated January 11, 1999 declaring the petitioner in default and allowed the respondents to present evidence ex parte. Petitioner filed a Motion for Reconsideration (of the Order dated 11 January 1999)[23] dated February 5, 1999 on the trial court's denial of its motion to dismiss and in declaring it in default. The trial court in an Order[24] dated March 18, 1999, denied the

former and granted the latter. In the same Order, the trial court admitted petitioner's Answer Ad Cautelam. Earlier, petitioner filed its Answer Ad Cautelam (With Compulsory Counterclaim)[25] dated November 12, 1998. Respondents countered by filing a Motion to Expunge Eland's Answer from the Records[26] dated December 2, 1998. Petitioner filed its Opposition (to Plaintiff's Motion to Expunge Eland's Answer from the Records)[27] dated December 21, 1998, as well as a Comment (on Plaintiff's Motion to Expunge Eland's Answer from the Records)[28] dated January 26, 1999. Consequently, respondents filed a Motion to Set Presentation of Evidence Ex Parte[29] dated January 18, 1999, which was granted in an Order[30] dated January 22, 1999. On January 28, 1999, respondents presented their evidence before the Clerk of Court of the trial court which ended on February 3, 1999; and, on February 10, 1999, respondents filed their Formal Offer of Evidence.[31] However, petitioner filed an Urgent Motion to Suspend Plaintiff's Ex Parte Presentation of Evidence[32] dated February 8, 1999. In that regard, the trial court issued an Order[33] dated February 11, 1999 directing the Clerk of Court to suspend the proceedings. On May 14, 1999, respondents filed a Motion for Clarification[34] as to whether or not the evidence presented ex parte was nullified by the admission of petitioner's Answer Ad Cautelam. Petitioner filed its Comment[35] dated May 13, 1999 on the said motion for clarification. A pre-trial conference was scheduled on May 27, 1999, wherein the parties submitted their pre-trial briefs.[36] However, petitioner filed a Motion to Suspend Proceedings[37] dated May 24, 1999 on the ground that the same petitioner had filed a petition for certiorari with the CA, asking for the nullification of the Order dated March 18, 1999 of the trial court and for the affirmation of its earlier Order denying petitioner's Motion to Dismiss. The petition for certiorari was subsequently denied; and a copy of the Resolution[38] dated June 14, 1999 was received by the trial court. Hence, in an Order[39] dated July 7, 1999, the trial court ruled that the reception of evidence already presented by the respondents before the Clerk of Court remained as part of the records of the case, and that the petitioner had the right to cross-examine the witness and to comment on the documentary exhibits already presented. Consequently, petitioner filed a Motion for Reconsideration[40] dated July 19, 1999, but it was denied by the trial court in an Omnibus Order[41] dated September 14, 1999. Eventually, respondents filed a Motion for Summary Judgment[42] dated August 5, 1999, while petitioner filed its Opposition[43] to the Motion dated August 31, 1999. In its Resolution[44] dated November 3, 1999, the trial court found favor on the respondents. The

dispositive portion of the Resolution reads: WHEREFORE, premises considered, the motion for summary judgment is hereby GRANTED and it is hereby adjudged that: 1. Plaintiffs are the absolute owners and rightful possessors of Lot 9250, CAD-355, Tagaytay Cadastre, subject to the rights of occupancy of the farm workers on the one-third area thereof; 2. The Judgment dated June 7, 1994 in Land Registration Case No. TG-423 is set aside and the Decree No. N-217313, LRC Record No. N-62686 dated August 20, 1997 is null and void; 3. The Original Transfer Certificate of Title is ordered to be canceled, as well as tax declaration covering Lot 9250, Cad-355. SO ORDERED. Petitioner appealed the Resolution of the trial court with the CA, which dismissed it in a Decision dated February 28, 2006, which reads: WHEREFORE, for lack of merit, the appeal is DISMISSED. The assailed Resolution dated November 3, 1999, of the RTC, Branch 18, Tagaytay City, in Civil Case No. TG-1784, is AFFIRMED. No pronouncement as to cost. SO ORDERED. Hence, the present petition. The grounds relied upon by the petitioner are the following: 5.1 THE COURT OF APPEALS ACTED IN A MANNER NOT IN ACCORD WITH LAW AND WITH THE APPLICABLE DECISIONS OF THIS HONORABLE COURT WHEN IT RULED THAT RESPONDENTS' MOTION FOR SUMMARY JUDGMENT DATED AUGUST 05, 1999 DID NOT VIOLATE THE TEN (10)-DAY NOTICE RULE UNDER SECTION 3, RULE 35 OF THE 1997 RULES OF CIVIL PROCEDURE. 5.2 THE COURT OF APPEALS ACTED IN A MANNER NOT IN ACCORD WITH LAW AND WITH THE APPLICABLE DECISIONS OF THIS HONORABLE COURT WHEN IT RULED THAT A MOTION FOR SUMMARY JUDGMENT IS PROPER IN AN ACTION FOR QUIETING OF TITLE.

5.3 THE COURT OF APPEALS ACTED IN A MANNER NOT IN ACCORD WITH LAW AND WITH THE APPLICABLE DECISIONS OF THIS HONORABLE COURT WHEN IT RULED THAT THERE ARE NO GENUINE FACTUAL AND TRIABLE ISSUES IN CIVIL CASE NO. TG-1784. 5.4 THE COURT OF APPEALS ACTED IN A MANNER NOT IN ACCORD WITH LAW AND WITH THE APPLICABLE DECISIONS OF THIS HONORABLE COURT WHEN IT UPHELD THE RESOLUTION DATED NOVEMBER 03, 1999 OF THE COURT A QUO, BASED ON TESTIMONIES OF RESPONDENTS' WITNESSES TAKEN WITHOUT GRANTING HEREIN PETITIONER THE RIGHT TO CROSS-EXAMINE AND UPON DOCUMENTARY EXHIBITS PRESENTED BUT NOT ADMITTED AS EVIDENCE. 5.5 THE COURT OF APPEALS ACTED IN A MANNER NOT IN ACCORD WITH LAW AND WITH THE APPLICABLE DECISIONS OF THIS HONORABLE COURT WHEN IT UPHELD THE RESOLUTION DATED NOVEMBER 03, 1999 OF THE COURT A QUO BASED ON FALSIFIED "EVIDENCE." 5.6 THE COURT OF APPEALS ACTED IN A MANNER NOT IN ACCORD WITH LAW AND WITH THE APPLICABLE DECISIONS OF THIS HONORABLE COURT WHEN IT FAILED TO RULE THAT THE COURT A QUO PATENTLY DEPRIVED PETITIONER OF ITS RIGHT TO DUE PROCESS IN RENDERING ITS SUMMARY JUDGMENT. 5.7 THE COURT OF APPEALS ACTED IN A MANNER NOT IN ACCORD WITH LAW AND WITH THE APPLICABLE DECISIONS OF THIS HONORABLE COURT WHEN IT HELD THAT THE COURT A QUO HAS JURISDICTION TO CANCEL PETITIONER'S ORIGINAL CERTIFICATE OF TITLE (OCT) NO. 0-660 IN AN ACTION TO QUIET TITLE. According to the petitioner, a motion for summary judgment must be served at least ten (10) days before the date set for hearing thereof, and that a hearing must be held to hear the parties on the propriety of a summary judgment, per Sec. 3 of Rule 35 of the Revised Rules of Court, which was not observed because the petitioner received a copy of the respondents' motion for summary judgment only on August 20, 1999, or the very same day that the motion was set for hearing. Petitioner further claims that the trial court never conducted any hearing on the motion for summary judgment. Petitioner also argued that a summary judgment is only available to a claimant seeking to recover upon a claim, counterclaim or cross-claim or to obtain a declaratory relief, and does not include cases for quieting of title. Furthermore, petitioner also averred that a summary judgment has no place in a case where genuine factual and triable issues exist, like in the present case. It added that the genuine and triable issues were all raised in its Answer Ad Cautelam.

Another ground relied upon by petitioner is its failure to cross-examine the witnesses for the respondents without fault on its part. It also stated that the trial court did not issue any order admitting in evidence the documentary exhibits presented by the respondents. Hence, according to the petitioner, the trial court gravely erred in relying upon the testimonies of the witnesses for the respondents, without having the latter cross-examined; and upon the documentary exhibits presented but not admitted as evidence. Petitioner further claimed that the trial court based its Resolution dated November 3, 1999 on falsified evidence. Lastly, petitioner raised the issue that by rendering summary judgment, the trial court deprived the former of its right to due process. Respondents, in their Comment[45] dated October 16, 2006, countered the first issue raised by the petitioner, stating that their filing of the motion for summary judgment fourteen (14) days before the requested hearing of the same motion was in compliance with Sec. 3, Rule 35 of the Rules of Court. As to the second and third issues, respondents argued that petitioner had a constricted perception of the coverage of the Rules of Summary Judgment, and that the latter's citation of cases decided by this Court showed the diverse causes of action that could be the subject matters of summary judgment. Respondents also posited that petitioner's statements in its Answer Ad Cautelam, although denominated as Specific Denial, were really general denials that did not comply with the provisions of Section 10, Rule 8 of the Rules of Court. Anent the fourth and fifth issues, respondents claimed that despite the opportunity, or the right allowed in the Order dated July 17, 1999 of the trial court, for the petitioner to crossexamine respondents' witnesses and to comment on the documentary evidence presented ex parte after the default order against the same petitioner, the latter evasively moved to set aside respondents' evidence in order to suspend further proceedings that were intended to abort the pre-trial conference. They added that petitioner neglected to avail itself of, or to comply with, the prescription of the rules found in Rule 35 of the Rules of Court by opting not to avail itself of the hearing of its opposition to the summary judgment after receiving the Order dated August 20, 1999; by failing to serve opposing affidavit, deposition or admission in the records; and by not objecting to the decretal portion of the said Order dated August 20, 1999, which stated that the motion for summary judgment has been submitted for resolution without further argument. With regard to the contention of the petitioner that the trial court wrongly appreciated falsified evidence, respondents asserted that petitioner's counsel failed to study carefully the records of the proceedings for the presentation of the evidence ex parte to be able to know that it was not only a single-day proceeding, and that more than one

witness had been presented. They further averred that the trial court did not only rely on the photographs of the houses of the occupants of the property in question. Finally, as to the sixth and seventh issues, respondents asseverated that their complaint alleged joint causes of action for quieting of title under Art. 476 of the New Civil Code and for the review of the decree of registration pursuant to Sec. 32 of the Property Registration Decree or P.D. No. 1529, because they are complimentary with each other. The petition is impressed with merit. The basic contention that must be resolved by this Court is the propriety of the summary judgment in this particular case of quieting of title. Rule 35 of the 1997 Rules of Civil Procedure provides: SEC. 1. Summary judgment for claimant. - A party seeking to recover upon a claim, counterclaim, or cross-claim or to obtain a declaratory relief may, at any time after the pleading in answer thereto has been served, move with supporting affidavits for a summary judgment in his favor upon all or any part thereof SEC. 3. Motion and proceedings thereon. - The motion shall be served at least ten (10) days before the time specified for the hearing. The adverse party prior to the day of hearing may serve opposing affidavits. After the hearing, the judgment sought shall be rendered forthwith if the pleading, depositions, and admissions on file together with the affidavits, show that, except as to the amount of damages, there is no genuine issue as to any material fact and that the moving party is entitled to a judgment as a matter of law.[46] In the present case, it was the respondents who moved for a summary judgment. Petitioner contended that the ten-day notice rule was violated, because the copy of the motion for summary judgment was served only on August 20, 1999 or on the same day it was set for hearing. It also added that even if the petitioner received a copy of the motion only on August 20, 1999, there was no hearing conducted on that date because the trial court issued an order giving petitioner 10 days within which to file its comment or opposition. The above specific contention, however, is misguided. The CA was correct in its observation that there was substantial compliance with due process. The CA ruled, as the records show, that the ten-day notice rule was substantially complied with because when the respondents filed the motion for summary judgment on August 9, 1999, they furnished petitioner with a copy thereof on the same day as shown in the registry receipt and that the motion was set for hearing on August 20, 1999, or 10 days from the date of the filing thereof.

Due process, a constitutional precept, does not, therefore, always and in all situations a trialtype proceeding. The essence of due process is found in the reasonable opportunity to be heard and submit one's evidence in support of his defense. What the law prohibits is not merely the absence of previous notice, but the absence thereof and the lack of opportunity to be heard.[47] Petitioner further argues that summary judgment is not proper in an action for quieting of title. This particular argument, however, is misplaced. This Court has already ruled that any action can be the subject of a summary judgment with the sole exception of actions for annulment of marriage or declaration of its nullity or for legal separation.[48] Proceeding to the main issue, this Court finds that the grant of summary judgment was not proper. A summary judgment is permitted only if there is no genuine issue as to any material fact and a moving party is entitled to a judgment as a matter of law. A summary judgment is proper if, while the pleadings on their face appear to raise issues, the affidavits, depositions, and admissions presented by the moving party show that such issues are not genuine.[49] It must be remembered that the non-existence of a genuine issue is the determining factor in granting a motion for summary judgment, and the movant has the burden of proving such nonexistence. The trial court found no genuine issue as to any material fact that would necessitate conducting a full-blown trial. However, a careful study of the case shows otherwise. In their motion for summary judgment, the respondents failed to clearly demonstrate the absence of any genuine issue of fact. They merely reiterated their averments in the complaint for quieting of title and opposed some issues raised by the petitioner in its Answer Ad Cautelam, to wit: Nonetheless, going by the records of the admitted and uncontroverted facts and facts established there is no more litigious or genuine issue of basic fact to be the subject of further trial on the merits. The first defense as to the identity of the subject property, the issue has already become nil because of not only the lack of seriousness in the allegations but also because the identity of the subject parcel of land Lot 9250 was proven by the approved plan Ap-04-008367 that was already presented and offered in evidence as Exhibit "B" for the plaintiffs. The second defense that plaintiffs' claim of the property is barred by prior judgment rule is unavailing considering that the vital documentary evidence they presented in Land Registration Case No. TG-423 before this Honorable Court the markings and descriptions of

such documents are stated in the Judgment quoted as follows: (1) Tax Declaration No. 015224-A (Exhibit "Q"; x x x. (2) Tax Declaration No. 05019-B (Exhibit "R"; x x x. (3) Tax Declaration No. 01926-B (Exhibit "S"; x x x. (4) Tax Declaration No. GR-007-0007 (Exhibit "T" x x x. are the very documentary evidence adopted and relied upon by the plaintiffs in seeking the review and nullity of the Decree No. 217313 issued on August 20, 1997 under LRC Record No. N-62686 pursuant to the Judgment dated June 7, 1994 rendered by this Honorable Court penned by the acting presiding Judge Eleuterio F. Guerrero in said Land Registration Case No. TG-423. On the other hand, as to the gravamen of the claims in the complaint, the plaintiffs have presented clear and convincing evidence as the well-nigh or almost incontrovertible evidence of a registerable title to the subject land in the proceedings conducted on the reception of evidence ex-parte for the plaintiffs establishing in detail the specifications of continuous, open, exclusive possession as aspects of acquisitive prescription as confirmed in the affidavit herein attached as Annex "A"; In ruling that there was indeed no genuine issue involved, the trial court merely stated that: This Court, going by the records, observed keenly that plaintiffs' cause of action for quieting of title on the disputed parcel of land is based on the alleged fraud in the substitution of their landholdings of Lot 9250, Cad 355, Tagaytay Cadastre containing only an area of 244,112 square meters with Lot 9121, Cad 335, Tagaytay Cadastre, containing only an area of 19,356 square meters. While defendant Eland in its answer practically and mainly interposed the defenses of: (a) the parcel of land being claimed by the plaintiffs is not the parcel of land subject matter of Land Registration Case No. TG-423; (b) the claim of the plaintiffs is barred by prior judgment of this Court in said Land Registration Case; and (c) plaintiffs' complaint is barred by the Statute of Limitation since Original Certificate of Title No. 0-660 has become incontrovertible. Cross-reference of the above-cited Land Registration Case No. TG-423 that was decided previously by this Court with the case at bench was imperatively made by this Court. Being minded that the Court has and can take judicial notice of the said land registration case, this Court observed that there is no genuine issue of fact to be tried on the merits. Firstly, because the supposed identity crisis of the controverted parcel of land covered by the Land

Registration Case No. TG-423 with the subject parcel of land is established by Plan Ap-04006275 (Exhibit "N") LRC Case No. 423 and by Plan A04 008367 (Exhibit "B" of the plaintiffs) and the Technical Description of Lot 9250, Cad 355 (Exhibit "B-1" of the plaintiffs). Secondly, the prior judgment rule cannot be availed of by defendant Eland since not only intrinsic fraud but extrinsic fraud were alleged in and established by the records. (Heirs of Manuel Roxas v. Court of Appeals, G. R. No. 1184436, pro. March 21, 1997). Thirdly, it is incontrovertible that the complaint in this case seeking to review the judgment and annul the decree was filed on March 5, 1998 or within one (1) year from August 20, 1997 or the date of issuance of Decree No. 217313, LRC Record No. N-62686, hence, the Original Certificate of Title No. 0-660 issued to defendant Eland has not attained incontrovertibility. (Heirs of Manuel Roxas v. Court of Appeals, G.R. No. 118436, prom. March 21, 1997). Notwithstanding, the issue of possession is a question of fact by the interaction of the basic pleadings, the observation of this Court is that the plaintiffs were able to prove by the wellnigh incontrovertible evidence, the aspects of possession in accordance with Section 48 (b) of Commonwealth Act 141, as amended, as hereinafter illustrated. The CA, in affirming the above Resolution of the trial court, propounded thus: The contention of defendant-appellant is untenable. Summary judgment is not only limited to solving actions involving money claims. Under Rule 35 of the 1997 Rules of Court, except as to the amount of damages, when there is no genuine issue as to any material fact and the moving party is entitled to a judgment as a matter of law, summary judgment may be allowed. The term "genuine issue" has been defined as an issue of fact which calls for the presentation of evidence as distinguished from an issue which is sham, fictitious, contrived, set up in bad faith and patently unsubstantial so as not to constitute a genuine issue for trial. Thus, under the aforecited rule, summary judgment is appropriate when there are no genuine issues of fact, which call for the presentation of evidence in a full-blown trial. Thus, even if on their face the pleadings appear to raise issues, but when the affidavits, depositions and admissions show that such issues are not genuine, then summary judgment as prescribed by the rules must ensue as a matter of law. It should be stressed that the court a quo which rendered the assailed resolution in Civil Case No. TG-1784 was the very court that decided the LRC Case No. TG-423. Such being the case, the court a quo was privy to all relevant facts and rulings pertaining to LRC Case No. TG-423 which it considered and applied to this case. Thus, where all the facts are within the judicial knowledge of the court, summary judgment may be granted as a matter of right. On the contrary, in petitioner's Answer Ad Cautelam, genuine, factual and triable issues were raised, aside from specifically denying all the allegations in the complaint, thus:

2. SPECIFIC DENIALS 2.1 Answering defendant specifically denies the allegations contained in paragraphs 1 and 3 of the Complaint insofar as it alleges the personal circumstances of the plaintiff and one A. F. Development Corporation for lack of knowledge or information sufficient to form a belief as to the truth thereof. 2.2 Answering defendant specifically denies the allegations contained in paragraphs 4, 5, 6 and 7 of the Complaint for lack of knowledge or information sufficient to form a belief as to the truth of said allegations. And if the property referred to in said paragraphs is that parcel of land which was the subject matter of Land Registration Case No. TG-423 which was previously decided by this Honorable Court with finality, said allegations are likewise specifically denied for the obvious reason that the said property had already been adjudged with finality by no less than this Honorable Court as absolutely owned by herein answering defendant as will be further discussed hereunder. 2.3 Answering defendant specifically denies the allegations contained in paragraph 8 of the Complaint insofar as it alleged that "(u)pon exercise of further circumspection, counsel for the plaintiffs once followed-up in writing the 1994 request of the plaintiffs to have the subject parcel of land be declared for taxation purposes" and insofar as it is made to appear that parcel of land being claimed by the plaintiffs is the same parcel of land subject matter of Land Registration Case No. TG-423 for lack of knowledge or information sufficient to form a belief as to the truth thereof and for the reason that the names of the herein plaintiffs were never mentioned during the entire proceedings in said land registration case and by reason of the Affirmative Allegations contained hereunder. 2.4 Answering defendant specifically denies the allegations contained in paragraphs 9, 10, 10 (a), 10 (b), 10 (c), 10 (d), 10 (e), 10 (f), 10 (g), 10 (h), and 11 for the reason that there is no showing that the parcel of land being claimed by the plaintiff is the same parcel of land which was the subject matter of Land Registration Case No. TG- 423, and in the remote possibility that the parcel of land being claimed by the plaintiffs is the same as that parcel of land subject of Land Registration Case No. TG-423, the allegations contained in said paragraphs are still specifically denied for the reason that no less than the Honorable Court had decided with finality that the parcel of land is absolutely owned by herein defendant to the exclusion of all other persons as attested to by the subsequent issuance of an Original Certificate of Title in favor of answering defendant and for reasons stated in the Affirmative Allegations. 2.5 Answering defendant specifically denies the allegations contained in paragraph 12 of the Complaint for the obvious reason that it was the plaintiffs who appear to have been sleeping

on their rights considering that up to the present they still do not have any certificate of title covering the parcel of land they are claiming in the instant case, while on the part of herein defendant, no less than the Honorable Court had adjudged with finality that the parcel of land subject matter of Land Registration Case No. TG-423 is absolutely owned by herein defendant. 2.6 Answering defendant specifically denies the allegations contained in paragraph 13 of the complaint for the reason that defendant has never ladgrabbed any parcel of land belonging to others, much less from the plaintiffs, and further, answering defendant specifically denies the allegations therein that plaintiffs engaged the services of a lawyer for a fee for lack of knowledge r information sufficient to form a belief as to the truth thereof. 2.7 Answering defendant specifically denies the allegations contained in paragraphs 14, 15, 16, 17 and 18 of the Complaint for lack of knowledge or information sufficient to form a belief as the truth thereof. 2.8 Answering defendant specifically denies the allegations contained in paragraphs IV (a) to IV (c) for the reason that, as above-stated, if the parcel of land being claimed by the plaintiffs is the same as that parcel of land subject matter of Land Registration Case No. TG-423, this Honorable Court had already decided with finality that said parcel of land is absolutely owned by herein answering defendant and additionally, for those reasons stated in defendant's Motion to Dismiss. 2.9 Answering defendant specifically denies the allegations contained in paragraph IV (d) of the Complaint for lack of knowledge or information sufficient to form a belief as to the truth thereof. Special and affirmative defenses were also raised in the same Answer Ad Cautelam, to wit: xxxx 4.1 The pleading asserting the claim of the plaintiff states no cause of action as asserted in the Motion To Dismiss filed by herein answering defendant and for the reason that there is no evidence whatsoever showing or attesting to the fact that the parcel of land being claimed by the plaintiffs in the Complaint is the same parcel of land which was the subject matter of Land Registration Case No. TG-423. 4.2 The complaint was barred by the prior judgment rendered by this Honorable in Land Registration Case No. TG-423. 4.3 The complaint is barred by the Statute of Limitation in that OCT No. 0-660 had become

incontrovertible by virtue of the Torrens System of Registration; and to allow plaintiffs to question the validity of answering defendant's title through the instant complaint would be a collateral of OCT No. 0-660 which is not permissible under the law. 4.4 Plaintiffs are barred by their own acts and/or omission from filing the present complaint under the principles of estoppel and laches. 4.5 Plaintiffs does not to the Court with clean hands as they appear to be well aware of the proceedings in said Land Registration Case No. TG- 423 and inspite of such knowledge, plaintiffs never bothered to present their alleged claims in the proceedings. 4.6 Answering defendant has always acted with justice, given everyone his due, and observed honesty and good faith in his dealings. Clearly, the facts pleaded by the respondents in their motion for summary judgment have been duly disputed and contested by petitioner, raising genuine issues that must be resolved only after a full-blown trial. When the facts as pleaded by the parties are disputed or contested, proceedings for summary judgment cannot take the place of trial.[50] In the present case, the petitioner was able to point out the genuine issues. A "genuine issue" is an issue of fact that requires the presentation of evidence as distinguished from a sham, fictitious, contrived or false claim.[51] It is of utmost importance to remember that petitioner is already the registered owner (Original Certificate of Title [OCT] No. 0-660 issued by the Register of Deeds) of the parcel of land in question, pursuant to a decree of registration (Decree No. N-217313, LRC Record No. 62686) based on the ruling of the same court that granted the summary judgment for the quieting of title. Incidentally, the findings of the trial court contained in the disputed summary judgment were obtained through judicial notice of the facts and rulings pertaining to that earlier case (LRC Case No. TG-423) wherein the same trial court ruled in favor of the petitioner. It is, therefore, disorienting that the same trial court reversed its earlier ruling, which categorically stated that: x x x There is overwhelming evidence or proof on record that the vendors listed in Exhibit "HH," with submarkings, are the previous owners of the parcel of land mentioned in the same deed of sale and aside form the tax declarations covering the same property (Exhibits "Q" to "T," inclusive), the uncontroverted testimony of Atty. Ruben Roxas establishes beyond any shadow of doubt that applicant's (referring to herein defendant-appellant) sellers/predecessors-in-interest are the grandchildren, great grandchildren and great great grandchildren of the spouses Lucio Petate and Maria Pobleta Petate, the former owners of

the same property, whose ownership is further bolstered by tax receipts showing payments of realty taxes (Exhibits "U" to "GG," inclusive, with submarkings). xxx On the basis of the foregoing facts and circumstances, and considering that applicant is a domestic corporation not otherwise disqualified from owning real properties in the Philippines, this Court finds that applicant has satisfied all the conditions/requirements essential to the grant of its application pursuant to the provisions of the Land Registration Law, as amended, inspite of the opposition filed by the Heirs of the late Doroteo Miranda. Hence, the grant of applicant's petition appears to be inevitable. WHEREFORE, this Court hereby approves the instant petition for land registration and, thus, places under the operation of Act 141, Act 496 and/or P.D. 1529, otherwise known as the Property Registration Law, the land described in Plan Ap-04-006275 and containing an area of Two Hundred Forty-Two Thousand Seven Hundred Ninety-Four (242,794) square meters, as supported by its technical description now forming part of the record of this case, in addition to other proofs adduced in the name of the applicant, ELAND PHILIPPINES, INC., with principal office at No. 43 E. Rodriguez Ave. (Espaa Extension), Quezon City, Metro Manila. Once this decision becomes final and executory, the corresponding decree of registration shall forthwith issue. SO ORDERED. By granting the summary judgment, the trial court has in effect annulled its former ruling based on a claim of possession and ownership of the same land for more than thirty years without the benefit of a full-blown trial. The fact that the respondents seek to nullify the original certificate of title issued to the petitioner on the claim that the former were in possession of the same land for a number of years, is already a clear indicium that a genuine issue of a material fact exists. This, together with the failure of the respondents to show that there were no genuine issues involved, should have been enough for the trial court to give the motion for summary judgment, filed by respondents, scant consideration. Trial courts have limited authority to render summary judgments and may do so only when there is clearly no genuine issue as to any material fact.[52] Based on the foregoing, this Court deems it necessary to delve briefly on the nature of the action of quieting of title as applied in this case. This Court's ruling in Calacala, et al. v. Republic, et al.[53] is instructive on this matter, thus:

To begin with, it bears emphasis that an action for quieting of title is essentially a common law remedy grounded on equity. As we held in Baricuatro, Jr. vs. CA:[54] Regarding the nature of the action filed before the trial court, quieting of title is a common law remedy for the removal of any cloud upon or doubt or uncertainty with respect to title to real property. Originating in equity jurisprudence, its purpose is to secure 'x x x an adjudication that a claim of title to or an interest in property, adverse to that of the complainant, is invalid, so that the complainant and those claiming under him may be forever afterward free from any danger of hostile claim.' In an action for quieting of title, the competent court is tasked to determine the respective rights of the complainant and other claimants, 'x x x not only to place things in their proper place, to make the one who has no rights to said immovable respect and not disturb the other, but also for the benefit of both, so that he who has the right would see every cloud of doubt over the property dissipated, and he could afterwards without fear introduce the improvements he may desire, to use, and even to abuse the property as he deems best xxx. Under Article 476 of the New Civil Code, the remedy may be availed of only when, by reason of any instrument, record, claim, encumbrance or proceeding, which appears valid but is, in fact, invalid, ineffective, voidable, or unenforceable, a cloud is thereby cast on the complainant's title to real property or any interest therein. The codal provision reads: Article 476. Whenever there is a cloud on title to real property or any interest therein, by reason of any instrument, record, claim, encumbrance or proceeding which is apparently valid or effective but is in truth and in fact invalid, ineffective, voidable, or unenforceable, and may be prejudicial to said title, an action may be brought to remove such cloud or to quiet the title. An action may also be brought to prevent a cloud from being cast upon title to real property or any interest therein. In turn, Article 477 of the same Code identifies the party who may bring an action to quiet title, thus: Article 477. The plaintiff must have legal or equitable title to, or interest in the real property which is the subject-matter of the action. He need not be in possession of said property. It can thus be seen that for an action for quieting of title to prosper, the plaintiff must first have a legal, or, at least, an equitable title on the real property subject of the action and that the alleged cloud on his title must be shown to be in fact invalid. So it is that in Robles, et al. vs. CA,[55] we ruled:

It is essential for the plaintiff or complainant to have a legal title or an equitable title to or interest in the real property which is the subject matter of the action. Also, the deed, claim, encumbrance or proceeding that is being alleged as a cloud on plaintiff's title must be shown to be in fact invalid or inoperative despite its prima facie appearance of validity or legal efficacy. Verily, for an action to quiet title to prosper, two (2) indispensable requisites must concur, namely: (1) the plaintiff or complainant has a legal or an equitable title to or interest in the real property subject of the action; and (2) the deed, claim, encumbrance, or proceeding claimed to be casting cloud on his title must be shown to be in fact invalid or inoperative despite its prima facie appearance of validity or legal efficacy. Respondents, in their Complaint, claim that they have become the owners in fee-simple title of the subject land by occupation and possession under the provisions of Sec. 48 (b) of the Public Land Law or Commonwealth Act No. 141, as amended. Thus, it appears that the first requisite has been satisfied. Anent the second requisite, respondents enumerated several facts that would tend to prove the invalidity of the claim of the petitioner. All of these claims, which would correspond to the two requisites for the quieting of title, are factual; and, as discussed earlier, the petitioner interposed its objections and duly disputed the said claims, thus, presenting genuine issues that can only be resolved through a full-blown trial. Anent the propriety of the filing of an action for the quieting of title, the indefeasibility and incontrovertibility of the decree of registration come into question. Under Sec. 32 of P.D. No. 1529 or the Property Registration Decree: Section 32. Review of decree of registration; Innocent purchaser for value. The decree of registration shall not be reopened or revised by reason of absence, minority, or other disability of any person adversely affected thereby, nor by any proceeding in any court for reversing judgments, subject, however, to the right of any person, including the government and the branches thereof, deprived of land or of any estate or interest therein by such adjudication or confirmation of title obtained by actual fraud, to file in the proper Court of First Instance a petition for reopening and review of the decree of registration not later than one year from and after the date of the entry of such decree of registration, but in no case shall such petition be entertained by the court where an innocent purchaser for value has acquired the land or an interest therein, whose rights may be prejudiced. Whenever the phrase "innocent purchaser for value" or an equivalent phrase occurs in this Decree, it shall be deemed to include an innocent lessee, mortgagee, or other encumbrancer for value. Upon the expiration of said period of one year, the decree of registration and the certificate of title issued shall become incontrovertible. Any person aggrieved by such decree of registration in any case may pursue his remedy by action for damages against the applicant

or any other persons responsible for the fraud. As borne out by the records and undisputed by the parties, OCT No. 0-660 of petitioner was issued on August 29, 1997 pursuant to a Decree issued on August 20, 1997, while the complaint for the quieting of title in Civil Case No. TG-1784 was filed and docketed on March 5, 1998; hence, applying the above provisions, it would seem that the period of one (1) year from the issuance of the decree of registration has not elapsed for the review thereof. However, a closer examination of the above provisions would clearly indicate that the action filed, which was for quieting of title, was not the proper remedy. Courts may reopen proceedings already closed by final decision or decree when an application for review is filed by the party aggrieved within one year from the issuance of the decree of registration.[56] However, the basis of the aggrieved party must be anchored solely on actual fraud. Shedding light on the matter is a discussion presented in one of the recognized textbooks on property registration,[57] citing decisions of this Court, thus: The right of a person deprived of land or of any estate or interest therein by adjudication or confirmation of title obtained by actual fraud is recognized by law as a valid and legal basis for reopening and revising a decree of registration.[58] One of the remedies available to him is a petition for review. To avail of a petition for review, the following requisites must be satisfied: (a) The petitioner must have an estate or interest in the land; (b) He must show actual fraud in the procurement of the decree of registration; (c) The petition must be filed within one year from the issuance of the decree by the Land Registration Authority; and (d) The property has not yet passed to an innocent purchaser for value.[59] A mere claim of ownership is not sufficient to avoid a certificate of title obtained under the Torrens system. An important feature of a certificate of title is its finality. The proceedings whereby such a title is obtained are directed against all persons, known or unknown, whether actually served with notice or not, and includes all who have an interest in the land. If they do not appear and oppose the registration of their own estate or interest in the property in the name of another, judgment is rendered against them by default, and, in the absence of fraud, such judgment is conclusive. If an interest in the land will not by itself operate to vacate a decree of registration, a fortiori, fraud is not alone sufficient to do so.[60] As further pointed out in the same book,[61] the petition for review must be filed within one

year from entry of the decree of registration. As written: As long as a final decree has not been entered by the Land Registration Authority and period of one year has not elapsed from the date of entry of such decree, the title is not finally adjudicated and the decision in the registration case continues to be under the control and sound discretion of the registration court.[62] After the lapse of said period, the decree becomes incontrovertible and no longer subject to reopening or review. Section 32 provides that a petition for review of the decree of registration may be filed "not later than one year from and after the date of entry of such decree of registration." Giving this provision a literal interpretation, it may at first blush seem that the petition for review cannot be presented until the final decree has been entered. However, it has been ruled that the petition may be filed at any time after the rendition of the court's decision and before the expiration of one year from the entry of the final decree of registration for, as noted in Rivera v. Moran,[63] there can be no possible reason requiring the complaining party to wait until the final decree is entered before urging his claim for fraud. The one-year period stated in Sec. 32 within which a petition to re-open and review the decree of registration refers to the decree of registration described in Section 31, which decree is prepared and issued by the Land Registration Administrator.[64] The provision of Section 31 that every decree of registration shall bind the land, quiet title thereto, and be conclusive upon and against all persons, including the national government, and Sec. 32 that the decree shall not be reopened or revised by reason of absence, minority or other disability or by any proceeding in court, save only in cases of actual fraud and then only for one year from the entry of the decree, must be understood as referring to final and unappealable decrees of registration. A decision or, as it is sometimes called after entry, a decree of a registration court, does not become final and unappealable until fifteen days after the interested parties have been notified of its entry, and during that period may be set aside by the trial judge on motion for new trial, upon any of the grounds stated in the Rules of Court.[65] An appeal from the decision of the trial court prevents the judgment from becoming final until that decree is affirmed by the judgment of the appellate court.[66] A petition for review under Section 32 is a remedy separate and distinct from a motion for new trial and the right to the remedy is not affected by the denial of such a motion irrespective of the grounds upon which it may have been presented. Thus, where petitioners acquired their interest in the land before any final decree had been entered, the litigation was therefore in effect still pending and, in these circumstances, they can hardly be considered innocent purchasers in good faith.[67] Where the petition for review of a decree of registration is filed within the one-year period

from entry of the decree, it is error for the court to deny the petition without hearing the evidence in support of the allegation of actual and extrinsic fraud upon which the petition is predicated. The petitioner should be afforded an opportunity to prove such allegation.[68] In the present case, the one-year period before the Torrens title becomes indefeasible and incontrovertible has not yet expired; thus, a review of the decree of registration would have been the appropriate remedy. Based on the above disquisitions, the other issues raised by the petitioner are necessarily rendered inconsequential. WHEREFORE, the petition for review on certiorari of petitioner Eland Philippines, Inc. is hereby GRANTED, and the decision dated February 28, 2006 of the Court of Appeals (CA) in CA-G.R. CV No. 67417, which dismissed the appeal of petitioner Eland Philippines, Inc. and affirmed the resolutions dated November 3, 1999 and June 28, 2006 of Branch 18, RTC of Tagaytay City, is hereby REVERSED and SET ASIDE. Consequently, the resolutions dated November 3, 1999 and June 28, 2006 of Branch 18, RTC of Tagaytay City in Civil Case No. TG-1784 are hereby declared NULL and VOID. SO ORDERED.

DECISION AUSTRIA-MARTINEZ, J.: Whether or not summary judgment is proper in the case at bar is the issue to be resolved in the petition for review on certiorari under Rule 45 of the Rules of Court filed with this Court assailing the Decision[1] of the Court of Appeals dated January 31, 1995 and its subsequent Resolution[2] dated April 28, 1995 in CA-G.R. CV No. 23601. The antecedent facts as found by the Court of Appeals are as follows: The Pacific Banking Corporation (hereafter, "PBC") was placed under receivership on 5 July 1985. A Liquidator was designated for the liquidation process. The Central Bank invited several banks to buy the assets and the franchise of the various offices of PBC and to assume its liabilities. The Far East Bank and Trust Company (herafter, FEBTC) was one of the bidders, and its bid was found to be the most advantageous. PBC and Central Bank on the one hand and FEBTC on the other, signed: (a) Purchase Agreement dated 28 October 1986 xxx; and (b) Memorandum of Agreement dated 16 April 1986 xxx.

On 27 May 1987, the Solidbank Corporation (a.k.a. the Consolidated Bank and Trust Corporation, hereafter, Solidbank) through its Senior Vice-President/Comptroller Ms. Corazon R. Dayao, filed its claims with the Liquidator of PBC, Mr. Renan V. Santos, namely: (1) P8,024,007.27 (excluding interests and surcharges) covering eight (8) receivables (computer machines and other accessories connected with their operations and the right to collect rentals therefrom) due from PBC and assigned to Solidbank by the United Pacific Leasing and Finance Corporation, a subsidiary of PBC, which amount due as of October 1988 totalled P24,158,263.10; (2) several deposits (proceeds of collection items evidenced by registers of collection items and balances of the current accounts in the various branches of PBC). Upon verification of the records of the case in court, the court discovered the existence of the Purchase Agreement and Memorandum Agreement aforementioned. On 09 November 1988, Solidbank filed with the trial court in Special Proceeding No. 8635313 a Motion to Implead the FEBTC as co-respondent, and that it be ordered to pay the former jointly and severally with the liquidator of petitioner; (a) the principal sum of P8,024,007.27 plus 3% penalty and 20% of the total amount thereof as attorney's fees which amounted to a total of P24,158,263.10 as of October, 1988, and, (b) the sum of P127,834.73 as FEBTC's deposit liability, plus 12% interest and 20% of the total amount of the claim as attorney's fees which amounted to P24,158,263.10 as of October 1988. The motion was granted in an order dated 17 November 1988, declaring also the motion as in the nature of a "third party complaint" against FEBTC. On 16 December 1988, FEBTC filed its Answer to Solidbank's Motion to Implead, averring it had no knowledge or information sufficient to form a belief as to the truth of the allegation in paragraph 2 of Solidbank's motion. It also denied paragraphs 3, 4, 5 ,6, 7, and 8 of the same. The following special and affirmative defenses were pleaded: the SGV Report was actually attached to the purchase agreement; Solidbank has no cause of action; computer machines and items subject of Solidbank's eight [8] receivables were not included in the properties and equipment purchased by FEBTC from the Central Bank; the items stated in Annex B of Solidbank's motion were not included among the deposit liabilities assumed by FEBTC under Section 2 of the Purchase Agreement. The Answer prayed that the motion to implead FEBTC as respondent in the case be denied. Earlier, on 5 December 1988, Solidbank filed a Motion to Order Immediate Payment and/or Partial Judgment, alleging that in the conference between Solidbank's representative and the Central Bank Deputy Receiver of PBC in March 1986 in connection with assigned receivables due from PBC, the unpaid balance due Solidbank from PBC at the date of its closure amounted to P1,206,495.17 and this amount is not controverted.

On 06 December 1988, the liquidation court issued an Order granting Solidbank's motion. It ruled that contrary to the Liquidator's position that the claim for unpaid rentals is an ordinary credit, the said claims of Solidbank should be given preference as they are part of administrative expenses pursuant to Sections 30 and 31 of the Central Bank Act. The trial court ordered the Liquidator of PBC to pay Solidbank the amount of P1,206,495.17. On 07 March 1989, the Liquidator of PBC wrote Solidbank inquiring when the latter will take delivery of the computers in settlement of its claim considering that an inventory of the computers was furnished Solidbank in September, 1988. On 16 March 1989, Solidbank wrote the Liquidator, stating that no agreement (whether verbal or written) had been reached that the surrender and delivery of the aforesaid computers shall constitute full settlement of its (Solidbank's) claim. Further, while Solidbank mentioned that it was ready to receive the computer machines and equipment, it was still pursuing its claim for the overdue rental proceeds pertaining thereto. On 04 May 1989, Solidbank filed with the liquidation court a Motion for Summary Judgment in connection with the claims aforementioned, citing the following grounds: there is no genuine issue as to any material fact; there is no substantial controversy in the case; and, it is entitled to summary judgment as a matter of law. Annexed to the motion was the "Affidavit of Merits" executed by one Corazon Dayao, Senior Vice-President / Comptroller of Solidbank. On 29 May 1989, FEBTC filed its Comment alleging: FEBTC did not specifically deny the claims of Solidbank in the Motion to Implead; the issues before the liquidation court are not purely legal, but factual, i.e., whether the subject receivables as well as deposit liabilities were included in the Purchase Agreement as among those purchased by FEBTC. On 05 June 1989, the Liquidator of PBC filed an Opposition. [3] On 12 June 1989, the liquidation court promulgated its assailed decision, the pertinent portions of which read: In the light of the aforesaid documented facts and circumstances recited in the pleadings, this Court finds no triable factual issue at least insofar as the fact and amounts of the indebtedness of FEBTC to claimant-movant are concerned. As indebtedness, movant is entitled to a judgment for payment thereof. Considering that the total amount of indebtedness is quite big, which movant needs in its operation as a bank, the Court is impressed not only on the propriety but also with the necessity of summarily adjudicating the case. Any delay of justice to movant in this case can mean denial thereof, especially in the

light of PBC's liquidation and claim by its creditors. WHEREFORE, the FEBTC and the (PBC) as duly represented by its Liquidator, are ordered to pay jointly and severally the claim of movant Solidbank as prayed for in its Motion for Summary Judgment dated November 9, 1988, less the amount of P1,206,495.17 already paid to Solidbank on January 11, 1989. SO ORDERED. [4] Not satisfied with the decision, FEBTC went to the Court of Appeals which reversed the trial court, explaining that: xxx xxx xxx From the categorical and positive asseverations of xxx documents, there was a need for a proceeding to examine and evaluate the true intent of the Memorandum of Agreement and the correct coverage of Purchase Agreement, to settle the issue in dispute. Hence, summary judgment to resolve the controversy was precipitate. xxx xxx xxx WHEREFORE, the decision appealed from is hereby SET ASIDE and the case remanded to the trial court for further proceedings. SO ORDERED. [5] A motion for reconsideration filed by petitioner was denied by the appellate court on April 28, 1995.[6] Hence, the present petition raising the following: RESPONDENT APPELLATE COURT COMMITTED REVERSIBLE ERROR IN SETTING ASIDE THE DECISION OF THE TRIAL COURT AND IN ORDERING THE REMAND OF THE RECORDS OF THE CASE FOR FURTHER PROCEEDINGS, AND IN HOLDING THAT SUMMARY JUDGMENT IS NOT PROPER IN THE CASE AT BAR.[7] As earlier stated, the only question that needs to be answered is: whether or not summary judgment is proper in the case at bar. Petitioner insists that summary judgment is proper in this case; that the grounds upon which the summary judgment was filed were not successfully rebutted by FEBTC nor by the Liquidator of Pacific Bank;[8] that the pleadings and admissions on the record, together with the affidavits show that there is no genuine issue as to any material fact and the moving

party is entitled to a judgment as a matter of law.[9] Petitioner cites par. 1.0 of respondentbank's answer to its Motion to Implead FEBTC where it averred that "it has no knowledge or information sufficient to form a belief as to the truth of the allegation xxx of Solidbank's motion" as well as its denial of pars. 3, 4, 5, 7 and 8 of the motion. These denials according to petitioner are general or blanket denials which are disallowed under the rules. Petitioner also points out that it is inconceivable that private respondent had no actual knowledge or was completely unaware of the claims of petitioner bank considering the enormity of the said claims.[10] Also, the subject matter of the motion to implead is fully documented and cannot be resisted by a mere general denial.[11] Assuming arguendo, petitioner continues, that FEBTC's denial of Solidbank's claims can be considered a denial allowable under the rules, summary judgment is still proper as the denial or averment of lack of knowledge does not raise a genuine issue.[12] Respondent's allegation that the computer machines and items subject of the eight (8) receivables were not included in the properties and equipment purchased by FEBTC from the Central Bank does not tender any genuine issue as to any material fact.[13] Also, the liquidation court was correct when it held that the FEBTC "is not at all contesting the Motion for Summary Judgment," citing the statement of FEBTC counsel Antonio R. Bautista, thus: "Presented before the Court is a Motion for Summary Judgment filed by Solidbank represented by C.M. de los Reyes and Associates through Atty. Maximino Z. Baaga. Atty. Bautista representing the Far East Bank and Trust Co. appeared before this Court and manifested that although in principle he is not objecting the motion for summary judgment as this being a liquidation claim that does not require full blown trial, he does not agree that there are no material issues raised in the pleadings because the same material allegations in the complaint is contested by Far East Bank in their Answer filed before this Court. However, said counsel for the Far East Bank and Trust Co. manifested that he will have no objection if the Court will just require the parties to submit affidavit and counter-affidavits in support to their respective contentions."[14] Finally, petitioner claims that since there is a variance in the findings of facts of the trial court and the appellate court, the doctrine in Roman Catholic Bishops of Malolos Inc., vs. IAC,[15] should be applied. In said case this Court held: "when findings of fact of the Court of Appeals are at variance with those of the trial court, xxx the [Supreme] Court has to review the evidence in order to arrive at the correct findings based on the records." [16] Petitioner asserts that there is a need to require the appellate court to elevate the records of this case, so that this Court can review the evidence to arrive at the correct findings.[17] For its part, respondent FEBTC is of the position that the case was not resolvable on summary judgment because there are genuine factual issues that are highly litigious and which require evidentiary hearing. These are: whether Solidbank's claim is included in the purchase agreement as among the properties and items purchased and assumed by FEBTC

from Pacific Bank/Central Bank and, corollarily, whether the SGV report, with all its contents, was actually attached to the purchase agreement. These issues, FEBTC argues, are not as simple and as uncomplicated as to be resolved on depositions and affidavits alone. These issues necessitate a trial.[18] Philippine Deposit Insurance Corporation (PDIC) meanwhile, as substitute[19] for the Central Bank, claims that petitioner misrepresented material facts;[20] that for petitioner's total principal claim of P8,024,007.27, it already received the total amount of P20,359,592.83 and was awarded by the liquidation court the sum of P7,983,771.60 representing the rentals for the computer machines due from November 1988 to June 1990 plus 3% due monthly as penalty and delayed payment.[21] PDIC clarified that petitioner bank's claim consisted of rental receivables of United Pacific Leasing Corporation (UNAM) due from PBC for the lease of its computer machines under a lease contract. These rental receivables were assigned by UNAM to petitioner-bank as security for the payment of certain loans granted by the latter to the former;[22] that on September 27, 1989, the court a quo rendered a decision approving the Compromise Agreement between the parties limiting PBC's obligation to P10,722,704.83.[23] PDIC also calls the attention of this Court to Civil Case No. 87-39114 entitled "The Consolidated Bank and Trust Corporation (Solidbank) vs. United Pacific Leasing and Finance Corporation, Antonio M. Andal and Spouse, et al.;" that while petitioner is pursuing what has been a settled claim against herein respondents, it was also prosecuting a case against UNAM for the purpose of collecting the loan obligations of the latter secured by the Deeds of Assignment, among which are the computer rental receivables of UNAM from closed PBC subject of the instant petition.[24] We affirm the Court of Appeals and find the herein petition devoid of merit. Summary judgment is a procedural device resorted to in order to avoid long drawn out litigations and useless delays. When the pleadings on file show that there are no genuine issues of fact to be tried, the Rules of Court allows a party to obtain immediate relief by way of summary judgment. That is, when the facts are not in dispute, the court is allowed to decide the case summarily by applying the law to the material facts.[25] Conversely, where the pleadings tender a genuine issue, summary judgment is not proper. [26] A "genuine issue" is such issue of fact which require the presentation of evidence as distinguished from a sham, fictitious, contrived or false claim.[27] Rule 34, Section 3 of the Rules of Court provides two (2) requisites for summary judgment to be proper: (1) there must be no genuine issue as to any material fact, except for the amount of damages; and (2) the party presenting the motion for summary judgment must be entitled to a judgment as a matter of law.[28]

In the case at bar, it cannot be said that the foregoing requisites are present. There is a genuine issue, the resolution of which requires the presentation of evidence, i.e., whether or not Solidbank's claim is included in the purchase agreement as among the properties and items purchased and assumed by FEBTC from Pacific Bank/Central Bank. While the counsel for FEBTC did say that in principle he is not objecting to the motion for summary judgment and "that they will have no objection if the Court will just require the parties to submit affidavit and counter-affidavits in support to their respective contentions," this should not be taken out of context for in the same manifestation, said counsel clearly expressed that he does not agree that there are no material issues raised in the pleadings. The appellate court is correct in holding that: "[s]uch statement is not an admission that summary judgment was in order. xxx [Rather] the more logical reading of FEBTC's position is that it was willing to submit the issue for resolution on the basis of affidavits, depositions, and admissions, the manner of proof in summary proceedings, consistent with the summary nature of liquidation proceedings. But given the extent and nature of the disputed factual points, summary judgment would be, and it was, injudicious." [29] Rule 34 does not vest in the trial court jurisdiction to summarily try the issues on depositions and affidavits when the requisites abovementioned are not present. Upon a motion for summary judgment, the sole function of the court is to determine whether or not there is an issue of fact to be tried. Any doubt as to the existence of an issue of fact must be resolved against the movant. Courts must be critical of the papers presented by the moving party and not of the papers in opposition thereto.[30] The party who moves for summary judgment has the burden of demonstrating clearly the absence of any genuine issue of fact, or that the issue posed in the complaint is patently unsubstantial so as not to constitute a genuine issue for trial.[31] Petitioner Solidbank failed to discharge this burden. A cursory reading of the pleadings submitted by the parties would show that a trial is necessary to ascertain which of the conflicting allegations are true. And contrary to what herein petitioner wants to happen, it is not this Court's duty to ascertain such facts at the first instance. Roman Catholic Bishops of Malolos Inc., vs. IAC finds no application in the case at bar. In said case, the trial court's decision, which was reversed by the Court of Appeals, was arrived at after a full blown trial. The same cannot be said here. What was rendered by the trial court was a summary judgment. No full trial was conducted that would have allowed the parties to present their respective evidence in support of their contending claims. As previously held by this Court, when the facts as pleaded by the parties are disputed or contested, proceedings for summary judgment cannot take the place of trial. [32] In ruling on a motion for summary judgment, the lower court should take that view of the

evidence most favorable to the party against whom it is directed, giving such party the benefit of all favorable inferences.[33] WHEREFORE, the petition is DENIED for lack of merit. The decision of the Court of Appeals is AFFIRMED. No pronouncement as to costs. SO ORDERED.

MARIANO NOCOM, Petitioner, vs. OSCAR CAMERINO, EFREN CAMERINO, CORNELIO MANTILE and MILDRED DEL ROSARIO, in her capacity as legal heir and representative of NOLASCO DEL ROSARIO, Respondents. G.R. No. 182984 | 2009-02-10

DECISION AZCUNA, J.: This is a petition for review on certiorari seeking to reverse and set aside the Decision dated February 14, 2008 of the Court of Appeals (CA) which affirmed the Joint Order dated June 9, 2005 and Summary Judgment dated June 15, 2006 of the Regional Trial Court (RTC) of Muntinlupa City, Branch 203 and dismissed petitioner's appeal under Rule 41 of the Rules of Court for lack of jurisdiction and its Resolution dated May 23, 2008 which denied petitioner's motion for reconsideration. The present case is an offshoot of the prior case, G.R. No. 161029, entitled \\\"Springsun Management Systems Corporation v. Oscar Camerino, Efren Camerino, Cornelio Mantile, Nolasco Del Rosario, and Domingo Enriquez,\\\" which was promulgated on January 19, 2005 (449 SCRA 65) and became final and executory on May 4, 2005 as recorded in the Book of Entries of Judgment. The factual antecedents are as follows: G.R. No. 161029: Respondent Oscar Camerino and respondents-intervenors Efren Camerino, Cornelio Mantile, the deceased Nolasco Del Rosario, represented by Mildred Del Rosario, and

Domingo Enriquez were the tenants who were tilling on the parcels of land planted to rice and corn previously owned by Victoria Homes, Inc. covered by Transfer Certificate of Title (TCT) Nos. 289237, now S-6135 (109,451 square meters); S-72244 (73,849 square meters); and 289236, now S-35855 (109,452 square meters). On February 9, 1983, without notifying the respondents, Victoria Homes, Inc. sold the said lots to Springsun Management Systems Corporation (SMSC) for P9,790,612. The three deeds of sale were duly registered with the Registry of Deeds of Rizal and new titles were issued in the name of SMSC. Subsequently, SMSC mortgaged to Banco Filipino (BF) the said lots as collaterals for its loans amounting to P11,545,000. As SMSC failed to pay the loans due, BF extrajudicially foreclosed the mortgage and, later, was adjudged the highest bidder. On May 10, 2000, SMSC redeemed the lots from BF. Earlier, on March 7, 1995, respondents filed a complaint against SMSC and BF for \\\"Prohibition/Certiorari, Reconveyance/Redemption, Damages, Injunction with Preliminary Injunction and Temporary Restraining Order,\\\" docketed as Civil Case No. 95-020, with the RTC of Muntinlupa City, Branch 256. On January 25, 2002, the RTC of Muntinlupa City, Branch 256, found respondents to be tenants who have been tilling on the subject land planted to rice and corn since 1967 and, thus, authorized them to redeem the subject lots. The dispositive portion of the decision states: WHEREFORE, judgment is hereby as follows: 1. Declaring that plaintiffs are entitled (sic) to redeem, and ordering the defendant Springsun Management Systems Corporation (now petitioner) to allow plaintiffs to redeem the landholdings in question within 180 days from finality of this decision at the total price of P9,790,612.00; upon full payment of the redemption price, the defendant Springsun Management Systems Corporation is ordered to deliver plaintiffs the titles and the corresponding Deed of Redemption so that the titles to the properties in litigation can be transferred in the name of the plaintiffs; 2. Declaring plaintiffs entitled to possession, and ordering the defendant Springsun Management Systems Corporation and all persons claiming under it to vacate the lands in question and to surrender the same to the plaintiffs; 3. Dismissing the case against Banco Filipino Savings and Mortgage Bank; 4. Ordering the defendant Springsun Management Systems Corporation to pay plaintiffs the sum of P200,000.00 as attorney's fees, plus costs. SO ORDERED.1

On September 23, 2003, the CA, in CA-G.R. SP No. 72475, affirmed with modification the RTC by declaring the respondents to be tenants or agricultural lessees on the disputed lots and, thus, entitled to exercise their right of redemption, but deleted the award of P200,000 attorney's fees for lack of legal basis. On January 19, 2005, this Court, in G.R. No. 161029, affirmed the CA and reiterated that being agricultural tenants of Victoria Homes, Inc. that had sold the lots to SMSC without notifying them, respondents had the right to redeem the subject properties from SMSC. This Court denied SMSC's motions for reconsideration and for leave to file a second motion for reconsideration and, on May 4, 2005, an Entry of Judgment was made. The present G.R. No. 182984: On December 3, 2003, petitioner Mariano Nocom gave the respondents several Philtrust Bank Manager's Checks amounting to P500,000 each, which the latter encashed, representing the price of their \\\"inchoate and contingent rights\\\" over the subject lots which they sold to him. On December 18, 2003, respondents, with the marital consent of their wives, executed an \\\"Irrevocable Power of Attorney\\\" which was notarized by their counsel Atty. Arturo S. Santos. Thus, IRREVOCABLE POWER OF ATTORNEY2 KNOW ALL MEN BY THESE PRESENTS: WE, OSCAR CAMERINO, of legal age, Filipino, married to Teresita L. Magbanua: EFREN CAMERINO, of legal age, Filipino, married to Susana Camerino, CORNELIO MANTILE, of legal age, Filipino, married to Maria Fe Alon, NOLASCO DEL ROSARIO, of legal age, Filipino, married to Mildred Joplo, and DOMINGO ENRIQUEZ, of legal age, Filipino, married to Dionicia Enriquez whose residences are stated under our respective names, hereby APPOINT, NAME, and CONSTITUTE MARIANO NOCOM, of legal age, Filipino, married to Anacoreta Nocom and with office at No. 2315 Aurora Blvd, Pasay City, in an irrevocable manner, coupled with interest, for us and in our stead, to do all or any of the following acts and deeds: 1. To sell, assign, transfer, dispose of, mortgage and alienate the properties described in TCT Nos. 120542, 120541 and 123872 of the Register of Deeds of Muntinlupa City, currently in the name of Springsun Management Systems Corporation, consisting of 292,752 square

meters subject matter of Civil Case No. 95-020 of the Regional Trial Court of Muntinlupa City, Branch 256. The said court, in its decision dated January 25, 2002 which was affirmed with modification of the Court of Appeals in its decision dated September 24, 2003 in CAG.R. SP No. 72475, adjudged that we are legally entitled to redeem the lands from Springsun Management Systems Corporation; 2. To comply with the said decision by paying the redemption price to Springsun Management Systems Corporation and/or to the court, and upon such payment, to secure execution of the judgment so that the titles can be issued in the name of our attorney-in-fact; 3. To accept and receive for his exclusive benefit all the proceeds which may be derived from the sale, mortgage, transfer or deposition thereof; 4. To sign and execute all the necessary papers, deed and documents that may be necessary or the accomplishment of purposes of the Deed of Assignment, and to issue receipts and proper discharges therefor; 5. To negotiate, deal and transact with all the persons and entities involved in Civil Case No. 95-020, RTC, Muntinlupa City, Branch 256, with full power and authority to compromise with them; 6. To procure all documents and papers in government agencies relative to the said properties and case in court; and 7. To procure the necessary transfer certificate of titles in his name as the absolute owner of said properties. GIVING AND GRANTING full power and authority to our said attorney-in-fact to do all things requisite and necessary with legal effects as if done by us when present. IN WITNESS WHEREOF, We have hereunto affixed [our] signatures this 18th day of December, 2003. (Sgd.) OSCAR CAMERINO Principal Sparrow St., Diamond Park Victoria Homes, Tunasan Muntinlupa City (Sgd.) EFREN CAMERINO Principal San Antonio, San Pedro Laguna

(Sgd.) CORNELIO MANTILE Principal Victoria Ave., Tunasan Muntinlupa City (Sgd.) NOLASCO DEL ROSARIO Principal Esmido St., Diamond Park Victoria Homes, Muntinlupa City (Sgd.) DOMINGO ENRIQUEZ Principal Tunasan Proper, Arandia Tunasan, Muntinlupa City WITH OUR MARITAL CONSENT: (Sgd.) TERESITA MAGBANUA Wife of Oscar Camerino (Sgd.) SUSANA CAMERINO Wife of Efren Camerino (Sgd.) MARIA FE ALON ALON Wife of Cornelio Mantile (Sgd.) MILDRED JOPLO Wife of Nolasco del Rosario (Sgd.) DIONICIA ENRIQUEZ Wife of Domingo Enriquez CONFORME: (Sgd.) MARIANO NOCOM Attorney-in-Fact Meanwhile, on July 21, 2005, the respondents, in Civil Case No. 95-020 of the RTC of Muntinlupa City, Branch 256, filed a Motion for Execution with Prayer to Order the Register of Deeds of Muntinlupa City to divest SMSC of title to the subject lots and have the same vested on them. As SMSC refused to accept the redemption amount of P9,790,612 plus P147,059.18 as commission given by the petitioner, the respondents deposited, on August 4, 2005, the amounts of P9,790,612, P73,529.59, and P73,529.59, duly evidenced by official receipts, with the RTC of Muntinlupa City, Branch 256. The RTC of Muntinlupa City, Branch 256 granted respondents' motion for execution and, consequently, TCT Nos. 120542, 120541 and 123872 in the name of SMSC were cancelled and TCT Nos. 15895, 15896 and 15897 were issued in the names of the respondents. It also ordered that the \\\"Irrevocable Power of Attorney,\\\" executed on December 18, 2003 by respondents in favor of petitioner, be annotated in the memorandum of encumbrances of TCT Nos. 15895, 15896, and 15897. On October 24, 2005, respondent Oscar Camerino filed a complaint against petitioner, captioned as \\\"Petition to Revoke Power of Attorney,\\\" docketed as Civil Case No. 05-172, in the RTC of Muntinlupa City, Branch 203, seeking to annul the \\\"Irrevocable Power of

Attorney\\\" dated December 18, 2003, the turnover of the titles to the properties in his favor, and the payment of attorney's fees and other legal fees. Respondent Oscar Camerino's complaint alleged that he and co-respondents were asked by their counsel, Atty. Arturo S. Santos, to sign a document with the representation that it was urgently needed in the legal proceedings against SMSC; that the contents of the said document were not explained to him; that in the first week of September 2005, he learned that TCT Nos. 15895, 15896 and 15897 were issued in their favor by the Register of Deeds; that he discovered that the annotation of the \\\"Irrevocable Power of Attorney\\\" on the said titles was pursuant to the Order of the RTC of Muntinlupa City, Branch 256 dated August 31, 2005; that the \\\"Irrevocable Power of Attorney\\\" turned out to be the same document which Atty. Santos required him and the other respondents to sign on December 18, 2003; that despite repeated demands, petitioner refused to surrender the owner's duplicate copies of the said titles; that petitioner had retained ownership over the subject lots; that he had no intention of naming, appointing, or constituting anyone, including petitioner, to sell, assign, dispose, or encumber the subject parcels of land; and that he executed an Affidavit of Adverse Claim which was annotated on the titles involving the subject lots. In his Answer with Counterclaim, petitioner countered that on September 3, 2003, Atty. Santos informed him of the desire of his clients, herein respondents, to sell and assign to him their \\\"inchoate and contingent rights and interests\\\" over the subject lots because they were in dire need of money and could no longer wait until the termination of the proceedings as SMSC would probably appeal the CA's Decision to this Court; that they did not have the amount of P9,790,612 needed to redeem the subject lots; that on December 18, 2003, he decided to buy the contingent rights of the respondents and paid each of them P500,000 or a total of P2,500,000 as evidenced by Philtrust Bank Manager's Check Nos. MV 0002060 (for respondent Oscar Camerino), MV 0002061 (for respondent Efren Camerino), MV 0002062 (for respondent Cornelio Mantile), MV 0002063 (for Nolasco Del Rosario), and MV 0002064 (for Domingo Enriquez) which they personally encashed on December 19, 2003; that on August 4, 2005, he also paid the amount of P147,059.18 as commission; that simultaneous with the aforesaid payment, respondents and their spouses voluntarily signed the \\\"Irrevocable Power of Attorney\\\" dated December 18, 2003; that being coupled with interest, the \\\"Irrevocable Power of Attorney\\\" cannot be revoked or cancelled at will by any of the parties; and that having received just and reasonable compensation for their contingent rights, respondents had no cause of action or legal right over the subject lots. Petitioner prayed for the dismissal of the complaint and the payment of P1,000,000 moral damages, P500,000 exemplary damages, and P500,000 attorney's fees plus costs. On January 17, 2006, petitioner filed a Motion for Preliminary Hearing on his special and/or affirmative defense that respondent Oscar Camerino had no cause of action or legal right over the subject lots because the latter and his wife received the proceeds of the Philtrust

Bank Manager's check in the sum of P500,000 which they personally encashed on December 19, 2003 and that being coupled with interest, the \\\"Irrevocable Power of Attorney\\\" cannot be revoked or cancelled at will by any of the parties. On January 26, 2006, respondents Efren Camerino, Cornelio Mantile and Mildred Del Rosario, in her capacity as legal heir and representative of Nolasco Del Rosario, filed a Motion for Leave of Court to Admit the Complaint-in-Intervention with the attached Complaint-in-Intervention, dated January 26, 2006, seeking the nullification of the \\\"Irrevocable Power of Attorney\\\" for being contrary to law and public policy and the annotation of the \\\"Irrevocable Power of Attorney\\\" on the titles of the subject lots with prayer that petitioner be ordered to deliver to them the copies of the owner's duplicate certificate of TCT Nos. 15895, 15896, and 15897. Their Complaint-in-Intervention alleged that they had a legal interest in the subject matter of the controversy and would either be directly injured or benefited by the judgment in Civil Case No. 05-172; that they were cosignatories or co-grantors of respondent Oscar Camerino in the \\\"Irrevocable Power of Attorney\\\" they executed in favor of the petitioner; that their consent was vitiated by fraud, misrepresentation, machination, mistake and undue influence perpetrated by their own counsel, Atty. Santos, and petitioner; that sometime in December 2003, Atty. Santos called for a meeting which was attended by petitioner and one Judge Alberto Lerma where petitioner gave them checks in the amount of P500,000 each as \\\"Christmas gifts\\\"; and that the \\\"Irrevocable Power of Attorney\\\" was void ab initio as the same was contrary to law and public policy and for being a champertous contract. On January 30, 2006, respondent Oscar Camerino filed a Motion for Summary Judgment alleging that since the existence of the \\\"Irrevocable Power of Attorney\\\" was admitted by petitioner, the only issue to be resolved was whether the said document was coupled with interest and whether it was revocable in contemplation of law and jurisprudence; that Summary Judgment was proper because petitioner did not raise any issue relevant to the contents of the \\\"Irrevocable Power of Attorney\\\"; and that in an Affidavit dated January 23, 2005, he admitted receipt of a check amounting to P500,000.00 which was given to him by petitioner as financial assistance. On February 3, 2006, petitioner opposed respondent Oscar Camerino's motion on the ground that there were factual issues that required the presentation of evidence. On February 14, 2006, petitioner filed a Motion to Dismiss the complaint on the ground that the petition for the cancellation of the \\\"Irrevocable Power of Attorney\\\" was actually an action to recover the titles and ownership over the properties; that since respondent Oscar Camerino alleged in paragraph 29 of his Motion for Summary Judgment that the assessed value of the subject lots amounted to P600,000,000, the case partook of the nature of a real action and, thus, the docket fees of P3,929 was insufficient; and that due to insufficient

docket fee, his complaint should be dismissed as the RTC was not vested with jurisdiction over the subject matter of the complaint. On February 22, 2006, respondent Oscar Camerino opposed petitioner's motion for preliminary hearing of special and/or affirmative defenses alleging that it was dilatory and that he had a cause of action. On March 9, 2006, respondent Oscar Camerino filed his Reply to petitioner's Opposition to the Motion for Summary Judgment claiming that the determinative issue of whether or not the amount of P500,000 given to him by petitioner rendered the power of attorney irrevocable can be determined from the allegations in the pleadings and affidavits on record without the need of introduction of evidence. On May 5, 2006, respondent Oscar Camerino filed an Opposition to petitioner's Motion to Dismiss stating that the instant case was a personal action for the revocation of the \\\"Irrevocable Power of Attorney\\\" and not for the recovery of real property and, thus, the correct docket fees were paid. On June 9, 2006, the RTC of Muntinlupa City, Branch 203 admitted the Complaint-inIntervention because the movants-intervenors ([herein respondents] Efren Camerino, Cornelio Mantile, and Mildred Del Rosario as legal heir of Nolasco Del Rosario) \\\"have legal interest in the subject properties in litigation and in the success of the petitioner [herein respondent Oscar Camerino], who was precisely their co-plaintiff in Civil Case No. 95-020, entitled 'Oscar Camerino, et al. v. Springsun Management Systems Corporation et al.,' where they are the prevailing parties against the defendant therein [SMSC], with respect to the same properties, subject of this case, in a decision rendered by Branch 256 of this Court.\\\" The RTC, Branch 203, also granted the Motion for Summary Judgment because \\\"a meticulous scrutiny of the material facts admitted in the pleadings of the parties reveals that there is really no genuine issue of fact presented therein that needs to be tried to enable the court to arrive at a judicious resolution of a matter of law if the issues presented by the pleadings are not genuine issues as to any material fact but are patently unsubstantial issues that do not require a hearing on the merits.\\\" Thus, The instant Motion to Dismiss by the respondent is therefore DENIED, PROVIDED, the petitioner should pay the balance of the docket fees remaining unpaid, if any, pursuant to Rule 141, Section 7 of the Rules of Court, as amended by A.M. No. 04-2-04-SC within the applicable prescriptive or reglementary period. The \\\"Motion for Intervention\\\" timely filed by intervenors Efren Camerino, Cornelio Mantile and Mildred Del Rosario, in her capacity as legal heir of Nolasco Del Rosario, as opposed by the respondent, is hereby GRANTED.

xxx Petitioner's Motion for Summary Judgment is therefore GRANTED. Consequently, respondent's Motion for Preliminary Hearing on his Special and Affirmative Defenses is deemed moot and academic. SO ORDERED.3 On June 15, 2006, the RTC of Muntinlupa City, Branch 203 rendered a Summary Judgment annulling the \\\"Irrevocable Power of Attorney\\\" for being contrary to law and public policy. The pertinent portions of the trial court's decision state that: Irrespective of whether the Power of Attorney in question is coupled with interest, or not, the same can be revoked or annulled, firstly, because it is contrary to law and secondly it is against public policy. As aptly pointed out by the intervenors, the assailed Special Power of Attorney which under its ultimate paragraph among others, authorizes the respondent (Nocom) 'to procure the necessary Transfer Certificate of Title in his name, as the absolute owner of the said properties is a disguised conveyance or assignment of the signatories' statutory rights of redemption and therefore prohibited under the provisions of Republic Act No. 3844, Sec. 62 which provides: Sec. 62. Limitation on Land Rights. Except in case of heredity succession by one heir, landholdings acquired under this Code may not be resold, mortgaged, encumbered, or transferred until after the lapse of ten years from the date of full payment and acquisition and after such ten year period, any transfer, sale or disposition may be made only in favor of persons qualified to acquire economic family-size farm units in accordance with the provisions of this Code xxx. (underlining supplied) The assailed \\\"power of attorney\\\" which was executed on December 18, 2003 is void ab initio for being contrary to the express prohibition or spirit of the aforesaid law or the declared state and public policy on the qualification of the beneficiaries of the agrarian reform program. It bears stressing that the redemption price of the subject lots was paid only on August 4, 2005 or 1 year, 8 months and 14 days after the execution of the assailed power of attorney.

If pursuant to the spirit of the Agrarian Reform Law, the tenant cannot even sell or dispose of his landholding within ten (10) years after he already acquired the same or even thereafter to persons not qualified to acquire economic size farm units in accordance with the provisions of the Agrarian Reform Code, with more reason should the tenant not be allowed to alienate or sell his landholding before he actually acquires the same. The right of redemption of the petitioner and his co-plaintiffs in Civil Case No. 95-020 as upheld by the Court of Appeals and the Supreme Court is founded on a piece of social legislation known as Agrarian Reform Code. Enunciated in the case of Association of Small Landowners in the Philippines, et al., vs. Hon. Secretary of Agrarian Reform (G.R. No. 78742, July 14, 1989) is the policy of the State on agrarian reform legislation. Said State policy emphasizes the \\\"Land for the Landless\\\" slogan that underscores the acute imbalance in the distribution of land among the people. Furthermore, the assailed Special Power of Attorney is a champertous contract and therefore void for being against public policy. The pleadings of the parties show that the same special power of attorney was executed by the petitioner, et al. through the intercession of Atty. Arturo Santos and at the behest of the respondent. In his own answer to the instant petition which he is estopped to deny, the respondent alleges that the actual agreement was for the respondent to pay the expenses of the proceedings to enforce the rights of the petitioner and his co-plaintiffs in Civil Case No. 95-020 without any provision for reimbursement. In other words, the respondents, through the intercession of Atty. Santos, petitioner's attorney, had agreed to carry on with the action for the petitioner et al. at his own expense in consideration of procuring for himself the title to the lots in question as the absolute owner thereof, with the respondent paying the redemption price of said lots, as well as separate amounts of Five Hundred Thousand (P500,000.00) to each of the five (5) co-plaintiffs in Civil Case No. 95020, including herein petitioner, or a total sum of Two Million Five Hundred Thousand Pesos (P2,500,000.00). Under the premises, the aforesaid contract brokered by Atty. Arturo Santos has all really the earmarks of a champertous contract which is against public policy as it violates the fiduciary relations between the lawyer and his client, whose weakness or disadvantage is being exploited by the former. In other words, the situation created under the given premises is a clear circumvention of the prohibition against the execution of champertous contracts between a lawyer and a client. A champertous contract is defined as a contract between a stranger and a party to a lawsuit, whereby the stranger pursues the party's claim in consideration of receiving part or any of the proceeds recovered under the judgment; a bargain by a stranger with a party to a suit, by which such third person undertakes to carry on the litigation at his own cost and risk, in

consideration of receiving, if successful, a part of the proceeds or subject sought to be recovered. (Blacks Dictionary; Schnabel v. Taft Broadcasting Co., Inc. Mo. App. 525 S.W. 2d 819, 823). An Agreement whereby the attorney agrees to pay expenses of proceedings to enforce the client's rights is champertous. [JBP Holding Corporation v. U.S. 166 F. Supp. 324 (1958)]. Such agreements are against public policy especially where as in this case, the attorney has agreed to carry on the action at its own expense in consideration of some bargain to have part of the thing in dispute. [See Sampliner v. Motion Pictures Patents Co., et al., 225 F. 242 (1918). The execution of these contracts violates the fiduciary relationship between the lawyer and his client, for which the former must incur administrative sanction. The intention of the law in prohibiting this kind of contract is to prevent a lawyer from acquiring an interest in the subject of the litigation and to avoid a conflict of interest between him and his client. In the instant case, it seems that Atty. Santos and the respondent colluded and conspired to circumvent these prohibitions. Considering therefore that Atty. Santos, then petitioner's counsel, brokered the alleged deal between petitioners et al. and the respondent with respect to the lands subject of litigation in Civil Case No. 95-020, the deal contracted is illegal for being a champertous agreement and therefore it cannot be enforced. Be that as it may, granting the agency established in the assailed Power of Attorney is coupled with interest, the petitioner and his co-plaintiffs in Civil Case No. 95-020, who are the present intervenors, are not revoking the Power of Attorney at will but have precisely gone to court and filed the instant petition for its cancellation or revocation. What is prohibited by law and jurisprudence is the arbitrary and whimsical revocation of a power of attorney or agency coupled with interest, at will by a party, without court declaration. WHEREFORE, judgment is hereby rendered as follows: (1) Nullifying the \\\"Irrevocable Power of Attorney\\\" in question dated December 18, 2003, signed by the petitioner [herein respondent Oscar Camerino] and his co-plaintiffs [herein respondents who were the movant-intervenors] in Civil Case No. 95-020 in favor of the respondent [herein petitioner]; (2) Ordering the respondent to turnover the Certificates of Title Nos. 15895, 15896 and 15897 covering the lots, the subject of this case, to the petitioner and the intervenors; (3) Ordering the respondent to pay the petitioner attorney's fees and all other legal fees incurred by the latter in connection with this case; (4) Ordering the petitioner and the intervenors to return to the respondent the amount of

P7,790,612 paid by the latter as redemption price of the lots in question plus commission of P147,049.18; and (5) Ordering the petitioner Oscar Camerino and the intervenors Efren Camerino, Cornelio Mantile, Nolasco Del Rosario or his heirs and Domingo Enriquez, who are petitioner's coplaintiffs in Civil Case No. 95-020, to return to the respondent the total amount of P2,500,000.00 or P500,000.00 from each of them paid by the respondent to them under Philtrust Bank Check Nos. MV 0002060, MV 0002061, MV 0002062, MV 0002063, and MV 0002064 which checks were encashed by them with the drawee bank. SO ORDERED.4 On July 3, 2006 petitioner filed an Omnibus Motion for Reconsideration seeking to set aside the trial court's Joint Order dated June 9, 2005 and Summary Judgment dated June 15, 2006 which was opposed by the respondents. On July 4, 2006, respondents filed a Motion for Execution Pending Final Decision/Appeal which was opposed by petitioner. On August 14, 2006, the trial court issued an order denying petitioner's Omnibus Motion for Reconsideration. Within the reglementary period, petitioner filed a Notice of Appeal and paid the corresponding appeal docket fees. On February 14, 2008, the CA affirmed the trial court's Joint Order dated June 9, 2006 and Summary Judgment dated June 15, 2006 and dismissed the petitioner's appeal for lack of jurisdiction. The CA ruled that as the RTC rendered the assailed Summary Judgment based on the pleadings and documents on record, without any trial or reception of evidence, the same did not involve factual matters. The CA found the issues raised by the petitioner in his appeal to be questions of law, to wit: (a) whether Summary Judgment was proper under the admitted facts and circumstances obtaining in the present case; (b) whether undue haste attended the rendition of the Summary Judgment; (c) whether the Summary Judgment was valid for failure of the RTC to implead an indispensable party; (d) whether the RTC erred in allowing the intervention of respondents Efren Camerino, Cornelio Mantile, and Mildred Del Rosario; and (e) whether the RTC erred in taking cognizance of the case despite nonpayment of the required docket fees. The CA concluded that since the issues involved questions of law, the proper mode of appeal should have been through a petition for review on certiorari under Rule 45 of the Rules of Court directly to this Court and not through an ordinary appeal under Rule 41 thereof and, thus, petitioner's appeal to the CA should be dismissed outright pursuant to this Court's Circular No. 2-90, dated March 9, 1990, mandating the dismissal of appeals involving pure questions of law erroneously brought to the CA.

In its Resolution of May 23, 2008, the CA denied petitioner's Motion for Reconsideration dated February 26, 2008. Hence, this present petition. Petitioner raises the following issues: I WHETHER OR NOT THE HONORABLE COURT OF APPEALS COMMITTED AN ERROR IN DISMISSING PETITIONER'S APPEAL. II WHETHER OR NOT THE COURT OF APPEALS ERRED IN UPHOLDING THE SUMMARY JUDGMENT OF THE TRIAL COURT DESPITE THE GENUINE ISSUE OF FACT RAISED IN PETITIONER'S ANSWER. III WHETHER OR NOT THE COURT OF APPEALS IS CORRECT IN NOT VOIDING THE ASSAILED SUMMARY JUDGMENT FOR FAILURE OF RESPONDENTS TO IMPLEAD AN INDISPENSABLE PARTY. IV WHETHER OR NOT THE COURT OF APPEALS ERRED IN NOT DISMISSING CIVIL CASE NO. 05-172 FOR NON-PAYMENT OF THE CORRECT DOCKET FEES. Petitioner contends that the CA erred in dismissing his appeal as the case involves questions of fact; that summary judgment was not proper as there were genuine issues of fact raised in his Answer; that respondents failed to implead their lawyer, Atty. Arturo S. Santos, as an indispensable party-defendant, who, according to them, allegedly connived with him in making them sign the \\\"Irrevocable Power of Attorney\\\" in his favor; and that since the case partakes of the nature of an action to recover ownership and titles to the properties, respondents' complaint should be dismissed for failure to pay the correct docket fees. Respondent Oscar Camerino argues that the sole issue to be resolved pertains to the legal issue of whether the Special Power of Attorney (SPA) denominated as irrevocable may be revoked; that three material facts have been established, i.e., that the SPA was executed,

that Atty. Santos facilitated the signing and execution of the SPA, and that petitioner paid P500,000 to each of the respondents in consideration for the signing of the SPA and, thus, summary judgment was proper; and that pure questions of law are not proper in an ordinary appeal under Rule 41 of the Rules. Respondents Efren Camerino, Cornelio Mantile, and Mildred Del Rosario, in her capacity as legal heir of Nolasco Del Rosario, aver that petitioner's petition is insufficient in form, i.e., due to defective verification as the word \\\"personal\\\" was not stated when referring to \\\"personal knowledge,\\\" and in substance, i.e., there is no genuine issue to be resolved as the factual allegations of the petitioner are unsubstantial and that Atty. Santos is not an indispensable party to the case. The petition has merit. In dismissing petitioner's appeal, the CA erroneously relied on the rationale that the petitioner's appeal raised questions of law and, therefore, it had no recourse but to dismiss the same for lack of jurisdiction. The summary judgment rendered by the trial court has the effect of an adjudication on the merits and, thus, the petitioner, being the aggrieved party, correctly appealed the adverse decision of the RTC to the CA by filing a notice of appeal coupled with the appellant's brief under Rule 41 of the Rules. Contrary to the findings of the RTC and the CA, the present case involves certain factual issues which remove it from the coverage of a summary judgment. Under Section 1, Rule 35 of the Rules of Court, a party seeking to recover upon a claim, counterclaim, or cross-claim or to obtain a declaratory relief may, at any time after the pleading in answer thereto has been served, move with supporting affidavits, depositions or admissions for a summary judgment in his favor upon all or any part thereof. Summary judgment is a procedural device resorted to in order to avoid long drawn out litigations and useless delays. When the pleadings on file show that there are no genuine issues of fact to be tried, the Rules allow a party to obtain immediate relief by way of summary judgment, that is, when the facts are not in dispute, the court is allowed to decide the case summarily by applying the law to the material facts. Conversely, where the pleadings tender a genuine issue, summary judgment is not proper. A "genuine issue" is such issue of fact which requires the presentation of evidence as distinguished from a sham, fictitious, contrived or false claim. Section 3 of the said rule provides two (2) requisites for summary judgment to be proper: (1) there must be no genuine issue as to any material fact, except for the amount of damages; and (2) the party presenting the motion for summary judgment must be entitled to a judgment as a matter of law.5 A summary judgment is permitted only if there is no genuine issue as to any material fact and a moving party is

entitled to a judgment as a matter of law. A summary judgment is proper if, while the pleadings on their face appear to raise issues, the affidavits, depositions, and admissions presented by the moving party show that such issues are not genuine.6 The present case should not be decided via a summary judgment. Summary judgment is not warranted when there are genuine issues which call for a full blown trial. The party who moves for summary judgment has the burden of demonstrating clearly the absence of any genuine issue of fact, or that the issue posed in the complaint is patently unsubstantial so as not to constitute a genuine issue for trial. Trial courts have limited authority to render summary judgments and may do so only when there is clearly no genuine issue as to any material fact. When the facts as pleaded by the parties are disputed or contested, proceedings for summary judgment cannot take the place of trial.7 Summary judgment is generally based on the facts proven summarily by affidavits, depositions, pleadings, or admissions of the parties. In this present case, while both parties acknowledge or admit the existence of the \"Irrevocable Power of Attorney,\" the variance in the allegations in the pleadings of the petitioner vis--vis that of the respondents require the presentation of evidence on the issue of the validity of the \\\"Irrevocable Power of Attorney\\\" to determine whether its execution was attended by the vices of consent and whether the respondents and their spouses did not freely and voluntarily execute the same. In his Answer with Counterclaim, petitioner denied the material allegations of respondent Oscar Camerino's complaint for being false and baseless as respondents were informed that the document they signed was the \\\"Irrevocable Power of Attorney\\\" in his favor and that they had received the full consideration of the transaction and, thus, had no legal right over the three parcels of land. Indeed, the presentation of evidence is necessary to determine the validity and legality of the \\\"Irrevocable Power of Attorney,\\\" dated December 18, 2003, executed by the respondents in favor of the petitioner. From said main factual issue, other relevant issues spring therefrom, to wit: whether the said \\\"Irrevocable Power of Attorney\\\" was coupled with interest; whether it had been obtained through fraud, deceit, and misrepresentation or other vices of consent; whether the five (5) Philtrust Bank Manager's checks given by petitioner to the respondents amounting to P500,000 each were in consideration of the \\\"inchoate and contingent rights\\\" of the respondents in favor of the petitioner; whether Atty. Santos connived with petitioner in causing the preparation of the said document and, therefore, should be impleaded as party-defendant together with the petitioner; whether respondents deposited the amount of P9,790,612.00 plus P147,059.18 with the RTC of Muntinlupa City, Branch 256; and whether the sale of respondents' inchoate and contingent rights amounted to a champertous contract. The incongruence and disparity in the material allegations of both parties have been evident. Respondent Oscar Camerino alleged in his complaint that he and his co-respondents were required by their counsel, Atty. Santos, to sign a document on the representation that it was

urgently needed in the legal proceedings against SMSC which turned out to be the \\\"Irrevocable Power of Attorney\\\"; but petitioner disproved the vitiated consent on the part of the respondents as they knew fully well that the document they signed, voluntarily and intelligently, on December 18, 2003, was the said \\\"Irrevocable Power of Attorney.\\\" Respondent Oscar Camerino alleged in his complaint that he has no intention of naming, appointing or constituting anyone, including the petitioner, to sell, assign, dispose or encumber the lots in question; but petitioner maintained that respondent Oscar Camerino agreed to sell and assign to him his \\\"inchoate and contingent rights and interests\\\" over the subject lot for and in consideration of the sum of P500,000, plus the redemption price of P9,790,612. Respondents claimed that the amount they received was grossly disproportionate to the value of the subject land; but petitioner countered that the respondents did not have the amount of P9,790,612 needed to redeem the subject lots, so he decided to buy their contingent rights and paid each of them P500,000 or a total of P2,500,000 as evidenced by five (5) Philtrust Bank Manager's Check which they personally encashed on December 19, 2003, that he also paid the amount of P147,059.18 as commission on August 4, 2005, that simultaneous with the aforesaid payment, respondents and their spouses voluntarily signed the \\\"Irrevocable Power of Attorney\\\" dated December 18, 2003, and that being coupled with interest, the \\\"Irrevocable Power of Attorney\\\" cannot be revoked at will by any of the parties. Respondents maintain that they were deceived into executing the \\\"Irrevocable Power of Attorney\\\" in favor of the petitioner which was done through the maneuverings of their own lawyer, Atty. Santos, who, according to them, had connived with petitioner in order to effect the fraudulent transaction. In this regard, respondents should have impleaded Atty. Santos as an indispensable party-defendant early on when the case was still with the RTC, but they failed to do so. However, their procedural lapse did not constitute a sufficient ground for the dismissal of Civil Case No. 05-172. In Domingo v. Scheer,8 the Court explained that the non-joinder of an indispensable party is not a ground for the dismissal of an action. Section 7, Rule 3 of the Rules, as amended, requires indispensable parties to be joined as plaintiffs or defendants. The joinder of indispensable parties is mandatory. Without the presence of indispensable parties to the suit, the judgment of the court cannot attain real finality. Strangers to a case are not bound by the judgment rendered by the court. The absence of an indispensable party renders all subsequent actions of the court null and void. There is lack of authority to act not only of the absent party but also as to those present. The responsibility of impleading all the indispensable parties rests on the petitioner or plaintiff. However, the non-joinder of indispensable parties is not a ground for the dismissal of an action. Parties may be added by order of the court on motion of the party or on its own initiative at any stage of the action and/or such times as are just. If the petitioner or plaintiff refuses to implead an indispensable party despite the order of the court, the latter may dismiss the complaint or petition for the

petitioner or plaintiff's failure to comply therefor. The remedy is to implead the non-party claimed to be indispensable. In the present case, the RTC and the CA did not require the respondents to implead Atty. Santos as party-defendant or respondent in the case. The operative act that would lead to the dismissal of Civil Case No. 05-172 would be the refusal of respondents to comply with the directive of the court for the joinder of an indispensable party to the case. In his petition, petitioner prays for the reversal of the Decision dated February 14, 2008 of the CA which affirmed the Joint Order dated June 9, 2005 and Summary Judgment dated June 15, 2006 of the RTC of Muntinlupa City, Branch 203 and dismissed petitioner's appeal under Rule 41 of the Rules for lack of jurisdiction and its Resolution dated May 23, 2008 which denied petitioner's motion for reconsideration; the annulment of the RTC's Summary Judgment rendered on June 15, 2006; and the dismissal of Civil Case No. 05-172 filed with the RTC on the ground that respondents failed to pay the correct docket fees as the action actually sought the recovery of ownership over the subject properties. The record shows that Civil Case No. 05-172 is a complaint filed by respondent Oscar Camerino against petitioner, denominated as \\\"Petition to Revoke Power of Attorney,\\\" that seeks to nullify the \\\"Irrevocable Power of Attorney\\\" coupled with interest dated December 18, 2003; that petitioner be ordered to turn over TCT No. 15898, 15896, and 15897 to him; and that petitioner be ordered to pay the attorney's fees and other legal fees as a consequence of the suit. This case is therefore not an action to recover the titles and ownership over the subject properties. For now, the nature of the suit remains that of personal action and not a real action in contemplation of Rule 4 of the Rules. Hence, the docket fees paid by the respondents were in order. Should the complaint be amended to seek recovery of ownership of the land, then the proper docket fees should be paid and collected. While the RTC erred in rendering the summary judgment, Civil Case No. 05-172 should not perforce be dismissed. Instead, this present case should be remanded to the RTC for further proceedings and proper disposition according to the rudiments of a regular trial on the merits and not through an abbreviated termination of the case by summary judgment. WHEREFORE, the petition is PARTLY GRANTED. The Decision of the Court of Appeals dated February 14, 2008 which affirmed the Joint Order dated June 9, 2005 and Summary Judgment dated June 15, 2006 of the Regional Trial Court of Muntinlupa City, Branch 203 and dismissed petitioner's appeal under Rule 41 of the Rules of Court on the ground of lack of jurisdiction and the Resolution of the Court of Appeals dated May 23, 2008 which denied petitioner's motion for reconsideration in CA-G.R. CV No. 87656 are REVERSED and SET ASIDE. The case is REMANDED to the Regional Trial Court of Muntinlupa City, Branch 203, for further proceedings in accordance with this Decision.

No costs. SO ORDERED.

The following case is instructive of what allegations we need to emphasize so as not to allow summary judgment.

BANK OF THE PHILIPPINE ISLANDS, INC., Petitioner, versus SPS. NORMAN AND ANGELINA YU and TUANSON BUILDERS CORPORATION represented by PRES. NORMAN YU, Respondents G.R. No. 184122 | 2010-01-20

DECISION

ABAD, J.: This case is about the propriety of a summary judgment in resolving a documented claim of alleged excessive penalty charges, interest, attorney's fees, and foreclosure expenses imposed in an extrajudicial foreclosure of mortgage. The Facts and the Case Respondents Norman and Angelina Yu (the Yus), doing business as Tuanson Trading, and Tuanson Builders Corporation (Tuanson Builders) borrowed various sums totaling P75 million from Far East Bank and Trust Company. For collateral, they executed real estate mortgages over several of their properties,[1] including certain lands in Legazpi City owned by Tuanson Trading.[2] In 1999, unable to pay their loans, the Yus and Tuanson Builders requested a loan restructuring,[3] which the bank, now merged with Bank of the Philippine Islands (BPI), granted.[4] By this time, the Yus' loan balance stood at P33,400,000.00. The restructured loan used the same collaterals, with the exception of Transfer Certificate of Title 40247 that secured a loan of P1,600,000.[5] Despite the restructuring, however, the Yus still had difficulties paying their loan. They asked BPI to release some of the mortgaged lands since their total appraised value far exceeded the amount of the remaining debt. When BPI ignored their request, the Yus withheld payments on their amortizations. Thus, BPI extrajudicially foreclosed[6] the mortgaged

properties in Legazpi City and in Pili, Camarines Sur. But the Yus sought by court action against BPI and the winning bidder, Magnacraft Development Corporation (Magnacraft), the annulment of the foreclosure sale. In the course of the proceedings, however, the Yus and Magnacraft entered into a compromise agreement[7] that affirmed the latter's ownership of three out of the 10 parcels of land that were auctioned. By virtue of this agreement, the court dismissed the complaint against Magnacraft,[8] without prejudice to the Yus filing a new one against BPI. On October 24, 2003 the Yus filed their new complaint before the Regional Trial Court (RTC) of Legazpi City, Branch 1, in Civil Case 10286 against BPI for recovery of alleged excessive penalty charges, attorney's fees, and foreclosure expenses that the bank caused to be incorporated in the price of the auctioned properties.[9] In its answer,[10] BPI essentially admitted the foreclosure of the mortgaged properties for P39,055,254.95, broken down as follows: P33,283,758.73 as principal debt; P2,110,282.78 as interest; and P3,661,213.46 as penalty charges.[11] BPI qualified that the total of P39,055,254.95 corresponded only to the Yus' debt as of date of filing of the petition.[12] The notice of the auction sale said that the total was "inclusive of interest, penalty charges, attorney's fee and expenses of this foreclosure."[13] BPI further admitted that its bid of P45,090,566.41 for all the auctioned properties was broken down as follows:[14] Principal P 32,188,723.07 Interest 2,763,088.93 Penalty Charges 5,568.649.09 Sub-total............... P 40,520,461.09 Add: 10% Attorney's Fees 4,052,046.11 Litigation Expenses & Interest 446,726.74 Cost of Publication & Interest 71,332.47 TOTAL................ P 45,090,566.41 BPI also admitted that Magnacraft submitted the highest and winning bid of P45,500,000.00.

[15] The sheriff turned over this amount to BPI.[16] According to BPI, it in turn remitted to the Clerk of Court the P409,433.59 difference between its bid price and that of Magnacraft's.[17] Although the proceeds of the sale exceeded the P39,055,254.95 stated in the notice of sale by P6,035,311.46,[18] the bid amount increased because it now included litigation expenses and attorney's fees as well as interests and penalties as recomputed.[19] BPI admitted that it also pushed through with the second auction for the sale of a lot in Pili, Camarines Sur that secured a remaining debt of P5,562,000.[20] BPI made the lone bid[21] of P1,701,934.09.[22] The Yus had three causes of action against BPI. First. The bank imposed excessive penalty charges and interests: over P5 million in penalty charges computed at 36% per annum compared to the 12% per annum that the Court fixed in the cases of State Investment House, Inc. v. Court of Appeals[23] and Ruiz v. Court of Appeals.[24] In addition, BPI collected a 14% yearly interest on the principal, bringing the combined penalty charges and interest to 50% of the principal per annum. Second. BPI also imposed a charge of P4,052,046.11 in attorney's fees, the equivalent of 10% of the principal, interest, and penalty charges. Third. BPI did not provide documents to support its claim for foreclosure expenses of P446,726.74 and cost of publication of P518,059.21. As an alternative to their three causes of action, the Yus claimed that BPI was in estoppel to claim more than the amount stated in its published notices. Consequently, it must turn over the excess bid of P6,035,311.46. After pre-trial, the Yus moved for summary judgment,[25] pointing out that based on the answer,[26] the common exhibits of the parties,[27] and the answer to the written interrogatories to the sheriff,[28] no genuine issues of fact exist in the case. The Yus waived their claim for moral damages so the RTC can dispose of the case through a summary judgment.[29] Initially, the RTC granted only a partial summary judgment. It reduced the penalty charge of 36% per annum[30] to 12% per annum until the debt would have been fully paid but maintained the attorney's fees as reasonable considering that BPI already waived the P1,761,511.36 that formed part of the attorney's fees and reduced the rate of attorney's fees it collected from 25% to 10% of the amount due. The RTC ruled that facts necessary to resolve the issues on penalties and fees had been admitted by the parties thus dispensing with the need to receive evidence.[31]

Still, the RTC held that it needed to receive evidence for the resolution of the issues of (1) whether or not the foreclosure and publication expenses were justified; (2) whether or not the foreclosure of the lot in Pili, Camarines Sur, was valid given that the proceeds of the foreclosure of the properties in Legazpi City sufficiently covered the debt; and (3) whether or not BPI was entitled to its counterclaim for attorney's fees, moral damages, and exemplary damages.[32] The Yus moved for partial reconsideration.[33] They argued that, since BPI did not mark in evidence any document in support of the foreclosure expenses it claimed, it may be assumed that the bank had no evidence to prove such expenses. As regards their right to the pro-rating of their debt among the mortgaged properties, the Yus pointed out that BPI did not dispute the fact that the proceeds of the sale of the properties in Legazpi City fully satisfied the debt. Thus, the court could already resolve without trial the issue of whether or not the foreclosure of the Pili property was valid. Further, the Yus sought reconsideration of the reduction of penalty charges and the allowance of the attorney's fees. They claimed that the penalty charges should be deleted for violation of Republic Act (R.A.) 3765 or the Truth in Lending Act. BPI's disclosure did not state the rate of penalties on late amortizations. Also, the Yus asked the court to reduce the attorney's fees from 10% to 1% of the amount due. On January 3, 2006 the RTC reconsidered its earlier decision and rendered a summary judgment:[34] 1. Deleting the penalty charges imposed by BPI for non-compliance with the Truth in Lending Act; 2. Reducing the attorney's fees to 1% of the principal and interest; 3. Upholding the reasonableness of the foreclosure expenses and cost of publication, both with interests; 4. Reiterating the turnover by the Clerk of Court to the Yus of the excess in the bid price; 5. Deleting the Yus' claim for moral damages they having waived it; 6. Denying the Yus' claim for attorney's fees for lack of basis; and 7. Dismissing BPI's counterclaim for moral and exemplary damages and for attorney's fees for lack of merit considering that summary judgment has been rendered in favor of the Yus. BPI appealed the decision to the Court of Appeals (CA) in CA-G.R. CV 86577. But the CA

rendered judgment on January 23, 2008, affirming the RTC decision in all respects. And when BPI asked for reconsideration,[35] the CA denied it on July 14, 2008,[36] hence, the bank's recourse to this Court. The Issues Presented BPI presents the following issues: 1. Whether or not the case presented no genuine issues of fact such as to warrant a summary judgment by the RTC; and 2. Where summary judgment is proper, whether or not the RTC and the CA a) correctly deleted the penalty charges because of BPI's alleged failure to comply with the Truth in Lending Act; b) correctly reduced the attorney's fees to 1% of the judgment debt; and c) properly dismissed BPI's counterclaims for moral and exemplary damages, attorney's fees, and litigation expenses. The Court's Rulings One. A summary judgment is apt when the essential facts of the case are uncontested or the parties do not raise any genuine issue of fact.[37] Here, to resolve the issue of the excessive charges allegedly incorporated into the auction bid price, the RTC simply had to look at a) the pleadings of the parties; b) the loan agreements, the promissory note, and the real estate mortgages between them; c) the foreclosure and bidding documents; and d) the admissions and other disclosures between the parties during pre-trial. Since the parties admitted not only the existence, authenticity, and genuine execution of these documents but also what they stated, the trial court did not need to hold a trial for the reception of the evidence of the parties. BPI contends that a summary judgment was not proper given the following issues that the parties raised: 1) whether or not the loan agreements between them were valid and enforceable; 2) whether or not the Yus have a cause of action against BPI; 3) whether or not the Yus are proper parties in interest; 4) whether or not the Yus are estopped from questioning the foreclosure proceeding after entering into a compromise agreement with Magnacraft; 5) whether or not the penalty charges and fees and expenses of litigation and publication are excessive; and 6) whether or not BPI violated the Truth in Lending Act.[38] But these are issues that could be readily resolved based on the facts established by the pleadings and the admissions of the parties.[39] Indeed, BPI has failed to name any document or item of fact that it would have wanted to adduce at the trial of the case. A trial would have been such a great waste of time and resources.

Two. Both the RTC and CA decisions cited BPI's alleged violation of the Truth in Lending Act and the ruling of the Court in New Sampaguita Builders Construction, Inc. v. Philippine National Bank[40] to justify their deletion of the penalty charges. Section 4 of the Truth in Lending Act states that: SEC. 4. Any creditor shall furnish to each person to whom credit is extended, prior to the consummation of the transaction, a clear statement in writing setting forth, to the extent applicable and in accordance with rules and regulations prescribed by the Board, the following information: (1) the cash price or delivered price of the property or service to be acquired; (2) the amounts, if any, to be credited as down payment and/or trade-in; (3) the difference between the amounts set forth under clauses (1) and (2); (4) the charges, individually itemized, which are paid or to be paid by such person in connection with the transaction but which are not incident to the extension of credit; (5) the total amount to be financed; (6) the finance charge expressed in terms of pesos and centavos; and (7) the percentage that the finance bears to the total amount to be financed expressed as a simple annual rate on the outstanding unpaid balance of the obligation. Penalty charge, which is liquidated damages resulting from a breach,[41] falls under item (6) or finance charge. A finance charge "represents the amount to be paid by the debtor incident to the extension of credit."[42] The lender may provide for a penalty clause so long as the amount or rate of the charge and the conditions under which it is to be paid are disclosed to the borrower before he enters into the credit agreement. In this case, although BPI failed to state the penalty charges in the disclosure statement, the promissory note that the Yus signed, on the same date as the disclosure statement, contained a penalty clause that said: "I/We jointly and severally, promise to further pay a late payment charge on any overdue amount herein at the rate of 3% per month." The promissory note is an acknowledgment of a debt and commitment to repay it on the date and under the conditions that the parties agreed on.[43] It is a valid contract absent proof of acts which might have vitiated consent.[44]

The question is whether or not the reference to the penalty charges in the promissory note constitutes substantial compliance with the disclosure requirement of the Truth in Lending Act.[45] The RTC and CA relied on the ruling in New Sampaguita as authority that the nondisclosure of the penalty charge renders its imposition illegal. But New Sampaguita is not attended by the same circumstances. What New Sampaguita disallowed, because it was not mentioned either in the disclosure statement or in the promissory note, was the unilateral increase in the rates of penalty charges that the creditor imposed on the borrower. Here, however, it is not shown that BPI increased the rate of penalty charge that it collected from the Yus. [46] The ruling that is more in point is that laid down in The Consolidated Bank and Trust Corporation v. Court of Appeals,[47] a case cited in New Sampaguita. The Consolidated Bank ruling declared valid the penalty charges that were stipulated in the promissory notes. [48] What the Court disallowed in that case was the collection of a handling charge that the promissory notes did not contain. The Court has affirmed that financial charges are amply disclosed if stated in the promissory note in the case of Development Bank of the Philippines v. Arcilla, Jr.[49] The Court there said, "Under Circular 158 of the Central Bank, the lender is required to include the information required by R.A. 3765 in the contract covering the credit transaction or any other document to be acknowledged and signed by the borrower. In addition, the contract or document shall specify additional charges, if any, which will be collected in case certain stipulations in the contract are not met by the debtor." In this case, the promissory notes signed by the Yus contained data, including penalty charges, required by the Truth in Lending Act. They cannot avoid liability based on a rigid interpretation of the Truth in Lending Act that contravenes its goal. Nonetheless, the courts have authority to reduce penalty charges when these are unreasonable and iniquitous.[50] Considering that BPI had already received over P2.7 million in interest and that it seeks to impose the penalty charge of 3% per month or 36% per annum on the total amount due-principal plus interest, with interest not paid when due added to and becoming part of the principal and also bearing interest at the same rate-the Court finds the ruling of the RTC in its original decision[51] reasonable and fair. Thus, the penalty charge of 12% per annum or 1% per month[52] is imposed. Three. As for the award of attorney's fee, it being part of a party's liquidated damages, the same may likewise be equitably reduced.[53] The CA correctly affirmed the RTC Order[54] to reduce it from 10% to 1% based on the following reasons: (1) attorney's fee is not essential to the cost of borrowing, but a mere incident of collection;[55] (2) 1% is just and adequate because BPI had already charged foreclosure expenses; (3) attorney's fee of 10% of the total amount due is onerous considering the rote effort that goes into extrajudicial

foreclosures. WHEREFORE, the Court DENIES the petition and AFFIRMS the Court of Appeals Decision in CA-G.R. CV 86577 dated January 23, 2008 subject to the RESTORATION of the penalty charge of 12% per annum or 1% per month of the amount due computed from date of nonpayment or November 25, 2001. SO ORDERED.

Even assuming that there was implied admission, such admission could still raise genuine issue.

CASENT REALTY DEVELOPMENT CORP., Petitioner, versus PHILBANKING CORPORATION, Respondent. G.R. No. 150731 | 2007-09-14

DECISION

VELASCO, JR., J.: On appeal to this Court through Rule 45 of the Rules of Court is the March 29, 2001 Decision[1] and November 7, 2001 Resolution[2] of the Court of Appeals (CA) in CA-G.R. CV No. 63979 entitled Philbanking Corporation v. Casent Realty Development Corporation. The CA reversed the May 12, 1999 Order[3] of the Makati City Regional Trial Court (RTC), Branch 145 in Civil Case No. 93-2612, which granted petitioner's demurrer to evidence and dismissed the complaint filed by respondent. The Facts The facts according to the appellate court are as follows: In 1984, petitioner Casent Realty Development Corporation executed two promissory notes in favor of Rare Realty Corporation (Rare Realty) involving the amounts of PhP 300,000 (PN No. 84-04) and PhP 681,500 (PN No. 84-05). It was agreed in PN No. 84-04 that the loan it covered would earn an interest of 36% per annum and a penalty of 12% in case of nonpayment by June 27, 1985, while the loan covered by PN No. 84-05 would earn an interest

of 18% per annum and 12% penalty if not paid by June 25, 1985.[4] On August 8, 1986, these promissory notes were assigned to respondent Philbanking Corporation through a Deed of Assignment.[5] Respondent alleged that despite demands, petitioner failed to pay the promissory notes upon maturity such that its obligation already amounted to PhP 5,673,303.90 as of July 15, 1993. Respondent filed on July 20, 1993 a complaint before the Makati City RTC for the collection of said amount. In its Answer,[6] petitioner raised the following as special/affirmative defenses: 1. The complaint stated no cause of action or if there was any, the same was barred by estoppel, statute of frauds, statute of limitations, laches, prescription, payment, and/or release; 2. On August 27, 1986, the parties executed a Dacion en Pago[7] (Dacion) which ceded and conveyed petitioner's property in Iloilo City to respondent, with the intention of totally extinguishing petitioner's outstanding accounts with respondent. Petitioner presented a Confirmation Statement[8] dated April 3, 1989 issued by respondent stating that petitioner had no loans with the bank as of December 31, 1988. 3. Petitioner complied with the condition in the Dacion regarding the repurchase of the property since the obligation was fully paid. Respondent sent confirmation statements in the latter months of 1989, which showed that petitioner had no more outstanding loan; and 4. Assuming that petitioner still owed respondent, the latter was already estopped since in October 1988, it reduced its authorized capital stock by 50% to wipe out a deficit of PhP 41,265,325.12.[9] Thus, petitioner, by way of compulsory counterclaim, alleged that it made an overpayment of approximately PhP 4 million inclusive of interest based on Central Bank Reference Lending Rates on dates of overpayment. Petitioner further claimed moral and exemplary damages and attorney's fee, amounting to PhP 4.5 million plus the costs of suit as a consequence of respondent's insistence on collecting.[10] The parties failed to reach an amicable settlement during the pre-trial conference. Thereafter, respondent presented its evidence and formally offered its exhibits. Petitioner then filed a Motion for Judgment on Demurrer to the Evidence,[11] pointing out that the plaintiff's failure to file a Reply to the Answer which raised the Dacion and Confirmation Statement constituted an admission of the genuineness and execution of said documents; and that since the Dacion obliterated petitioner's obligation covered by the promissory notes, the bank had no right to collect anymore.

Respondent subsequently filed an Opposition[12] which alleged that: (1) the grounds relied upon by petitioner in its demurrer involved its defense and not insufficiency of evidence; (2) the Dacion and Confirmation Statement had yet to be offered in evidence and evaluated; and (3) since respondent failed to file a Reply, then all the new matters alleged in the Answer were deemed controverted.[13] The trial court ruled in favor of petitioner and dismissed the complaint through the May 12, 1999 Order, the dispositive portion of which reads: WHEREFORE, premises considered[,] finding defendant's Motion For Judgment On Demurrer To The Evidence to be meritorious[,] the same is hereby GRANTED. Consequently, considering that the obligation of the defendant to the plaintiff having been extinguish[ed] by a Dacion en Pago duly executed by said parties, the instant complaint is hereby DISMISSED, with prejudice. Without Cost.[14] The Ruling of the Court of Appeals On appeal, respondent alleged that the trial court gravely erred because the promissory notes were not covered by the Dacion, and that respondent was able to prove its causes of action and right to relief by overwhelming preponderance of evidence. It explained that at the time of execution of the Dacion, the subject of the promissory notes was the indebtedness of petitioner to Rare Realty and not to the "Bank"--the party to the Dacion. It was only in 1989 after Rare Realty defaulted in its obligation to respondent when the latter enforced the security provided under the Deed of Assignment by trying to collect from petitioner, because it was only then that petitioner became directly liable to respondent. It was also for this reason that the April 3, 1989 Confirmation Statement stated that petitioner had no obligations to repondent as of December 31, 1988. On the other hand, petitioner claimed that the Deed of Assignment provided that Rare Realty lost its rights, title, and interest to directly proceed against petitioner on the promissory notes since these were transferred to respondent. Petitioner reiterated that the Dacion covered all conceivable amounts including the promissory notes.[15] The appellate court ruled that under the Rules of Civil Procedure, the only issue to be resolved in a demurrer is whether the plaintiff has shown any right to relief under the facts presented and the law. Thus, it held that the trial court erred when it considered the Answer which alleged the Dacion, and that its genuineness and due execution were not at issue. It added that the court a quo should have resolved whether the two promissory notes were covered by the Dacion, and that since petitioner's demurrer was granted, it had already lost its right to present its evidence.[16]

The CA found that under the Deed of Assignment, respondent clearly had the right to proceed against the promissory notes assigned by Rare Realty. Thus, the CA ruled, as follows: WHEREFORE, premises considered, the Order dated May 12, 1999 of the Regional Trial Court, National Capital Judicial Region, Branch 145, Makati City is hereby REVERSED and SET ASIDE. Judgment is hereby entered ORDERING [petitioner] Casent Realty [Development] Corporation to: 1. pay [respondent] Philbanking Corporation the amount of P300,000.00 with an interest of 36% per annum and a penalty of 12% for failure to pay the same on its maturity date, June 27, 1985 as stipulated in Promissory Note No. 84-04; 2. pay [respondent] Philbanking Corporation the amount of P681,500.00 with an interest of 18% per annum and a penalty of 12% for failure to pay the same on its maturity date, June 25, 1985 as stipulated in Promissory Note No. 84-05; and 3. pay [respondent] Philbanking Corporation, the amount representing 25% of total amount due as attorney's fee as stipulated in the promissory notes. SO ORDERED.[17] Petitioner filed a Motion for Reconsideration[18] which was denied by the CA in its November 7, 2001 Resolution.[19] The Issues WHETHER OR NOT THE COURT OF APPEALS ERRED IN EXCLUDING THE PETITIONER'S AFFIRMATIVE DEFENSES IN ITS ANSWER IN RESOLVING A DEMURRER TO EVIDENCE; AND WHETHER OR NOT PETITIONER IS LIABLE TO PAY THE RESPONDENT In other words, the questions posed by this case are: 1. Does respondent's failure to file a Reply and deny the Dacion and Confirmation Statement under oath constitute a judicial admission of the genuineness and due execution of these documents?

2. Should judicial admissions be considered in resolving a demurrer to evidence? If yes, are the judicial admissions in this case sufficient to warrant the dismissal of the complaint? Petitioner asserts that its obligation to pay under the promissory notes was already extinguished as evidenced by the Dacion and Confirmation Statement. Petitioner submits that when it presented these documents in its Answer, respondent should have denied the same under oath. Since respondent failed to file a Reply, the genuineness and due execution of said documents were deemed admitted, thus also admitting that the loan was already paid. On the other hand, respondent states that while it failed to file a Reply, all the new matters were deemed controverted pursuant to Section 10, Rule 6 of the Rules of Court. Also, the loan which was covered by the Dacion refers to another loan of petitioner amounting to PhP 3,921,750 which was obtained directly from the respondent as of August 1986.[20] Furthermore, petitioner argued that assuming respondent admitted the genuineness and due execution of the Dacion and Confirmation Statement, said admission was not all-encompassing as to include the allegations and defenses pleaded in petitioner's Answer. The Court's Ruling The petition is partly meritorious. Rule 33, Section 1 of the 1997 Rules of Civil Procedure provides: Section 1. Demurrer to evidence.--After the plaintiff has completed the presentation of his evidence, the defendant may move for dismissal on the ground that upon the facts and the law the plaintiff has shown no right to relief. If his motion is denied, he shall have the right to present evidence. If the motion is granted but on appeal the order of dismissal is reversed he shall be deemed to have waived the right to present evidence. In Gutib v. Court of Appeals, we defined a demurrer to evidence as "an objection by one of the parties in an action, to the effect that the evidence which his adversary produced is insufficient in point of law, whether true or not, to make out a case or sustain the issue."[21] What should be resolved in a motion to dismiss based on a demurrer to evidence is whether the plaintiff is entitled to the relief based on the facts and the law. The evidence contemplated by the rule on demurrer is that which pertains to the merits of the case, excluding technical aspects such as capacity to sue.[22] However, the plaintiff's evidence should not be the only basis in resolving a demurrer to evidence. The "facts" referred to in Section 8 should include all the means sanctioned by the Rules of Court in ascertaining matters in judicial proceedings. These include judicial admissions, matters of judicial notice, stipulations made during the pre-trial and trial, admissions, and presumptions, the only

exclusion being the defendant's evidence. Petitioner points out that the defense of Dacion and Confirmation Statement, which were submitted in the Answer, should have been specifically denied under oath by respondent in accordance with Rule 8, Section 8 of the Rules of Court: Section 8. How to contest such documents.--When an action or defense is founded upon a written instrument, copied in or attached to the corresponding pleading as provided in the preceding section, the genuineness and due execution of the instrument shall be deemed admitted unless the adverse party, under oath, specifically denies them, and sets forth, what he claims to be the facts; but the requirement of an oath does not apply when the adverse party does not appear to be a party to the instrument or when compliance with an order for an inspection of the original instrument is refused. Since respondent failed to file a Reply, in effect, respondent admitted the genuineness and due execution of said documents. This judicial admission should have been considered by the appellate court in resolving the demurrer to evidence. Rule 129, Section 4 of the Rules of Court provides: Section 4. Judicial admissions.--An admission, verbal or written, made by a party in the course of the proceeding 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. On appeal to the CA, respondent claimed that even though it failed to file a Reply, all the new matters alleged in the Answer are deemed controverted anyway, pursuant to Rule 6, Section 10: Section 10. Reply.--A reply is a pleading, the office or function of which is to deny, or allege facts in denial or avoidance of new matters alleged by way of defense in the answer and thereby join or make issue as to such new matters. If a party does not file such reply, all the new matters alleged in the answer are deemed controverted. We agree with petitioner. Rule 8, Section 8 specifically applies to actions or defenses founded upon a written instrument and provides the manner of denying it. It is more controlling than Rule 6, Section 10 which merely provides the effect of failure to file a Reply. Thus, where the defense in the Answer is based on an actionable document, a Reply specifically denying it under oath must be made; otherwise, the genuineness and due execution of the document will be deemed admitted.[23] Since respondent failed to deny the genuineness and due execution of the Dacion and Confirmation Statement under oath, then these are deemed admitted and must be considered by the court in resolving the demurrer to

evidence. We held in Philippine American General Insurance Co., Inc. v. Sweet Lines, Inc. that "[w]hen the due execution and genuineness of an instrument are deemed admitted because of the adverse party's failure to make a specific verified denial thereof, the instrument need not be presented formally in evidence for it may be considered an admitted fact."[24] In any case, the CA found that: From the facts of the case, the genuineness and due execution of the Dacion en Pago were never put to issue. Genuineness merely refers to the fact that the signatures were not falsified and/or whether there was no substantial alteration to the document. While due execution refers to whether the document was signed by one with authority.[25] The more important issue now is whether the Dacion and Confirmation Statement sufficiently prove that petitioner's liability was extinguished. Respondent asserts that the admission of the genuineness and due execution of the documents in question is not all encompassing as to include admission of the allegations and defenses pleaded in petitioner's Answer. In executing the Dacion, the intention of the parties was to settle only the loans of petitioner with respondent, not the obligation of petitioner arising from the promissory notes that were assigned by Rare Realty to respondent. We AGREE. Admission of the genuineness and due execution of the Dacion and Confirmation Statement does not prevent the introduction of evidence showing that the Dacion excludes the promissory notes. Petitioner, by way of defense, should have presented evidence to show that the Dacion includes the promissory notes. The promissory notes matured in June 1985, and Rare Realty assigned these promissory notes to respondent through a Deed of Assignment dated August 8, 1986. The Deed of Assignment provides, thus: Rare Realty Corporation, a corporation duly organized and existing in accordance with law, with office at 8th Floor Philbanking Building, Ayala Ave., Makati, Metro Manila (herein called Assignor) in consideration of the sum of THREE MILLION SEVEN HUNDRED NINETY THOUSAND & 00/100 pesos [PhP 3,790,000.00] and as security fee or in the payment of the sum, obtained or to be obtained as loan or credit accommodation of whatever form or nature from the [PHILBANKING] CORPORATION, with office at Ayala Ave., Makati, Metro Manila (herein called Assignee), including renewals or extensions of such loan or credit accommodation, now existing or hereinafter incurred, due or to become due, whether absolute or contingent, direct or indirect, and whether incurred by the Assignor as principal,

guarantor, surety, co-maker, or in any other capacity, including interest, charges, penalties, fees, liquidated damage, collection expenses and attorney's fee, the Assignor hereby assigns, transfers and conveys to Assignee all its rights, title and interest in and to: (a) contracts under which monies are or will be due to Assignor, (b) moneys due or to be due thereunder, or (c) letters of credit and/or proceeds or moneys arising from negotiations under such credits, all which are herein called moneys or receivables assigned or assigned moneys or receivables, and are attached, or listed and described in the Attached Annex A (for contracts) or Annex B (for letters of credit).[26] It is clear from the foregoing deed that the promissory notes were given as security for the loan granted by respondent to Rare Realty. Through the Deed of Assignment, respondent stepped into the shoes of Rare Realty as petitioner's creditor. Respondent alleged that petitioner obtained a separate loan of PhP 3,921,750. Thus, when petitioner and respondent executed the Dacion on August 27, 1986, what was then covered was petitioner's loan from the bank. The Dacion provides, thus: NOW, THEREFORE, in consideration of the foregoing premises, the DEBTOR hereby transfers and conveys in favor of the BANK by way of Dacion en Pago, the above-described property in full satisfaction of its outstanding indebtedness in the amount of P3,921,750.00 to the BANK, subject to x x x terms and conditions.[27] (Emphasis supplied.) The language of the Dacion is unequivocal--the property serves in full satisfaction of petitioner's own indebtedness to respondent, referring to the loan of PhP 3,921,750. For this reason, the bank issued a Confirmation Statement saying that petitioner has no unpaid obligations with the bank as of December 31, 1988. In 1989, however, Rare Realty defaulted in its payment to respondent. Thus, respondent proceeded against the security assigned to it, that is, the promissory notes issued by the petitioner. Under these promissory notes, petitioner is liable for the amount of PhP 300,000 with an interest of 36% per annum and a penalty of 12% for failure to pay on the maturity date, June 27, 1985; and for the amount of PhP 681,500 with an interest of 18% per annum and a penalty of 12% for failure to pay on the maturity date, June 25, 1985. WHEREFORE, the March 29, 2001 Decision and November 7, 2001 Resolution of the CA are AFFIRMED. Costs against petitioner. SO ORDERED.