Almendrala vs. Ngo

The right of legal redemption under Article 1622 of the Civil Code requires the concurrence of four elements: (1) the land is urban; (2) it is so small that a major portion cannot be used for any practical purpose within a reasonable time; (3) it was bought merely for speculation; and (4) it is about to be resold or its resale has been perfected — all of which must be alleged in the complaint and proved at trial, and failure to establish even one element is fatal to the claim.

The Almendrala spouses and the Manalo spouses were related by affinity — Josefina Manalo being Ricardo Almendrala's sister — and owned adjoining lots in San Pedro, Laguna, under the same subdivision plan. The Manalo spouses' lot, Lot 5-D, measured 22 square meters and adjoined the Almendrala spouses' Lot 5-B, which measured 304 square meters. The dispute arose when the Manalo spouses sold Lot 5-D to the Ngo spouses, prompting the Almendrala spouses to seek legal redemption under Article 1622 of the Civil Code, a provision granting owners of adjoining urban land a right of pre-emption or redemption when a small, unusable lot is bought for speculation and resold.

The Almendrala spouses — Ricardo and Rosario Doroja — were the registered owners of Lot 5-B of Subdivision Plan Csd-04-003353, a 304-square-meter lot along Mabini Street, San Pedro, Laguna, covered by TCT No. T-169139. Adjoining their lot was Lot 5-D of the same subdivision plan, a 22-square-meter parcel covered by TCT No. T-150411, registered in the name of Josefina Manalo (Ricardo's sister) and her husband Lysias Manalo. On July 25, 1991, the Manalo spouses executed a Deed of Absolute Sale conveying Lot 5-D to the Ngo spouses — Wing On Ngo and Lily T. Ngo — for ₱44,000.00. On August 21, 1991, TCT No. T-234792 was issued in the Ngo spouses' name. The sale was registered without the requisite vendor's affidavit regarding service of written notices to adjacent owners.

On February 4, 1992, the Almendrala spouses filed a complaint for legal redemption and damages before the RTC of Biñan, Laguna, alleging that the subject land was not only needed for a reasonable frontage to the adjoining street but was actually occupied by their own house, and that they were ready, able, and willing to exercise their right of legal redemption. The Ngo spouses, in their Answer dated March 25, 1992, claimed they relied in good faith on Josefina Manalo's assurance that none of her relatives wanted to buy the property and that they had no intention to oppose the Almendrala spouses' desire to redeem. The Ngo spouses later filed a third-party complaint against the Manalo spouses for breach of warranty to keep the vendees in peaceful possession.

The Manalo spouses, in their amended answer to the third-party complaint, alleged that the ₱44,000.00 consideration actually represented their indebtedness to the Ngo spouses, that they had agreed to remain in possession and later redeem the property at the same price, and that the land had first been offered to the Almendrala spouses at ₱12,000.00 per square meter to no avail. On September 12, 1994, the Ngo spouses and the Manalo spouses executed a compromise agreement acknowledging the Ngo spouses' ownership and the Manalo spouses' undertaking to vacate, which the RTC approved on December 26, 1994.

On April 30, 1997, the RTC upheld the Almendrala spouses' right of legal redemption, relying on the testimony of Ricardo Almendrala corroborated by Ariel Uypico that the Ngo spouses were selling the lot, the non-approval of the building design and plan prepared by architect Jaime Patalud, and the failure of the design to comply with the National Building Code's road right-of-way requirements for commercial buildings of 20 to 24 square meters. The RTC concluded the lot was so small it could not be used for any practical purpose within a reasonable time and was bought for speculation. The Ngo spouses appealed to the Court of Appeals, which on September 30, 1999 reversed the RTC decision and dismissed the complaint, holding that the Almendrala spouses failed to allege and prove that the lot could not be used for any practical purpose or was bought for speculation, and that the Ngo spouses had shown they planned to use it for a two-storey bakery, store, and restaurant. The CA denied reconsideration on March 9, 2000.

• Factual Findings of the CA: Petitioner spouses argued that the Court of Appeals committed grave abuse of discretion in replacing the trial court's factual findings with its own second-hand appreciation of the evidence.
• Credibility of Witnesses: Petitioner spouses contended that the CA erred in giving credence to the testimonies of Wing On Ngo and Jaime Patalud despite their alleged perjuries, specifically asserting that Wing On Ngo lied when he swore he inspected the lot before purchase, informed the Almendrala spouses of the purchase, revealed his two-storey bakery project, and claimed they agreed to remove the eave overhanging the lot.
• Speculation as Tried Issue: Petitioner spouses admitted they did not allege in the complaint that the Ngo spouses bought the lot for speculation, but insisted they offered evidence on this point without objection from the Ngo spouses, thereby trying the issue by implied consent.

• Rehash of Previous Arguments: Respondent spouses submitted that the arguments in the petition were a mere rehash of those raised in the motion for reconsideration before the CA and already resolved by that court.
• Failure to Prove Speculation: Respondent spouses contended that speculation was neither alleged nor proven, and that the Almendrala spouses were duly notified of the sale but failed to exercise the right of pre-emption or redemption within the 30-day period required by Article 1623 of the Civil Code.
• No Valid Tender of Payment: Respondent spouses argued there was no rightful redemption because there was no valid tender of payment or consignation in court of the redemption price, merely an offer to redeem.
• Falsus in Uno, Falsus in Omnibus: Respondent spouses maintained that the maxim is not a positive rule of universal application but deals only with the weight of evidence, and that the alleged perjured testimonies were normal reactions of a witness on the stand. They asserted their good faith was evident from the National Housing Authority certification dated July 31, 1991 approving the transfer of rights.
• Claim for Damages: Respondent spouses raised as additional error the CA's refusal to grant their claim for damages and attorney's fees.

• Elements of Article 1622: Whether the Almendrala spouses sufficiently alleged and proved all four elements required for the application of Article 1622 of the Civil Code to warrant the right of legal redemption.
• Factual Findings of the Court of Appeals: Whether the CA committed reversible error or grave abuse of discretion in its appreciation of the facts, such as to warrant the Supreme Court's re-examination of the evidence.
• Credibility of Witnesses: Whether the alleged perjured testimonies of Wing On Ngo and Jaime Patalud should have been rejected in whole under the maxim falsus in uno, falsus in omnibus.
• Damages and Attorney's Fees: Whether the Ngo spouses were entitled to damages and attorney's fees despite not having appealed from the CA decision.

• Elements of Article 1622: No. The Almendrala spouses failed to prove that a major portion of the lot could not be used for any practical purpose, that it was bought merely for speculation, or that it was about to be resold, notwithstanding that the lot was urban and small.
• Factual Findings of the Court of Appeals: No. None of the recognized exceptions to the rule that CA factual findings are conclusive and binding on the Supreme Court found application in this case.
• Credibility of Witnesses: No. The maxim falsus in uno, falsus in omnibus is not a strict legal maxim or positive rule of universal application in Philippine jurisprudence; it deals only with the weight of evidence, and credible portions of testimony corroborated by other evidence should be admitted.
• Damages and Attorney's Fees: No. Parties who have not appealed cannot obtain affirmative reliefs other than those granted in the decision of the lower tribunal; because the Ngo spouses did not appeal from the CA decision, their claim for damages could not be entertained.

• Elements of Article 1622: Article 1622 of the Civil Code confers a right of pre-emption or redemption upon the owner of adjoining land when a piece of urban land, so small and so situated that a major portion cannot be used for any practical purpose within a reasonable time, having been bought merely for speculation, is about to be re-sold or its resale perfected. Four elements must concur: (1) the land is urban; (2) it is so small that a major portion cannot be used for any practical purpose within a reasonable time; (3) it was bought merely for speculation; and (4) it is about to be resold or its resale has been perfected. While the first two elements were undisputed — the lot was urban and measured only 22 square meters — the Almendrala spouses failed to prove the remaining elements. Their testimonial evidence on the Ngo spouses' intent to resell was uncorroborated and vague. The non-approval of the building design did not establish that the lot could not be used for practical purposes, as a compliant design could simply be prepared. The Ngo spouses, for their part, demonstrated that 15.81 square meters of the lot could be used for their proposed building, and that they had engaged an architect, whose design remained unapproved only because of the pending litigation. The failure to allege speculation in the complaint did not forestall relief under Section 5, Rule 10, since the issue was tried by implied consent; however, the evidence adduced was insufficient to establish the element of speculation or impending resale.

• Factual Findings of the Court of Appeals: It is settled that the Supreme Court is not a trier of facts and does not normally re-examine evidence, the factual findings of the CA being conclusive and binding. While jurisprudence recognizes exceptions — such as findings grounded on speculation, manifestly mistaken inferences, grave abuse of discretion, misapprehension of facts, conflicting findings, or findings contrary to the trial court — none of these exceptions was found to apply. The CA's findings were supported by the evidence on record and did not fall within any recognized exception.

• Credibility of Witnesses: The maxim falsus in uno, falsus in omnibus is neither a categorical test of credibility nor a positive rule of universal application in Philippine jurisprudence. It deals only with the weight of evidence and should not be applied to portions of testimony corroborated by other evidence, particularly where the false portions could be innocent mistakes. It is within the discretion of the CA to accept credible portions of a witness's testimony and reject those it believes false. No concrete evidence showed that Wing On Ngo or Jaime Patalud intended to pervert the truth when testifying on their intention to use the subject property.

• Damages and Attorney's Fees: Parties who have not appealed cannot obtain from the appellate court any affirmative reliefs other than those granted in the decision of the lower tribunal. Appellees may advance arguments necessary to defeat the appellant's claims or uphold the appealed decision, but cannot seek modification in their favor to obtain other positive reliefs. Because the Ngo spouses did not file a motion for reconsideration of, or appeal from, the CA decision, their entitlement to damages was not in question and could not be granted.

• Elements of Article 1622, Civil Code — The right of pre-emption or redemption under Article 1622 requires the concurrence of four elements: (1) the land is urban; (2) it is so small that a major portion cannot be used for any practical purpose within a reasonable time; (3) it was bought merely for speculation; and (4) it is about to be resold or its resale has been perfected. All elements must be alleged in the complaint and proved at trial; failure to establish even one is fatal. The Court applied this by finding that only the first two elements were satisfied, the petitioners having failed to prove speculation or impending resale.

• Conclusiveness of CA Factual Findings — The factual findings of the Court of Appeals are conclusive and binding on the Supreme Court, which is not a trier of facts. Recognized exceptions include findings grounded on speculation or conjecture, manifestly mistaken inferences, grave abuse of discretion, misapprehension of facts, conflicting findings, findings beyond the issues, findings contrary to the trial court, findings without citation of evidence, undisputed facts, findings premised on absence of evidence, and manifest oversight of relevant facts. None of these exceptions applied here.

• Falsus in Uno, Falsus in Omnibus — This maxim is not a strict legal maxim, categorical test of credibility, or positive rule of universal application in Philippine jurisprudence. It deals only with the weight of evidence and should not be applied to portions of testimony corroborated by other evidence, particularly where the false portions could be innocent mistakes consistent with good faith. The Court held that the CA properly exercised its discretion in accepting credible portions of the witnesses' testimony.

• Amendment to Conform to Evidence (Section 5, Rule 10) — When issues not raised by the pleadings are tried by express or implied consent of the parties, they are treated as if raised in the pleadings. The Court recognized that the failure to allege speculation in the complaint did not forestall relief if sufficient evidence was offered without objection, but found the evidence insufficient on its merits.

• No Affirmative Relief for Non-Appealing Party — Parties who have not appealed cannot obtain affirmative reliefs from the appellate court beyond those granted by the lower tribunal; appellees may only argue to defeat the appellant's claims or uphold the appealed decision. The Ngo spouses, having neither moved for reconsideration of nor appealed from the CA decision, could not obtain damages or attorney's fees.

• "There are 4 elements necessary for the application of Article 1622, to wit: (1) that the piece of land is urban land; (2) that the land is so small that a major portion thereof cannot be used for any practical purpose within a reasonable time; (3) that it was bought merely for speculation; and (4) that the land is about to be resold, or that its resale has been perfected. Before a party may avail of the right of pre-emption or redemption under this provision, it is necessary that all these elements be alleged in the complaint and proved at the trial." — This passage states the canonical formulation of the requisites of Article 1622 and is the ratio decidendi of the case.

• "The maxim falsus in uno, falsus in omnibus is not a strict legal maxim in our jurisprudence. It is neither a categorical test of credibility nor a positive rule of universal application." — This defines the Court's posture on the maxim, frequently cited in subsequent jurisprudence on witness credibility.

• "Parties who have not appealed cannot obtain from the appellate court any affirmative reliefs other than those granted, if any, in the decision of the lower tribunal." — This articulates the procedural rule barring non-appealing parties from seeking additional affirmative relief, a principle consistently applied in appellate practice.

• Hernandez vs. Quitain, G.R. No. L-48457, November 29, 1988 — Cited for the four-element test of Article 1622 of the Civil Code, which all must be alleged and proved.
• Ayson vs. Enriquez Vda. de Carpio, G.R. No. 152438, June 17, 2004 — Cited for the doctrine that issues tried by implied consent are treated as if raised in the pleadings under Section 5, Rule 10.
• The Insular Life Assurance Company, Ltd. vs. Court of Appeals, G.R. No. 126850, April 28, 2004 — Cited for the enumeration of exceptions to the rule that CA factual findings are conclusive and binding on the Supreme Court.
• People vs. Abella, G.R. No. 127803, August 28, 2000 — Cited for the limitation on the maxim falsus in uno, falsus in omnibus, holding that believable portions of testimony should be admitted where false portions could be innocent mistakes.
• Lagandaon vs. Court of Appeals, G.R. Nos. 102526-31, May 21, 1998 — Cited for the rule that non-appealing parties cannot obtain affirmative relief beyond what the lower tribunal granted.

• Article 1622, Civil Code — Confers the right of pre-emption or redemption to the owner of adjoining urban land when a small, unusable lot bought for speculation is about to be resold or its resale perfected. Applied as the controlling provision; the Court found that not all four elements were satisfied.
• Article 1623, Civil Code — Provides that the right of legal pre-emption or redemption shall be exercised within thirty days from written notice by the prospective vendor or vendor, and requires an affidavit of service of notice to all possible redemptioners before recording the deed. The Court declined to apply this provision, having ruled that no right of redemption existed under Article 1622 in the first place.
• Section 5, Rule 10, Rules of Court — Provides that issues not raised by the pleadings but tried by express or implied consent shall be treated as if raised in the pleadings. Applied to hold that the failure to allege speculation in the complaint did not bar relief, though the evidence ultimately proved insufficient.

Associate Justice Reynato S. Puno (Chairman, Second Division), Associate Justice Romeo J. Callejo, Sr., Associate Justice Dante O. Tinga, and Associate Justice Minita V. Chico-Nazario concurred. Chief Justice Hilario G. Davide, Jr. certified pursuant to Section 13, Article VIII of the Constitution that the conclusions were reached in consultation before the case was assigned to the writer of the opinion.