Del Mundo vs. Court of Appeals

A deed of sale that is simulated and made without consideration is null and void, and the findings of fact of the lower courts, when adopted by the Court of Appeals, are binding and conclusive upon the Supreme Court. The Court also held that in an ejectment case, the issue of possession can be resolved without deciding the issue of ownership, and when ownership is indispensable to the resolution of possession, the Metropolitan Trial Court is empowered to decide it, though such decision does not bind the title or affect ownership.

Petitioner Gerardo A. Del Mundo was a lawyer who formerly represented private respondent Alejandra Nava. The spouses Carlos and Alejandra Nava owned a house and lot in Project 6, Quezon City, covered by TCT No. 256140, which was mortgaged to the Philippine Veterans Bank. In 1981, before the spouses Nava migrated to the United States, they entered into a lease contract denominated as "Agreement of Lease with Option to Purchase" with petitioner, who was given until October 16, 1982 to exercise his option to buy the property.

Petitioner Gerardo A. Del Mundo was a lawyer who formerly represented private respondent Alejandra Nava. The spouses Carlos and Alejandra Nava owned a house and lot in Project 6, Quezon City, covered by TCT No. 256140, which was mortgaged to the Philippine Veterans Bank. In 1981, before the spouses Nava migrated to the United States, this residential property was leased by petitioner under a contract denominated as "Agreement of Lease with Option to Purchase," with a monthly rental of P2,500.00. The del Mundo family moved into the house upon execution of the lease contract, and petitioner was given until October 16, 1982 to exercise his option to buy the property.

Petitioner was unable to exercise his option to purchase because he had no money. While the respondent spouses were in the United States, petitioner sent them a Deed of Sale with Assignment of Mortgage, asking them to sign it ostensibly to enable him to borrow part of the purchase price in the sum of P470,000.00 from the bank. Petitioner also sent them an Addendum to the Deed of Sale stating that he would assume her obligations to Mrs. Ligaya Gonzales and to Pablo Nava. After several letters, petitioner succeeded in persuading the spouses Nava to trust him and to sign the Deed of Sale with Assignment of Mortgage and the Addendum even without receiving consideration for the property.

Private respondent Alejandra Nava lost faith in petitioner because he did not comply with his promise to pay the P174,000.00 obligation to the Philippine Veterans Bank, the P166,000.00 indebtedness to Mrs. Ligaya Gonzales, and her P40,000.00 obligation to Pablo Nava. On March 16, 1983, the spouses Nava executed a Revocation of Deed of Sale with Assignment of Mortgage, duly notarized by a County Clerk of the Superior Court of California and certified by Vice Consul Danilo Bacalzo of the Philippine Consulate General in California, U.S.A. The Deed of Sale with Assignment of Mortgage in favor of petitioner and his wife was revoked and canceled because the former had not yet paid the private respondent spouses and Mrs. Ligaya Gonzales.

On August 11, 1983, the private respondent spouses, through their attorney-in-fact Bayani Sy, filed a complaint for Unlawful Detainer (Civil Case No. 44181) against petitioner before the Metropolitan Trial Court of Quezon City, Branch 43. Petitioner was ordered to vacate the premises, pay rent and attorney's fees in a decision dated March 26, 1992. Petitioner appealed to the Regional Trial Court, and the unlawful detainer suit was docketed as Civil Case No. Q-92-12438. Upon motion by private respondent spouses, Judge Teodoro P. Regino ordered the issuance of a writ of execution pending appeal on January 14, 1993.

The trial court in the declaratory relief case found that petitioner's allegation that he paid the amount of P476,000.00 to Mrs. Nava in his law office was not corroborated by any of the office personnel allegedly present at that time; there was no receipt of payment signed by the Navas presented in evidence; petitioner's allegation that he paid the consideration in his office conflicted with his statement in his affidavit-complaint that he paid the said amount at the City Hall of Manila; his payment of rentals for December 1981 and January 1982 and his failure to declare the property in his name and non-payment of realty taxes indicated that he still recognized the Navas as owners; and the series of letters he sent to the Navas from March to June 1982 showed that he had not paid the consideration as he was then requesting them to sign the prepared documents so that he may use them in applying for a bank loan.

• Validity of the Deed of Sale: Petitioner contended that the notarized Deed of Sale with Assignment of Mortgage signed by the spouses Nava conclusively shows that there was consideration for the contract of sale, thus making him the owner of the property.
• Parol Evidence: Petitioner argued that the respondent court erred in giving credence to parol evidence over the written instrument.
• Formal Offer of Evidence: Petitioner argued that since the testimony of private respondent's witness was not seasonably offered, the documentary exhibits identified by the witness were likewise not properly offered.
• Jurisdiction of the MTC: Petitioner contended that the Metropolitan Trial Court was bereft of jurisdiction because the issue of possession cannot be decided without deciding the issue of ownership, and because respondent judge deprived him of his right to be heard.
• Validity of the Writ of Execution: Petitioner assailed the issuance of the writ of execution pending appeal on the ground that the Metropolitan Trial Court did not have jurisdiction over the ejectment case.

N/A — The decision does not separately recount the arguments of the private respondents beyond the findings of the lower courts adopted by the Supreme Court.

• Misjoinder of Causes of Action: Whether the petition properly joined the review of the declaratory relief case and the challenge to the writ of execution in the ejectment case in a single petition for certiorari.
• Validity of the Deed of Sale: Whether the Deed of Sale with Assignment of Mortgage was valid and supported by consideration, making petitioner the owner of the property.
• Formal Offer of Documentary Exhibits: Whether the documentary exhibits of private respondents were formally offered and properly admitted by the trial court.
• Jurisdiction of the Metropolitan Trial Court: Whether the Metropolitan Trial Court had jurisdiction over the ejectment case where the issue of ownership was intertwined with the issue of possession.
• Propriety of the Writ of Execution: Whether the writ of execution issued by the RTC judge in the ejectment case was valid and proper.

• Misjoinder of Causes of Action: No. The petition was treated as a petition for review under Rule 45 of the decision of the Court of Appeals in the declaratory relief case, since the errors raised were more properly addressed in a petition for review rather than a petition for certiorari under Rule 65.
• Validity of the Deed of Sale: No. The Deed of Sale with Assignment of Mortgage was simulated and made without consideration, as found by the Regional Trial Court and affirmed by the Court of Appeals, and these findings of fact are binding and conclusive upon the Supreme Court.
• Formal Offer of Documentary Exhibits: No. The documentary exhibits were formally offered and properly admitted by the trial court, and petitioner's contention to the contrary was without merit.
• Jurisdiction of the Metropolitan Trial Court: Yes. The issue of possession can be resolved in an ejectment proceeding without deciding the issue of ownership, and when the issue of ownership is indispensable to the resolution of the issue of possession, the Metropolitan Trial Court is empowered to decide it as well, though its decision does not bind the title or affect ownership.
• Propriety of the Writ of Execution: Yes. The writ of execution was valid, having been served and effected on March 1, 1993, and the subsequent decision of the RTC on June 30, 1993 confirmed the propriety of the writ.

• Misjoinder of Causes of Action: The Court noted that there was a misjoinder of causes of action in the instant petition. Petitioner sought a review of the decision of the Court of Appeals in the declaratory relief case and a declaration of nullity of the writ of execution issued in the ejectment case. The Court explained that the writ of certiorari is granted when any tribunal acts without or in excess of its jurisdiction or with grave abuse of discretion, while errors of judgment are not proper in a petition for certiorari and should be raised in a petition for review. The petition dealt with two separate and distinct cases having different causes of action: Special Civil Action No. Q-46386 for declaratory relief under Rule 64 and Civil Case No. Q-92-12438 for unlawful detainer under Rule 70. The former results in the determination of the legal rights of the parties under a contract, while ejectment involves the issue of possession only. The Court treated the petition as a petition for review of the decision of the Court of Appeals in the declaratory relief case.

• Validity of the Deed of Sale: The Court held that the errors raised by petitioner were clearly factual in nature, and there was no justification to depart from the well-settled principle that the findings of fact of the lower courts, the trial court and the Court of Appeals, are, as a general rule, binding and conclusive upon the Supreme Court. The Court agreed with the respondent appellate court in sustaining the trial court's findings: (a) petitioner's allegation that he paid P476,000.00 to Mrs. Nava was not corroborated by any office personnel; (b) there was no receipt of payment signed by the Navas; (c) petitioner's allegation that he paid the consideration in his office conflicted with his statement in his affidavit-complaint that he paid at the City Hall of Manila; (d) his payment of rentals and failure to declare the property in his name indicated he still recognized the Navas as owners; and (e) the series of letters he sent to the Navas showed that he had not paid the consideration as he was requesting them to sign documents for a bank loan.

• Formal Offer of Documentary Exhibits: The Court found petitioner's contention, made through indirection, to be without merit, and agreed with the Court of Appeals that the documentary exhibits were formally offered and properly admitted by the trial court.

• Jurisdiction of the Metropolitan Trial Court: The Court held that the issue of possession can be resolved in an ejectment proceeding without deciding the issue of ownership. A judgment rendered in the summary action of forcible entry or unlawful detainer is conclusive only on the question of possession and not of ownership. When the issue of ownership is indispensable to the resolution of the issue of possession, the Metropolitan Trial Court is empowered to decide it as well, pursuant to Batas Pambansa 129, Section 33(2). In any case, its decision does not bind the title or affect the ownership of the land or building, pursuant to Rule 70, Section 7.

• Propriety of the Writ of Execution: The Court found that petitioner's allegations regarding the writ of execution were moot and academic, as the writ was served and effected on March 1, 1993, and a decision in favor of private respondents was rendered by the RTC on June 30, 1993, in effect confirming the propriety of the writ. The Court also quoted the trial court's finding that petitioner's appeal was wholly without merit and evidently interposed only for the purpose of delay, noting that the spouses Nava had been deprived of possession of the premises since October 31, 1982 to March 1, 1993, a period of more than ten years. The Court found petitioner's employment of his legal knowledge to unnecessarily and unjustly delay the case deplorable and meriting reprimand.

• Binding Effect of Factual Findings of Lower Courts — The findings of fact of the trial court and the Court of Appeals are, as a general rule, binding and conclusive upon the Supreme Court. The Court applied this doctrine in affirming the lower courts' finding that the Deed of Sale with Assignment of Mortgage was simulated and made without consideration, there being no justification to depart from the established principle.

• Jurisdiction in Ejectment Cases — A judgment rendered in the summary action of forcible entry or unlawful detainer is conclusive only on the question of possession and not of ownership. When the issue of ownership is indispensable to the resolution of the issue of possession, the Metropolitan Trial Court is empowered to decide it as well, but its decision does not bind the title or affect the ownership of the land or building. The Court applied this doctrine in upholding the MTC's jurisdiction over the ejectment case.

• Distinction Between Rule 45 and Rule 65 — The writ of certiorari is granted when any tribunal acts without or in excess of its jurisdiction or with grave abuse of discretion, while errors of judgment are not proper in a petition for certiorari and should be raised in a petition for review. The Court applied this doctrine in treating the petition as a petition for review under Rule 45 of the decision of the Court of Appeals in the declaratory relief case.

• "The writ of certiorari is granted when any tribunal acts without or in excess of its jurisdiction or with grave abuse of discretion. Errors in judgment are not proper in a petition for certiorari. These are raised in a petition for review." — This passage articulates the distinction between Rule 65 and Rule 45 remedies, which was central to the Court's treatment of the petition.

• "The issue of possession can be resolved in an ejectment proceeding without deciding the issue of ownership. A judgment rendered in the summary action of forcible entry or unlawful detainer is conclusive only on the question of possession and not of ownership. When the issue of ownership is indispensable to the resolution of the issue of possession, the Metropolitan Trial Court is empowered to decide it as well." — This passage states the controlling doctrine on the jurisdiction of the Metropolitan Trial Court in ejectment cases where ownership is intertwined with possession.

• "Petitioner's employment of his legal knowledge to unnecessarily and unjustly delay this case is deplorable and merits reprimand by the Court." — This passage reflects the Court's condemnation of petitioner's use of legal tactics to delay the resolution of the case, which formed the basis for the reprimand and stern warning issued against him.

• Javier vs. Veridiano, G.R. No. L-48050, October 10, 1994, 237 SCRA 565 — Cited for the proposition that ejectment involves the issue of possession only, distinguishing it from actions to quiet title which are based on ownership.
• Villaluz vs. CA, G.R. No. 100571, June 26, 1992, 210 SCRA 540 — Cited for the same proposition that ejectment involves the issue of possession only.
• Depra vs. Dumlao, G.R. No. L-57348, May 16, 1985, 136 SCRA 475 — Cited for the distinction between ejectment cases (deprivation of possession) and actions to quiet title (based on ownership).
• Aspi vs. CA, G.R. No. 83527, September 1, 1994, 236 SCRA 94 — Cited in the line of cases establishing that findings of fact of the lower courts are binding and conclusive upon the Supreme Court.
• Tay Chun Suy vs. CA, G.R. No. 93640, January 7, 1994, 229 SCRA 151 — Cited in the same line of cases on the binding effect of factual findings of lower courts.
• Coca-Cola Bottlers Philippines, Inc. vs. CA, G.R. No. 100957, January 27, 1994, 229 SCRA 533 — Cited in the same line of cases on the binding effect of factual findings of lower courts.
• Santos vs. CA, 229 SCRA 489 — Cited in the same line of cases on the binding effect of factual findings of lower courts.
• Lim vs. CA, G.R. No. 55201, February 3, 1994, 229 SCRA 616 — Cited in the same line of cases on the binding effect of factual findings of lower courts.
• Manlapaz vs. CA, G.R. No. L-39430, December 3, 1990, 191 SCRA 795 — Cited for the proposition that a judgment in ejectment does not bind the title or affect the ownership of the land or building.

• Rule 2, Section 5, Revised Rules of Court — The Court noted that there was a misjoinder of causes of action in the instant petition, as petitioner sought review of the declaratory relief case and declaration of nullity of the writ of execution in the ejectment case in a single petition.
• Rule 45, Rules of Court — The Court treated the petition as a petition for review under this rule, as the errors raised by petitioner were errors of judgment more properly addressed in a petition for review.
• Rule 64, Section 1, Rules of Court — Cited as the basis for the declaratory relief action (Special Civil Action No. Q-46386), which results in the determination of the legal rights of the parties under a contract.
• Rule 65, Rules of Court — The Court noted that the writ of certiorari is granted when any tribunal acts without or in excess of its jurisdiction or with grave abuse of discretion, and that errors of judgment are not proper in a petition for certiorari.
• Rule 70, Rules of Court — Cited as the basis for the unlawful detainer action (Civil Case No. Q-92-12438), which involves the issue of possession only.
• Rule 70, Section 7, Rules of Court — Cited for the proposition that a judgment in ejectment does not bind the title or affect the ownership of the land or building.
• Batas Pambansa 129, Section 33(2) — Cited for the proposition that when the issue of ownership is indispensable to the resolution of the issue of possession, the Metropolitan Trial Court is empowered to decide it as well.

• Regalado, J.
• Mendoza, J.

• Puno, J., took no part in the decision.