Pascual vs. Burgos, et al

A petition for review on certiorari under Rule 45 is limited to questions of law, and the factual findings of the Court of Appeals are final, binding, and conclusive absent a substantiated and proved exception; mere disagreement between the trial and appellate courts, or a bare claim of grave abuse of discretion, does not warrant review. The exceptions must be alleged, substantiated, and proved, and the Supreme Court retains discretion whether to review factual findings.

Ernesto and Remedios Pascual and Benito Burgos, et al. were co-owners of a fishpond in Bulacan covered by Original Certificate of Title No. 21. Their co-ownership had been the subject of a prior partition and accounting case, which produced a judgment apportioning 17% to Burgos, et al. and 83% to the Pascual Spouses and ordering payment of unpaid income shares. That judgment and the execution proceedings that followed generated multiple related cases and appeals, including the auction sale of the Pascual Spouses' share. The present petition arose from the proceedings on remand to determine the fair market value of the fishpond and whether redemption should be allowed as a matter of equity.

Ernesto and Remedios Pascual and Benito Burgos, et al. co-owned a fishpond in Bulacan covered by Original Certificate of Title No. 21. On September 8, 1965, Burgos, et al. filed an action for partition of the fishpond and accounting of its income from 1945. On August 31, 1976, the trial court rendered a Decision apportioning 17% to Burgos, et al. and 83% to the Pascual Spouses, and ordering the Pascual Spouses to pay Burgos, et al. their unpaid shares in the income of the property since 1945 until actual partition and delivery of shares. The Pascual Spouses appealed the trial court Decision before the Court of Appeals, which denied the appeal on June 30, 1983. The Petition for Review on Certiorari filed before the Supreme Court was denied on January 11, 1984, and the Motion for Reconsideration was denied on March 22, 1984.

While the appeal of the trial court Decision on the partition case was pending, several incidents occurred. On November 25, 1976, Burgos, et al. filed a Motion for Execution Pending Appeal of the money portion of the trial court Decision, which the trial court granted. The Pascual Spouses filed a Petition for Certiorari before the Court of Appeals, which was dismissed on July 5, 1978. Their Petition for Review before the Supreme Court was denied on May 16, 1979. On December 28, 1981, the trial court issued another order granting execution pending appeal. On February 9, 1982, the Deputy Sheriff of Bulacan addressed a Notice of Levy to the Register of Deeds of Bulacan, notifying that the fishpond and all its improvements were being levied. A Notice of Auction Sale of Real Property set the public auction on March 23, 1982. On March 23, 1982, the auction sale was conducted and the Pascual Spouses' share of the fishpond was sold for ₱95,000.00 to Burgos, et al., through Marcial Meneses, the highest bidder. A Certificate of Sale was then issued.

On February 23, 1983, almost a year after the auction sale, the Pascual Spouses filed an Omnibus Motion before the trial court assailing the Writ of Execution issued on December 28, 1981 and the ensuing levy and sale of their share in the fishpond. They also offered to post a bond to stay execution. On April 21, 1983, the trial court denied the Omnibus Motion since the assailed orders had already become final and executory. On April 25, 1983, the Pascual Spouses filed an Urgent Motion for Reconsideration and/or Extension of Time to Redeem before the trial court. They argued that the sale was void since the trial court Decision on the partition case, which was the basis for the Motion for Execution, was still pending appeal. They also argued that the Decision ordered that the disputed property should not be touched pending appeal. They prayed that they be given until May 16, 1983 to redeem the property considering that the period of redemption already expired on April 15, 1983. Burgos, et al. filed a Motion for Confirmation of Sale on July 8, 1983, and then a Motion for Issuance of Writ of Possession on August 30, 1983. In an Order dated September 16, 1983, the trial court denied the Pascual Spouses' Urgent Motion for Reconsideration and/or Extension of Time to Redeem and granted Burgos, et al.'s Motions for Confirmation of Sale and Issuance of Writ of Possession. On September 26, 1983, the Pascual Spouses filed an Urgent Motion to Quash and/or Recall Writ of Possession, arguing for the first time that irregularities attended the auction sale, alleging anomalies in the number of times the notice of sale was published, the unconscionably low price the fishpond was sold at the auction sale, the lack of authority of Marcial Meneses to buy the fishpond on behalf of Burgos, et al., and the insufficiency in the description of rights and interests to be sold in the notice of sale. Without waiting for the resolution of the Urgent Motion to Quash and/or Recall Writ of Possession, the Pascual Spouses initiated on April 24, 1984 a separate case for annulment of execution of sale against Burgos, et al., raffled to Branch 6 of the Regional Trial Court, Malolos, Bulacan. Burgos, et al. filed a Motion for Preliminary Hearing of their defense of lack of jurisdiction. The trial court denied the Motion, prompting Burgos, et al. to file a Petition for Certiorari before the Court of Appeals. The Court of Appeals granted the Petition and ordered the dismissal of the Pascual Spouses' annulment of execution sale case. The Pascual Spouses filed a Petition for Review before the Supreme Court, which was denied on March 10, 1989. As to the Urgent Motion to Quash and/or Recall Writ of Possession, the trial court denied the Motion in its Decision dated October 10, 1984. The Pascual Spouses filed a Motion for Partial Reconsideration, which was denied in the Order dated December 18, 1986. The trial court rejected the argument on the irregularities of the auction sale and upheld its validity. The Pascual Spouses filed a Petition for Review before the Court of Appeals assailing the trial court's October 10, 1984 Decision and December 18, 1986 Order. On May 6, 1994, the Court of Appeals affirmed the trial court's Decision upholding the validity of the auction sale. However, it considered the Pascual Spouses' allegation that the price at which the fishpond was sold was unconscionably low. The Court of Appeals ordered the remand of the case to the trial court for reception of evidence to determine the fair market value of the fishpond at the time of the auction sale and whether equity demanded that the Pascual Spouses still be allowed to redeem the property. Burgos, et al. filed before the Supreme Court a Petition for Review on Certiorari assailing the Court of Appeals Decision remanding the case to the trial court. The Supreme Court denied the Petition on July 12, 1995, and the Resolution became final and executory on October 9, 1995. The case was then remanded to the Regional Trial Court.

On April 23, 1999, the trial court set the case for hearing pursuant to the Court of Appeals Decision dated May 6, 1994. The Pascual Spouses presented three witnesses to prove that the fair market value of the fishpond sold at public auction in 1982 was ₱200,000.00 per hectare. Their first witness, Silvestre Pascual, brother of Ernesto Pascual, testified that as the son of the fishpond's owner and as a fishpond operator himself, he knew the value of the fishpond. He testified that in 1963 or 1964, the fishpond previously owned by his mother was sold to Ernesto Pascual for ₱100,000.00. In 1982, he learned from his friends and neighbors who were also fishpond operators that the value of the fishpond was already ₱200,000.00 per hectare. Their second witness, Guillermo Samonte, a fishpond caretaker, testified that the market value of the fishpond was ₱200,000.00 per hectare in 1982. He knew this amount as he witnessed the sale transaction between the Fishermen Corporation and Precillano Gonzales Development Corporation. To prove the transaction, Guillermo Samonte presented a Deed of Absolute Sale dated November 19, 1981 and testified that the total consideration was ₱10,000,000.00. The Deed documented a sale of a 481,461-square meter parcel of land in Bulacan for ₱4,000,000.00. Antonio Gonzales, the Pascual Spouses' third witness, was the former President of Precillano Gonzales Development Corporation and he purchased the property testified to by Guillermo Samonte for the Corporation. He corroborated the testimony of Guillermo Samonte and clarified that ₱4,000,000.00 was paid in cash to the seller and the seller's loan of ₱6,000,000.00 to Philippine National Bank was assumed by the buyer, totaling ₱10,000,000.00.

Burgos, et al. presented three witnesses to prove that the fishpond's fair market value was only ₱10,000.00 to ₱20,000.00 per hectare. Their first witness, Policarpio dela Cruz, son of Catalina Antonio, one of the former owners of the fishpond who sold her share to the Pascual Spouses, claimed knowledge of the prices of fishponds as he grew up in and continued visiting Bulacan. He testified that in 1982, first-class fishponds were sold at ₱20,000.00 to ₱30,000.00 per hectare while second-class fishponds were sold at a lower price. The fishpond in this case is considered second-class so it was priced at ₱10,000.00 to ₱20,000.00 per hectare. Policarpio dela Cruz presented two tax declarations. The first tax declaration with number 223 series of 1974 covered the fishpond and stated that the market value of the fishpond was ₱202,694.00. The second tax declaration with number 10468 series of 1980 covered a parcel of land in Bulacan used as a fishpond with an area of 12.9493 hectares, with a market value of ₱388,479.00. Patricia delos Reyes, Burgos, et al.'s second witness, testified that she is the great grandniece of Benito Burgos and was in possession of the property pursuant to the Supreme Court's Decision. She presented two tax declarations covering the property to prove its market value. The first was the same tax declaration presented by Policarpio dela Cruz with number 223, series of 1974, showing that the property had an area of 10.1347 hectares and market value of ₱202,694.00. Tax declaration number 223 series of 1974 was cancelled by tax declaration number 12807 dated April 9, 1985, the second tax declaration presented by Patricia delos Reyes. Tax declaration number 12807 states that the market value of the property is ₱304,041.00. Burgos, et al.'s last witness, Antonio Magpayo, the Municipal Assessor in Bulacan in 1975 and re-appointed in 1995, identified and showed in his Book of Tax Declarations the tax declaration presented by Patricia delos Reyes. He also testified that no tax declaration was issued in 1982.

On September 24, 2001, the trial court gave credence to the evidence presented by the Pascual Spouses. It considered the testimony of Antonio Gonzales authoritative, having come from a disinterested witness who was a fishpond operator himself and who negotiated the sale of a 48-hectare fishpond also in Bulacan. The trial court did not give any weight to the tax declarations presented by Burgos, et al.'s witnesses as these did not reflect the actual fair market value of the properties covered by these tax declarations. The trial court found the fair market value of the fishpond in question to be ₱200,000.00 per hectare or ₱2,000,000.00 in 1982. Considering that it was only sold at an unusually lower price of ₱95,000.00 than its true value, the trial court found it equitable to allow the defendants to redeem the rights and interests thereto within a period of ninety (90) days after the finality of the decision. Burgos, et al. appealed the trial court Decision. On June 30, 2005, the Court of Appeals rendered a Decision granting the appeal. It emphasized that the Decision which remanded the case to the trial court still affirmed the validity of the auction sale and the issuance of a Writ of Possession in favor of Burgos. The case was remanded solely to determine the fair market value of the property to decide whether the Pascual Spouses can still redeem the property as a matter of equity. Upon review of the evidence, the Court of Appeals found a discrepancy between the testimony of Antonio Gonzales and the provisions in the Deed of Sale presented. Antonio Gonzales testified that the purchase price of the fishpond in the sale between The Fishermen Corporation and Precillano Gonzales Development Corporation was ₱10,000,000.00, with ₱4,000,000.00 paid in cash while the buyer had to assume the ₱6,000,000.00 loan of the seller. However, the Deed of Sale provided that from the purchase price of ₱4,000,000.00, the buyer shall undertake to pay the existing indebtedness of the seller to the National Investment and Development Corporation and the Philippine National Bank in order to secure the release of the mortgaged property, and that the amount paid to the National Investment and Development Corporation shall be considered as part of the purchase price. The Pascual Spouses offered no proof to clarify this inconsistency. Moreover, the sale testified to by the witnesses of the Pascual Spouses was an isolated transaction. No evidence was presented to show that the fishpond subject of the sale was the same type, quality, and quantity of the disputed fishpond. The Court of Appeals held that this sale cannot be deemed to reflect the fair market value of the disputed fishpond. On the other hand, the tax declarations presented by Burgos, et al., being public documents, are prima facie evidence of the statements written there, including the market value of the property. Thus, the Pascual Spouses must present ample proof to substantiate a contrary allegation, which they failed to do. The Court of Appeals reversed and set aside the trial court Decision, ordered the trial court not to allow appellees to redeem their former rights, interests and participation in the property covered by Original Certificate of Title No. 21, and to consolidate ownership of the same upon appellants. The Pascual Spouses filed a Motion for Reconsideration, which was denied by the Court of Appeals in the Resolution dated February 13, 2006. Remedios Pascual filed this Petition for Review on Certiorari assailing the Court of Appeals Decision and Resolution.

• Review of Factual Findings: Petitioner admitted that she was raising factual issues that the Supreme Court cannot ordinarily entertain, but argued that the case fell under the exceptions to the rule limiting a petition for review to questions of law.
• Grave Abuse of Discretion: Petitioner alleged that the Court of Appeals committed grave abuse of discretion in reversing the trial court's factual findings and appreciation of the evidence presented by the parties.
• Conflicting Findings: Petitioner maintained that the findings of fact of the Court of Appeals and of the Regional Trial Court were contrary to each other, which warranted review by the Supreme Court.
• Credibility and Weight of Evidence: Petitioner invoked People vs. Vitancur and People vs. Mendez to argue that the trial court's findings of fact and evaluation of witness credibility should be respected absent bias, partiality, or grave abuse of discretion, and insisted that the testimony of Antonio Gonzales should be given weight.

• Consistency with Evidence: Respondents countered that the Court of Appeals Decision is more consistent with the testimony of the witnesses and the evidence presented by the parties during the trial.

• Scope of Rule 45 Review: Whether a petition for review before the Supreme Court allows a review of the factual findings of the lower courts.
• Exception to the Rule: Whether the case presents an exception to the rule on the Supreme Court's power to review decisions of the Court of Appeals via a petition for review.
• Unconscionably Low Price: If the second issue is answered in the affirmative, whether the price at which the fishpond was sold is unconscionably low.

• Scope of Rule 45 Review: No. A petition for review under Rule 45 is limited to questions of law; the Supreme Court is not a trier of facts, and the factual findings of the appellate courts are final, binding, or conclusive when supported by substantial evidence.
• Exception to the Rule: No. The case does not fall under any of the recognized exceptions; petitioner failed to substantiate grave abuse of discretion or any other exception.
• Unconscionably Low Price: Not reached. Because no exception applied, the Court did not delve into the factual issue of whether the price was unconscionably low.

• Scope of Rule 45 Review: The Rules of Court require that only questions of law should be raised in petitions filed under Rule 45. Review by the Supreme Court is not a matter of right but of sound judicial discretion, and petitions will be granted only when there are special and important reasons. The Court is not a trier of facts; it will not entertain questions of fact because the factual findings of the appellate courts are final, binding, or conclusive on the parties and upon the Court when supported by substantial evidence. A question of fact requires review of the truthfulness or falsity of the parties' allegations, assessment of the probative value of the evidence, or the correctness of the lower courts' appreciation of the evidence. Petitioner admitted that she was raising factual issues, but argued that the case fell under the exceptions. The Court held that parties praying for review of factual findings must demonstrate and prove that the case clearly falls under the exceptions; mere assertion and claim that the case falls under the exceptions do not suffice.
• Exception to the Rule: The Court recognized the 10 exceptions first listed in Medina vs. Mayor Asistio, Jr., including grave abuse of discretion and conflicting findings of fact. Petitioner claimed that the Court of Appeals committed grave abuse of discretion and that its findings were contrary to those of the Regional Trial Court. The Court defined grave abuse of discretion as capricious and whimsical exercise of judgment equivalent to lack of jurisdiction, exercised in an arbitrary or despotic manner by reason of passion or personal hostility, and so patent and gross as to amount to evasion of positive duty or virtual refusal to perform the duty enjoined or to act at all in contemplation of law. It also includes gross misapprehension of facts. However, the Court held that the Court of Appeals' reversal or modification of the trial court's factual findings does not automatically mean that it gravely abused its discretion. The Court of Appeals, acting as an appellate court, is still a trier of facts and may rule on questions of fact. The trial court's findings are given weight because of its first-hand knowledge and familiarity with the witnesses, but this does not diminish the Court of Appeals' jurisdiction to review factual findings. In People vs. Vitancur and People vs. Mendez, cited by petitioner, the Court of Appeals did not have the opportunity to review the factual findings because the cases were directly elevated to the Supreme Court on automatic appeal. As to conflicting findings, the Court held that mere disagreement between the Court of Appeals and the trial court as to the facts does not of itself warrant review, so long as the findings of the Court of Appeals are borne out by the record or based on substantial evidence. A conflict in findings may prima facie provide a basis for recourse, but only a clear showing of gross or extraordinary misperception or manifest bias in the appellate court's reading of the evidence will justify intervention. Petitioner failed to show why the Court of Appeals' factual findings were without basis. Petitioner did not dispute the tax declarations relied upon by the Court of Appeals and instead insisted that Antonio Gonzales' testimony should be given weight despite the valid and substantial basis provided by the Court of Appeals to find otherwise. Petitioner also failed to clarify the anomaly between Antonio Gonzales' testimony on the purchase price and the provision on the purchase price in the Deed of Sale. The Court found no compelling reason to review the factual findings of the Court of Appeals.
• Unconscionably Low Price: Because the Court found that the case did not fall under any exception to the rule limiting review to questions of law, it did not delve into the factual issues of the case. Accordingly, it did not reach the question of whether the price at which the fishpond was sold was unconscionably low.

• Rule 45 limits review to questions of law — A petition for review on certiorari under Rule 45 may raise only questions of law. The Supreme Court is not a trier of facts, and review is not a matter of right but of sound judicial discretion, granted only for special and important reasons.
• Factual findings of the Court of Appeals are binding — The factual findings of the Court of Appeals are final, binding, or conclusive on the parties and upon the Supreme Court when supported by substantial evidence. They will not be reviewed or disturbed on appeal to the Supreme Court absent a recognized exception.
• Recognized exceptions to factual review — The Court enumerated the 10 recognized exceptions first listed in Medina vs. Mayor Asistio, Jr.:
  • (1) When the conclusion is a finding grounded entirely on speculation, surmises or conjectures;
  • (2) When the inference made is manifestly mistaken, absurd or impossible;
  • (3) Where there is a grave abuse of discretion;
  • (4) When the judgment is based on a misapprehension of facts;
  • (5) When the findings of fact are conflicting;
  • (6) When the Court of Appeals, in making its findings, went beyond the issues of the case and the same is contrary to the admissions of both appellant and appellee;
  • (7) The findings of the Court of Appeals are contrary to those of the trial court;
  • (8) When the findings of fact are conclusions without citation of specific evidence on which they are based;
  • (9) When the facts set forth in the petition as well as in the petitioner's main and reply briefs are not disputed by the respondents; and
  • (10) The finding of fact of the Court of Appeals is premised on the supposed absence of evidence and is contradicted by the evidence on record.
  • Grave abuse of discretion — Grave abuse of discretion means capricious and whimsical exercise of judgment equivalent to lack of jurisdiction. The abuse must be grave, as where power is exercised in an arbitrary or despotic manner by reason of passion or personal hostility, and so patent and gross as to amount to evasion of positive duty or virtual refusal to perform the duty enjoined or to act at all in contemplation of law. It also includes gross misapprehension of facts.
  • Mere conflict of findings does not automatically warrant review — A conflict between the factual findings of the Court of Appeals and the trial court may prima facie provide a basis for recourse to the Supreme Court, but it does not automatically warrant review. There must be a clear showing of gross or extraordinary misperception or manifest bias in the appellate court's reading of the evidence.
  • Burden to invoke an exception — Parties praying that the Supreme Court review the factual findings of the Court of Appeals must demonstrate and prove that the case clearly falls under the exceptions. Mere assertion and claim that the case falls under the exceptions do not suffice.
  • Court of Appeals as trier of facts — The Court of Appeals, acting as an appellate court, is still a trier of facts. Parties may raise questions of fact before it, and its reversal or modification of the trial court's factual findings does not automatically mean that it gravely abused its discretion.

• "Only questions of law may be raised in a petition for review on certiorari." — This opening statement states the Rule 45 limitation that controlled the Court's refusal to review the factual findings of the Court of Appeals.
• "The factual findings of the Court of Appeals bind this court." — This states the general conclusiveness of the appellate court's factual findings, subject only to recognized exceptions.
• "Mere assertion and claim that the case falls under the exceptions do not suffice." — This defines the petitioner's burden to substantiate an exception before the Supreme Court may review facts.
• "The Court of Appeals’ reversal or modification of the factual findings of the trial court does not automatically mean that it gravely abused its discretion." — This rejects petitioner's principal basis for review and explains that the appellate court remains a trier of facts.

• Medina vs. Mayor Asistio, Jr., 269 Phil. 225 (1990) — Listed the 10 recognized exceptions to the rule that factual findings of the Court of Appeals are conclusive.
• Buyco vs. People, 95 Phil. 453 (1954) — Laid down the grave abuse of discretion exception to the non-review of the Court of Appeals' factual findings.
• Uniland Resources vs. Development Bank of the Philippines, G.R. No. 95909, Aug. 16, 1991, 200 SCRA 751 — Held that mere disagreement between the Court of Appeals and the trial court as to facts does not of itself warrant Supreme Court review.
• Fernan vs. Court of Appeals, 260 Phil. 594 (1990) — Held that conflicting findings may prima facie justify review, but only upon a clear showing of gross or extraordinary misperception or manifest bias.
• Garcia, et al. vs. Court of Appeals, et al., 144 Phil. 615 (1970) — Identified circumstances that may compel the Supreme Court to examine the record to determine whether an exception exists.
• Remalante vs. Tibe, 241 Phil. 930 (1988) — Discussed the additional exceptions and their relationship to the original exceptions.
• People vs. Vitancur, 399 Phil. 131 (2000) and People vs. Mendez, 390 Phil. 449 (2000) — Cited by petitioner for respect for trial court findings; distinguished because the Court of Appeals had no opportunity to review the factual findings in those cases, which were elevated on automatic appeal.
• Cariño vs. Court of Appeals, 236 Phil. 566 (1987) — Examined whether substantial and convincing evidence supported the Court of Appeals' factual findings in resolving a grave abuse of discretion claim.
• United Coconut Planters Bank vs. Looyuko, 560 Phil. 581 (2007) — Supplied the definition of grave abuse of discretion, including gross misapprehension of facts.
• Bank of the Philippine Islands vs. Leobrera, 461 Phil. 461 (2003) — Cited for the rule that factual findings of the Court of Appeals bind the Supreme Court when supported by substantial evidence.

• Rule 45, Section 1, Rules of Court — Provides that only questions of law may be raised in a petition for review on certiorari; the Court applied this to decline review of the fair market value and redemption issues.
• Rule 45, Section 6, Rules of Court — Provides that review is not a matter of right but of sound judicial discretion and will be granted only for special and important reasons; the Court found no such reason.

Antonio T. Carpio (Chairperson), Arturo D. Brion, Mariano C. Del Castillo, and Jose Catral Mendoza.