Case Digest (G.R. No. 148444)
Facts:
Associated Bank (now United Overseas Bank [Phils.]) v. Spouses Rafael and Monaliza Pronstroller, G.R. No. 148444, July 14, 2008, Supreme Court Third Division, Nachura, J., writing for the Court.The petitioner is Associated Bank (later Westmont Bank, now United Overseas Bank [Phils.]); the respondents are spouses Rafael and Monaliza Pronstroller. Third parties in the background are spouses Eduardo and Ma. Pilar Vaca, the original mortgagors and, later, purchasers of the subject lot.
On April 21, 1988 the spouses Vaca executed a Real Estate Mortgage in favor of petitioner over a residential parcel in Quezon City. Following default, the property was foreclosed and sold at public auction with petitioner as highest bidder; TCT No. 254504 (Vaca) was cancelled and TCT No. 52593 issued in petitioner’s name. The Vaca spouses litigated the mortgage and foreclosure; petitioner sought a writ of possession (denied by the RTC), secured a favorable ruling from the Court of Appeals, and the matter reached the Supreme Court as G.R. No. 109672, which was resolved on July 14, 1994 in favor of petitioner.
While the Vaca litigation was pending, petitioner advertised the property for sale for P9,700,000.00. In March 1993 respondents offered P7,500,000.00 through Atty. Jose Soluta, Jr., petitioner’s Vice-President and Corporate Secretary; petitioner accepted and respondents paid a 10% deposit (P750,000.00). On March 18, 1993 the parties executed a Letter-Agreement setting the P7.5M price and requiring the balance to be deposited in escrow within 90 days, to be applied upon delivery of the property free from occupants.
Because of the pending Vaca case, respondents asked that the balance be payable only upon service of a final resolution of the Supreme Court affirming petitioner’s right to possess the property. The proposal was referred to petitioner’s Asset Recovery and Remedial Management Committee (ARRMC), which deferred action. On July 14, 1993 respondents and Atty. Soluta (for petitioner) executed another Letter-Agreement permitting payment of the balance upon receipt of a final order from the Supreme Court and/or delivery of the property free from occupants.
Petitioner reorganized late 1993/early 1994. Atty. Braulio Dayday replaced Atty. Soluta in certain duties, reviewed the file and found respondents had not deposited the balance. ARRMC on March 4, 1994 disapproved the extension and referred the matter to the Legal Department for rescission. On May 5, 1994 Atty. Dayday informed respondents the contract was rescinded and the deposit forfeited; respondents produced the July 14 letter but Dayday asserted Soluta lacked authority. Respondents then proposed on June 6, 1994 a staged payment; petitioner countered on June 9, 1994 requiring 24.5% interest on the unpaid balance or offered to refund the deposit.
After this Court’s July 14, 1994 resolution in the Vaca case confirming petitioner’s right of possession, respondents filed a Complaint for Specific Performance on July 28, 1994 in the Regional Trial Court (RTC), Branch 72, Antipolo (Civil Case No. 94-3298), and annotated a notice of lis pendens on TCT No. 52593. The RTC on November 14, 1997 ruled for respondents: it declared petitioner’s rescission null and void, ordered petitioner to accept payment of P6,750,000.00 and to deliver title and possession free of liens, and awarded moral damages, attorney’s fees and litigation expenses; the court applied the doctrine of apparent authority to validate the July 14, 1993 Letter-Agreement.
The Court of Appeals (CA) on February 27, 2001 affirmed, holding Atty. Soluta had authority (apparent or by acquiescence), petitioner could not unilaterally rescind the contract after the July 14 modification, and petitioner was estopped from denying the July 14 letter because it failed to repudiate it for one year; the CA ordered cancellation of TCT No. 158082 (issued later in the Vaca spouses’ names) and issuance of a Torrens title in re...(Pro-only)
Issues:
- Is petitioner bound by the July 14, 1993 Letter-Agreement under the doctrine of apparent authority?
- Was there a valid rescission of the March 18, 1993 and/or July 14, 1993 Letter-Agreements?
- Are respondents estopped from enforcing the July 14, 1993 Letter-Agreement because of their June 6, 1994 new proposal?
- Is petitioner estopped from denying the validity of the July 14, 1993 Letter-Agreement by reason of its failure to repudiate the agreement earlier?
- Does the relief ordering cancellation of TCT No. 158082 constitute a proscribed collateral attack on title?
- Are respondents entitled to moral damages, atto...(Pro-only)
Ruling:
- (Pro-only)
Ratio:
- (Pro-only)
Doctrine:
- (Pro-only)