G.R. No. L-11716 - Bacani vs. Macadaeg

Title: Bacani vs. Macadaeg

Case: G.R. No. L-11716

Decision Date: Apr 30, 1959

Bacani failed to repurchase foreclosed property, continued occupancy treated as lease; eviction upheld by courts due to unpaid rentals and jurisdictional validity.

Font Size:

Dark Mode

Case Digest (G.R. No. L-11716)
Legal Reasoning Model

Facts:

Background of the Case

Petitioner, Encarnacion Bacani, owned a parcel of land with a house located at No. 209 Padilla Street, San Miguel, Manila.

On 16 May 1949, she mortgaged the property to the respondent, Rehabilitation Finance Corporation, to secure a real estate loan of P9,000.

Due to her failure to comply with the agreed terms of the mortgage, the respondent foreclosed the mortgage under Act No. 3135 (as amended) and subsequently conducted a public auction on 10 September 1951.

At the auction, the respondent emerged as the highest bidder, subject to Bacani’s right to redeem the property within one year from the date of sale.

Bacani continued to occupy the property despite not redeeming it, until on 15 April 1953 the respondent consolidated ownership, thereby converting her status from owner to that of an occupant or lessee.

Transactional and Procedural Developments

On 29 August 1952, Bacani offered to repurchase the property for P10,569.23 under specified conditions, including a required down payment of 20% and subsequent monthly amortizations at an interest rate of 6% per annum.

The conditions also provided that failure to complete the down payment would result in the automatic cancellation of the repurchase and forfeiture of a P700 deposit as rent and/or damages.

On 15 September 1952, the respondent accepted her offer, reducing the repurchase price by deducting P436.32 (50% of the penal clause) to P10,132.91, and requested the balance of the 20% down payment (P1,326.58).

Bacani failed to complete the payment within the stipulated two-month period, leading the respondent to cancel the resale on 19 February 1953.

Subsequent partial payments (P500 on 17 March 1954 and P300 on 10 November 1954) amounted to only P1,500, leaving a balance of P526.58 unpaid.

On 18 January 1955, the respondent notified Bacani that due to her failure to complete the payment, the amounts already received would be deemed rentals (at P140 per month), and demanded both the unpaid rentals and that she vacate the property.

Litigation and Court Proceedings

The respondent filed a complaint for detainer on 21 September 1955 in the Municipal Court of Manila (civil No. 39651) aiming to recover possession of the land and the house.

Bacani filed her answer on 16 November 1955, and a supplemental answer on 5 January 1956, wherein she raised the issue of her purported title to the property, asserting her ownership.

On 7 February 1956, Bacani filed a motion to dismiss the case for lack of jurisdiction, which was denied by the Municipal Court on 10 February 1956.

At trial, after the respondent presented documentary evidence (including Exhibits A, A-1, A-2, B, and C), the Municipal Court rendered judgment on 6 March 1956 ordering Bacani to:

Vacate the parcel and house;

Pay P2,700 in rentals in arrears (with interest from the filing date of the complaint);

Pay an additional sum of P140 monthly until the premises were vacated; and

Pay the litigation costs.

Bacani appealed the Municipal Court’s decision to the Court of First Instance of Manila (case No. 29483), reproducing her answer.

On 6 July 1956, the respondent moved for the execution of the judgment due to Bacani’s failure to post a supersedeas bond of P4,100 and pay the P140 monthly rentals, which was eventually granted on 18 October 1956.

A writ of execution was issued on 19 November 1956 directing the respondent sheriff to oust Bacani from the property.

Bacani, in a petition for certiorari and prohibition, challenged the jurisdiction of the Municipal Court and consequently the validity of the judgment and the subsequent execution orders. She further sought a writ of preliminary injunction to halt the enforcement of the writ of execution upon filing the required bond.

On 3 January 1957, the Court granted a writ of preliminary injunction subject to a bond of P1,000, which was later amended to a mandatory injunction upon Bacani’s ex parte urgent petition filed on 10 January 1957.

On 15 February 1957, after opposition from the respondent, the Court granted the preliminary mandatory injunction with a bond of P5,000.

Determination on Property Ownership

It was determined that despite Bacani’s assertion of ownership, the property’s title had never been transferred to her.

The foreclosure process, the public auction, and the respondent’s subsequent consolidation of ownership rendered the respondent the absolute owner.

Bacani’s claim to repurchase the property failed due to her non-compliance with the stipulated payment conditions, and her continued occupation merely established her status as a lessee rather than an owner.

Additionally, her request for postponement of the enforcement (as evidenced in her 1 December 1956 letter) further reinforced the notion that she acknowledged the respondent’s control over the property.

Issue:

Jurisdiction Issue

Whether the Municipal Court had proper jurisdiction to hear and decide on the forcible entry and detainer case despite Bacani’s claim of ownership.

Whether the filing of an answer that raises title issues is sufficient to divest the court of its jurisdiction in an action of forcible entry and detainer.

Ownership and Title Issue

Whether Bacani’s assertion of title or ownership, supported by her answers in the lower courts, could defeat the respondent’s established title after foreclosure and consolidation of ownership.

Whether her status as a lessee impeded her ability to challenge the respondent’s title.

Relief Sought and Procedural Issues

Whether Bacani was entitled to the issuance of a writ of preliminary injunction (and later a mandatory injunction) to halt the execution of the judgment despite the underlying foreclosure and her subsequent actions.

Whether her requests for injunctive relief, including a petition for certiorari and prohibition, were proper remedies in this context given the circumstances of default in repurchase and procedural actions already taken.

Ruling:

(Subscriber-Only)

Ratio:

(Subscriber-Only)

Doctrine:

(Subscriber-Only)

Unlock Full Case Digest

END