Title
Barfel Development Corp. vs. Court of Appeals
Case
G.R. No. 98177
Decision Date
Jun 8, 1993
Dispute over land sale involving misrepresentation of liens; Supreme Court ruled late amendment to implead PISO Bank improper, as it was not indispensable.
Font Size:

Case Digest (G.R. No. 98177)

Facts:

Background of the Case

  • The case involves a dispute over the sale of two parcels of land with houses located in Ayala-Alabang, Muntinlupa, Metro Manila. The properties were covered by Transfer Certificates of Title (TCT) No. T-132671 and 132651.
  • Petitioners: Barfel Development Corporation and spouses Victor and Aida Barrios (sellers).
  • Respondents: Reginas Industries and Development Corporation and Teodorico E. Zaragoza (buyers).

Agreement to Buy/Sell

  • On June 19, 1987, the parties entered into an Agreement to Buy/Sell the properties. The agreement stipulated that the sellers would apply the cash portion of the purchase price to remove any liens on the properties.
  • Respondents paid a down payment of P100,000 upon signing the agreement.

Misrepresentation of Liens

  • During negotiations, petitioners repeatedly assured respondents that the properties were free from liens except for a mortgage in favor of the Bank of the Philippine Islands (BPI) and a Deed of Restrictions.
  • On June 24, 1987, respondents discovered a second mortgage in favor of PISO/Central Bank amounting to P2,571,400.
  • Petitioners claimed the second mortgage had been reduced to P54,000 and assured respondents they would provide documentation to support this.

Loan Arrangement with Philippine Savings Bank (PSB)

  • On June 29, 1987, PSB approved a loan for respondents to purchase the properties, subject to certain conditions, including the annotation of a real estate mortgage in favor of PSB.
  • PSB sent letters of undertaking to petitioners and BPI, detailing a payment arrangement to consummate the transaction.
  • Petitioners agreed to the arrangement in a letter dated July 8, 1987.

Breach of Contract

  • Despite the agreements, petitioners allegedly negotiated with other parties for the sale of the properties.
  • Petitioners failed to secure the release of the second mortgage, preventing the consummation of the sale.
  • BPI later disauthorized the transaction, further complicating the matter.

Trial Court Proceedings

  • Respondents filed a complaint for specific performance and damages against petitioners.
  • During the trial, respondents sought to amend their complaint to implead PISO Bank as an additional defendant to compel it to accept payment and release the second mortgage.
  • The trial court allowed the amendment, prompting petitioners to file a petition for certiorari and prohibition with the Court of Appeals.

Issue:

  1. Whether the trial court erred in allowing the amendment of the complaint to implead PISO Bank as an additional defendant after respondents had rested their case and petitioners had begun presenting their evidence.
  2. Whether PISO Bank is an indispensable or necessary party to the action for specific performance and damages.

Ruling:

  • (Subscriber-Only)

Ratio:

  • (Subscriber-Only)

Conclusion:

The Supreme Court granted the petition, reversed the decision of the Court of Appeals, and remanded the case to the trial court for continuation of the proceedings. The Court held that the amendment to implead PISO Bank was improper and that complete relief could be granted without its inclusion as a party.


Jur is an AI-powered legal research platform in the Philippines for case digests, summaries, and jurisprudence. AI-generated content may contain inaccuracies; please verify independently.