G.R. No. 127820 - Municipality of Paranaque vs. V.M. Realty Corp.

A house (the subject house) was constructed by Eulalia Leis on a parcel of land (the subject land) owned by Filomena Gatchalian.
In 1949, Leis openly manifested her rights over the house by securing a Tax Declaration.
The initial construction of the house employed light materials and measured 25.25 square meters; by 1974, the house had been renovated, built with stronger materials, and expanded in floor area.
The house was mortgaged to the Rural Bank of Teresa (Rizal), Inc. (RBTRI), from which it eventually reverted to the bank after the mortgagor defaulted on the loan.
In 1980, Isabelita Bumatay, daughter of Leis, purchased the house back from RBTRI through a deed of sale.

The subject land, on which the house was constructed, was originally owned by Filomena Gatchalian.
Ownership of the land later passed to the spouses Felipe Matawaran and Ofelia Oliveros, though the manner of acquisition was not recorded.
In 1980, the Matawaran spouses executed two mortgage contracts with Capitol City Development Bank (CCDB), covering the land together with the house as collateral for a loan of P200,000.00.
After default, CCDB foreclosed on the mortgage in 1984 and consolidated title to the property, issuing Transfer Certificate of Title (TCT) No. 115486 in its name.

In July 1983, Isabelita, now married to Danilo Alcantara, purchased an adjacent 76 square meter lot from Florencio Oliveros.
Beginning in 1987, Contreras (the petitioner) resided in the lower floors of the house which was being rented out by the Alcantaras.
CCDB advertised its intention to sell the subject land; however, there were no buyers until 1990.
In March 1990, CCDB and Contreras entered into a Contract to Sell for the subject land “together with the improvements existing thereon.”
A Deed of Absolute Sale was executed on 13 November 1990, whereby Contreras purchased the subject land for P212,400.00.

Even before the execution of the Deed of Absolute Sale, the Alcantaras wrote to CCDB asserting their preferential right to purchase, referencing their ownership of the adjacent lot and their pre-emptive right under the Civil Code.
In 1991, the Alcantaras filed a Complaint with the Regional Trial Court (RTC) of Antipolo, Rizal, seeking:

The annulment of the Deed of Absolute Sale between CCDB and Contreras.
Judicial affirmation of their ownership of the house built on property that was not originally theirs, as the house was constructed on land owned by the Matawaran spouses.
The exercise of their right of pre-emption and redemption under Article 1622 of the Civil Code.

Contreras filed an answer with a counterclaim for damages asserting that the subject house was included in the sale between CCDB and herself.
CCDB filed its own answer and a cross-claim against Contreras and the Matawaran spouses.
The Matawaran spouses admitted that the Alcantaras are the owners of the house, denying that any misrepresentation was made to CCDB.
During the trial, Contreras died and was substituted by her parents, Francisco and Lourdes Pascual.

Affirmed the Alcantaras’ ownership of the subject house.
Ordered the surrender of possession of the house to the Alcantaras.
Declared the Deed of Absolute Sale dated 13 November 1990 null and void.
Directed CCDB to convey the subject property (Lot A-4, TCT No. 115486) to the Alcantaras subject to the payment of P212,400.00, an amount to be returned to Contreras’ representatives by the bank.

The RTC found that evidence such as the deed of sale between RBTRI and Isabelita, the tax declarations, and the testimonies clearly established the Alcantaras’ ownership, negating the presumption that “the accessory follows the principal.”
The Court of Appeals, on 30 August 2002, affirmed in toto the RTC decision, particularly upholding:

The validity of the finding that the Alcantaras are the rightful owners of the subject house.
The application of Articles 1621 and 1622 of the Civil Code regarding the right of pre-emption for the owners of the adjacent lot.

Alleged that the copy of the Court of Appeals decision received by her was deficient, specifically citing an unsigned page (page 6) contrary to Section 1, Rule 36 of the Rules of Civil Procedure.
It was shown that the official records did contain the proper signatures and certifications despite the clerical error in the copy sent to petitioner.

Contended that the RTC exceeded its jurisdiction by ordering the bank to convey the subject land to the Alcantaras for a price that the Alcantaras had not explicitly demanded.
Argued that the relief awarded, which encapsulated both the right of pre-emption and the right of redemption, was not prayed for in the complaint since the Alcantaras had only claimed a portion of the house, not the entire property.

Whether the alleged deficiency in the Court of Appeals decision—specifically an unsigned page—violates the requirements of Section 1, Rule 36 of the Rules of Civil Procedure and thereby invalidates the decision.
Whether the RTC exceeded its jurisdiction by ordering CCDB to convey the subject land to the Alcantaras at the stipulated price, thus awarding relief that was not expressly prayed for by the plaintiffs.