G.R. No. 119310 - Esguerra vs. Court of Appeals

On June 29, 1984, Julieta V. Esguerra (petitioner) filed a complaint for administration of conjugal partnership or separation of property against her husband, Vicente Esguerra, Jr., before the trial court.
The complaint was later amended on October 31, 1985, to implead V. Esguerra Construction Co., Inc. (VECCI) and other family corporations as additional defendants.
The parties entered into a judicially-approved compromise agreement, based on which the court rendered partial judgments on January 11, 1990—one between Julieta and Vicente, the other between Julieta and VECCI.

VECCI was mandated to sell, alienate, transfer, or dispose of several properties, including:

Real estate and buildings at 140 and 104 Amorsolo Street, Legaspi Village, Makati.
Various real estate and improvements in Barangay San Jose (Antipolo, Rizal), Kamagong Street (Cainta, Rizal), and Barangay Malaatis (San Mateo, Rizal).

After the sale and the settlement of financial obligations of VECCI, 50% of the net proceeds were to be remitted to Julieta as her share.

Esguerra Building I, located at 140 Amorsolo St., was sold, and proceeds were distributed pursuant to the agreement.
Dispute arose over Esguerra Building II at 104 Amorsolo St., which Julieta claimed one-half of the rentals starting January 1990. VECCI refused to pay, prompting Julieta to file a motion on August 7, 1990, to compel remittance of rentals.
The trial court ruled in her favor on October 30, 1990; this decision was affirmed by the Court of Appeals on May 17, 1991, and later by the Supreme Court on May 4, 1992. The Supreme Court recognized Julieta’s one-half ownership and entitlement to half the rentals pending sale.

Esguerra Building II was sold to Sureste Properties, Inc. (private respondent) for P150,000,000.00.
On June 17, 1993, Julieta moved to nullify the sale on the ground that VECCI was not the lawful and absolute owner and that she was neither notified nor consulted.
Sureste Properties, not a party to the civil case, filed a manifestation asserting that Julieta expressly consented to the sale under the compromise agreement.
The trial court initially denied Sureste’s motion but later, after trial on merits, modified its previous ruling on February 1, 1994:

It declared the sale valid as to one-half of the property but ineffectual and unenforceable as to Julieta’s one-half ownership for lack of consultation.
Annotated the Notice of Lis Pendens on the title was declared valid.
Enjoined Sureste from further court actions against Julieta.

Sureste appealed the trial court’s modified order to the Court of Appeals, which reversed the trial court’s ruling, declaring the sale valid and enforceable in its entirety.
Julieta’s motion for reconsideration was denied by the Court of Appeals on February 23, 1995.
Julieta then filed the instant petition for review seeking reversal of the Court of Appeals.

Whether a co-owner can contest as unenforceable a sale of real property executed pursuant to a judicially-approved compromise agreement but without the co-owner’s knowledge or consent.

Whether the corporate secretary’s certification of stockholders’ and directors’ resolutions authorizing the sale suffices to validate the sale, precluding the buyer’s duty to investigate beyond such certifications.

Whether the Court of Appeals acted without jurisdiction or with grave abuse of discretion in reversing the trial court’s ruling that the sale was unenforceable as to the petitioner’s one-half ownership.