G.R. No. 213039 - Polytechnic University of the Philippines vs. National Development Co.

Case Digest (G.R. No. 213039)
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Facts:

Background and Property Details

In the early sixties, the National Development Company (NDC) possessed a ten (10)-hectare property in Sta. Mesa, Manila, commonly known as the NDC Compound, which was evidenced by Transfer Certificate of Title Nos. 92885, 110301, and 145470.
The property became the subject of multiple agreements involving leasing and purchase options:

On September 7, 1977, NDC entered into a lease contract with Golden Horizon Realty Corporation (GHRC) covering a portion of the property.
A subsequent lease covering additional portions was executed, wherein GHRC was granted the option to purchase the leased area.

Dispute Arising from Lease Contracts and Governmental Transference

On August 12, 1988, prior to the expiration of the lease’s ten-year period under the second contract, GHRC notified NDC of its intention to renew the lease and later exercise its option to purchase; however, NDC failed to respond.
Subsequent to discovering NDC’s apparent intent to dispose of the property to a third party, GHRC commenced litigation by filing a complaint for specific performance and damages (Civil Case No. 88-2238) on October 21, 1988.
On January 6, 1989, then-President Corazon C. Aquino issued Memorandum Order No. 214 which ordered the transfer of the entire NDC Compound to the National Government, with the understanding that the property would later be conveyed to the Polytechnic University of the Philippines (PUP) at acquisition cost.
The transfer order essentially canceled NDC’s overall obligation to the National Government, although later developments would complicate this arrangement.

Regional Trial Court (RTC) Decision and Subsequent Appellate Proceedings

On November 25, 2004, the RTC ruled in favor of GHRC, sustaining its right to purchase the leased areas. The decision:

Ordered GHRC to conduct a ground survey of the leased areas, and upon approval, exercise its purchase option within specified periods.
Instructed PUP, as the current registered owner due to the earlier transfer, to reconvey the subject property to GHRC once GHRC paid the purchase price.
Imposed an order for NDC to pay attorney’s fees to GHRC.

On June 25, 2008, the Court of Appeals (CA) affirmed the RTC decision in its entirety.
The case was elevated to the Supreme Court in G.R. Nos. 183612 and 184260, and on March 15, 2010, the Supreme Court:

Upheld GHRC’s right of first refusal.
Modified the terms by increasing the purchase price per square meter.
Finalized its decision on July 23, 2010, making it executory.

Execution Proceedings and RTC Modifications

Following the finality of the Supreme Court decision, GHRC executed the judgment by depositing a cashier’s check representing the purchase price as ordered.
On May 23, 2011, PUP filed a manifestation contending that, rather than NDC, it was entitled to receive the deposited purchase price.
The RTC issued an Order on September 5, 2011, directing:

The simultaneous withdrawal of the deposit by both NDC and PUP.
The execution of a deed of conveyance to GHRC.
The delivery of the Owner’s Duplicate Copies of the relevant Transfer Certificates of Title.

Subsequent motions for clarification/reconsideration were filed by both NDC (September 20, 2011) and PUP (September 22, 2011).
On February 2, 2012, the RTC rendered a modified Resolution:

It allowed NDC to withdraw the deposit.
Directed that PUP, representing the National Government, should have the titles annulled and replaced, given that the subject properties were not included in the transfer (as they were under litigation).
Ordered a subsequent conveyance in favor of GHRC.

The RTC’s modifications were justified based on:

The Memorandum of Agreement (MOA) between NDC and the Republic of the Philippines, which excluded areas under litigation (including the subject properties under TCT Nos. 197748 and 197798).
The fact that Presidential Memorandum No. 214 did not list the disputed properties, leaving them still in NDC’s name.

Petition for Certiorari and Appellate Review

PUP filed a Petition for Certiorari and Prohibition under Rule 65, challenging the RTC’s September 5, 2011 Order and the Resolution of February 2, 2012.

The petition alleged grave abuse of discretion due to:

The implied failure of PUP to file a motion for reconsideration regarding the RTC’s February 2, 2012 Resolution.
Errors in upholding RTC’s orders which compelled PUP to act in reconveying the property.

On February 19, 2014, the CA dismissed PUP’s petition for lack of merit.
PUP subsequently moved for reconsideration, which was denied in a Resolution dated June 16, 2014.
The Supreme Court, reviewing the consolidated controversy, focused on whether the trial court (RTC) committed grave abuse of discretion in issuing its orders and resolutions.

Issues:

Whether the appellate court erred on a question of law in dismissing the petition in CA-G.R. SP No. 124575 by imputing PUP’s failure to file a motion for reconsideration regarding the RTC’s February 2, 2012 Resolution in Civil Case No. 88-2238.
Whether the appellate court committed a legal error by upholding the RTC’s Order dated September 5, 2011 and the Resolution dated February 2, 2012, particularly regarding the issue of reconveyance of the subject property when such property was not actually transferred to PUP.

Ruling:

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Ratio:

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Doctrine:

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