Title
Vive Eagle Land, Inc. vs. Court of Appeals
Case
G.R. No. 150308
Decision Date
Nov 26, 2004
Spouses Flores sold land to TATIC, later sold to VELI, then to respondent. VELI obligated to transfer title, evict squatters, but not pay capital gains tax as a corporation.

Case Digest (G.R. No. 150308)
Expanded Legal Reasoning Model

Facts:

  • Parties and Procedural History
    • Petitions were filed by Vive Eagle Land, Inc. (VELI) and Virgilio O. Cervantes seeking review of the Court of Appeals’ decision and resolution in CA-G.R. CV No. 51933.
    • The respondent is Genuino Ice Co., Inc., with the case also involving issues raised by the respondent through its counsel.
    • The case originates from complex real estate transactions involving multiple deeds of sale and assignment of rights over two parcels of land in Aurora Boulevard, Cubao, Quezon City.
  • Transactions and Underlying Agreements
    • On October 10, 1987, the Spouses Raul and Rosalie Flores executed an Agreement to Sell with Tatic Square International Corporation (TATIC) for two parcels of land covered by TCT Nos. 241845 and 241846.
    • A loan was secured by TATIC from the Capital Rural Bank of Makati, Inc., contingent upon registering the titles in TATIC’s name as collateral.
    • On April 13, 1988, a Memorandum of Agreement (MOA) was executed among the Spouses Flores, TATIC, the broker Isidro S. Tobias, and the Bank.
      • The MOA contained mutual undertakings regarding:
        • The registration of the first deed of absolute sale and issuance of Torrens titles in favor of TATIC.
ii. The payment of capital gains tax by the Spouses Flores and payment and securing of tax clearances by Tobias. iii. The removal of tenants/occupants within sixty days from April 12, 1988.
  • Expenses related to these undertakings were to be deducted from the purchase price of the property, estimated at P790,000.00.
  • On April 14, 1988, TATIC and petitioner VELI executed a deed of absolute sale wherein TATIC sold the property to VELI for P6,295,224.88.
    • This deed included warranties regarding the validity and registration of titles, subject to the existence of a mortgage with the bank.
    • An addendum was later executed which reinforced TATIC’s obligations to register the title in VELI's name and to effect the eviction of occupants within the agreed time frame.
  • On November 11, 1988, another deed of absolute sale was executed involving VELI, as vendor, and Genuino Ice Co., Inc., as vendee, for the parcel under TCT No. 241846, for a price of P4,000,000.00.
    • On the same day, a deed of assignment of rights was executed by VELI, transferring its interest under the prior deeds of sale to the respondent.
  • Dispute and Subsequent Proceedings
    • Post-transaction, the respondent demanded that VELI pay capital gains tax, secure a BIR clearance, and address delays in registration and eviction of squatters.
    • VELI, through counsel, rejected the respondent’s demands, arguing that:
      • It was exempt from paying the capital gains tax as a corporation.
      • The obligations to register the title and evict occupants were incumbered on the Spouses Flores, Tobias, and TATIC, not itself.
    • On June 24, 1990, the respondent filed a Complaint for specific performance and damages asserting that:
      • VELI had failed to transfer title to its name in favor of the respondent despite a reasonable lapse of time.
      • VELI was responsible for removing the squatters and paying the capital gains tax necessary for the registration and transfer of the property.
    • The trial court rendered judgment in favor of the respondent, ordering:
      • The transfer of title in favor of the respondent.
      • VELI to bear the expenses for registration and to pay the capital gains tax.
      • The eviction of the squatters, under threat of a P300,000.00 forfeiture.
    • The Court of Appeals later affirmed, with modifications, the trial court’s decision, particularly holding VELI liable for registration expenses and obliging it to evict the squatters.

Issues:

  • Obligation on Registration and Transfer Expenses
    • Is petitioner VELI obligated to pay for the expenses related to the registration of the third deed of sale and the issuance of a Torrens title in the name of the respondent?
  • Liability for Capital Gains Tax
    • Should petitioner VELI be held liable for the capital gains tax arising from the November 11, 1988 sale of the property to the respondent?
  • Responsibility for Eviction of Occupants
    • Is petitioner VELI required to cause the eviction of the tenants/occupants from the property, even though there were multiple agreements regarding such removal?

Ruling:

  • (Subscriber-Only)

Ratio:

  • (Subscriber-Only)

Doctrine:

  • (Subscriber-Only)
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