G.R. No. L-42636 - Escaler vs. Court of Appeals

Case Summary (G.R. No. L-42636)

Factual Background

On April 21, 1961, the Register of Deeds of Rizal and A. Doronilla Resources Development, Inc. filed Case No. 4252 before the Court of First Instance of Rizal, seeking the cancellation of OCT No. 1526, based on the ground that the property covered by that title had previously been registered under TCT No. 42999 in the name of A. Doronilla Development, Inc. Petitioners opposed the petition.

On June 10, 1964, the trial court issued an order whose dispositive portion directed the cancellation of OCT No. 1526 and of all subsequent transfer certificates of title derived therefrom, and declared the owner’s duplicates held by transferees null and void. The order further allocated the expenses of cancellation to spouses Angelina Reynoso and Floro Reynoso.

Relying on this cancellation order, petitioners instituted Civil Case No. 9014 on August 31, 1965 against their vendors, spouses Jose L. Reynoso and Africa Reynoso, seeking the recovery of the value of the property sold, plus damages, invoking the vendors’ warranty against eviction. The complaint alleged that the June 10, 1964 order had already become final and executory, depriving petitioners of their rights over the property sold, and that respondents were summoned and given their day in court in Case No. 4252.

Pleadings and Motion for Summary Judgment

Respondents answered and, among other affirmative defenses, alleged that the cause of action, if any, had been “fully adjudicated in Case No. 4252” because petitioners failed to file a third-party complaint against respondents.

On August 18, 1967, petitioners filed a Motion for Summary Judgment, alleging facts already pleaded and asserting that defendants were summoned and afforded their day in court in Case No. 4252 at petitioners’ instance. In support, petitioners attached the affidavit of Atty. Alberto R. Avancena, who had represented petitioners in Case No. 4252 and had filed a joint opposition for all vendees. The affidavit stated that a copy of the joint opposition had been furnished to Africa Reynoso at her given address c/o Antipolo Enterprises, Antipolo, Rizal, as shown by a registry return receipt, and that the affidavit was executed to prove that Africa and Jose Reynoso were given their day in court and/or afforded their opportunity to be heard in Case No. 4252.

Trial Court Decision

On September 27, 1967, the trial court granted the motion for summary judgment. It found that the deed of absolute sale expressly warranted valid title and the undertaking to defend against claims of any persons. It further found that the warranties were violated when the June 10, 1964 order in Case No. 4252 became final and executory, and it concluded that defendants were summoned and given a day in court at petitioners’ instance in Case No. 4252.

Consequently, the trial court ordered the defendants, jointly and severally, to return the value of the property sold to petitioners at the time of eviction, not less than P5,500.00 to reimburse expenses of contract and litigation, and to pay additional amounts for attorney’s fees and costs of suit.

Issues on Appeal to the Court of Appeals

Respondents appealed, assigning as the sole error that the trial court erred in finding that respondents were summoned and given their day in court at petitioners’ instance in Case No. 4252. The then Court of Appeals reversed and dismissed the case. It ruled that petitioners had not given respondents formal notice of the eviction case as mandated by Articles 1558 and 1559 of the New Civil Code. The Court of Appeals thus held that petitioners could not enforce the warranty against eviction without compliance with the statutory requirement that the vendor be summoned in the eviction suit at the instance of the vendee.

Petitioners’ Contentions Before the Supreme Court

Petitioners sought reversal. They contended first that the Court of Appeals erred in applying Articles 1558 and 1559 strictly to the case at hand. Second, they insisted that the trial court’s decision should have been affirmed, or, alternatively, that the Court of Appeals should have remanded the case for hearing on the merits.

Legal Framework Applied: Warranty Against Eviction

In resolving the dispute, the Court referred to Article 1548 in relation to Articles 1558 and 1559 of the New Civil Code. Under Article 1548, eviction occurs whenever, by final judgment based on a right prior to the sale or by an act imputable to the vendor, the vendee is deprived of the whole or a part of the thing purchased, and the vendor answers for eviction even if nothing was said in the contract, subject to any contractual adjustment. Under Article 1558, the vendor is not obliged to make good the warranty unless the vendor is summoned in the suit for eviction at the instance of the vendee. Under Article 1559, the vendee must ask, within the time for answering the complaint, that the vendor be made a co-defendant.

The Court reiterated that to enforce the vendor’s liability for eviction, the following requisites must concur: (a) there must be a final judgment; (b) the purchaser must have been deprived of the whole or part of the thing sold; (c) the deprivation must have resulted from a right prior to the sale made by the vendor; and (d) the vendor must have been summoned and made co-defendant in the suit for eviction at the instance of the vendee. The Court cited earlier cases: Bautista et al vs. Laserna, et al, 72 Phil 506; Jovellano, et al vs. Lualhati, 47 Phil 371; and Canizares Tiana vs. Torrejos, 21 Phil 127.

Supreme Court’s Ruling and Disposition

The Court affirmed the Court of Appeals. It held that the crucial fourth requisite—summons of the vendor in the eviction suit at the instance of the vendee—was not present. While petitioners asserted that respondents were summoned and given their day in court in Case No. 4252, the Court observed that petitioners, by their own admission, merely furnished respondents by registered mail with a copy of the opposition petitioners filed in the eviction-related proceeding. The Court considered this not to be the notice contemplated by Articles 1558 and 1559.

The Court explained that the phrase “unless he is summoned in the suit for eviction at the instance of the vendee” requires the vendee’s action to bring the vendor into the suit, either by asking that the vendor be made a co-defendant or by filing a third-party complaint against the vendor. The Court found that nothing of that sort appeared in petitioners’ conduct. It therefore sustained the Court of Appeals’ conclusion that petitioners failed to meet the statutory condition for enforcing the warranty against eviction.

Accordingly, the Court dismissed the petition and affirmed the Court of Appeals decision, with no pronouncement as to costs.

Dissenting View

Aquino, J. dissented. He recounted that petitioners and their vendors were part of a chain beginning with Africa’s purchase from Angelina and subsequent transfers to Escaler and Roxas, with petitioners obtaining separate titles derived from OCT No. 1526. He described how the cancellation proceeding (Case No. 4252) proceeded for years, after notice was given to Angelina by registered mail, and after Escaler and Roxas, among others, filed a joint opposition alleging innocence and contesting jurisdiction, and asserting entitlement to relief from the Assurance Fund if titles were annulled.

The dissenting opinion stressed that copies of the petition and opposition were furnished by registered mail, and that Escaler and Roxas complied by giving notice to the vendor in the only feasible manner. Aquino, J. reasoned that strict compli

Case Syllabus (G.R. No. L-42636)

Parties and Procedural Posture

The petitioners Maria Luisa de Leon Escaler and Ernesto Escaler, and Cecilia J. Roxas and Pedro Roxas, filed a Petition for Review on Certiorari assailing a Decision and a Resolution of the then Court of Appeals.
The respondents were Jose L. Reynoso, later described as now deceased and to be substituted by his heirs or legal representatives, and Africa V. Reynoso.
The Court of Appeals acted in CA-G.R. No. 41953-R, which involved an appeal from the judgment of the Court of First Instance of Rizal in Civil Case No. 9014.
The petitioners sought to reverse the Court of Appeals ruling that dismissed their complaint for failure to comply with the procedural requirements for enforcing a vendor’s warranty against eviction.
The Supreme Court ultimately dismissed the petition and affirmed the Court of Appeals decision, while Aquino, J. filed a dissenting opinion.

Key Factual Allegations

On March 7, 1958, the spouses Africa V. Reynoso and Jose L. Reynoso sold to the petitioners a parcel of land in Antipolo, Rizal with an area of 239,479 square meters, covered by TCT No. 57400.
The Deed of Sale contained an express covenant against eviction, including an assurance by the vendor that she was the absolute owner, that the title and ownership were warranted, and that she would defend the property from claims of any persons.
On April 21, 1961, the Register of Deeds of Rizal and A. Doronilla Resources Development, Inc. filed before the Court of First Instance of Rizal a petition (Case No. 4252) for cancellation of OCT No. 1526 in the name of Angelina C. Reynoso.
The cancellation petition alleged that the property covered by OCT No. 1526 had been previously registered under Transfer Certificate of Title No. 42999 in the name of A. Doronilla Development, Inc.
On June 10, 1964, the trial court in Case No. 4252 set aside Decree No. 62373 and ordered cancellation of OCT No. 1526 and all subsequent Transfer Certificates of Title issued from it, declaring them null and void and ordering surrender of the owners’ duplicates.
The petitioners, as vendees, filed Civil Case No. 9014 on August 31, 1965 against their vendors to recover the value of the property sold plus damages, citing violation of the vendor’s warranty against eviction.
The petitioners alleged that the final order in Case No. 4252 that cancelled the vendor’s title and all derivative titles included the titles of the petitioners.
The complaint asserted that in Case No. 4252, the respondents were summoned and were given their day in court at the instance of the petitioners.
The respondents denied the alleged compliance, and raised as an affirmative defense that the cause of action, if any, had been fully adjudicated in Case No. 4252 due to the petitioners’ failure to file a third-party complaint.
The petitioners moved for summary judgment and relied on an affidavit of their counsel, asserting that the respondents had been furnished with a copy of the opposition filed in Case No. 4252.

Statutory Framework

The Court treated vendor’s liability for eviction under Article 1548 in relation to Articles 1558 and 1559 of the New Civil Code.
Article 1548 was invoked to define eviction as deprivation by final judgment based on a right prior to the sale or by an act imputable to the vendor, and to establish that the vendor answers for eviction even if nothing was said in the contract unless the contracting parties modify the obligation.
Article 1558 was invoked to state that the vendor is not obliged to make good the warranty unless the vendor is summoned in the suit for eviction at the instance of the vendee.
Article 1559 was invoked to require that the vendee ask, within the time fixed by the Rules of Court for answering the complaint, that the vendor be made co-defendant.
The decision articulated four requisites for enforcing a vendor’s eviction liability, including the requirement that the vendor must have been summoned and made co-defendant in the suit for eviction at the vendee’s instance.
The Supreme Court held that the controversy in Case No. 4252 did not satisfy the fourth requisite as it was understood under Articles 1558 and 1559.

Issues Raised

The petitioners argued that the Court of Appeals erred in applying Articles 1558 and 1559 strictly to the case.
The petitioners contended that the judgme