G.R. No. 60544 - Florendo, Jr. vs. Coloma

Case Summary (G.R. No. 60544)

Factual Background

On July 11, 1969, Adela Salindon, an awardee of a Philippine Homesite and Housing Corporation (PHHC) lot, instituted an ejectment action in the City Court of Quezon City against William R. Vasquez and Silverio Nicolas, alleging that they were squatters on the parcel described as covered by Transfer Certificate of Title No. 138007. The defendants denied squatting and asserted long, continuous, open and adverse possession since 1950 and, in consequence, questioned the city court's jurisdiction as the action would involve title or ownership. Silverio Nicolas died on March 12, 1971 and was substituted by his wife Erlinda Nicolas, who filed an amended answer with a third-party complaint against PHHC. The PHHC admitted the sale to Adela Salindon and maintained that its award was a valid administrative act not subject to collateral attack in an ejectment case.

Trial Court Proceedings

After trial, the respondent city court rendered judgment in favor of the defendants and against Adela Salindon, declaring conditional and absolute deeds of sale by PHHC to Salindon null and void and ordering PHHC to award the subject lot to William Vasquez and Erlinda Nicolas upon payment within thirty days and to execute deeds of absolute sale in their favor. The defendants prevailed in the ejectment proceeding as to ownership and award of the lot.

Appellate Proceedings and Post-Judgment Events

Adela Salindon appealed the city court decision to the Court of Appeals on August 25, 1975. After her death on December 11, 1976 her counsel failed to inform the court and no substitution was made; nevertheless the Court of Appeals remanded the case March 21, 1977 for retaking testimony and, later, ordered show cause why the appeal should not be dismissed and ultimately dismissed the appeal for abandonment on December 4, 1980. The city court issued a writ of execution August 3, 1981. The PHHC’s successor, the National Housing Authority, through General Manager Gaudencio Tobias, communicated readiness to implement the city court decision and suggested cancellation of Transfer Certificate of Title No. 239729. Thereafter William Vasquez and Erlinda Nicolas moved for orders directing the Registrar of Deeds for Quezon City to cancel TCT No. 138007 and TCT No. 239729; the petitioners opposed those motions, prompting the present certiorari petition to annul the trial court’s decision, the writ of execution and the order directing cancellation of titles.

Issues Presented

The case raised whether the Court of Appeals lost jurisdiction after the death of the plaintiff-appellant without substitution; whether the City Court of Quezon City exceeded its jurisdiction and committed grave abuse by annulling administrative determinations of the PHHC, rescinding deeds of sale, awarding government lots to private respondents and ordering the cancellation of Torrens titles; whether the petitioners, as successors-in-interest to Adela Salindon, could challenge the proceedings and the city court’s orders; and whether the writ of execution and the March 1, 1982 order to annul the titles should be set aside.

Parties' Contentions

The petitioners contended that the death of Adela Salindon without substitution rendered the appellate proceedings void and deprived the Court of Appeals of jurisdiction, and that the city court lacked jurisdiction to order cancellation of the titles. The private respondents, having asserted adverse possession and having in their answers challenged the city court’s jurisdiction at trial, relied on the trial court’s judgment in their favor. The PHHC (and later the National Housing Authority) maintained that its administrative award to Salindon was valid and not subject to collateral attack in ejectment proceedings and that the city court could not rescind the agency’s sale or make awards reserved to the agency.

Court's Analysis on Appellate Jurisdiction and Substitution

The Court held that the death of Adela Salindon did not extinguish her civil claim and that the appellate court retained jurisdiction to proceed because counsel for the deceased failed to inform the court as required by Section 16 of Rule 3 and no proper notice of death was made. The Court relied on Section 17, Rule 3 of the Rules of Court which mandates substitution of a deceased party’s legal representative upon proper notice, and concluded that the Court of Appeals could properly continue the appeal and eventually dismiss it for abandonment. The Court further held that the appellate decision thereby became binding and enforceable against the petitioners as successors-in-interest under Section 49 (b) Rule 39, Rules of Court.

Court's Analysis on Trial Court's Jurisdiction over PHHC Functions

The Court found that the City Court exceeded its jurisdiction and committed grave abuse when it cancelled administrative determinations of the PHHC, rescinded deeds of sale, awarded the government lot to private respondents on the basis of evidence insufficient under the agency’s rules, and ordered cancellation of Torrens titles. The Court emphasized that the city court could not usurp functions reserved to an administrative agency and that squatters who clandestinely occupy titled government property do not acquire vested rights by possession alone. The Court nonetheless applied estoppel against the petitioners insofar as they derived title from Adela Salindon and the deceased plaintiff had repeatedly insisted on the jurisdiction of the city court during proceedings; by invoking that jurisdiction for affirmative relief, her successors were precluded from later questioning it. Conversely, the private respondents could not profit from the city court’s excess of jurisdiction because they had consistently challenged that same jurisdiction during trial.

Ruling and Disposition

The Court annulled and set aside the City Court decision dated May 20, 1975, the writ of execution dated August 3, 1981, and the March 1, 1982 order directing cancellation of TCT Nos. 138007 and 239729 insofar as those instruments and orders had been issued in excess of jurisdiction and with grave abuse of discretion as to the private respondents. The Court nonetheless ordered the Registrar of Deeds for Quezon City to cancel TCT No. 239729 in the names of the petitioners and TCT No. 138007 in the name of Adela Salindon, declared the National Housing Authority the owner of the disputed lot, and directed the NHA to take possession and to hold or dispose of the property according to law and the agency’s policies. The Court also expressly left open the private respondents’ right to present evidence and arguments before the NHA to seek any rights to which they may be entitled under law and the facts.

Legal Basis and

Case Syllabus (G.R. No. 60544)

Parties and Posture

Petitioners are Arsenio Florendo, Jr., Milagros Florendo and Beatriz Florendo who claim title by transfer of a lot formerly in the name of Adela Salindon.
Respondents include Hon. Perpetua D. Coloma, Presiding Judge of Branch VII, City Court of Quezon City, Gaudencio Tobias, General Manager of the National Housing Authority, the Registrar of Deeds for Quezon City, and private respondents William R. Vasquez and Erlinda Nicolas.
The petition sought certiorari with preliminary injunction to annul the City Court's May 20, 1975 decision, the August 3, 1981 writ of execution, and the March 1, 1982 order directing cancellation of certain Torrens titles.
The relief sought challenged both the city court's substantive adjudication of title and its orders affecting registration of Torrens titles.

Key Facts

The disputed property is a residential lot in Diliman, Quezon City, described in the complaint as Lot No. 1, Block No. 101, covered by Transfer Certificate of Title No. 138007, containing 915.00 square meters.
Adela Salindon was an awardee of a Philippine Homesite and Housing Corporation (PHHC) lot and sued for ejectment on July 11, 1969 against William Vasquez and Silverio Nicolas, who claimed long adverse possession since 1950.
Silverio Nicolas died on March 12, 1971 and was substituted by his wife Erlinda Nicolas, who filed a third-party complaint against PHHC.
PHHC admitted the sale to Salindon and asserted that its administrative award could not be collaterally attacked and that issues of title and rescission fell beyond city court jurisdiction.
The respondent city court rendered judgment on May 20, 1975 nullifying the PHHC deeds of sale and ordering PHHC to award the lot to Vasquez and Erlinda Nicolas upon payment.
Salindon appealed but died on December 11, 1976 without substitution, her estate later conveying the lot to the petitioners.
The Court of Appeals remanded for retaking of testimony and subsequently dismissed the appeal for abandonment on December 4, 1980 after a July 31, 1980 show-cause order.
A writ of execution issued August 3, 1981, and motions to cancel TCT Nos. 138007 and 239729 were filed in February 1982, prompting the petitioners' opposition on March 19, 1982.

Procedural History

The ejectment action commenced in the respondent city court on July 11, 1969 and proceeded to judgment on May 20, 1975.
Salindon appealed to the Court of Appeals on August 25, 1975, but no substitution occurred after her death on December 11, 1976.
The Court of Appeals remanded the case on March 21, 1977 for retaking of testimony and ultimately dismissed the appeal for abandonment on December 4, 1980.
The respondent city court issued a writ of execution on August 3, 1981 and an order directing cancellation of titles on March 1, 1982, which prompted the present petition for certiorari.

Issues

Whether the Court of Appeals lost jurisdiction to decide the appeal after the death of Salindon without substitution.
Whether the respondent city court exceeded its jurisdiction by annulling PHHC administrative determinations, rescinding deeds of sale, awarding government lots, and ordering cancellation of Torrens titles.
Whether the petitioners, as successors-in-interest to Salindon, may challenge the city court's exercise of jurisdiction.
Whether the private respondents who contested city court jurisdiction may now avail themselves of a decision rendered in excess of that jurisdiction.

Contentions

The petitioners contended that the appellate proceedings after Salindon's death were void for want of substitution and that the city court lacked jurisdiction to order cancellation of Torrens titles.
The private respondents con