Case Summary (G.R. No. 168387)
Factual Background and Property Descriptions
Respondents, original owners of both parcels, mortgaged them to RBBI. Upon default, RBBI foreclosed, consolidated the titles, and issued TCTs: T-62096 for Murong and T-62836 for Lantap. In 1985, respondents purportedly repurchased a property from RBBI via a Deed of Sale referencing TCT No. T-62096 (Murong property), though they did not occupy or enforce ownership of this parcel. Separately, in 1990, RBBI voluntarily transferred land to petitioners via Deeds of Voluntary Land Transfer (VLTs), describing the land as located in Barangay Murong but covered by TCT No. T-62836 (Lantap property). Petitioners completed payments and were issued CLOAs for the Murong property. Respondents later filed a complaint to cancel petitioners’ CLOAs, asserting ownership of the Murong property by virtue of their 1985 buy-back.
Proceedings and Conflicting Decisions Below
The Regional Agrarian Reform Adjudicator (RARAD) gave primacy to TCT numbers, ruling respondents owned Murong and petitioners’ CLOAs covered Lantap, resulting in petitioners’ disqualification as tenants. Upon appeal, the Department of Agrarian Reform Adjudication Board (DARAB) reversed this, favoring petitioners as bona fide tenant-farmers of Murong and recognizing respondents’ buy-back as pertaining to Lantap, directing an agricultural lease contract for respondent Nemi for Lantap. The Court of Appeals (CA), however, reinstated the RARAD’s decision, applying the Best Evidence Rule to prioritize the literal TCT numbers in the contracts, treating the descriptions referring to barangays as typographical errors, thus nullifying petitioners’ CLOAs for lack of qualification. Motions for reconsideration were denied.
Legal Issues Presented
- The effect of a prior final judgment dismissing RBBI’s separate petition challenging the same CA decision.
- The correctness of the CA’s application of the Best Evidence Rule in determining the contract subjects.
- Identification of the actual properties intended and covered by the Deed of Sale and the VLTs executed with RBBI.
Reviewability and Jurisdiction
Although respondents argued the petition raised factual issues beyond Rule 45’s scope for questions of law only, this Court recognized the legal implications involved in the evidentiary rulings, particularly concerning the admissibility and application of the Best Evidence Rule versus Parol Evidence Rule. The Court identified exceptions allowing factual review where findings are unsupported or contradictory to admissions and held that the contrasting rulings of the various tribunals warranted exercise of jurisdiction to correct misappreciations of evidence and law.
RBBI’s Former Petition and Its Impact
The dismissal of RBBI’s earlier petition was insufficient to bind petitioners, who were not parties to that case. The Court highlighted that an appellate dismissal does not necessarily establish the correctness of the judgment and that parties who acquired rights prior to the contentious judgment are not bound by it under the doctrines of res judicata and successor-in-interest limitations.
Misapplication of the Best Evidence Rule
The CA incorrectly applied the Best Evidence Rule, which governs the admissibility of evidence to prove document contents when originals are unavailable or disputed. Here, contents of the relevant documents were not in dispute (the Deed of Sale referred to TCT No. T-62096, and VLTs to TCT No. T-62836). The real issue concerned the true intention behind the descriptors in the contracts, an area appropriate for the Parol Evidence Rule. However, even the strict application of the Parol Evidence Rule was improper given that respondents were not parties to the VLTs, and that intrinsic ambiguities and possible mistakes in both sets of contracts justified the admission of extrinsic evidence to determine intent.
Proper Interpretation of Contracts and Intent of Parties
Pursuant to Civil Code Articles 1370 and 1371 and Rule 130, Section 13 of the Rules of Court, the Court emphasized that the intention of the parties prevails over literal wording when ambiguity exists. Contemporaneous and subsequent acts of the parties are key to interpreting contracts with imperfect expressions. Applying this principle, evidence showed respondents did not take possession or exercise ownership over the Murong property, but rather occupied Lantap via Nemi Fernandez, indicating their buy-back involved the Lantap property despite the Deed of Sale referencing Murong's TCT. Conversely, petitioners continuously occupied, paid rentals for, and received CLOAs for the Murong property, consistent with their VLTs despite the erroneous title number annotated. These acts reveal the mutual intent and recognition of ownership and tenancy, over
Case Syllabus (G.R. No. 168387)
Facts of the Case
- Respondents Espejo family owned two parcels of agricultural land, each two hectares, situated in Barangay Lantap and Barangay Murong, Bagabag, Nueva Vizcaya.
- The Lantap property was tenanted by respondent Nemi Fernandez, husband of Elenita Espejo; the Murong property was tenanted by petitioners Salun-at Marquez and Nestor Dela Cruz.
- Both properties were mortgaged to Rural Bank of Bayombong, Inc. (RBBI). Upon loan default, RBBI foreclosed and acquired consolidated title to these properties.
- Transfer Certificates of Title (TCT) were issued: TCT No. T-62096 for Murong property; TCT No. T-62836 for Lantap property, both referencing "Bagabag Townsite, K-27," without distinct barangay identification.
- On February 26, 1985, respondents bought back a parcel from RBBI by Deed of Sale referencing TCT No. T-62096 (Murong property). However, respondents did not take possession or exercise ownership over the Murong property, nor demand lease payments from petitioners.
- Petitioners, meanwhile, remained tenants of the Murong property, paying rentals to RBBI, and held separate Deeds of Voluntary Land Transfer (VLTs) from RBBI dated June 20, 1990, described as agricultural lands in Barangay Murong but referenced TCT No. T-62836 (Lantap property).
- Petitioners completed payments and received Certificates of Land Ownership Award (CLOAs) in 1991 covering lands in Barangay Murong.
- Respondents initiated legal action in 1997 to cancel petitioners’ CLOAs asserting ownership of Murong property based on the February 1985 Deed of Sale.
Procedural History
- The Regional Agrarian Reform Adjudicator (RARAD) ruled that the TCT numbers controlled; thus, respondents owned Murong property and petitioners owned Lantap property. It cancelled petitioners’ CLOAs, ordered their cancellation due to disqualification as tenants of Lantap property, and directed RBBI to contract with Nemi, rightful tenant of Lantap.
- The Department of Agrarian Reform Adjudication Board (DARAB) reversed, presuming correctness in the issuance of CLOAs to petitioners as bona fide beneficiaries. It found respondents failed to prove they repurchased the Murong property, ruling instead that respondents repurchased the Lantap property; ordered respondents to lease the Lantap property to Nemi.
- The Court of Appeals (CA) reversed DARAB, affirming RARAD’s interpretation that titles control: respondents’ Deed of Sale indicated Murong property, and petitioners’ VLTs referred to Lantap property, with the latter’s designation "Barangay Murong" deemed a mere typographical error; hence petitioners were disqualified tenants.
- Motions for reconsideration by both RBBI and petitioners were denied by the CA.
- RBBI separately filed a Petition for Review on Certiorari before the Supreme Court; it was dismissed for lack of merit.
- Petitioners filed the present Petition for Review on Certiorari assailing the CA decision.
Issues Presented
- The effect of the final judgment dismissing RBBI's appeal against the same Court of Appeals Decision.
- Whether the Court of Appeals erred in applying the Best Evidence Rule to determine the subject properties of the parties’ contracts.
- The proper determination regarding the subject properties of the contracts between the parties and RBBI.
Ruling on Propriety of the Petition
- The Court recognized that the petition raises legal questions on admissibility of evidence and misapplication of legal rules, thus proper under Rule 45 despite partially involving factual issues.
- Exceptions to the general rule limiting appeals to pure questions of law apply because of conflicting findings and misappreciation of facts by the CA.
- Dismissal of RBBI’s prior petition does not preclude petitioners’ appeal, especially