Case Summary (G.R. No. L-47088)
Petitioner (Relief Sought)
Plaintiff-appellant prayed (a) for an order compelling defendant Farrales to sell the 156 sq. m. parcel on which plaintiff’s house of strong materials stood; (b) for injunctive protection against enforcement of the writ of execution in the earlier ejectment case pending final resolution; (c) for costs and other relief as warranted.
Respondent (Position and Actions)
Defendant Farrales defended against the specific-performance claim and filed a counterclaim. She enforced a judgment in the ejectment action, invoked execution through the Sheriff of Olongapo City, and asserted that portions of the property previously had been sold to other tenants. She moved to deny injunctions and later moved to dismiss the appeal on grounds of mootness after demolition of the house.
Key Dates and Procedural History
- Complaint filed: January 2, 1973.
- Urgent petition for preliminary injunction filed: January 9, 1973 (amended January 16, 1973).
- Temporary restraining order issued: January 22, 1973; subsequently lifted by the trial court.
- Trial court denied preliminary injunction, denied reconsideration, and after trial dismissed plaintiff’s complaint.
- Appeal filed to Court of Appeals: August 13, 1973; application for injunctive aid in appeal denied by CA (March 6, 1974).
- Various procedural motions and dilatory matters were taken up by the Court of Appeals; the case was ultimately certified to the Supreme Court because the question was purely legal.
Applicable Law (Constitutional and Statutory Basis)
Applicable constitution for the decision period: the Constitution in force at the time of decision (the prompt indicates the decision was rendered in 1981; the controlling constitutional framework referenced in the decision is the “New Constitution”). Relevant statutory and civil law provisions cited and applied in the decision: Articles 1315 and 1475 (contract formation and enforceability), Article 1319 (judicial admission principle), Article 1403(2)(e) (Statute of Frauds provision as cited), Article 1678 (rights of the lessee as to improvements under the Civil Code), and the principles governing specific performance and the Statute of Frauds.
Stipulated Facts and Background Findings by the Trial Court
At pre-trial the parties stipulated to several material facts: Farrales owned the titled residential land; plaintiff had been a lessee occupying about 156 sq. m. of that land and had erected a house; Farrales instituted an ejectment suit (Civil Case No. 650) against plaintiff and other lessees and prevailed in the City Court and in the Court of First Instance on appeal (affirmed with modification as to arrears); the ejectment judgment became final and executory and execution had begun (rent arrears were paid as to plaintiff, but removal of the house remained to be executed); Farrales had sold other parcels occupied by other tenants either by direct sale or by compromise agreements, leaving plaintiff as the remaining party subject to execution.
Trial Court’s Core Finding: No Enforceable Contract to Sell
The trial court found that no completed, legally enforceable compromise agreement or contract to sell existed between plaintiff and Farrales. The court emphasized (1) plaintiff’s judicial admissions in the complaint that Farrales refused the purchase offer, (2) plaintiff’s testimony that no agreement was finalized because Farrales required cash payment while plaintiff had no money and no installment arrangement was agreed upon, and (3) therefore there was no meeting of the minds on essential terms (particularly the manner and timing of payment). Accordingly, there was no perfected contract to be specifically enforced.
Legal Reasoning on Contract Formation and Perfection
The court applied settled contract principles: consent (meeting of minds) is essential to contract formation; agreements are enforceable only from the moment of perfection (Articles 1315 and 1475). An offer without acceptance yields no contract. The court relied on precedent (Velasco et al. v. Court of Appeals) holding that an unresolved down payment and instalment terms preclude a binding sale. Because essential terms — chiefly payment terms — remained unsettled, the specific-performance action failed for lack of a perfected sale.
Statute of Frauds Consideration
The trial court additionally held that the alleged compromise agreement fell within the Statute of Frauds (Article 1403(2)(e) as cited), rendering the asserted oral or unperfected agreement unenforceable. This reinforced the conclusion that specific performance could not be ordered.
Rights of Lessees and Applicability of Article 1678
The court analyzed the parties’ relationship under lease law. Plaintiffs were lessees and, under Article 1678, a lessee who makes useful improvements may be entitled to partial reimbursement or to remove improvements if the lessor refuses reimbursement; but a lessee does not thereby obtain a right to compel purchase of the land. The trial court concluded plaintiffs were neither builders in good faith nor bad faith in a manner that would alter their ancillary rights; their remedies were those of lessees, not purchasers.
Comparison to Sales to Other Tenants
The court addressed the argument that Farrales sold parcels to other tenants and therefore shou
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Court and Decisional Information
- Decision reported at 192 Phil. 614, First Division, G.R. No. L-47088, dated July 10, 1981.
- Decision authored by Justice Fernandez.
- Concurring justices: Teehankee (Chairman), Makasiar, Guerrero, and Melencio-Herrera.
- Case was certified to the Supreme Court by the Court of Appeals on the ground that the issue raised in the appeal is purely legal.
Parties
- Plaintiff-Appellant: Consolacion Duque Salonga, assisted by her husband Wenceslao Salonga.
- Defendants-Appellees: Julita B. Farrales, and the Sheriff of Olongapo City.
Original Action and Trial Court (Court of First Instance of Zambales and Olongapo City, Third Judicial District, Branch III, Olongapo City)
- Case caption at trial: Civil Case No. 1144-0, "Consolacion Duque Salonga, assisted by her husband, Wenceslao Salonga, Plaintiff, versus Julita B. Farrales, and The Sheriff of Olongapo City, Defendants."
- Trial court rendered judgment dismissing plaintiff's complaint and defendants' counterclaim; costs were imposed against plaintiff.
- The dispositive part of the trial court judgment reads: "FOR THE REASONS GIVEN, judgment is hereby rendered dismissing plaintiff's complaint, as well as defendants' counterclaim. Costs against plaintiff. SO ORDERED."
Relief Sought by Plaintiff in the Complaint
- Prayer for a court order compelling defendant Julita Farrales to sell to plaintiff a parcel of land containing an area of 156 square meters, more or less, where plaintiff's house of strong materials exists.
- Prayer for an order enjoining defendants from disturbing or interfering with plaintiff's peaceful possession or occupation of the land until a final decision.
- Prayer for joint and several payment of costs by defendants.
- Prayer for "such other relief conformable to law, justice and equity."
Petition for Preliminary Injunction and Interim Orders
- On January 9, 1973, plaintiff filed an urgent petition for the issuance of a writ of preliminary injunction; the petition was amended on January 16, 1973.
- Amended petition sought:
- Issuance of a restraining order enjoining defendants, particularly the Sheriff of Olongapo City, from enforcing the writ of execution issued pursuant to the judgment in Civil Case No. 650 (ejectment) of the City Court of Olongapo.
- After hearing, issuance of a writ of preliminary injunction (conditioned upon reasonable bond) enjoining enforcement of the writ of execution to maintain the status of the parties and prevent irreparable injury and to avoid rendering any subsequent judgment moot, academic, illusory or ineffectual.
- Other relief conformable to law, justice and equity.
- On January 22, 1973, the trial court issued an order temporarily restraining the carrying out of the writ of execution issued pursuant to the judgment in City Court Civil Case No. 650.
- Defendant Farrales filed a motion to deny the motion for preliminary injunction as vague and filed an answer with counterclaim on January 23, 1973.
- Farrales filed an opposition to the amended petition for preliminary injunction on January 25, 1973.
- In an order dated January 20, 1973, the trial court denied the petition for a preliminary injunction and lifted the January 22, 1973 restraining order.
- Plaintiff moved for reconsideration (date in source shows January 5, 1973, contextually related to the denial); reconsideration was denied by the court a quo on February 21, 1973.
Procedural History on Appeal and in the Court of Appeals
- After trial on the merits in Civil Case No. 1144-0, the trial court dismissed plaintiff's complaint.
- Plaintiff appealed to the Court of Appeals on August 13, 1973.
- On February 25, 1974, plaintiff filed with the Court of Appeals a motion for issuance of a writ of preliminary injunction in aid of appeal.
- Court of Appeals resolution dated March 6, 1974 denied the writ of preliminary injunction sought in aid of appeal on the ground that the writ prayed for was intended to restrain enforcement of the writ of execution in Civil Case No. 650 for ejectment, which was not involved in the appeal, and there was no justification for issuance of the writ.
- On January 13, 1975, defendant Farrales filed a motion to dismiss the appeal on the ground that the appeal had become moot and academic because the house of the plaintiffs-appellants was demolished on October 21, 1974 (as stated in the sheriff's return) and the land was delivered to her and she was in possession.
- The plaintiffs-appellants failed to comment on the motion to dismiss when required by the Court of Appeals in its resolution dated January 16, 1975.
- The Court of Appeals resolved to submit the motion for decision in a resolution dated April 17, 1975.
- Plaintiffs-appellants likewise failed to show cause why the case should not be submitted for decision without the benefit of appellant's reply brief when required to do so in a Court of Appeals resolution dated May 14, 1975.
- The Court of Appeals resolved on July 8, 1975 to submit the case for decision without the benefit of appellants' reply brief.
- In a resolution promulgated on September 15, 1977, the Court of Appeals certified the case to the Supreme Court on the ground that the issue raised is purely legal.
Facts as Stipulated at Pre-Trial and Found by Trial Court
- Parties stipulated to several facts at pre-trial, including:
- Personal circumstances of the parties as alleged in the complaint were admitted.
- Defendant Farrales is the titled owner of a parcel of residential land situated in Sta. Rita, Olongapo City; identity of the land was not disputed.
- The parcel was formerly acquired by Farrales from Leoncio Dytuco, who acquired from the corpus family; after sales to others o