National Housing Authority v. Mendiola
REITERATIONFacts
The Antecedents: The People's Homesite and Housing Corporation (PHHC), owner of Lot 20-A, Block E-74, filed a complaint for recovery of possession and damages against Gavino Mendiola, alleging unlawful occupation and refusal to vacate despite demands. Mendiola admitted PHHC's ownership and receipt of notice to vacate but denied unlawful occupation, claiming PHHC had caused the transfer of his house to the lot, approved its sale to him, and then improperly sold it to Antonio Ilustre. Procedural History: The Court of First Instance of Rizal, Branch V, Quezon City, rendered judgment in favor of Mendiola, ordering PHHC to award Lot 20-A to him, cancel the award to Ilustre, and pay attorney's fees and costs. The Court of Appeals affirmed this decision. The Petition: The National Housing Authority (NHA), successor to PHHC, filed a petition for review, assailing the decisions of the lower courts.
Issue(s)
Whether the trial court erred in delegating the reception of evidence to a commissioner. Whether the issue of preferential right to the lot was properly resolved despite not being explicitly raised in the pleadings. Whether the PHHC committed grave abuse of discretion in awarding Lot 20-A to Antonio Ilustre.
Ruling
The Supreme Court affirmed the judgment of the Court of Appeals, upholding the decision of the trial court. The Court ordered the National Housing Authority to award Lot 20-A to Gavino Mendiola and to cancel the award to Antonio Ilustre.
Ratio Decidendi
On the delegation of evidence reception: The Court held that the contention that the trial court cannot delegate the reception of evidence to its Clerk of Court is not well-taken. Citing Laluan vs. Manalo, no provision of law prohibits a court from authorizing its Clerk of Court to receive evidence. Furthermore, in this case, the parties agreed to the appointment of a commissioner, a procedure sanctioned by the Rules of Court. Even if there was no written consent, the issue was raised for the first time in the Court of Appeals and not in the trial court, thus precluding its ventilation at that stage. The alleged lack of written consent does not invalidate the proceedings, especially since the parties proceeded with the hearing and the petitioner presented no proof of error or abuse by the commissioner. On the resolution of the preferential right issue: The Court found no merit in the argument that the issue of preferential right was not raised in the pleadings. The respondent Appellate Court correctly noted that Mendiola, in his Answer, averred as a special defense that PHHC's motive in filing the case was because it sold the lot to Ilustre, who was disqualified. Mendiola also prayed for the cancellation of the sale to Ilustre and for PHHC to sell the lot to him. These averments squarely raised the issue of who between Mendiola and Ilustre had a better right to the lot, necessitating its resolution by the court to decide the case in its totality and end litigation. On the grave abuse of discretion in awarding Lot 20-A: The Court found that the PHHC committed grave abuse of discretion. Mendiola was originally awarded and occupied Lot 20 since 1959, and subsequently, Lot 20-A was awarded to him. Although PHHC later awarded Lot 20-A to Antonio Ilustre by raffle, an investigation revealed that Ilustre had transferred his rights to a third party even before the suit was filed and had since died. The Court noted that Ilustre had no real need for the property, whereas Mendiola had continuously occupied it. The Court also pointed to an internal memorandum recommending that the award to Ilustre was not satisfactorily explained and lacked justification, suggesting Ilustre be awarded another lot. Considering that the subdivision was intended for original squatters like Mendiola, and Ilustre was an 'outsider' with a transferee, the award to Ilustre was deemed unjust and inequitable.
Main Doctrine
The Court affirmed the decision of the Court of Appeals, holding that the National Housing Authority committed grave abuse of discretion in awarding Lot 20-A to Antonio Ilustre when Gavino Mendiola had a prior and better claim, considering Mendiola's continuous occupation and the circumstances surrounding Ilustre's award and subsequent transfer of rights.