Heirs of Rosario Posadas Realty, Inc. v. Rosendo Bantug
REITERATIONFacts
The Antecedents: In September 1985, Rosendo Bantug (private respondent) purchased a subdivision lot from Heirs of Rosario Posadas Realty, Inc. (petitioner) evidenced by Contract to Sell No. 151. After paying the downpayment and 21 monthly amortizations, Bantug applied for a housing loan with SSS, but it did not materialize due to petitioner's refusal to transfer the title to Bantug's name as required by SSS. Bantug subsequently ceased paying amortization but obtained an extension. He then applied for a loan with Premiere Development Bank, using the lot as collateral. Petitioner again refused to transfer the title, citing the bank's letter of guarantee as unacceptable. Exasperated, Bantug filed a complaint for specific performance with the HLURB. Procedural History: The HLURB Arbiter ruled the notarial cancellation of the contract to sell invalid and meant to harass respondent, but also noted that petitioner was not obligated to execute a deed of sale as respondent had not paid in full. The Arbiter found respondent's reliefs premature due to internal disputes among the Posadas heirs and a pending mortgage foreclosure. The HLURB Board of Commissioners affirmed the Arbiter's decision. The Office of the President denied Bantug's appeal for lack of merit. The Court of Appeals upheld the Office of the President, except for the ruling that petitioner was remiss in its duty to execute the deed of sale, affirming the Arbiter's finding that respondent had not met the requirements for the deed of sale. The Petition: Petitioner filed a petition for review with the Supreme Court, raising issues regarding the validity of the contract cancellation due to respondent's default, respondent's rights under RA 6552, respondent's status as a builder in bad faith, and the basis for the Court of Appeals' declaration that petitioner could not guarantee title free from liens and encumbrances.
Issue(s)
Whether the Court of Appeals erred in refusing to consider respondent's default as sufficient basis for cancellation of the Contract to Sell No. 151; and whether the Contract to Sell No. 151, having been legally cancelled, entitled respondent only to a refund under RA 6552, given his failure to meet the minimum payment requirement. Whether respondent is a builder in bad faith on the land of another, thus losing what is built without right to indemnity. Whether the Court of Appeals' declaration that petitioner cannot guarantee title free from liens and encumbrances has a basis. On the issues raised by the petitioner: The Supreme Court found no need to pass upon the issues raised by the petitioner because the parties had arrived at an amicable settlement. The filing of a joint motion to render judgment based on this settlement rendered the petition moot.
Ruling
The Supreme Court granted the joint motion to render judgment based on an amicable settlement between the parties. The petition was declared moot, and the parties were ordered to faithfully abide by the terms and conditions of their amicable settlement.
Ratio Decidendi
On the issues of default and cancellation: The Supreme Court found no need to pass upon these issues because the parties had arrived at an amicable settlement. The filing of a joint motion to render judgment based on this settlement rendered the petition moot. The Court explicitly stated that "Inasmuch as the parties to this case have already arrived at an amicable settlement, we find no need to pass upon the issues raised by petitioner. The petition itself is now moot." Regarding the Amicable Settlement and its effect on the issue of builder in bad faith: The amicable settlement, signed by both parties and their counsels, stipulated that petitioner accepts the validity of Contract to Sell 151 and respondent's rights thereunder. Respondent agreed to pay the balance due, plus accrued interests and charges, which petitioner accepted as full payment. Respondent disclosed the transfer of his rights to Carmen Ramos Kanematsu, which petitioner approved. Petitioner agreed to execute the Deed of Absolute Sale in favor of Kanematsu, with respondent undertaking to cause the issuance of the proper title and assume all incidental expenses. Both parties mutually released each other from any and all claims, irrevocably terminating the litigation to their mutual satisfaction. Therefore, the issue of respondent being a builder in bad faith is rendered moot by the amicable settlement. Regarding the Amicable Settlement and its effect on the issue of guarantee of title: The amicable settlement, signed by both parties and their counsels, stipulated that petitioner accepts the validity of Contract to Sell 151 and respondent's rights thereunder. Respondent agreed to pay the balance due, plus accrued interests and charges, which petitioner accepted as full payment. Respondent disclosed the transfer of his rights to Carmen Ramos Kanematsu, which petitioner approved. Petitioner agreed to execute the Deed of Absolute Sale in favor of Kanematsu, with respondent undertaking to cause the issuance of the proper title and assume all incidental expenses. Both parties mutually released each other from any and all claims, irrevocably terminating the litigation to their mutual satisfaction. Therefore, the issue of the petitioner's ability to guarantee title is rendered moot by the amicable settlement. The Dispositive Portion: The Court granted the joint motion for judgment based on the amicable settlement and declared the petition moot. It ordered both petitioner and respondent to faithfully abide by the terms and conditions of their amicable settlement.
Main Doctrine
The Supreme Court declared the petition moot and directed the parties to abide by their amicable settlement, rendering the issues raised by the petitioner unnecessary to pass upon.