Agan v. Heirs of Nueva
REITERATIONFacts
The Antecedents: On April 13, 1988, Diosdada Nueva, with marital consent, sold a parcel of land to Philadelphia Agan under a pacto de retro agreement for P21,000.00. The property, covered by TCT No. 25370 and registered in the name of Spouses Andres and Diosdada Nueva, was agreed to be repurchased by the Nuevas within six months. The vendors failed to repurchase the property within the stipulated period. Following Diosdada Nueva's death on July 5, 1991, and the alleged loss of the title in a fire, the property was extrajudicially partitioned, and a new title was issued to Ann and Lou Nueva. Procedural History: Philadelphia Agan filed a petition for consolidation of ownership on June 19, 1992. The respondents, the heirs of the Nuevas, alleged in their answer that the pacto de retro sale was an equitable mortgage due to the disparity between the sale price and the property's fair market value. The Regional Trial Court (RTC), Branch 19, of Cagayan de Oro City, after trial, rendered a decision on August 3, 2000, consolidating ownership in favor of Agan but also granting the vendors a thirty-day period to repurchase the property, citing Articles 1606 and 1607 of the New Civil Code. Agan filed a petition for relief from this decision, arguing the redemption period was surplusage. The RTC granted this petition and amended its decision by deleting the redemption period. The respondents filed a petition for certiorari with the Court of Appeals, which reversed the RTC's order, holding that a petition for relief was not the proper remedy and that the RTC erred in amending its judgment. The Petition: Philadelphia Agan seeks review of the Court of Appeals' decision, reiterating her argument that the thirty-day redemption period granted by the RTC was surplusage and that her belief in this regard constituted a mistake of fact, justifying her petition for relief from judgment. She contends that the Court of Appeals erred in ruling that the respondents had thirty days to redeem the property under Article 1606 of the Civil Code. The petitioner argues that her belief that an appeal was unnecessary due to the perceived surplusage in the RTC's dispositive portion was a mistake that prevented her from filing an appeal, and that the Court of Appeals incorrectly applied the principles governing petitions for relief and the interpretation of Article 1606.
Issue(s)
Whether the Court of Appeals erred in reversing the RTC's Order granting the petition for relief. Whether the RTC gravely abused its discretion in amending its decision to delete the thirty-day redemption period. Whether the grant of a thirty-day redemption period was proper under Article 1606 of the Civil Code.
Ruling
The Supreme Court DENIED the petition for lack of merit. It affirmed the ruling of the Court of Appeals that the petition for relief was improperly granted. The Court held that Agan's belief that the redemption period was surplusage constituted a mistake of law, not of fact, and that she had an adequate remedy of appeal, which she failed to avail of within the reglementary period. The Court also found that the RTC did not err in applying Article 1606 of the Civil Code, as the Nuevas' defense of equitable mortgage was raised in good faith.
Ratio Decidendi
On the propriety of the Petition for Relief: The Court reiterated the basic principle that a mistake, to constitute a ground for a petition for relief under Rule 38 of the Rules of Court, must be a mistake of fact, not of law. Petitioner Agan's belief that the thirty-day redemption period granted by the RTC was surplusage and thus unenforceable constituted a mistake of law. The Court emphasized that relief is an equitable remedy granted only in exceptional cases where there is no other adequate remedy. Since Agan had the remedy of appeal to question the RTC's decision, her failure to file an appeal within the reglementary period, due to her mistaken belief about the legal effect of the redemption period, barred her from seeking relief under Rule 38. The Court cited Guevara v. Tuason & Co. and Ibabao v. Intermediate Appellate Court to support the principle that a party cannot use a petition for relief as a substitute for a lost remedy of appeal due to negligence or a mistaken mode of procedure. On the RTC's amendment of its decision: The Court found that the RTC gravely abused its discretion in granting the petition for relief and amending its decision. The RTC's original decision, which consolidated ownership but granted a redemption period, was based on the evidence and the application of Article 1606 of the Civil Code. The subsequent amendment, deleting the redemption period, was an attempt to correct a perceived error in law, which is not the proper function of a petition for relief. The Court clarified that if there was any error in the RTC's decision, it was an error in judgment, not an error of jurisdiction, and such errors are correctible by appeal. The Court also noted that Agan's failure to move for reconsideration or appeal immediately after the decision was rendered suggested that her rationalization for seeking relief was an afterthought. On the application of Article 1606 of the Civil Code: The Court upheld the RTC's application of Article 1606 of the Civil Code. The Nuevas had raised the defense in their answer that the pacto de retro sale was an equitable mortgage, citing inadequate consideration and their continued possession and payment of taxes. The RTC did not make any finding that this defense was not made in good faith. In the absence of a contrary finding by the RTC, the law presumes good faith on the part of the respondents. Therefore, the respondents were entitled to the right to redeem the property pursuant to the third paragraph of Article 1606, which allows repurchase within thirty days from the rendition of final judgment declaring the contract to be a true sale with right to repurchase. The Court clarified that the legislative intent behind Article 1606 is to protect vendors a retro from circumventing usury laws and to accord them maximum safeguards.
Main Doctrine
A petition for relief from judgment under Rule 38 of the Rules of Court is not available when the loss of the remedy of appeal is due to the party's own negligence or mistaken mode of procedure, and the mistake contemplated pertains to a mistake of fact, not of law.