San Diego, Inc. v. Alzul
REITERATIONFacts
The Antecedents: Rosario T. Alzul (Alzul) purchased four subdivision lots from B.E. San Diego, Inc. (San Diego) through a Contract to Sell. Alzul took possession and constructed a house. Alzul later assigned her rights to Wilson P. Yu, with San Diego's knowledge, and a new Contract to Sell was issued in Yu's name. When Yu failed to pay, Alzul informed San Diego and manifested her intent to pay the installments. Alzul initiated a case against Yu for rescission of the assignment, which she won, and annotated notices of lis pendens on the titles. San Diego later declared the Contract to Sell rescinded and cancelled, and sold the lots to spouses Carlos and Sandra Ventura. The Venturas filed a quieting of title case, which was initially ruled in their favor but reversed on appeal, declaring their titles void and reinstating ownership to San Diego with the lis pendens annotated in favor of Alzul until ownership was transferred to her. This decision was affirmed by the Supreme Court. Procedural History: The Supreme Court, in a subsequent resolution, granted Alzul a non-extendible period of thirty (30) days from entry of judgment to make full payment. Alzul attempted to pay on several occasions but San Diego allegedly refused acceptance. Alzul filed a Manifestation with the Supreme Court, which referred the case to the court of origin for appropriate action. Alzul then filed an action for consignation and specific performance before the Housing and Land Use Regulatory Board (HLURB). The HLURB dismissed the complaint, holding that no valid consignation was made as the amount was not deposited and the period had long expired. The HLURB's decision was affirmed by its First Division and the Office of the President (OP). The Petition: Alzul filed a petition for certiorari with the Court of Appeals (CA), assailing the OP's dismissal of her appeal. The CA reversed the OP, HLURB, and Arbiter's decisions, ordering Alzul to pay the balance within five (5) days and San Diego to accept payment and issue a Deed of Sale. San Diego's motion for reconsideration was denied by the CA, which also granted Alzul's motion for extension to comply and for consignation. San Diego then filed a Petition for Review on Certiorari with the Supreme Court.
Issue(s)
Whether the Court of Appeals erred in granting respondent Alzul the right to pay the balance of the purchase price despite the lapse of the non-extendible period set by the Supreme Court; and whether respondent Alzul is still entitled to consignation and specific performance despite her failure to comply with the Supreme Court's directive within the prescribed period and her subsequent failure to make a valid consignation. Whether the Court of Appeals committed grave abuse of discretion in allowing belated consignation and granting an extension of time to comply with its decision. Whether the enforceability of previous rulings against petitioner B.E. San Diego, Inc. and the forfeiture of rights due to Alzul's non-compliance should be upheld.
Ruling
The Supreme Court granted the petition, reversed and set aside the Court of Appeals' decision and resolution, and reinstated the resolutions of the Office of the President. The Court declared B.E. San Diego, Inc. as the true and legal owner of the lots and ordered the cancellation of the Ventura spouses' titles and the lis pendens in favor of Alzul. Petitioner was ordered to reimburse Alzul for payments made, and Alzul and all persons claiming under her were ordered to vacate the properties.
Ratio Decidendi
On the issue of belated consignation, the validity of consignation, the effect of non-compliance, and the Court of Appeals' ruling: The Supreme Court held that the Court of Appeals erred in allowing respondent Alzul to pay the balance of the purchase price beyond the non-extendible period set by the Supreme Court in G.R. No. 109078. The Court emphasized that a mere tender of payment is not sufficient to extinguish an obligation; a valid consignation must be made, requiring the deposit of the thing due at the disposal of judicial authority. Alzul's failure to consign the amount within the 30-day period or a reasonable time thereafter, and her subsequent filing of an action for consignation and specific performance after a significant delay, constituted fatal non-compliance. Alzul did not deposit the amount with the HLURB as required by Article 1258 of the Civil Code. The Court reiterated that equity cannot prevail over statutory law and established jurisprudence, especially when it would reward indolence or negligence. The CA's reliance on justice and equity to grant an additional period was deemed misplaced and contrary to settled jurisprudence. On the procedural issue of attachments to the petition: The Supreme Court found petitioner's argument regarding the insufficiency of attachments to Alzul's petition before the CA to be without merit. While Rule 43 of the Rules of Civil Procedure requires certain attachments, Section 7 of the same rule gives the CA discretion to determine if the failure to comply constitutes sufficient ground for dismissal. The Court noted that it was not satisfactorily shown that the missing attachments deprived the CA of the full opportunity to examine and resolve the petition, and that the CA's decision to give due course was not arbitrary or oppressive. The Court also highlighted the CA Revised Internal Rules and the principle of liberal construction of procedural rules to promote justice. On the enforceability of previous rulings against petitioner and the forfeiture of rights: The Court clarified that petitioner B.E. San Diego, Inc. was not impleaded as a party in the original quieting of title case before the Regional Trial Court, the appeal to the Court of Appeals, or the Supreme Court petition (G.R. No. 109078). Therefore, petitioner was not under the jurisdiction of those courts and was not bound by their dispositions, particularly the directive to accept payment and issue a deed of sale. The dispositive portion of the CA decision, affirmed by the Supreme Court, did not contain an order for petitioner to accept payment. Consequently, the CA decision could not be enforced against petitioner, and Alzul could not ask for a writ of execution from the trial court. The action for consignation before the HLURB was the proper remedy, but it was filed out of time. Due to Alzul's failure to effect payment within the prescribed 30-day period or within a reasonable time thereafter, her rights to the disputed lots were deemed forfeited, lost, and extinguished. The Court emphasized that while it commiserated with Alzul's plight, the CA's ruling based on equity could not prevail over established legal principles and procedural rules. The Court would not allow a party to benefit from her own negligence.
Main Doctrine
A mere tender of payment, without valid consignation within the prescribed period or a reasonable time thereafter, does not extinguish an obligation. Equity cannot prevail over statutory law and established jurisprudence, especially when it rewards indolence or negligence.