Marquez v. Espejo
REITERATIONFacts
The Antecedents: Respondents Eloisa, Elenita, Emerita, Ophirro, Othniel, Orlando, Osmundo, and Odelejo Espejo, and Nemi Fernandez, were the registered owners of two agricultural parcels of land, each two hectares in area, located in Barangay Lantap and Barangay Murong, respectively. These properties were mortgaged to Rural Bank of Bayombong, Inc. (RBBI) to secure loans. Upon default, the properties were foreclosed and title consolidated in RBBI's name. Petitioners Salun-at Marquez and Nestor Dela Cruz were the tenants of the Murong property, while respondent Nemi Fernandez was the tenant of the Lantap property. Procedural History: On February 26, 1985, the Espejos repurchased one of the lots from RBBI, documented by a Deed of Sale referencing TCT No. T-62096, which corresponds to the Murong property. However, the Espejos did not take possession of the Murong property, nor did they receive rentals from the petitioners who continued to occupy and till it. Meanwhile, RBBI executed Deeds of Voluntary Land Transfer (VLTs) in favor of petitioners Marquez and Dela Cruz for the Murong property, referencing TCT No. T-62836 (which actually corresponds to the Lantap property). Upon completion of payments, the DAR issued Certificates of Land Ownership Award (CLOAs) to the petitioners for the Murong property. On February 10, 1997, the Espejos filed a complaint seeking cancellation of the petitioners' CLOAs, claiming ownership of the Murong property based on their 1985 repurchase. The OIC-RARAD ruled in favor of the Espejos, but the DARAB reversed this, upholding the validity of the petitioners' CLOAs and finding that the Espejos had repurchased the Lantap property. The Court of Appeals (CA) then reversed the DARAB, agreeing with the Espejos and applying the Best Evidence Rule to find that the Espejos had indeed repurchased the Murong property. RBBI's subsequent petition for review to the Supreme Court was dismissed. The Petition: Petitioners Salun-at Marquez and Nestor Dela Cruz filed this Petition for Review on Certiorari under Rule 45 of the Rules of Court, assailing the CA's Decision and Resolution. They argue that the CA erred in applying the Best Evidence Rule, contending that the true intention of the parties, not the literal wording of the documents, should prevail. They assert that the issue involves an intrinsic ambiguity and failure of the written agreements to express the true intent of the parties, thus necessitating the consideration of parol evidence, specifically the contemporaneous and subsequent acts of the parties. Petitioners contend that the Deed of Sale was intended to transfer the Lantap property to the Espejos, and the VLTs were intended to convey the Murong property to them, despite the conflicting title numbers and descriptions in the documents.
Issue(s)
Whether the dismissal of RBBI’s appeal prejudices the petitioners. Whether the Court of Appeals erred in applying the Best Evidence Rule to determine the subject of the contracts. What are the subject properties of the parties’ respective contracts with RBBI?
Ruling
The Supreme Court granted the petition, reversed and set aside the Court of Appeals' decision, and reinstated the DARAB's decision. It ruled that the Deed of Sale between respondents and RBBI covered the Lantap property (TCT No. T-62836), and the Deeds of Voluntary Land Transfer and CLOAs of the petitioners covered the Murong property (TCT No. T-62096). The Register of Deeds was directed to make necessary corrections to the titles.
Ratio Decidendi
On the issue of RBBI's dismissed appeal: The Court held that the dismissal of RBBI's petition for review on certiorari in G.R. No. 163320 did not prejudice the petitioners. The dismissal was due to RBBI's failure to convincingly demonstrate reversible error, not necessarily because the CA decision was correct. Furthermore, RBBI had already divested itself of title to the properties before the action was filed, making its successors-in-interest (petitioners) not bound by the judgment against RBBI under the principle of res judicata. Petitioners, as parties to a separate appeal, were entitled to present their arguments articulately and effectively. On the application of the Best Evidence Rule: The Court ruled that the CA erred in applying the Best Evidence Rule. This rule applies when the inquiry is about the contents of a document, and the original document is the best evidence. In this case, there was no dispute regarding the contents of the Deed of Sale and the VLTs; the issue was whether these contents adequately expressed the true intention of the parties. The CA's refusal to look beyond the literal wording of the documents, while citing the Best Evidence Rule, was akin to applying the Parol Evidence Rule, which was also improper because respondents were not parties to the VLTs, and the case fell under the exceptions to the Parol Evidence Rule due to intrinsic ambiguity and failure to express true intent. On determining the intention of the parties regarding the subject properties: The Court found that the Deed of Sale between RBBI and the respondents covered the Lantap property, not the Murong property. This was evidenced by the respondents' failure to exercise acts of ownership over the Murong property after the sale, their continued possession of the Lantap property through respondent Nemi, and the fact that petitioners paid rentals for the Murong property to RBBI. Conversely, the VLTs in favor of petitioners covered the Murong property. This was supported by the fact that petitioners were already tenant-farmers of the Murong property, paying rentals to RBBI, and remained in possession after the VLTs. The reference to TCT No. T-62836 (Lantap property) in the VLTs was considered an honest but mistaken belief that it covered the Murong property, given the similar descriptions of the properties and the lack of specific barangay identification in TCT No. T-62836. The Court emphasized that in case of doubt, the intention of the contracting parties prevails over the wording, which is prone to mistakes and ambiguities, citing Articles 1370 and 1371 of the Civil Code and Rule 130, Section 13 of the Rules of Court.
Main Doctrine
When the terms of a written agreement are ambiguous or fail to express the true intent of the parties, resort must be had to evidence outside the instrument, particularly the contemporaneous and subsequent acts of the parties, to determine their true intention. The Best Evidence Rule and the Parol Evidence Rule are not applicable when the issue is not the contents of the document but the intent behind it, especially when the agreement fails to express the true intent of the parties or contains intrinsic ambiguities.