Rojales v. Dime
REITERATIONFacts
The Antecedents: Juana Vda. de Rojales (petitioner) was the registered owner of Lot 4-A. Marcelino Dime (respondent) alleged that on May 16, 1999, petitioner conveyed Lot 4-A to him under a pacto de retro sale for P2,502,932.10, with a reserved right for petitioner to repurchase the property within nine months. Petitioner denied executing the pacto de retro sale, claiming the document was falsified and that she had merely mortgaged the property. She asserted that the fingerprint on the document was not hers and that the notary public's signature was also forged. She further claimed that the property was initially mortgaged to Batangas Savings and Loan Bank, redeemed by Antonio Barcelon, who then mortgaged it to respondent. Procedural History: Respondent filed a petition for consolidation of ownership with the Regional Trial Court (RTC). Petitioner denied the sale and alleged falsification. The RTC referred the thumbmark to the National Bureau of Investigation (NBI), which concluded that the thumbmark on the pacto de retro contract belonged to the petitioner. Respondent passed away and was substituted by his heirs. The respondent's heirs later filed a motion to dismiss, alleging that Rufina Villamin, respondent's common-law wife, provided the funds for the purchase, and consolidating ownership would unjustly enrich them. The RTC initially dismissed the case with prejudice, but later set aside the dismissal and, after further reception of evidence, dismissed the case for lack of merit. The Court of Appeals (CA) reversed the RTC's decision, ordering the consolidation of ownership in favor of the respondent, ruling that Villamin was not an indispensable party. Petitioner's motion for reconsideration was denied, leading to the present petition. The Petition: Petitioner seeks review on certiorari of the CA's decision, raising four issues. Primarily, she argues that the CA erred in giving due course to the appeal despite the respondent's heirs' manifestation to dismiss the case and in disregarding the necessity of verification for the motion for reconsideration. She also contends that the CA erred in allowing the consolidation of title despite the alleged admission of unjust enrichment and in ruling that she failed to overcome the presumption of regularity of the pacto de retro sale. Petitioner asserts that the CA should not have relied on the NBI's fingerprint examination and that the respondent's heirs' motion to dismiss, which suggested unjust enrichment due to Villamin providing the funds, should have been given more weight. The core of her argument is that the pacto de retro sale was not genuine and that the CA improperly disregarded the claims of the respondent's heirs regarding the source of funds.
Issue(s)
Whether the Court of Appeals erred in giving due course to the appeal despite the manifestation of the heirs of Marcelino Dime to dismiss the case, and whether the Court of Appeals erred in allowing the consolidation of the title despite the manifestation and admission of the respondents that continuing so would constitute unjust enrichment. Whether the Court of Appeals erred in disregarding the necessity of verification of the respondents in the motion for reconsideration filed before the Regional Trial Court. Whether the Court of Appeals erred when it ruled that the petitioner failed to overcome the presumption of regularity of the subject pacto de retro sale.
Ruling
The petition is denied. The Decision and Resolution of the Court of Appeals are affirmed. Ownership over Lot 4-A is consolidated in the name of the vendee a retro, Marcelino Dime.
Ratio Decidendi
On the issue of the heirs' motion to dismiss and unjust enrichment: The Court affirmed the principle that a client has the exclusive control over the subject matter of litigation and may settle the case. However, it clarified that the source of the purchase price (Villamin) is not an indispensable party in a pacto de retro sale consolidation case. Applying Articles 1311 and 1607 of the Civil Code, the Court reiterated that contracts take effect only between the parties, their assigns, and heirs. Villamin, not being privy to the contract between petitioner and respondent, could not maintain an action for consolidation in her name. The Court also noted that the RTC relied on bare assertions regarding Villamin providing the funds, and the records lacked evidence to support this. Even if Villamin was the source of funds, her legal obligation to respondent is separate from the pacto de retro sale, making consolidation in her name untenable. On the issue of verification: The Court held that non-compliance with verification is not a jurisdictional defect and does not necessarily render a pleading fatally defective. Verification is a formal requirement intended to ensure good faith. The RTC waived strict compliance in the interest of justice and equity by acting on the motion for reconsideration and allowing further reception of evidence. Therefore, dismissing the case based on non-compliance with verification was erroneous. The Court reiterated that Villamin was not an indispensable party, thus the case should not have been dismissed on that ground. On the issue of the presumption of regularity of the pacto de retro sale: The Court found that the petitioner failed to present clear and convincing evidence to overcome the presumption of regularity accorded to a notarized document. The NBI Fingerprint Examination concluded that the thumbmark on the pacto de retro contract belonged to the petitioner. The petitioner's lawyer manifested that the petitioner was bound by the NBI's findings, and there was no longer an issue regarding the authenticity and genuineness of the thumbmark. The petitioner's inconsistent testimonies regarding the mortgage of the property and the circumstances under which respondent borrowed the title further cast doubt on her credibility. Her claim that respondent merely borrowed the title was contradicted by her daughter's testimony. The Court concluded that the petitioner failed to prove that the agreement was not a pacto de retro sale but a loan secured by a mortgage.
Main Doctrine
The source of the purchase price for a property subject to a pacto de retro sale is not an indispensable party in an action for consolidation of ownership, as the contract only binds the parties thereto and their heirs or assigns, not third persons who are not privy to the agreement.