Domilos v. Spouses Pastor
REITERATIONFacts
The Antecedents: This case originates from a dispute over a parcel of land in Baguio City, initially possessed by Victoriano Domilos since 1953. In 1976, Victoriano transferred his rights to his son, petitioner Lino Domilos. Shortly thereafter, Sergio Nabunat and his family, who had previously occupied the land, returned and built a house without Lino's consent. Lino filed a forcible entry complaint against Nabunat, which he won, leading to Nabunat's eviction and demolition of his house. Years later, in 1986, Lino entered into a compromise agreement with Can-ay Palichang, dividing the property among themselves and other parties, including Sergio Nabunat and his wife. Subsequently, Lino, Nabunat, and Palichang sold various portions of their respective shares to different individuals, including respondents Spouses John and Dorothea Pastor and Joseph L. Pastor. Procedural History: In May 1989, Lino sought to execute the earlier forcible entry judgment by filing a motion for a 4th alias Writ of Execution. Concurrently, Lino and Palichang executed a revocation of their 1986 compromise agreement. The court granted Lino's motion, leading to the issuance of the 4th alias Writ of Execution and the demolition of some properties belonging to the Spouses Pastor. Consequently, the Spouses Pastor and Joseph Pastor filed a suit for annulment of the order, writ, revocation of the compromise agreement, and recovery of possession, arguing they were rightful owners of portions of the land acquired through valid sales. Lino, Palichang, and Nabunat denied the allegations. The Regional Trial Court (RTC) ruled in favor of the Pastors, declaring them rightful owners of specific parcels of land and ordering the surrender of possession. The RTC later modified its decision to state that the Pastors acquired lawful rights through valid conveyance. The Court of Appeals (CA) affirmed the RTC's decision. The Petition: Petitioner Lino Domilos filed this petition for review on certiorari under Rule 45 of the Rules of Court, assailing the CA's decision that affirmed the RTC's ruling in favor of the respondents, Spouses John and Dorothea Pastor, and Joseph L. Pastor. Lino argues that the RTC and CA decisions failed to state the law and jurisprudence supporting their judgments, violating constitutional and procedural rules. He also questions the validity of the compromise agreement as a source of right, given it was not judicially approved, and contends the CA erred in not considering that the Pastors were buyers in bad faith and thus lacked legal standing to assail the revocation of the compromise agreement. Furthermore, Lino challenges the CA's application of Article 1131 of the Civil Code. The Supreme Court, however, denied the petition, affirming the CA and RTC decisions, finding that the lower courts' decisions were supported by law and jurisprudence, that the Pastors had a legal and real interest in the properties, and that Lino could no longer move to execute the earlier decisions due to the lapse of time.
Issue(s)
Whether the RTC and CA decisions violated Article VIII, Section 14 of the Constitution and Rule 36, Section 1 of the Rules of Court by failing to state the law and jurisprudence on which they were based. Whether the compromise agreement, not submitted for judicial approval, could be a valid source of right. Whether the CA erred in not considering judicial admissions proving the Pastors were buyers in bad faith. Whether buyers in bad faith have legal interest to assail the revocation of a compromise agreement to which they were not parties. Whether Article 1131 of the Civil Code was properly applied.
Ruling
The Court denies the petition for review on certiorari and affirms the Decision of the Court of Appeals and the Regional Trial Court, finding the Pastors to be the rightful owners of the subject properties.
Ratio Decidendi
On the alleged violation of Article VIII, Section 14 of the Constitution and Rule 36, Section 1 of the Rules of Court: The Court disagreed with Lino's contention. A perusal of the records showed that both the RTC and CA decisions summarized the essential facts and supported their rulings with applicable law and jurisprudence. The Court reiterated the principle that decisions need only state the "essential ultimate facts" and need not discuss every piece of evidence. The purpose of the constitutional and procedural rules is to inform the parties of how the decision was reached, which was fulfilled by both the RTC and CA decisions through their thorough summaries of facts, discussions of law, and presentation of evidence. Therefore, no error could be attributed to either decision. On the validity of the compromise agreement as a source of right: The Court affirmed that the Pastors had a legal and real interest in the subject properties. The compromise agreement, being a contract creating real rights, is governed by the principles of contracts under the Civil Code. Article 1312 explicitly states that third persons who come into possession of the object of a contract creating real rights are bound thereby. The Pastors, as third persons who came into possession of portions of the property, were bound by the compromise agreement. Furthermore, rescission or revocation of the agreement could not take place because the properties were already in the legal possession of the Pastors, who did not act in bad faith. Their shares were validly conveyed, and their objection to the revocation could be treated as an adverse claim. On whether the Pastors were buyers in bad faith: The Court found that the Pastors had a legal and real interest in the subject properties. The compromise agreement created real rights, and third persons who came into possession of the object of the contract are bound by it, subject to specific laws. The Pastors acquired lawful rights over the properties by virtue of a valid conveyance. The revocation of the compromise agreement by Lino and Palichang could not affect the Pastors' acquired rights as they were already in legal possession of their shares and did not act in bad faith. Their objection to the revocation was treated as an adverse claim, validating their interest. On the legal interest of buyers in bad faith to assail the revocation: The Court found that the Pastors had a legal and real interest in the subject properties. The compromise agreement created real rights, and third persons who came into possession of the object of the contract are bound thereby. The Pastors acquired lawful rights over the properties by virtue of a valid conveyance. The revocation of the compromise agreement by Lino and Palichang could not validly include the Pastors' shares without their knowledge and consent, as they were already in legal possession and did not act in bad faith. Their objection to the revocation was treated as an adverse claim, thus giving them legal standing to object. On the application of Article 1131 of the Civil Code: The Court agreed with the CA in invalidating the motion for a 4th alias writ of execution. The MTCC decision became final in 1979. Under Rule 39, Section 6 of the Rules of Court, Lino had five years from 1979 to file a motion for execution. However, the motion was filed on May 9, 1989, more than 10 years later. Even under Article 1144(3) of the Civil Code, Lino had 10 years from the finality of the RTC judgment (January 6, 1979) to bring an ordinary civil action, which also lapsed by May 1989. Therefore, the writ of execution could no longer be lawfully enforced, and the RTC did not err in invalidating it.
Main Doctrine
A compromise agreement creating real rights binds third persons who come into possession of the object of the contract, provided they did not act in bad faith. Rescission or revocation of such an agreement cannot take place if the objects are already in the legal possession of good faith third parties. Furthermore, a motion for writ of execution must be filed within five years from the finality of the judgment, and after the lapse of this period, the judgment may only be enforced by an ordinary civil action filed within ten years.