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350 Phil. 237
THIRD DIVISION
[ G.R. No. 115410, February 27, 1998 ]
JUAN CASABUENA, PETITIONER,
VS. HON. COURT OF APPEALS AND SPOUSES CIRIACO URDANETA AND OFELIA
IPIL-URDANETA, RESPONDENTS.
D E C I S I O N
ROMERO, J.:
A one hundred
square meter (100 sq.m.) lot located at the NDC Compound in Santa Mesa, Manila
is coveted by two hopeful parties in this Petition for Review on Certiorari. The rivals are the spouses Ciriaco and
Ofelia-Ipil Urdaneta, beneficiaries of the “Land of the Landless Program” of
the City of Manila, and Juan Casabuena, transferee of the right, title and
interest of Ciriaco’s assignee, Arsenia Benin.
Urdaneta is one
of the fortunate grantees of a parcel of land purchased by the City of Manila
and conveyed to its less privileged inhabitants, through its land reform
program.[1] On August 12, 1965, Urdaneta
assigned his rights and interests in one-half (1/2) of the lot to Arsenia Benin
covering full payment of his indebtedness in the amount of five hundred pesos (P500.00).[2] A deed of sale with mortgage[3] was executed, with Urdaneta
undertaking to pay the City the amount of five thousand five hundred pesos (P5,500.00)
for a period of forty years in 480 equal installments. On February 16, 1967,
after having incurred additional indebtedness in the amount of two thousand
pesos (P2,000.00), Ciriaco executed another deed of assignment[4] involving the whole lot,
with assignee Benin agreeing to shoulder all obligations including the payment of
amortization to the City, in accordance with the contract between it and
Urdaneta.[5] The parties verbally agreed that
Urdaneta could redeem the property upon payment of the loan within three (3)
years from the date of assignment; failure to pay would transfer physical
possession of the lot to Benin for a period of fifteen (15) years, without
actual transfer of title and ownership thereto.[6] A Transfer Certificate of Title was
issued in the name of Urdaneta, married to Ofelia Ipil.[7]
Meanwhile, the
administration of the property was assigned to brothers Candido and Juan
Casabuena,[8] to whom Benin had transferred her
right, title and interest for a consideration of seven thousand five hundred
pesos (P7,500.00). Notwithstanding this assignment, Benin constructed a
two-door apartment on the lot separately occupied by Jose Abejero and Juan
Casabuena, who collected rentals from the former. After the lot was fully paid for by the Urdanetas, a Release of
Mortgage was executed on February 7, 1984, under which deed the period of
non-alienation of the land was extended from five (5) years to twenty (20)
years.[9]
From 1973 to
1976, Juan Casabuena was Benin’s rental collector.[10] Their relationship soured, however,
compelling the latter to name as administrator Angel Tanjuakio, who filed a
complaint for ejectment against petitioner, alleging that the latter stopped
paying rentals on June 15, 1980 and ignored a demand letter to him. For his
part, petitioner asserted that he did not receive copies of the receipts issued
by Tanjuakio because the tenor of the writings therein made him appear as a
tenant of the premises paying rentals and not paying for monthly amortizations
for the construction cost of the building.[11] Finding that the receipts issued by
Tanjuakio were “insufficient” to prove his ownership over the property, thereby
depriving him of a better right of possession over the premises than the
defendant (petitioner herein), the city court[12] dismissed the complaint. Affirmed by the Regional Trial Court of
Manila,[13] the decision was again affirmed by
the appellate court.[14] His motion for reconsideration
having been denied,[15] Tanjuakio appealed to this Court
armed with a petition for review on certiorari which, to his
disappointment, was denied.
Upon learning of
the litigation between petitioner and Benin, Urdaneta asked them to vacate the
property and surrender to him possession thereof within fifteen (15) days from
notice. Petitioner’s adamant refusal to
comply with such demand resulted in a complaint for ejectment and recovery of
possession of property filed by Urdaneta against him (Casabuena), Benin and
Tanjuakio.[16] For lack of jurisdiction, the
complaint was dismissed by the city court. The Urdaneta spouses then entered
into an agreement with Benin whereby the latter would surrender to them the
property with the duplex constructed thereon. On November 3, 1987, they filed a complaint for recovery of possession
of the property with damages against petitioner and Thelma Casabuena, representing
the heirs of Candido Casabuena.
Amid the
sprouting controversies involving the lot, the Urdaneta spouses succeeded in
having the Court declare them as its true and lawful owners with the deed of
assignment to Benin merely serving as evidence of Ciriaco’s indebtedness to her
in view of the prohibition against the sale of the land imposed by the City
government.
On appeal, the
appellate court affirmed[17] the findings of the lower
court. A motion for reconsideration was
denied. Unfazed by the protracted litigious
process, petitioner files this petition for review on certiorari, arguing that
the assignment by Benin was made in her capacity as creditor of the spouses,
thus allowing her to transfer ownership of the property to her assignees.
Can a deed of assignment
transfer ownership of the property to the assignee?
At the bottom of
this controversy is the undisputed fact that Ciriaco Urdaneta was indebted to
Benin, to secure which debt the spouses ceded their rights over the land
through a deed of assignment. An
assignment of credit is an agreement by virtue of which the owner of a credit,
known as the assignor, by a legal cause, transfers his credit and its accessory
rights to another, known as the assignee, who acquires the power to enforce it
to the same extent as the assignor could have enforced it against the debtor.[18] Stated simply, it is the process of
transferring the right of the assignor to the assignee, who would then be
allowed to proceed against the debtor.[19] The assignment involves no transfer
of ownership but merely effects the transfer of rights which the assignor has
at the time, to the assignee. Benin
having been deemed subrogated to the rights and obligations of the spouses, she
was bound by exactly the same conditions to which the latter were bound.[20] This being so, she and the
Casabuenas were bound to respect the prohibition against selling the property
within the five-year period imposed by the City government.
The act of
assignment could not have operated to efface liens or restrictions burdening
the right assigned,[21] because an assignee cannot acquire
a greater right than that pertaining to the assignor.[22] At most, an assignee can only
acquire rights duplicating those which his assignor is entitled by law to
exercise. In the case at bar, the
Casabuenas merely stepped into Benin’s shoes, who was not so much an owner as a
mere assignee of the rights of her debtors. Not having acquired any right over the land in question, it follows that
Benin conveyed nothing to defendants with respect to the property.
While it is true
that the duplex is owned by Benin, the Casabuenas mistakenly believed
that the deed included cession of rights of ownership over the land as
well. The encumbrance of the property
may be deemed as an exercise of their right of ownership over the property
considering that, under the law, only owners of certain properties may mortgage
the same.[23] By mortgaging a piece of property,
a debtor merely subjects it to a lien but ownership thereof is not parted with.[24] As a result, notwithstanding the
encumbrance of the Bulacan lot through a deed of assignment in favor of Benin,
the spouses Urdaneta remain its owners, to the exclusion of petitioner.
WHEREFORE, considering the foregoing, the
decision is AFFIRMED. No
costs.
SO ORDERED.
[1]
Condition No. 10, Deed of Sale with Mortgage between the City of Manila
and Ciriaco Urdaneta.
[2]
Exh "B"
[3]
Exhibit “E”.
[4]
Exhibit "C"
[5]
Ibid.
[6]
Records, pp. 2-3. This agreement is reflected in the subsequent written
agreement dated May 27, 1987, between the Urdaneta spouses and Arsenia Benin.
[7]
Exhibit “A”.
[8]
Exhibit “G”.
[9]
Exhibit "F".
[10]
Rollo, p. 44.
[11]
Rollo, p. 57.
[12]
Thru Judge Priscilla C. Mijares.
[13]
Exhibit “5”.
[14]
Decision penned by Associate Justice Jose A.R. Melo, with concurring
opinions by Associate Justices Milagros A. German and Santiago M. Kapunan.
[15]
Rollo, p. 67.
[16]
Exhibit “M”.
[17]
Penned by Associate Justice Angelina S. Gutierrez.
[18]
Tolentino, Civil Code of the Philippines (Book V), p. 188.
[19]
Nyco Sales Corp. vs. BA Finance Corps. 200 SCRA 637 (1991).
[20]
Koa vs. Court of Appeals, 219 SCRA 541 (1993).
[21]
Gonzales vs. Land Bank of the Philippines, 183 SCRA 520 (1990).
[22]
Supra.
[23] Article 2085 of the Civil Code provides: “The following requisites are essential to the contracts of
pledge and mortgage:
xxx
(2) (t)hat the
pledgor or mortgagor be the absolute owner of the thing pledged or mortgaged
x x x ”
[24]
Adlawan vs. Torres, 233 SCRA 645 (1994).