537 Phil. 770
CALLEJO, SR.,J.:
Capt. Pantaleon U. del Rosario Metro Cebu Abattoir and Meat Processing Services City of Cebu
Sir:
When we jointly signed the contract to Buy and Sell a portion of the Asinan Property to the City of Cebu, it was agreed that you will comply with the following conditions, to wit:THESE FOREGOING CONDITIONS were mutually agreed upon precedent to our signing of the above-stated contract, so please sign your conformity in the space provided for to make this agreement final, executory and effective immediately.
- THAT the areas sold to the City of Cebu for its abattoir project, the subject of the above contract, will be entirely taken from the share of Teresita R. Reyes de Leon bought by your son Vicente B. del Rosario per Deed of Absolute Sale dated January 20, 1985, entered as Doc. 490, page 98, Book 52, series of 1985 of the Notarial Registry of Notary Public Carlito P. Valente;
- THAT all proceeds in connection with the sale of the above-mentioned properties shall accrue in your favor only;
- THAT you will pay me for the cost of the house and bodega which will be demolished when the abattoir building will be constructed;
- THAT modern sanitation and pollution controls be implemented in accordance with the standards acceptable to the National Pollution Control Commission;
- THAT the City of Cebu will provide a ten (l0)-meter road right of way for passage to our property at their expense.
Truly yours,(Signature)
VICENTE S. DEL ROSARIO
NOW, THEREFORE, the City of Cebu represented by the City Mayor, Ronald R. Duterte, through the Office of the City Treasurer, hereby deposits in escrow with the Philippine National Bank, Cebu Branch the total amount of P2,156,040.00 and the Vendors pursuant to their obligations under the contract hereby allows the peaceful and uninterrupted possession by the Vendee of the aforementioned parcels of land which shall take effect on January 7, 1986, subject to the following conditions:As agreed upon, the City of Cebu deposited in escrow the purchase price with the Philippine National Bank, Cebu City Branch. The City also engaged the services of the H. Franco Construction Company for the construction of the abattoir. The contractor commenced the work and as of early 1986 had completed 40% of the work.
- The vendors Vicente S. del Rosario and Pantaleon U. del Rosario may not withdraw any amount from said deposit in escrow until they shall have delivered to the Vendee City of Cebu all the clean titles to the aforementioned eight parcels of land, however, if the titles are not issued at one and the same time, the Vendee may allow the Vendors to partially collect for every title or titles they could deliver to the City of Cebu.
- The City of Cebu shall immediately facilitate the release of the sum deposited as soon as the clean title or titles shall have been delivered to the City of Cebu.
- That in spite of the delay in the delivery of the clean titles and therefore the vendors cannot withdraw the amount deposited, the Vendee City of Cebu shall have the absolute right of possession of the aforementioned parcels of land and the Vendors undertake not to disturb said possession and that as agreed upon in the Contract to Buy and Sell the Vendors shall cause the immediate clearing of the properties from any and all obstructing improvements and the filling up of the existing fishponds.[7]
1) The ownership of the vendees of Lot 3443, 3447 and 3448 subject of the Contract to Buy and Sell be documented;All these were rejected by respondent in his reply letter[10] dated July 8, 1986, where he emphatically stated that he could not agree to the proposal to make the area into a relocation site for squatters, and that such proposal was a naive attempt to taunt and harass him.
2) If the City decides to relocate the abattoir, the properties will be used for the relocation of squatters;
3) A renegotiation of the purchase price;
4) The decision of the RTC in Bohol had been annotated at the dorsal portion of the titles of the property. Steps should be undertaken to deliver titles to the property to the City free from any other liens or encumbrances.[9]
Vicente prayed for moral damages and unrealized monthly rentals of P75,000.00, or, in the alternative, that the amount deposited in escrow with the PNB, inclusive of interests be given to him:
- That immediately after assuming office as OIC-Mayor of the City of Cebu, John H. Osmena publicly announced that the City of Cebu will not proceed with the construction of the abattoir in plaintiff's property;
- That consistent with his foregoing public pronouncement, and imposing his unilateral will and decision, OIC-Mayor John H. Osmena ordered the stoppage of the construction of the abattoir at plaintiffs property and in lieu thereof constructed another abattoir in another site located in the City of Mandaue, Cebu;
- That by constructing another abattoir in another place, i.e., in the City of Mandaue, defendant City of Cebu, through then OIC-MayorJohn H. Osmena have effectively abandoned its original plan of constructing and operating an abattoir at the site acquired by defendant City of Cebu from herein plaintiff and the late Vicente S. del Rosario, thereby breaching the contract it entered into with the latter;
- That plaintiff had never intended that his property be used for any other purpose than as a site for the Cebu City Abattoir only, its use for any other purpose will never be allowed and, in fact, the civil works on the abattoir in his property was already in advanced stage and the stoppage of the contraction and eventual abandonment of the project thereat had caused irreparable damages consisting of among others, of the destruction of fishponds and saltworks which deprived and will continue to deprive plaintiff of income in the amount estimated to be not less than P250,000.00, or as may be proven during the trial on the merits of the case;
- That the excavations for the foundation of the abattoir which rendered the area unproductive and the presence of the unfinished abattoir which now constitute a perpetual obstruction will prevent the use of the premises for the purpose it was used before the buildings were constructed.[18]
WHEREFORE, foregoing premises considered, it is most respectfully prayed that after trial on the merits, judgment issue in favor of plaintiff and against defendant:In its Answer to the Complaint, the City of Cebu alleged, by way of special and affirmative defenses, that the plaintiff was not a party to the Contract to Buy and Sell and Agreement, hence, has no cause of action for rescission. The construction of the abattoir is not a suspensive condition, and there is no provision in the Contract to Buy and Sell, or in the Agreement, which states that the failure of the abattoir will entitle plaintiff to rescind the same. The use of the property for the construction of a modern abattoir is only an incidental condition which does not affect the efficacy of the contracts; hence, the plaintiff has no cause of action to rescind the deeds. Neither will the non-construction of the abattoir constitute performance of a negative resolutory condition that terminates the contract. The non-construction of the abattoir cannot also be considered as the cause or consideration of the contract of the "Contract to Buy and Sell" and the subsequent "Agreement" because the consideration is the P2,156,040.00 agreed upon by the parties. The City declared that the plaintiff is not entitled to rescission because in the first place, the clean titles to the lots had not been delivered. Moreover, plaintiff's claim for monthly rental of P75,000.00 is completely devoid of any factual and contractual basis. The City claimed that the plaintiff should be compelled to produce the titles for those parcels of land which had not yet been transferred in its name otherwise the amount deposited in escrow could never be legally withdrawn.[20]Such other reliefs and remedies as may be consistent with law, justice and equity are likewise prayed for.[19]
- Declaring the RESCISSION of the Contract to Buy and Sell (Annex "A" hereto) and Agreement (Annex "B" hereto), and all other agreements related thereto;
- Ordering the defendant City of Cebu, to:
(a) Remove all improvements introduced in the property of plaintiff by reason of or as a consequence of the Contract to Buy and Sell and the Agreement:
(b) Restore the property to plaintiff on the same condition before defendant City of Cebu took possession thereof and for defendant to pay the plaintiff monthly rentals of at least SEVENTY FIVE THOUSAND (Php75,000.00)PESOS; from August 23, 1985; or in the alternative, the amount deposited in escrow together with the accrued interest be paid to plaintiff as rentals.
(c) Pay plaintiff compensatory damages in the amount not less than P250,000.00;
(d) Pay plaintiff not less than P250,000.00 as moral damages; P100,000.00 as exemplary damages; P70,000.00 as attorney's fees; P30,000.00 as litigation expenses; and other costs, and;
1) Whether or not defendant City of Cebu culpably violated Art. 1308 of the New Civil Code of the Philipines?For its part, the City of Cebu defined the issues as follows:
2) Whether or not defendant violated the principal condition of the Contract to Buy and Sell when defendant City of Cebu stopped and abandoned the on-going construction of the Abattoir at plaintiff's property and transferred it to another site in Mandaue City?
3) Whether or not defendant City of Cebu can be held liable for the restoration of the property, pay rentals, damages and attorney's fees called in the complaint?[21]
1) Whether or not the Contract to Buy and Sell entered by the parties may be validly rescinded? In other words, whether or not the action for rescission is barred by prescription?On February 26, 2003, Isidro de Leon and Michael de Leon filed a Motion for Leave to Intervene as defendants. They averred that they are husband and son, respectively, of Teresita Reyes-de Leon, the former owner of the properties subject matter of the Amended Complaint, and that they had filed a complaint for the declaration of nullity of the January 20, 1985 Deed of Absolute Sale in the RTC of Cebu City, docketed as Civil Case No. Ceb-24698. Appended thereto was the Answer-in-Intervention of the movants as well as a copy of the complaint in Civil Case No. Ceb-24698.[23] Only the plaintiff opposed the motion contending, inter alia, that the movants had no more interest over the properties; in any event, their interest may amply be protected in the cases for partition pending between the parties over the same properties - Civil Case No. 24698 and Civil Case No. 17236.
2) Whether or not Vicente B. del Rosario herein represented by his Attorney-in-Fact Pantaleon U. del Rosario has the legal personality to solely and single-handedly ask for the rescission of the contract without taking into consideration the collective decision of the co-heirs of the late Vicente S. del Rosario? And owing to the alleged claim of the would-be intervenors who are the heirs of the late Teresita Reyes-de Leon would bolster the lack of legal personality for Vicente B. del Rosario to ask for rescission.
3) Whether or not the defendant City could be held liable for damages and attorney's fees in view of the complaint for rescission filed by the plaintiff?[22]
a) Whether plaintiff has cause of action against defendant?On March 17, 2004, the court issued an Order declaring that the case was submitted for decision only for the interpretation of the contract and not for the claim of damages. In short, the court declared that the plaintiff should waive his claim for damages, otherwise, the case cannot be submitted for decision.[27] On April 19, 2004, the plaintiff, through counsel, filed a "Waiver of Claim for Damages" so that the case could be submitted for decision.[28]
b) Whether Pantaleon del Rosario can lawfully and properly represent VICENTE B. DEL ROSARIO in this case?
c) Whether the action for rescission is barred by prescription or not?
d) Whether the construction of the abattoir is the suspensive or resolutory condition which affects the efficacy of the contracts which herein plaintiff sought to be rescinded.
e) Whether plaintiff can rightfully withdraw the deposit in escrow despite the fact that he has not delivered the clean titles of the properties to the defendant City of Cebu?
f) Whether plaintiff can legally and rightfully convert the money deposited in escrow meant for payment of the lots into monthly rentals;
g) Whether judicial novation of contract is allowed?
h) Whether plaintiff is guilty of estoppel and laches?
i) Whether defendants are liable for damages and attorney's fees?[26]
WHEREFORE, premises considered, a decision is hereby rendered in favor of plaintiff and against the defendant, as follows:In an Urgent Manifestation[30] filed on June 14, 2004, the plaintiff informed the court that the defendant had transferred the deposit in escrow to the Land Bank of the Philippines.IT IS SO ORDERED.[29]
- The rescission prayed for by the plaintiff is granted, consequently the Contract to Buy and Sell, dated August 23, 1985, which was notarized as Document No. 883, Page No. 77, Book II, by Notary Public Lorenda E. Amion, is hereby ordered RESCINDED;
- Consequently, defendant is directed to pay rentals to plaintiff to be taken from the whole amount of TWO MILLION ONE HUNDRED FIFTY-SIX THOUSAND AND FORTY (P2,156,040.00) PESOS deposited by defendant in escrow with the Philippine National Bank, Cebu Branch, and to include all the interests it earned up to the present.
- Defendant is also directed to remove all the improvements it introduced on the subject lots; and
- In addition, defendant is ordered to pay plaintiff P50,000.00 attorney's fees and P30.000.00 litigation expenses.
The affidavit by so-called attorney-in-fact Pantaleon del Rosario attached to the motion for summary judgment did not mention of any claim for damages which warrant the award rendered by the Court. Furthermore, plaintiff submitted a Waiver of Damages on April 19, 2004. These matters are judicial admissions or omissions which do not need any further proof. The award of litigation expenses by the court in favor of the plaintiff is erroneous and misguided because such award is disallowed, there being no price for litigation. (Filinvest Corporation vs. IAC, et al., GR No. 65935, Sept. 30, 1988)The plaintiff opposed the motion, contending that although he waived his claim for damages, he did not waive his claim for unrealized rentals which are not synonymous to damages.
However, the court, for reasons which defendant could not fathom nor comprehend has amazingly awarded damages in the form of rentals to the plaintiff equivalent to the amount of compensation for property as if plaintiff would be in the right position to submit clean title of the property to defendant.
The factual basis of said damages in the form of rentals are wanting including the factual basis for the award of attorney's fees and litigation costs because no evidence was ever presented by the plaintiff to that effect. On the contrary, an express waiver was made renouncing the same."Actual damages cannot be awarded in the absence of receipts to support the same, in line with the rule that actual damages cannot be allowed unless supported by evidence on record." (PEOPLE vs. (sic) G.R. Nos. 124384-86, 2000 January 28, 1st Division)Even the document presented by the plaintiff require that payment of the property shall only be made when title shall be transferred to the defendant. The same is quoted in the decision on page 7, however, the same is given nary a consideration. Further, the payment of rental is never a consequence of rescission.[31]
WHEREFORE, foregoing premises considered, it is most respectfully prayed that after trial on the merits, judgment issue in favor of Plaintiff-in-Intervention and against Defendants-in-Intervention:On July 9, 2004, plaintiff filed a Motion[33] for a special order for execution, citing the rulings of this Court in Navarra v. Labrador[34], PVTA v. Lucero, et al[35]. The City of Cebu opposed the motion contending, inter alia, that:Such other relief and remedies as may be consistent with law, justice and equity are likewise prayed for.[32]
- Declaring the RESCISSION of the Contract to Buy and Sell (ANNEX "B" hereto) and Agreement (ANNEX 'C" hereto), and that other agreements related thereto;
- Ordering the City of Cebu, to Remove all improvements introduced in the property of the late Vicente S. del Rosario and Pantaleon U. del Rosario by reason of or as a consequence of the Contract to Buy and Sell and the Agreement;
- Ordering the City of Cebu to Restore the property to the Plaintiff-in-Intervention/Intervenor and other legal heirs of the late Vicente S. del Rosario, as well as to co-owner Pantaleon U. del Rosario, to the same condition when City of Cebu took possession thereof;
- Ordering the City of Cebu to pay to the Plaintiff-in-Intervention/Intervenor and the other legal heirs of the late Vicente S. del Rosario, as well as co-owner Pantaleon U. del Rosario, REASONABLE RENT in consideration for the almost twenty (20) years of its absolute possession, control and use of the properties above cited (1985-to date).
- Declaring that the Plaintiff-in-Intervention Carlos U. del Rosario and other legal heirs of the late Vicente S. del Rosario is entitled to the one half (1/2) or fifty (50) percent of the said reasonable rent and other award of this Court, while the other half (1/2) pertain to the co-owner Pantaleon U. del Rosario.
- Award to the Plaintiff-in-Intervention reasonable attorney's fees, damages and cost of litigation as may be proven in court.
The plaintiff likewise opposed the motion of Carlos del Rosario for leave to intervene on the ground that his interests over the property and on the purchase price thereof may be adequately protected in Civil Case No. 17236.
- For the Court to allow the execution pending appeal of its decision as prayed for by the Plaintiff would have very serious consequences to the Defendant. There is a pending case for partition among the heirs of the late Vicente S. Del Rosario wherein certain parcels of land subject of the Contract to Buy and Sell are included in the list of the properties of the decedent. Another claimant may be the heirs of the late Teresita de los Reyes who are questioning the spurious claim of the Plaintiff to the decedent's inherited properties. Their case for certiorari is awaiting decision from the Supreme Court. To prematurely execute the decision would pre-empt the right of the Defendant to seek a review of the questioned decision to a higher court. The Plaintiff's claim of ownership to the properties which are subject of the Contract to Buy and Sell is highly questionable as he does not have any privity of contract with the city government of Cebu. It is a fact that if judgment is executed and, on appeal, the same is reversed, although there are provisions for restitution, often times, damages may arise which cannot be fully compensated. The city stands to suffer irreparable injury because it is hardly expected that the Plaintiff shall be able to make complete and full restitution. Public funds are at stake and should this be released to the wrong person, it is exposing itself to possible lawsuits from the legal heirs of the late Vicente S. del Rosario;
- Why the obvious haste as clearly displayed by the attorney-in-fact of the Plaintiff and his counsel? There are still two (2) pending incidents left unresolved by the Court - the motion for reconsideration filed by the Defendant and the Motion for Intervention filed by Mr. Carlos U. del Rosario. It would seem that the attorney-in-fact, who is just one of the co-heirs of the late Vicente S. del Rosario through some maneuverings, would want to deprive his siblings their rights, by claiming the proceeds on the pretext that all these are his son's sole and rightful share.
- To consider the mere posting of a bond a "good reason" would precisely make immediate execution of a judgment pending appeal routinary, the rule rather than the exception. To follow such line of reasoning would mean that judgments would be executed immediately, as a matter of course, once rendered, if all that the prevailing party needed to do was to post bond to answer for damages that might result therefrom. This is a situation, to repeat, neither contemplated nor intended by law. (David vs. Court of Appeals, 342 Phil. 387, 391 ).[36]
In the decision dated May 28, 2004, the court considered the fact that the subject real properties, consisting of eight (8) lots with a total area of 21,000 square meters or more than two hectares, are in the absolute possession and control of defendants since January 6, 1986 up to the present on the basis of a stipulation in the contract of buy and sell between herein parties that defendant would pay them in the amount of P2,156,040.00 placed in escrow deposit with the Philippine National Bank, Cebu City. Until now or for a period of eighteen (18) years, the defendant has not paid a single centavo to the plaintiff. So the court believes the defendant should pay reasonable rentals to the plaintiff in keeping with the law against unjust enrichment, although the plaintiff made an express waiver of its claim for damages.Plaintiff moved for the reconsideration of the Order, asking for the reduction of the surety bond. On the part of the City of Cebu, it averred that the court no longer had jurisdiction to grant the motion for execution pending appeal because it already ordered the transmittal of the records to the CA. Besides, there is no good reason to support the granting of the motion for execution pending appeal.
In short, the foregoing facts are the "good reason" that the court considers in granting the execution pending appeal. Moreover, it could not be disputed that the eight (8) lots subject matter of the contract between the plaintiff and defendant City of Cebu are located within the city proper of Cebu City, so the yearly rental of P547,042.237, which is only P45,586.85 a month , appears just and reasonable under the circumstances. Thus, the original amount in escrow deposit with PNB, Cebu City, has now accumulated to P9,846,760.27 (as per addendum) to include the increments, which amount was already transferred already to the Land Bank of the Philippines, Banilad Branch, Cebu City. The rentals should be taken from the aforesaid amount.[42]
On the FIRST REASON, the court believes it still has jurisdiction to grant the Motion for Execution Pending Appeal because the records of the case are still in its possession and it has not yet transmitted them to the Court of Appeals.On October 29, 2004, the court issued an Amended Order for Execution, the dispositive portion of which reads:
On the SECOND REASON, the court does not doubt there is a good reason to support the execution pending appeal, as may be stated as follows:
- On August 23, 1985, defendant City of Cebu, through then City Mayor Ronald Duterte, entered into a Contract to Buy and Sell with the plaintiff on the latter's Lots 8401, 8403, 8404, 8405, 3113, 3114, 3147 and 3148, with a total area of 21,000 square meters to be used as a City Abattoir. The stipulated purchase price for the eight (8) lots is P2,156,040.00, which defendant deposited in escrow with the Land Bank of the Philippines, Banilad Branch, Cebu City.
- After the EDSA People Power, when John H. Osmena became the OIC-Mayor of Cebu City he unilaterally stopped the on-going construction of the abattoir on the plaintiff's lots and transferred the same to Mabolo, Cebu City where it is now located. For nineteen (19) continuous years and until now, defendant is in actual possession of subject lots, to the damage and prejudice of the plaintiff who has not received a single centavo by way of income or considerable payment thereof. With these facts, the court believes the present appeal interposed by defendant is patently dilatory.[43]
WHEREFORE, you are commanded to serve a copy of this Writ upon the Land Bank of the Philippines, Plaza Independencia Branch, Cebu City and direct them to release to the plaintiff the amount of P9,846,760.27, representing the principal and interest under account Nos. 1451, 1024-58 and 1451 1024-66, respectively, and deliver the same to the plaintiff, plus the lawful fees for the service of this writ after the commission due thereon shall have been paid to the Ex-Officio Sheriffs Official Cashier for which an official receipt shall be issued therefore, and thereafter return this Writ to this court with your proceedings endorsed thereon, in accordance with Sec. 14, Rule 39 of the Rules of Court, as amended.The plaintiff posted a surety bond issued by the Utility Assurance Corporation for the amount of P9,846,760.00 which was approved by the court. The court issued the Writ of Execution[45] on October 29, 2004 which was however amended[46] on the same day. A notice of garnishment[47] was subsequently issued.
You are further commanded to comply with the directives provided for in par. No. 4 of the Administrative Circular No. 12 as approved by the Supreme Court of the Philippines, en banc, on October 1, 1985, by submitting to the Honorable IRENEO LEE GAKO, JR., Presiding Judge of this court, a report of the action you have taken on this writ within ten (10) days from your receipt hereof.[44]
WHEREFORE, foregoing premises considered, the petition is hereby dismissed. The writ of preliminary injunction issued by this court on January 27, 2005 is hereby lifted. The assailed Orders and other issuances of the lower court are hereby affirmed and reinstated.The appellate court affirmed the findings of the trial court and declared that
The trial court ordered on September 8, 2004 an execution of its decision pending appeal, as follows:The Civil Code provision on human relations states:In the decision, dated May 28, 2004, the court considered the fact that the subject real properties, consisting of eight (8) lots with a total area of 21,000 square meters or more than two hectares, are in the absolute possession and control of defendants since January 6, 1986 to the present on the basis of a stipulation in the contract to buy and sell between the herein parties that defendant would pay them the amount of P2,156,040.00 placed in escrow deposit with the Philippine National Bank, Cebu City. Until now or for a period of more than eighteen (18) years, the defendant has not paid a single centavo to the plaintiff. So the court believes that defendant should pay reasonable rentals to the plaintiff in keeping with the law against unjust enrichment, although the plaintiff made an express waiver with respect to its claim for damages.From the foregoing, the public respondent clearly and concisely elucidated the superior circumstances and indeed, the very "good reason" for its granting private respondent's motion for execution pending appeal. With the above cited good reason as the basis for the execution pending appeal prayed for, the public respondent further buttressed the same by ordering private respondent to post a bond in an amount equal the value sought to be enforced in the amount of P9,846,760.27, so as to protect the interest of petitioner, City of Cebu. Indeed, the bond which has been properly posted through a bonding company amply guarantees and safeguards the rights of the petitioner.
In short, the foregoing facts are the "good reason" that the court considers in granting the execution pending appeal.
The "combination of circumstances is the dominant consideration which impels the grant of immediate execution, the requirement of a bond is imposed merely as an additional factor, no doubt for the protection of the defendant's creditor."
The ascertainment of good reasons for execution pending appeal lies within the sound discretion of the trial court, and the appellate court will not normally disturb such finding. Intervention by the latter may be proper, if it is shown that there has been an abuse of discretion. Normally, the trial court is not allowed to assess its own judgment and to hold that an appeal may not prosper, or that it would merely be dilatory. In the present case, however, there are circumstances that undisputedly serve as cogent bases for arriving at such a conclusion. In the light of the former, there is hardly any question that private respondent's Motion for Execution Pending Appeal is meritorious.[51]
x x x x
Even assuming ex gratia argitmenti that there indeed existed certain legal infirmities in connection with the assailed Orders of Judge Gako, still, considering the totality of circumstances of this case, the nullification of the contested orders would be iniquitous. As rightly averred by public respondent that "until now for a period of eighteen (18) years, the petitioner has not paid a single centavo to the respondent. So the court believes the defendant should pay reasonable rentals to the plaintiff in keeping with the law against unjust enrichment x x x. Moreover, it could not be disputed that the eight (8) lots subject matter of the contract between the plaintiff and the defendant City of Cebu are located within the city proper of Cebu City, so a yearly rental of P547,042.237, which is only P45,586.85 a month, appears just and reasonable under the circumstances. Thus, the original amount deposited in escrow with PNB, Cebu City, [which] has now accumulated to P9,846,760.27 (as per addendum) to include the increments should be granted to private respondent in the equitable form of rentals for the past 18 years.
All told, private respondent having been deprived of the use, possession and enjoyment of his property for 18 long years, starting 1986, when the edifice for the abattoir was constructed on the site or property in controversy, up to the present, is entitled to the amount garnished by way of rentals in keeping with the age old principle of justice and equity. To rule otherwise would result in the unjust enrichment of the petitioner at the expense of private respondent.
The appellate court likewise ruled that the petitioner was guilty of forum shopping because it filed a petition for certiorari while its appeal from the decision of the RTC was pending in the CA.Art. 19. Every person must, in the exercise of his rights and in the performance of his duties, act with justice, give everyone his due, and observe honesty and good faith.Following the applicable provision of law and hearkening to the dictates of equity, that no one, not even the government, shall unjustly enrich himself at the expense of another. At any rate, of paramount importance to us is that justice has been served. No right of the public was violated and public interest was preserved. This Court will not condone the repudiation of just obligations contracted by municipal corporations. On the contrary, we will extend our aid and every judicial facility to any citizen in the enforcement of just and valid claims against abusive local government units.[52]
Petitioner avers that the RTC committed grave abuse of discretion amounting to excess or lack of jurisdiction when it issued the assailed Orders, Writ and Amended Writ of Execution and Notice of Garnishment and that the appellate court erred in affirming the same. Petitioner maintains that respondent failed to establish "good reasons" for execution pending appeal. The bare fact that petitioner had been in actual possession of the property for 18 years and that the purchase price, inclusive of interests, had been deposited in escrow with the PNB, later with the LBP, are not good reasons to allow execution pending appeal. After all, if respondent would prevail in petitioner's appeal from the RTC decision, respondent would be entitled to the amount deposited in escrow, including the interests already earned by the account. The fact of the matter is that, even if the property had been placed in its possession, it has not been able to use nor profit from it, since it is part of the property which had been placed under receivership in Civil Case No. 17236 (for partition) between the heirs of Vicente S. del Rosario. Petitioner further points out that one of his heirs even leased a portion of the property from which he earned income.I
THE HONORABLE COURT OF APPEALS ERRED IN AFFIRMING THE DECISION OF THE LOWER COURT HOLDING THAT THE PRIVATE RESPONDENT IS ENTITLED TO AN EXECUTION PENDING APPEAL BY POSTING A PERFORMANCE BOND IN THE AMOUNT OF P9,846,760.27. THE GRANT OF EXECUTION PENDING APPEAL BY THE LOWER COURT CITING IT HAS GOOD REASON, IS WITHOUT ANY URGENT BASIS AND WOULD ONLY PRE-EMPT THE REVIEW OF THE DECISION OF THE CASE WHICH WAS TIMELY RAISED ON APPEAL;II
THE HONORABLE COURT OF APPEALS ERRED IN FINDING THAT FORUM SHOPPING WAS COMMITTED BY THE PETITIONER.[60]
Trial Court's Residual Jurisdiction despite the loss of its jurisdiction as a result of the appeal, the Court before the transmission of the original record or the record on appeal may issue orders: (a) for the protection and preservation of the rights of the parties which do not involve any matter litigated by the appeal; (b) approved compromises; (c) permit appeal of indigent litigants; and (d) order execution pending appeal (Section 9, Rule 41 of the Revised Rules of Court).On the second issue, however, we agree with petitioner's contention that it did not indulge in nor commit forum shopping by filing its petition for certiorari assailing the Orders of the RTC granting execution pending appeal, and questioning the writ of execution and garnishment while the appeal of the decision of the RTC was pending in the appellate court.
After perfection of the appeal by either mode, the trial court loses jurisdiction over the case or the subject matter involved in the appeal, as the case may be. In either instance, and before the transmittal to the appellate court of the original record or the record on appeal, the trial court still retains its so called residual jurisdiction to issue protective orders, approve compromises, permit appeals of indigent litigants and as has been added by amendment of this section (Section 9 of Rule 41) to order discretionary execution and to allow withdrawal of the appeal.
The records of this petition does not show nor has petitioner duly established that on August 20, 2004 the public respondent indeed had ordered and transferred the records of the case as well as its complete transcript of stenographic notes to the Court of Appeals. All we have before us is a mere allegation which we cannot give due credit.[61]
Not to be brushed aside is the fact that from January 7, 1986 up to January 21, 2002, or for a period of 16 years, respondent did not assail the Contract to Buy and Sell and Agreement, nor demand the receivership thereof and for petitioner to pay rentals. In the negotiations for the settlement of the controversy relative to said deeds, Vicente S. del Rosario and the respondent negotiated with the petitioner. It was Vicente S. del Rosario, not the respondent, who wrote John Osmeña, on July 8, 1986, rejecting the latter's proposal. It was Vicente S. del Rosario, not the respondent, who filed the complaint against petitioner on January 22, 1987, for specific performance and/or receivership of contract and agreement, docketed as Civil Case No. 7705. On October 16, 1991, it was Pantaleon U. del Rosario, not the respondent, who, acting as attorney-in-fact of the heirs of Vicente S. del Rosario, who represented them before the Office of City Mayor Tomas Osmeña for amicable settlement. There is no showing in the records that petitioner ever recognized respondent to be the owner of the properties subject of the Contract to Buy and Sell and the Agreement.
- THAT the areas sold to the City of Cebu for its abattoir project, the subject of the above contract, will be entirely taken from the share of Teresita R. Reyes de Leon bought by your son Vicente B. del Rosario per Deed of Absolute Sale dated January 20, 1985, entered as Doc. 490, page 98, Book 52, series of 1985 of the Notarial Registry of Notary Public Carlito P. Valente;
- THAT all proceeds in connection with the sale of the above mentioned properties shall accrue in your favor only;[71]
The court also believes that the payment of rentals is in keeping with the law against unjust enrichment. It has noted that the defendant has been in possession and control of subject lots for nineteen (19) years, thereby depriving the plaintiff not only of the use of subject lots but also the income that could be derived therefrom. In addition, defendant had destroyed the fishponds and salt beds when it constructed the buildings and other civil works on subject lots. To compensate the plaintiff, the court believes that the amount deposited by defendant in escrow with the Philippine National Bank intended as purchase considerations of subject lots should be paid to the plaintiff as rentals to include the interest earned from said deposit.[72]Petitioner objected to respondent's motion for execution on the ground that respondent failed to present a shred of evidence to prove that the reasonable compensation by way of rentals for the property from January 7, 1986 up to May 28, 2004, was P2,156,040.00 plus interests of P7,858,073.27. Petitioner posited that there is no showing in the decision how the trial court computed and arrived at the reasonable compensation for the property. It was only in the September 6, 2004 Order of the RTC granting the motion of respondent for execution pending appeal that the RTC declared, for the first time, that the monthly rental of P45,786.85 or in the total amount of P9,846,760.27 was reasonable simply because the property is located in Cebu City.
In the Decision, dated May 28, 2004, the court considered the fact that the subject real properties, consisting of eight (8) lots with a total area of 21,000 square meters or more than two hectares, are in the absolute possession and control of defendants since January 6, 1986 to the present on the basis of a stipulation in the contract of buy and sell between herein parties that defendant would pay them in the amount of P2,156,040.00 placed in escrow deposit with the Philippine National Bank, Cebu City. Until now or for a period of eighteen (18) years, the defendant has not paid a single centavo to the plaintiff. So the court believes the defendant should pay reasonable rentals to the plaintiff in keeping with the law against unjust enrichment, although the plaintiff made an express waiver of its claim for damages.In Badillo v. Tayag,[74] the Court ruled that the fair rental value is the reasonable compensation for the use and compensation of property. There is no hard and fast rule in determining the reasonableness of rental for a property. However, the court ruled that a court may fix the reasonable rental but must still base its action on the evidence adduced by the parties. It behooved respondent to prove his claim for entitlement to reasonable rentals for the property. As the Court ruled in Josef a v. San Buenaventura:[75]
In short, the forgoing facts are the "good reason" that the court considers in granting the execution pending appeal. Moreover, it could not be disputed that the eight (8) lots subject matter of the contract between the plaintiff and defendant City of Cebu are located with the city proper of Cebu City, so the yearly rental of P547,042.237 which is only P45,586.85 a month, appears just and reasonable under the circumstances. Thus, the original amount in escrow deposit with PNB, Cebu City, has now accumulated to P9,846,760.27 (as per addendum) to include the increments, which amount was already transferred to Land Bank of the Philippines, Banilad Branch, Cebu City. The rentals should be taken from the aforesaid amount.[73]
In Asian Transmission Corporation v. Canlubang Sugar Estates, the Court ruled that the reasonable compensation contemplated under said Rule partakes of the nature of actual damages. While the trial court may fix the reasonable amount of rent, it must base its action on the evidence adduced by the parties. The Court also ruled that "fair rental value is defined as the amount at which a willing lessee would pay and a willing lessor would receive for the use of a certain property, neither being under compulsion and both parties having a reasonable knowledge of all facts, such as the extent, character and utility of the property, sales and holding prices of similar land and the highest and best use of the property. The Court further held that the rental value refers to "the value as ascertained by proof of what the property would rent or by evidence of other facts from which the fair rental value may be determined."[76]While location of the property may be considered in determining, the reasonableness of rentals, other factors must be considered, such as (a) the prevailing rates in the vicinity; (b) use of the property; (c) inflation rate; and (d) testimonial evidence.[77]