FACTS:

The dispute in this case arose from a Complaint for Specific Performance with Damages filed by Ophelia Tuatis against Visminda Escol before the Regional Trial Court (RTC) of Sindangan, Zamboanga del Norte. Tuatis alleged that she entered into a Deed of Sale by Installment with Visminda for a parcel of land, with a purchase price of P10,000.00. According to the Deed, Tuatis paid P3,000.00 as a downpayment, and the remaining balance was supposed to be paid in installments. Tuatis claimed that she had already made additional payments totaling P7,000.00 and requested Visminda to sign an absolute deed of sale. However, Visminda refused, arguing that Tuatis had not fully paid the purchase price. The parties failed to settle the dispute amicably, leading to the filing of the case before the RTC. After trial, the RTC ruled in favor of Visminda, finding that Tuatis had not provided satisfactory proof of her compliance with the terms and conditions of the Deed of Sale by Installment, and that non-payment of the full purchase price was a suspensive condition preventing the obligation of Visminda to convey title.

The case involves a contract of sale between the buyer, Tuatis, and the seller, Visminda. The contract stipulated that if the buyer fails to pay the remaining balance within three months, the buyer shall return the land to the seller and the seller shall return the amount paid by the buyer. Tuatis constructed a building on the land despite knowing that Visminda is still the owner of the land. Both parties were found to have acted in bad faith. The Regional Trial Court (RTC) dismissed Tuatis' complaint and ordered the return of the property and the amount paid by Tuatis to Visminda. Tuatis appealed to the Court of Appeals (CA), but the appeal was dismissed for failure to file the appellant's brief.

Tuatis filed a motion to exercise her right under Article 448 of the Civil Code to either be indemnified for the value of her building or buy the land from Visminda. Visminda deposited the amount paid by Tuatis to the court. The RTC ordered the sheriff to serve the writ of execution, but before the RTC could rule on Tuatis' motion for reconsideration, the sheriff enforced the writ of execution and reported that it was fully satisfied. Tuatis filed a petition for certiorari with the CA, but it was dismissed for failure to comply with procedural requirements. Tuatis filed a motion for reconsideration, which was denied. Tuatis then filed a motion for leave to file a second motion for reconsideration, but it was also denied. Tuatis filed a petition for review before the Supreme Court, arguing that Article 448 of the Civil Code should be applied.

This case involves a dispute between the petitioner, Anecita Tuatis, and respondent, Visminda Yap, over a piece of land. Tuatis claims that she constructed a building on the said land and argues that Article 448 of the Civil Code should be applied to their situation.

Tuatis alleges that the Regional Trial Court (RTC) committed grave abuse of discretion in issuing an order dated 26 September 2005 and the Sheriff in enforcing the writ of execution on 27 October 2005. According to Tuatis, her motion for reconsideration of the order dated 26 September 2005 legally prevented the execution of the RTC decision dated 29 April 1999. She contends that the rights of the parties should be determined pursuant to Article 448 of the Civil Code. Tuatis argues that the value of the building she constructed is P502,073.00, while the entire piece of land, including the subject property, has a market value of only about P27,000.00. Due to this, she believes she is entitled to buy the land at a price determined by the court or is willing to sell her house to Visminda for P502,073.00.

Tuatis also claims that the Court of Appeals committed grave abuse of discretion in dismissing her petition and subsequently denying her motion for reconsideration and motion for leave to file a second motion for reconsideration.

The Court grants the present petition but for reasons other than those argued by Tuatis.

It is noted that Tuatis committed several procedural deficiencies in her petition before the Court of Appeals in CA-G.R. No. 00737-MIN. The Court of Appeals dismissed her petition for failure to comply with the requirements, including the complete payment of required docket fees, attachment of a certified copy of the assailed RTC order, and indication of her counsel's IBP and PTR Official Receipts' place of issue.

Section 3, Rule 46 of the Rules of Court lays down the requirements for original cases filed before the Court of Appeals and the effect of non-compliance. The Court of Appeals dismissed Tuatis' petition for not complying with these requirements.

ISSUES:

1. Whether the Court of Appeals committed grave abuse of discretion in dismissing Tuatis' petition for failure to comply with the requirements for such a petition.

2. Whether the procedural deficiencies in Tuatis' petition should be set aside in the interest of substantial justice.

3. Whether the RTC failed to make an adjudication on the rights of Tuatis and Visminda under Article 448 of the Civil Code.

4. Whether the Court can clarify the ambiguity in the dispositive portion of the RTC Decision even after it has become final and executory.

5. Whether Tuatis and Visminda were both in bad faith.

6. Which options are available to Visminda under Article 448 of the Civil Code.

7. Whether Tuatis has the right to choose between buying the subject property from Visminda or selling the building to Visminda.

8. Whether Tuatis can be compelled to remove the building from the land.

9. Whether or not Visminda's Motion for Issuance of Writ of Execution can be considered as a manifestation of her choice to recover possession of the subject property under the first option.

10. Whether or not Visminda should be given the opportunity to make a choice between the options available to her.

RULING:

1. Yes, the Court of Appeals committed grave abuse of discretion in dismissing Tuatis' petition for failure to comply with the requirements. The Court held that while non-compliance with the requirements stated in Section 3, Rule 46 of the Rules of Court may be grounds for dismissal, the power to dismiss an appeal or an original action is discretionary and must be exercised in accordance with the principles of justice and fair play. The court emphasized that technicalities should not be used to frustrate the ends of justice and that the law abhors technicalities that impede the cause of justice. Dismissal of appeals on purely technical grounds is frowned upon, and the rules of procedure should be used to secure, not override, substantial justice.

2. Yes, the procedural deficiencies in Tuatis' petition should be set aside in the interest of substantial justice. The Court found that the procedural deficiencies should not be the sole basis for dismissing the petition and that the peculiar circumstances of the case and the interest of substantial justice justify setting aside the procedural defects.

3. The Court finds that the RTC failed to make an adjudication on the rights of Tuatis and Visminda under Article 448 of the Civil Code. The RTC only implemented a provision in the Deed of Sale by Installment without considering the effects of Article 448. This resulted in a controversy that the Court is compelled to address for a just and complete settlement of the rights of the parties.

4. The Court holds that even after a judgment has become final and executory, it may clarify an ambiguity caused by an omission or mistake in the dispositive portion of the decision. In doing so, the Court may resort to the pleadings filed by the parties, as well as the findings of fact and conclusions of law expressed in the body of the decision. Therefore, the Court can make the necessary amendment to the dispositive portion of the RTC Decision to ensure that it conforms to the body of the decision.

5. Tuatis and Visminda were both in bad faith.

6. Under Article 448 of the Civil Code, Visminda has two options: to appropriate the building after indemnifying Tuatis for the necessary and useful expenses incurred for said building, or to oblige Tuatis to pay the present fair value of the land.

7. The choice of options under Article 448 belongs to Visminda, not Tuatis.

8. Tuatis cannot compel the owner of the land to remove the building.

9. The Supreme Court granted the petition, annulled and set aside the resolution of the trial court ordering the issuance of a writ of execution, and directed the trial court to conduct further proceedings to determine the essential facts and Visminda's choice of option under Article 448 of the Civil Code. The trial court was also directed to implement Visminda's choice of option as soon as possible.

PRINCIPLES:

• Compliance with procedural requirements is necessary, but the court has the discretion to dismiss an appeal or petition based on such non-compliance.

• Procedural rules are intended to promote, not frustrate, the ends of justice.

• Technicalities should be avoided, and the court's primary duty is to render or dispense justice.

• Dismissal of appeals on purely technical grounds is frowned upon, and the rules of procedure should be used to secure, not override, substantial justice.

• The owner of the land on which anything has been built, sown or planted in good faith has the right to appropriate the works, sowing, or planting after payment of the indemnity provided for in the Civil Code, or to oblige the builder or planter to pay the price of the land (Article 448 of the Civil Code).

• A final judgment is immutable and unalterable, and may only be modified to correct clerical errors or through nunc pro tunc entries, or where the judgment is void.

• The dispositive portion or fallo of a decision controls over the body of the decision, and where there is a conflict, the fallo prevails.

• The Court may clarify an ambiguity in the dispositive portion of a decision even after it has become final and executory, by resorting to the pleadings and findings of fact and conclusions of law expressed in the body of the decision.

• The objective of Article 546 of the Civil Code is to administer justice between the parties involved and the current market value of improvements should be the basis of reimbursement.

• The options under Article 448 are available to the owner of the land, and the choice belongs to the landowner.

• The principle of accession states that the accessory follows the principal.

• The owner of the building cannot be compelled to remove it from the land if the landowner exercises their option under Article 448.

• The law provides a just solution to the impracticability of creating a state of forced co-ownership by giving the owner of the land the option to acquire the improvements or oblige the builder or planter to pay for the land and the sower the proper rent.

• The owner of the land has the authority to exercise the option because his right is older and he is entitled to the ownership of the accessory thing.

• The options and their consequences under Article 448 of the Civil Code should be clearly presented to the parties before a choice is made.

• In cases involving Article 448 of the Civil Code, the trial court should conduct additional proceedings to determine the essential facts and the choice of option by the party entitled thereto, and should ensure the thorough and prompt settlement of the parties' rights.