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SM SYSTEMS CORPORATION v. OSCAR CAMERINO

FACTS:

The dispute in this case involves the ownership of three lots in Muntinlupa City, Metro Manila, which were originally owned by Victoria Homes, Inc. and cultivated by the respondents who were farmers-tenants. Victoria Homes sold the lots to Springsun Management Systems Corporation (Springsun) without informing the respondents. Springsun mortgaged the lots to Banco Filipino Savings and Mortgage Bank (Banco Filipino) but failed to repay the loans, resulting in the lots being sold at a public auction to Banco Filipino. However, Springsun was able to redeem the lots.

The respondents filed a complaint seeking to redeem the lots from Springsun. The Regional Trial Court (RTC) ruled in favor of the respondents, allowing them to redeem the lots. Springsun appealed to the Court of Appeals (CA), but their appeal was unsuccessful. Springsun then filed a petition with the Supreme Court, which was also denied.

Meanwhile, the respondents executed an Irrevocable Power of Attorney in favor of Mariano Nocom to pay the redemption price to Springsun. However, this power of attorney was challenged in a separate action for revocation. The RTC invalidated the power of attorney and the CA affirmed this decision. However, the Supreme Court set aside the CA ruling and sent the case back for further proceedings.

Following the remand of the case, the respondents deposited the redemption amount with the RTC, and as a result, the title of the lots was transferred to them. The parties then entered into a compromise settlement. However, Springsun filed a motion to hold the execution in abeyance, which the RTC denied. The CA affirmed the RTC's denial and further found Springsun guilty of forum shopping.

ISSUES:

  1. Whether or not the RTC has jurisdiction over the redemption case.

  2. Whether or not the power of attorney executed by respondents in favor of Nocom is valid.

  3. Whether or not the Kasunduan entered into by petitioner and respondents is valid.

RULING:

  1. The RTC has jurisdiction over the redemption case. The Court held that the Department of Agrarian Reform does not have jurisdiction over instances where the tenant-farmers seek to redeem the subject property. It is the RTC that has jurisdiction over redemption cases involving agricultural lands.

  2. The power of attorney executed by respondents in favor of Nocom is valid. The Court set aside the CA decision and concluded that the RTC erred in annulling the power of attorney. It ruled that the RTC should have conducted a regular trial on the merits instead of rendering a summary judgment.

  3. The Kasunduan entered into by petitioner and respondents is not valid. The RTC denied petitioner's motion to hold execution in abeyance and disapproved the Kasunduan. The CA upheld the RTC's decision. As a result, the Kasunduan does not have any legal effect.

PRINCIPLES:

  • The RTC has jurisdiction over redemption cases involving agricultural lands.

  • A power of attorney should not be annulled through summary judgment but should be subject to a regular trial on the merits.

  • A compromise settlement is not valid if disapproved by the court.