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SALUN-AT MARQUEZ v. ELOISA ESPEJO

FACTS:

The case involves a land ownership dispute between the respondents, Espejos, and the petitioners. The respondents were the original registered owners of two parcels of agricultural land in Barangay Lantap and Barangay Murong in Bagabag, Nueva Vizcaya. The properties were mortgaged to Rural Bank of Bayombong, Inc. (RBBI) to secure loans. When the respondents failed to pay the loans, RBBI foreclosed the properties and became the registered owner. The Department of Agrarian Reform Adjudication Board (DARAB) issued a decision granting ownership of the Murong property to the respondents and ordering the cancellation of the certificates of land ownership award (CLOAs) of the tenants in the Lantap property. The Court of Appeals reversed the DARAB decision, but the Supreme Court reinstated the DARAB decision. The respondents bought back one of their lots from RBBI, but the Deed of Sale did not mention the barangay where the property was located. The respondents did not take possession of the property or demand lease rentals from the petitioners who continued to be the tenants of the property. On the other hand, the petitioners claimed to have bought the Murong property as farmer-beneficiaries, occupied and exercised acts of ownership over it. The parties dispute the subject properties covered by the contracts with RBBI.

ISSUES:

  1. Whether the instant petition raises factual issues that are beyond the scope of Rule 45.

  2. Whether the Court's earlier dismissal of RBBI's appeal is proof that there is no reversible error in the appellate court's decision.

  3. Whether it is correct to apply the Best Evidence Rule in determining the subject of the Deed of Sale and the Deeds of Voluntary Land Transfer.

  4. Whether the Best Evidence Rule is applicable in this case.

  5. Whether the Parol Evidence Rule is proper in this case.

  6. Whether the exceptions to the Parol Evidence Rule apply in this case.

  7. Whether the subject of the Deed of Sale was the Lantap property or the Murong property.

  8. Whether the subject of the Deeds of Voluntary Land Transfer (VLTs) was the Lantap property or the Murong property.

  9. Whether the intention of the parties regarding the subjects of their contracts can be determined based on their actuations.

  10. Whether or not the Petition for Review on Certiorari should be granted.

  11. Whether or not the Deed of Sale dated February 26, 1985 covers the Lantap property under TCT No. T-62836.

  12. Whether or not the Deeds of Voluntary Land Transfer and TCT Nos. CLOA-395 and CLOA-396 of the petitioners cover the Murong property under TCT No. T-62096.

  13. Whether or not the Register of Deeds of Nueva Vizcaya should make the necessary corrections to the titles of the properties.

RULING:

  1. The issues involved in the instant petition are not purely factual. The admissibility of evidence is a legal question within the Court's authority to review. Moreover, the exceptions to the general rule that a petition for review should raise only questions of law are applicable in this case. Therefore, the Court can review the factual findings of the appellate court.

  2. The Court's earlier dismissal of RBBI's appeal does not preclude petitioners from filing a separate appeal and presenting their own arguments. Petitioners cannot be bound by the final judgment against RBBI as they were not parties to RBBI's appeal. Additionally, res judicata does not apply as RBBI had already transferred its title to petitioners before the commencement of the action.

  3. The appellate court erred in applying the Best Evidence Rule to determine the subject of the contracts. The issue is not the contents of the contracts but the intention of the parties, which should be resolved under the Parol Evidence Rule.

  4. The Best Evidence Rule is not applicable in this case because there is no dispute regarding the contents of the documents. The parties admit the contents of the documents and the issue is whether they adequately express the true intention of the parties.

  5. The Parol Evidence Rule is not properly applied by the CA in this case. The CA gave primacy to the literal terms of the contracts and refused to admit any other evidence that would contradict such terms. However, the Parol Evidence Rule is exclusive only as "between the parties and their successors-in-interest." Since the respondents are strangers to the written contracts, they may present evidence to modify, explain or add to the terms of the written agreement.

  6. The exceptions to the Parol Evidence Rule apply in this case. The VLTs and the Deed of Sale suffer from intrinsic ambiguity, and it was put in issue that the written agreements failed to express the true intent of the parties. Therefore, evidence outside of the instruments may be presented to determine the true intent of the parties.

  7. The subject of the Deed of Sale between RBBI and the respondents was the Lantap property, not the Murong property. The respondents did not exercise acts of ownership over the Murong property and did not take possession of it. The Murong property was in the possession of the petitioners, who paid leasehold rentals to RBBI. This is supported by the fact that respondent Nemi was the farmer actually tilling the Lantap property without turning over the supposed landowner's share to RBBI. The respondents' neglect of their alleged ownership rights over the Murong property and their actions regarding the Lantap property indicate that their intention was to repurchase the Lantap property.

  8. The subject of the Deeds of Voluntary Land Transfer (VLTs) in favor of the petitioners was the Murong property, not the Lantap property. The petitioners were already the tenant-farmers of the Murong property and had been paying rentals to RBBI. They remained in possession of the Murong property after the execution of the VLTs and were found to be the qualified beneficiaries of the Murong property by the Department of Agrarian Reform (DAR). The DAR officials issued Certificates of Land Ownership Award (CLOAs) referring to the land in Barangay Murong. The petitioners' possession of the Murong property and their subsequent actions support the conclusion that the subject of the VLTs was the Murong property.

  9. The Petition for Review on Certiorari is granted. The assailed Decision and Resolution of the Court of Appeals are reversed and set aside. The DARAB Central Office's Decision is reinstated. The Deed of Sale dated February 26, 1985 covers the Lantap property under TCT No. T-62836, while the Deeds of Voluntary Land Transfer and TCT Nos. CLOA-395 and CLOA-396 of the petitioners cover the Murong property under TCT No. T-62096. The Register of Deeds of Nueva Vizcaya is directed to make the necessary corrections to the titles of the said properties.

PRINCIPLES:

  • The admissibility of evidence is a legal question within the Court's authority to review.

  • Exceptions to the general rule that a petition for review should only raise questions of law include cases where the findings are based on speculations, there is grave abuse of discretion, or the findings are contrary to those of the trial court.

  • Dismissal of an appeal does not necessarily mean that the appealed decision is correct but may be due to inadequate discussion, ineffectual arguments, or procedural lapses.

  • Res judicata only applies to parties and their successors-in-interest by title subsequent to the commencement of the action.

  • The Best Evidence Rule applies when the subject of inquiry is the contents of a document, while the Parol Evidence Rule applies when the intention of the parties is at issue.

  • The Best Evidence Rule states that when the subject of inquiry is the contents of a document, the best evidence is the original document itself and no other evidence is admissible as a general rule.

  • The Parol Evidence Rule excludes extrinsic evidence by which a party seeks to contradict, vary, add to or subtract from the terms of a valid agreement or instrument.

  • The exceptions to the Parol Evidence Rule allow a party to present evidence to modify, explain or add to the terms of a written agreement if there is an intrinsic ambiguity, mistake or imperfection in the agreement, or if the written agreement fails to express the true intent and agreement of the parties.

  • In case of doubt, the intention of the contracting parties prevails. The intention is the soul of a contract, not its wording which is prone to mistakes, inadequacies, or ambiguities.

  • The interpretation of contracts involves considering the contemporaneous and subsequent acts of the parties in order to judge their intention.

  • The intention of the parties in a contract regarding the subject matter can be determined based on their actuations and contemporaneous and subsequent actions.

  • The possession and payment of leasehold rentals can be indicative of the intention of the parties regarding the subject matter of a contract.

  • A mistake in the technical description of a property in a contract, if supported by the parties' actions and intentions, may not invalidate the contract.

  • The Petition for Review on Certiorari may be granted if the circumstances warrant the reversal or setting aside of the assailed decision.

  • The Deeds of Sale and the corresponding Transfer Certificates of Title should accurately reflect the properties they cover.

  • The Register of Deeds has the authority to make necessary corrections to the titles of properties in accordance with the court's decision.