G.R. No. 231676. August 23, 2017

THIRD DIVISION: [G.R. No. 231676, August 23, 2017] EMMANUEL Y. RONQUILLO VS. SPOUSES ALFREDO V. PAMINTUAN AND ADELA S. PAMINTUAN.

At bench is a Petition for Review on Certiorari under Rule 45 of the Rules of Court assailing the Decision[1] dated November 7, 2016 and the Resolution[2] dated May 19, 2017 of the Court of Appeals (CA) in CA-G.R. SP No. 137818.

The case stemmed from a Complaint for Ejectment (Complaint) filed by respondents Spouses Alfredo V. Pamintuan and Adela S. Pamintuan (Spouses Pamintuan) against petitioner Emmanuel Ronquillo (Ronquillo) before the Municipal Trial Court in Cities (MTCC) of Antipolo City, Branch 4, docketed as SCA Case No. 021-13.

Eliza Ronquillo (Eliza), petitioner's mother, owned a house and lot at #23 Don Juan Street, Villa Cecilia Subdivision, Brgy. Mambugan, Antipolo City, Rizal (subject property), which she then mortgaged to Rural Bank of Cainta (RBC). The mortgage was later foreclosed due to non-payment of the monetary obligation and the subject property was sold at public auction to RBC as the highest bidder. But, despite this, the petitioner and his family remained in possession of the subject property.[3]

Thereafter, or on October 17, 2011, the respondents bought the subject property from RBC for PI.25 Million. A "Kasunduan" dated December 22, 2011 was then executed between respondent Alfredo Pamintuan (Alfredo) and the petitioner, wherein the former allowed the latter continued possession of the subject property, subject, among others, to this condition: "3. Na si [herein petitioner] ay binibigyan ni [herein respondent Alfredo] ng pagkakataon (option) na bay or an ang lahat ng perang kanyang [respondent Alfredo] ginastos sa nabanggit na House & Lot hanggang October 17, 2012 upang maibalik sa kanya [petitioner] ang House & Lot. At kung hindi mabayaran ni [petitioner] ang nasabing halaga hanggang October 17, 2012, siya ay kusang aalis sa lugar na nabanggit."[4]

Regrettably, the petitioner failed to exercise the option on .the date agreed upon, thus, the respondents asked the former to immediately vacate and to surrender possession of the subject property in accordance with their "Kasunduan." But, despite repeated verbal and written demands, the petitioner refused to do so. An attempt to settle the matter amicably before the Tanggapan ng Lupon ng Tagapamayapa of Brgy. Mambugan, Antipolo City, was also made by the respondents but even this effort was futile. Hence, the filing of the Complaint.[5]

In response, the petitioner claimed that the respondents never bought the subject property. Rather, the latter took it out pursuant to a Judgment Based on Compromise Agreement[6] dated February 23, 2012 entered into between his mother and the RBC. It was in accordance with this Judgment Based on Compromise Agreement that the so-called "Kasunduan" was executed between the petitioner and the respondents. The petitioner even alleged that the terms and conditions of the said Judgment Based on Compromise Agreement pertain to a pacto de retro sale. The petitioner likewise insisted that it was the respondents who violated their "Kasunduan" and not him.[7]

In a Decision[8] dated January 10, 2014, the MTCC ruled in favor of the respondents and against the petitioner. The MTCC ordered the petitioner and all persons claiming rights under him to vacate and to surrender the subject property to the respondents. The petitioner was further ordered to pay the respondents P15,000.00 as attorney's fees plus cost of suit. In so ruling, the MTCC elucidated, thus:
The pivotal issue to be resolved is whether or not the [petitioner] is unlawfully withholding possession of the subject property for his failure to buy it back from the [respondents] on or before October 17, 2012.

That the [respondents] are the registered owners of the subject property as well as the due execution of the KASUNDUAN are not disputed by the [petitioner]. However, he posits that the transaction between him and the [respondents] covered by the KASUNDUAN is one of pacto de retro sale. It was not him, but the [respondents], who grossly violated the terms and conditions of the agreement x x x x such that they refused to receive the BDO Manager's Check for P1,550,000.00 and instead demanded for P2,500,000.00 as repurchase price.

The essence of pacto de retro sale is that the title and ownership of property sold are immediately bestowed upon the vendee a retro, subject to the resolutory condition of repurchase by the vendor a retro within the agreed period. The vendor a retro's failure to exercise the right of repurchase within the agreed time vests upon the vendee a retro, by operation of law, absolute title to the property, x x x

It would seem that all the elements of pacto de retro sale are present in the aforesaid Kasunduan, except for the fact that, sadly for the [petitioner], he could not have sold the property to the [respondents], as he was not the owner thereof. Short of being repetitious, the subject property was acquired by the [respondents] from [RBC], "whose title and ownership over the said property, together with improvements thereon were fully recognized by [Eliza] x x x.

xxxx

A reading of the terms and conditions of the KASUNDUAN clearly shows that the said agreement is an option contract. Paragraph 3 thereof provides, and quoted herein, to wit:

 "3.
Na si [petitioner] ay bibigyan ni [respondent Alfredo] ng pagkakataon (option) na bayaran ang lahat ng perang kanyang [respondent Alfredo] ginastos sa nabanggit na House & Lot hanggang October 17, 2012 upang maibalik sa kanya [petitioner] ang House & Lot. At kung hindi mabayaran ni [petitioner] ang nasabing halaga hanggang October 17, 2012, siya ay kusang aalis sa lugar na nabanggit. "

xxxx

Being the registered owner[s] of the property at bench, [respondents] have the right to exercise the attributes of ownership such as the right to possess, enjoy, convey, alienates. When the [respondents] executed the KASUNDUAN, [they were] exercising [their] right to alienate the aforesaid property by giving an option to [petitioner] to buy it at a price of Pl,550,000.00 within a period comprising December 22, 2011 to October 17, 2012.

xxxx

Now did [petitioner] exercise his option to buy or buy back the property at bar? Based on the evidence at hand, the answer is in the negative.

Except for his bare allegations of tender of payment plus exhibiting a mere photocopy of a BDO Manager's Check No. 0001169, [petitioner] failed to substantiate his claim, x x x If indeed the said Manager's Check exists but he surrendered it to the bank to save on cost of money and interest after the [respondents] allegedly refused to accept it, [petitioner] could have secured a Certification from his bank, Banco de Oro, pertinent to his procurement of the said check. This Court sigrees with the observation of the [respondents] that if [petitioner] really desires to buy back the property, he could have consigned the check to the court or deposit it in escrow to the bank. He never did. Neither did he pursue seriously his prayer in his answer to allow him to consign to court the amount of Pl,550,000.00. On the contrary, as borne out of the records, the [respondents] have shown more interest in the amicable settlement of the instant case with their presence during mediation proceedings. It is on record that mediation before the court annexed Philippine Mediation Center failed because of the non-appearance of the [petitioner].

Gauged from the foregoing, it is clear that the [petitioner] ceased to have the right to possess and occupy the property at bench. He failed to exercise his option to buy back the property from the [respondents], who gave him until October 17, 2012 to do so. Necessarily, in accordance with paragraph 3 of the KASUNDUAN, he should have voluntarily vacated the said property. But he refused. The demand letters/notice to vacate x x x, which he refused to receive are tell-tale signs that he knew of its content. He cannot now claim that there was no prior demand/notice to vacate sent to him. In effect, there were constructive notices to him of [respondents'] demand for him to vacate the property.

xxxx

For all the foregoing, only one conclusion can be drawn, that the [petitioner] is unlawfully withholding possession of the subject property and could therefore be evicted together with all other persons claiming rights under him x x x. (Emphases partly in the original and partly supplied; italics partly in the original and partly supplied.)
On appeal, the Regional Trial Court (RTC) of Antipolo City, in a Decision[10] dated August 4, 2014, affirmed in toto the MTCC ruling. The petitioner sought reconsideration but it was denied for lack of merit in an Order[11] dated September 18, 2014.On further appeal,[12] the CA, in its now assailed Decision, affirmed the RTC ruling. The subsequent Motion for Reconsideration was denied in the now questioned Resolution dated May 19, 2017.

Hence, this Petition, which anchors on two grounds, to wit: (1) the CA erred when it did not (like the RTC) make a ruling on the factual issue raised by [the herein petitioner] on appeal in regard to "whether or not the MTCC erred in finding that the [herein respondents] are not in breach of the "Kasunduan;" and (2) the CA erred when it upheld the RTC in holding that the ["Kasunduari"] executed between the parties is an option contract, and when it further held that there was no consideration therefor such that to make the same unenforceable and thereby constitute [respondents] as not to be in breach thereof.
RULING: This Court resolves to DENY the instant Petition.

At the outset, the CA, the RTC and the MTCC had already exhaustively addressed the issues presented herein, and this Court finds no compelling reason to depart therefrom. It is an oft-stated doctrine that factual findings of the CA affirming those of the trial court are binding on this Court unless there is a clear showing that such findings are tainted with arbitrariness, capriciousness or palpable error.[13] In this case, there is none.

This Court fully agrees with the lower courts that the "Kasunduan" between the petitioner and the respondents is, indeed, an option contract. The nature of this option contract is very well discussed in Eulogio v. Apeles, [14] thus:
An option is a contract by which the owner of the property agrees with another person that the latter shall have the right to buy the former's property at a fixed price within a certain time. It is a condition offered or contract by which the owner stipulates with another that the latter shall have the right to buy the property at a fixed price within a certain time, or under, or in compliance with certain terms and conditions; or which gives to the owner of the property the right to sell or demand a sale. An option is not of itself a purchase, but merely secures the privilege to buy. It is not a sale of property but a sale of the right to purchase. It is simply a contract by which the owner of the property agrees with another person that he shall have the right to buy his property at a fixed price within a certain timeHe does not sell his land; he does not then agree to sell it; but he does sell something, i.e., the right or privilege to buy at the election or option of the other party. Its distinguishing characteristic is that it imposes no binding obligation on the person holding the option, aside from the consideration for the offer.[15] (Emphases supplied.)
Here, as aptly found by the lower courts, paragraph 3 of the "Kasunduan" clearly revealed that such an agreement is an option contract for the respondents gave the petitioner an option to buy the subject property until October 17, 2012 for P1,550,000.00. The two essential elements of an option contract, i.e., that the option granted is for a fixed period and at a determined price, [16] are present in the said "Kasunduan.'" However, the petitioner failed to exercise the option given to him for he was not able to buy the subject property on or before October 17, 2012. The effect of this is also provided in the "Kasunduan," that is, the petitioner would have to vacate and to surrender the possession of the subject property to the respondents. But this the petitioner never did, prompting the respondents to file an ejectment suit (unlawful detainer) against him to recover possession of the subject property.

Unlawful detainer is a summary action for the recovery of possession of real property, which may be filed by a lessor, vendor, vendee, or other person against whom the possession of any land or building is unlawfully withheld after the expiration or termination of the right to hold possession by virtue of any contract, express or impliedIn unlawful detainer, the possession of the defendant was originally legal, as his possession was permitted by the plaintiff on account of an express or implied contract between them, but later became illegal due to the expiration or termination of the right to possess under the contract, and the defendant refused to heed the demand for him to vacate the same.[17]

In this case, the petitioner's possession of the subject property was at first legal for the "Kasunduan" recognized his right of possession thereof. Nonetheless, the petitioner's right to possess the subject property ceased upon his failure to buy it back until October 17, 2012. From that time on, the petitioner's possession of the subject property became illegal and, hence, the respondents have all the right to evict him, as well as those claiming rights under him, after his vehement refusal to accede to the respondents' demand to vacate and to surrender the same.
WHEREFORE, finding no reversible error in the assailed Decision and Resolution of the Court of Appeals in CA-G.R. SP No. 137818, the Court resolves to DENY the petition and, thus, AFFIRM said Decision and Resolution.

SO ORDERED.

[1] Rollo, pp. 110-118. Penned by Associate Justice Samuel H. Gaerlan with Associate Justices Normandie B. Pizarro and Ma. Luisa Quijano-Padilla, concurring.

[2] Id. at 126-127.

[3] Id. at 111.

[4] id.

[5] Id. at 112.

[6] This is with regard to Civil Case No. 11-9420 for Declaration of Nullity of the Foreclosure Proceedings, Auction Sale, Certificate of Sale, Cancellation of Title, and Recovery of Ownership filed by Eliza Ronquillo, represented by her Attorney-in-Fact Emmanuel Ronquillo v Yamzon, against the Rural Bank of Cainta, Inc., Office of the Clerk of Court and Ex-Officio Sheriff, Registry of Deeds, Antipolo City, before the RTC of Antipolo City, Branch 95, id. at 129-131.

[7] Supra note 5.

[8] Penned by Presiding Judge Elenita C. Dimaguila, id. at 60-67.

[9] MTCC Decision dated January 10, 2014, id. at 64-67.

[10] Penned by Presiding Judge Mary Josephine P. Lazaro, id. at 79-85.

[11] Id. at 89.

[12] By way of Petition for Review under Rule 42 of the Rules of Court.

[13]Fuentes v. Cowl of Appeals, G.R. No. 109849, February 26, 1997, 268 SCRA 703.

[14] G.R. No. 167884, July 20, 2009, 576 SCRA 561.

[15] Id. at 572-573.

[16] Tuazon v. Del Rosario-Suarez, G.R. No. 168325, December 13, 2010, 637 SCRA 728.

[17] Jose v. Alfuerlo, G.R. No. 169380, November 26, 2012, 686 SCRA 323.

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