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ARTURO SARTE FLORES, Petitioner, Respondents filed their Answer with Affirmative Defenses
vs. and Counterclaims where they admitted the loan but stated
SPOUSES ENRICO L. LINDO, JR. and EDNA C. that it only amounted to ₱340,000. Respondents further
LINDO, Respondents. alleged that Enrico was not a party to the loan because it
was contracted by Edna without Enrico’s signature.
DECISION Respondents prayed for the dismissal of the case on the
grounds of improper venue, res judicata and forum-
shopping, invoking the Decision of the RTC, Branch 33. On 7
CARPIO, J.: March 2005, respondents also filed a Motion to Dismiss on
the grounds of res judicata and lack of cause of action.
The Case
The Decision of the Trial Court
Before the Court is a petition for review1 assailing the 30 May
2008 Decision2 and the 4 August 2008 Resolution3 of the On 22 July 2005, the RTC, Branch 42 issued an
Court of Appeals in CA-G.R. SP No. 94003. Order8 denying the motion to dismiss. The RTC, Branch 42
ruled that res judicata will not apply to rights, claims or
The Antecedent Facts demands which, although growing out of the same subject
matter, constitute separate or distinct causes of action and
were not put in issue in the former action. Respondents filed
The facts, as gleaned from the Court of Appeals’ Decision, a motion for reconsideration. In its Order9 dated 8 February
are as follows: 2006, the RTC, Branch 42 denied respondents’ motion. The
RTC, Branch 42 ruled that the RTC, Branch 33 expressly
On 31 October 1995, Edna Lindo (Edna) obtained a loan stated that its decision did not mean that petitioner could no
from Arturo Flores (petitioner) amounting to ₱400,000 longer recover the loan petitioner extended to Edna.
payable on 1 December 1995 with 3% compounded monthly
interest and 3% surcharge in case of late payment. To Respondents filed a Petition for Certiorari and Mandamus
secure the loan, Edna executed a Deed of Real Estate with Prayer for a Writ of Preliminary Injunction and/or
Mortgage4 (the Deed) covering a property in the name of Temporary Restraining Order before the Court of Appeals.
Edna and her husband Enrico (Enrico) Lindo, Jr.
(collectively, respondents). Edna also signed a Promissory
Note5 and the Deed for herself and for Enrico as his The Decision of the Court of Appeals
attorney-in-fact.
In its 30 May 2008 Decision, the Court of Appeals set aside
Edna issued three checks as partial payments for the loan. the 22 July 2005 and 8 February 2006 Orders of the RTC,
All checks were dishonored for insufficiency of funds, Branch 42 for having been issued with grave abuse of
prompting petitioner to file a Complaint for Foreclosure of discretion.
Mortgage with Damages against respondents. The case was
raffled to the Regional Trial Court of Manila, Branch 33 The Court of Appeals ruled that while the general rule is that
(RTC, Branch 33) and docketed as Civil Case No. 00-97942. a motion to dismiss is interlocutory and not appealable, the
rule admits of exceptions. The Court of Appeals ruled that
In its 30 September 2003 Decision,6 the RTC, Branch 33 the RTC, Branch 42 acted with grave abuse of discretion in
ruled that petitioner was not entitled to judicial foreclosure of denying respondents’ motion to dismiss.
the mortgage. The RTC, Branch 33 found that the Deed was
executed by Edna without the consent and authority of
Enrico. The RTC, Branch 33 noted that the Deed was
executed on 31 October 1995 while the Special Power of
Attorney (SPA) executed by Enrico was only dated 4
November 1995.
Hence, the petition before this Court. In this case, however, there are circumstances that the Court
takes into consideration.
The Issue
Petitioner filed an action for foreclosure of mortgage. The
RTC, Branch 33 ruled that petitioner was not entitled to
The sole issue in this case is whether the Court of Appeals
judicial foreclosure because the Deed of Real Estate
committed a reversible error in dismissing the complaint for
Mortgage was executed without Enrico’s consent. The RTC,
collection of sum of money on the ground of multiplicity of
Branch 33 stated:
suits.
The real estate mortgage executed by petition Edna Lindo Both Article 96 and Article 127 of the Family Code provide
over their conjugal property is undoubtedly an act of strict that the powers do not include disposition or encumbrance
dominion and must be consented to by her husband to be without the written consent of the other spouse. Any
effective. In the instant case, the real estate mortgage, disposition or encumbrance without the written consent shall
absent the authority or consent of the husband, is be void. However, both provisions also state that "the
necessarily void. Indeed, the real estate mortgage is this transaction shall be construed as a continuing offer on the
case was executed on October 31, 1995 and the subsequent part of the consenting spouse and the third person, and may
special power of attorney dated November 4, 1995 cannot be perfected as a binding contract upon the acceptance
be made to retroact to October 31, 1995 to validate the by the other spouse x x x before the offer is withdrawn by
mortgage previously made by petitioner. either or both offerors."
The liability of Edna Lindo on the principal contract of the In this case, the Promissory Note and the Deed of Real
loan however subsists notwithstanding the illegality of the Estate Mortgage were executed on 31 October 1995. The
mortgage. Indeed, where a mortgage is not valid, the Special Power of Attorney was executed on 4 November
principal obligation which it guarantees is not thereby 1995. The execution of the SPA is the acceptance by the
rendered null and void. That obligation matures and other spouse that perfected the continuing offer as a
becomes demandable in accordance with the stipulation binding contract between the parties, making the Deed
pertaining to it. Under the foregoing circumstances, what is of Real Estate Mortgage a valid contract.
lost is merely the right to foreclose the mortgage as a special
remedy for satisfying or settling the indebtedness which is
However, as the Court of Appeals noted, petitioner allowed
the principal obligation. In case of nullity, the mortgage deed
the decisions of the RTC, Branch 33 and the RTC, Branch
remains as evidence or proof of a personal obligation of the
93 to become final and executory without asking the courts
debtor and the amount due to the creditor may be enforced
for an alternative relief. The Court of Appeals stated that
in an ordinary action.
petitioner merely relied on the declarations of these courts
that he could file a separate personal action and thus failed
In view of the foregoing, judgment is hereby rendered to observe the rules and settled jurisprudence on multiplicity
declaring the deed of real estate mortgage as void in the of suits, closing petitioner’s avenue for recovery of the loan.
absence of the authority or consent of petitioner’s spouse
therein. The liability of petitioner on the principal contract of
Nevertheless, petitioner still has a remedy under the law.
loan however subsists notwithstanding the illegality of the
real estate mortgage.19
In Chieng v. Santos,20 this Court ruled that a mortgage-
creditor may institute against the mortgage-debtor either a
The RTC, Branch 93 also ruled that Edna’s liability is not
personal action for debt or a real action to foreclose the
affected by the illegality of the real estate mortgage.
mortgage. The Court ruled that the remedies are alternative
and not cumulative and held that the filing of a criminal
Both the RTC, Branch 33 and the RTC, Branch 93 action for violation of Batas Pambansa Blg. 22 was in effect
misapplied the rules. a collection suit or a suit for the recovery of the mortgage-
debt.21 In that case, however, this Court pro hac vice, ruled
that respondents could still be held liable for the balance of
Article 124 of the Family Code provides:
the loan, applying the principle that no person may unjustly
enrich himself at the expense of another.22
Art. 124. The administration and enjoyment of the conjugal
partnership property shall belong to both spouses jointly. In
The principle of unjust enrichment is provided under Article
case of disagreement, the husband’s decision shall prevail,
22 of the Civil Code which provides:
subject to recourse to the court by the wife for proper
remedy, which must be availed of within five years from the
date of contract implementing such decision. Art. 22. Every person who through an act of performance by
another, or any other means, acquires or comes into
possession of something at the expense of the latter without
In the event that one spouse is incapacitated or otherwise
just or legal ground, shall return the same to him.
unable to participate in the administration of the conjugal
properties, the other spouse may assume sole powers of
administration. These powers do not include disposition or There is unjust enrichment "when a person unjustly retains a
encumbrance without authority of the court or the written benefit to the loss of another, or when a person retains
consent of the other spouse. In the absence of such money or property of another against the fundamental
authority or consent the disposition or encumbrance shall be principles of justice, equity and good conscience."23 The
void. However, the transaction shall be construed as a principle of unjust enrichment requires two conditions: (1)
continuing offer on the part of the consenting spouse that a person is benefited without a valid basis or
and the third person, and may be perfected as a binding justification, and (2) that such benefit is derived at the
contract upon the acceptance by the other spouse or expense of another.241avvphi1
authorization by the court before the offer is withdrawn
by either or both offerors. (Emphasis supplied)
The main objective of the principle against unjust enrichment
is to prevent one from enriching himself at the expense of
another without just cause or consideration.25 The principle is consultation before the case was assigned to the writer of
applicable in this case considering that Edna admitted the opinion of the Court’s Division.
obtaining a loan from petitioners, and the same has not been
fully paid without just cause. The Deed was declared void
RENATO C. CORONA
erroneously at the instance of Edna, first when she raised it
Chief Justice
as a defense before the RTC, Branch 33 and second, when
she filed an action for declaratory relief before the RTC,
Branch 93. Petitioner could not be expected to ask the RTC,
Branch 33 for an alternative remedy, as what the Court of
Appeals ruled that he should have done, because the RTC,
Branch 33 already stated that it had no jurisdiction over any
personal action that petitioner might have against Edna. Footnotes
SO ORDERED. 7
Id. at 89-90.
ANTONIO T. CARPIO 8
Id. at 48-50. Penned by Judge Guillermo G.
Associate Justice Purganan.
WE CONCUR: 9
Id. at 51. Penned by Judge Vedasto R. Marco.
14
I attest that the conclusions in the above Decision had been Id.
reached in consultation before the case was assigned to the
writer of the opinion of the Court’s Division. 15
Id. at 493 citing Bachrach Motor Co., Inc. v.
Esteban Icarañgal and Oriental Commercial Co.,
ANTONIO T. CARPIO Inc., 68 Phil. 287 (1939).
Associate Justice
Chairperson 16
Id.
CERTIFICATION 17
Rollo, pp. 87-88.
Antecedents
On March 18, 1991, the petitioners delivered the final M. Cuaderno St., Executive Village, BF Homes,
amount of ₱700,000.00 to Ma. Elena, who executed a deed Parañaque, Metro Manila, and covered by TCT
of absolute sale in their favor. However, Ma. Elena did not Nos. 63376 and 63377 is declared null and void.
turn over the owner’s duplicate copy of TCT No. 63376,
claiming that said copy was in the possession of a relative
2. Defendant Mrs. Elena Parulan is directed to pay
who was then in Hongkong.12 She assured them that the
litigation expenses amounting to ₱50,000.00 and
owner’s duplicate copy of TCT No. 63376 would be turned
the costs of the suit.
over after a week.
SO ORDERED.19
On March 19, 1991, TCT No. 63377 was cancelled and a
new one was issued in the name of the petitioners.
The RTC declared that the SPA in the hands of Ma. Elena
was a forgery, based on its finding that Dionisio had been
Ma. Elena did not turn over the duplicate owner’s copy of
out of the country at the time of the execution of the
TCT No. 63376 as promised. In due time, the petitioners
SPA;20 that NBI Sr. Document Examiner Rhoda B. Flores
learned that the duplicate owner’s copy of TCT No. 63376
had certified that the signature appearing on the SPA
had been all along in the custody of Atty. Jeremy Z. Parulan,
purporting to be that of Dionisio and the set of standard
who appeared to hold an SPA executed by his brother
sample signatures of Dionisio had not been written by one
Dionisio authorizing him to sell both lots.13
and the same person;21 and that Record Officer III Eliseo O.
Terenco and Clerk of Court Jesus P. Maningas of the Manila
At Atanacio’s instance, the petitioners met on March 25, RTC had issued a certification to the effect that Atty. Alfred
1991 with Atty. Parulan at the Manila Peninsula.14 For that Datingaling, the Notary Public who had notarized the SPA,
meeting, they were accompanied by one Atty. had not been included in the list of Notaries Public in Manila
Olandesca.15 They recalled that Atty. Parulan "smugly for the year 1990-1991.22
demanded ₱800,000.00" in exchange for the duplicate
owner’s copy of TCT No. 63376, because Atty. Parulan
The RTC rejected the petitioners’ defense of being buyers in
represented the current value of the property to be ₱1.5
good faith because of their failure to exercise ordinary
million. As a counter-offer, however, they tendered
prudence, including demanding from Ma. Elena a court order
₱250,000.00, which Atty. Parulan declined,16 giving them
authorizing her to sell the properties similar to the order that
only until April 5, 1991 to decide.
the Los Baños Rural Bank had required before accepting the
mortgage of the property.23 It observed that they had
Hearing nothing more from the petitioners, Atty. Parulan appeared to be in a hurry to consummate the transaction
decided to call them on April 5, 1991, but they informed him despite Atanacio’s advice that they first consult a lawyer
that they had already fully paid to Ma. Elena.17 before buying the property; that with ordinary prudence, they
should first have obtained the owner’s duplicate copies of the
TCTs before paying the full amount of the consideration; and
Thus, on April 15, 1991, Dionisio, through Atty. Parulan,
that the sale was void pursuant to Article 124 of the Family
commenced an action (Civil Case No. 91-
Code.24
1005 entitled Dionisio Z. Parulan, Jr., represented by
Jeremy Z. Parulan, as attorney in fact, v. Ma. Elena Parulan,
Sps. Rex and Coney Aggabao), praying for the declaration of Ruling of the CA
the nullity of the deed of absolute sale executed by Ma.
Elena, and the cancellation of the title issued to the
As stated, the CA affirmed the RTC, opining that Article 124
petitioners by virtue thereof.
of the Family Code applied because Dionisio had not
consented to the sale of the conjugal property by Ma. Elena;
In turn, the petitioners filed on July 12, 1991 their own action and that the RTC correctly found the SPA to be a forgery.
for specific performance with damages against the
respondents.
The CA denied the petitioners’ motion for reconsideration.25
Veloso is inapplicable, however, because the contested I attest that the conclusions in the above Decision had been
property therein was exclusively owned by the petitioner and reached in consultation before the case was assigned to the
did not belong to the conjugal regime. Veloso being upon writer of the opinion of the Court’s Division.
conjugal property, Article 124 of the Family Code did not
apply.
CONCHITA CARPIO MORALES
Associate Justice
In contrast, the property involved herein pertained to the Chairperson
conjugal regime, and, consequently, the lack of the written
consent of the husband rendered the sale void pursuant to
Article 124 of the Family Code. Moreover, even assuming CERTIFICATION
that the property involved in Veloso was conjugal, its sale
was made on November 2, 1987, or prior to the effectivity of Pursuant to Section 13, Article VIII of the Constitution, and
the Family Code; hence, the sale was still properly covered the Division Chairperson’s Attestation, I certify that the
by Article 173 of the Civil Code, which provides that a sale conclusions in the above Decision had been reached in
effected without the consent of one of the spouses is only consultation before the case was assigned to the writer of
voidable, not void. However, the sale herein was made the opinion of the Court’s Division.
already during the effectivity of the Family Code, rendering
the application of Article 124 of the Family Code clear and
indubitable. RENATO C. CORONA
Chief Justice
31
11
Id., pp. 24-25. Under Article 1876, Civil Code, a general
agency comprises all the business of the principal,
12 but a special agency comprises one or more
Id., p. 57. specific transactions.
13
Id., p. 110. 32
Article 1409, Civil Code.
14
Id., p. 26. 33
Heirs of Ignacia Aguilar-Reyes v. Mijares, G.R.
No. 143826, August 28, 2003, 410 SCRA 97, 107
15
Id., p. 110.
34
Bautista v. Silva, G.R. No. 157434, September
16
Id., p. 26. 19, 2006, 502 SCRA 334, 346; Aguirre v. Court of
Appeals, G.R. No. 122249, January 29, 2004, 421
17
SCRA 310, 321.
Id., p. 105.
35
18
Id, p. 348.
Id., pp. 14-15.
36
19
Id, p. 348.
Id., p. 56.
37
20
Abad v. Guimba, G.R. No. 157002, July 29,
Id., p. 58. 2005, 465 SCRA 356, 366-367.
21
Id., p. 59. 38
G.R. No. 157701, December 9, 2005, 477 SCRA
227.
22
Id., pp. 58-59.
39
Id., p. 244.
23
Id., pp. 59-60.
40
Bautista v. Silva, note 34.
24
Id., p. 60.
41
Supra, note 26.
25
Supra, at note 3.
26
G.R. No. 102737, August 21, 1996, 260 SCRA
593.
27
Article 254. Titles III, IV, V, VI, VII, VIII, IX, XI
and XV of Book I of Republic Act No. 386,
otherwise known as the Civil Code of the
Philippines, as amended, and Articles 17, 18, 19,
27, 28, 29, 30, 31, 39, 40, 41 and 42 of
Presidential Decree No. 603, otherwise known as
the Child and Youth Welfare Code, as amended,
and all laws, decrees, executive orders,
proclamations, rules and regulations, or parts
thereof, inconsistent herewith are hereby repealed.
28
Alfredo v. Borras, G.R. No. 144225, June 17,
2003, 404 SCRA 145; Heirs of Ignacia Aguilar-
Reyes v. Mijares, G.R. No. 143826, August 28,
2003, 410 SCRA 97; Sps. Guiang v. Court of