HEIRS OF TAN ENG KEE VS. CA, 341 SCRA 740

HEIRS OF TAN ENG KEE VS. CA, 341 SCRA 740

(citing Evangelista vs Collector of Internal Revenuw, 54 O.G. 996

 DE LEON, JR., J .:

G.R. No. 126881. October 3, 2000

Parties:

HEIRS OF TAN ENG KEE, petitioners 

COURT OF APPEALS and BENGUET LUMBER COMPANY, represented by its President TAN ENG LAY, respondents

Nature: PETITION for review on certiorari of a decision of the Court of Appeals.

Keyword: Partnership, Joint venture

Facts:

Following the death of Tan Eng Kee, the HEIRS OF TAN ENG KEE (Matilde Abube, the common-law spouse & their children) filed suit against the decedent’s brother TAN ENG LAY. The complaint in the Baguio RTC was for the accounting, liquidation and winding up of the alleged partnership formed after World War II between Tan Eng Kee and Tan Eng Lay. On March 1991, the petitioner HEIRS filed an amended complaint impleading BENGUET LUMBER COMPANY (BLC), as represented by Tan Eng Lay.

                The amended complaint alleged that after the war, Tan Eng Kee and Tan Eng Lay, pooling their resources and industry together, entered into a partnership engaged in the business of selling lumber and hardware and construction supplies. They named their enterprise Benguet Lumber” which they jointly managed until Tan Eng Kee’s death. Petitioner HEIRS averred that the business prospered due to the hard work and thrift of the alleged partners.

However, they claimed that in 1981, Tan Eng Lay and his children caused the conversion of the partnership “Benguet Lumber” into a corporation called “Benguet Lumber Company.” The incorporation was purportedly a ruse to deprive Tan Eng Kee and his heirs of their rightful participation in the profits of the business. Petitioners prayed for accounting of the partnership assets, and the dissolution, winding up and liquidation thereof, and the equal division of the net assets of Benguet Lumber.

RTC: declared that: (1) Benguet Lumber is a JOINT VENTURE which is akin to particular partnership; (2) that the deceased Tan Eng Kee and Tan Eng Lay are joint adventurers and/or partners in a business venture and/or particular its and/or losses of the business venture or particular partnership; (3) that the assets of Benguet Lumber are the same assets turned over to Benguet Lumber Co., Inc. and as such the heirs or legal representative of the deceased Tan Eng Kee have a legal right to share in said assets; (4) that all the rights and obligations of Tan Eng Kee as joint adventurers and/or as partner in a particular partnership have descended to the plaintiffs who are his legal heirs; (5) ordered Defendant to render accounting of all the assets of Benguet Lumber Company, Inc.; (6) Denied the award of damages; (7) denied the counter-claim of the defendants for lack of merit.

CA: reversed the judgment of the trial court.

As a side-bar to the proceedings, petitioners filed Criminal Case against Tan Eng Lay and Wilborn Tan for the use of allegedly falsified documents in a judicial proceeding. Petitioners complained that Exhibits offered by the defendants before the trial court, consisting of payrolls indicating that Tan Eng Kee was a mere employee of Benguet Lumber, were fake, based on the discrepancy in the signatures of Tan Eng Kee. They also filed Criminal Cases Nos. 78857-78870 against Gloria, Julia, Juliano, Willie, Wilfredo, Jean, Mary and Willy, all surnamed Tan, for alleged falsification of commercial documents by a private individual.

MTC: dismissed the cases for insufficiency of evidence

Issue:  WHETHER OR NOT THE LATE TAN ENG KEE WAS A PARTNER OR AN EMPLOYEE OF HIS BROTHER TAN ENG LAY

Held: We conclude that Tan Eng Kee was only an employee, not a partner.

Ratio:

A contract of partnership is defined by law as one where:

x x x two or more persons bind themselves to contribute money, property, or industry to a common fund, with the intention of dividing the profits among themselves.

Two or more persons may also form a partnership for the exercise of a profession.¹⁴

Thus, in order to constitute a partnership, it must be established that (1) two or more persons bound themselves to contribute money, property, or industry to a common fund, and (2) they intend to divide the profits among themselves.¹⁵ The agreement need not be formally reduced into writing, since statute allows the oral constitution of a partnership, save in two instances: (1) when immovable property or real rights are contributed,¹⁶ and (2) when the partnership has a capital of three thousand pesos or more.

In both cases, a public instrument is required. An inventory to be signed by the parties and attached to the public instrument is also indispensable to the validity of the partnership whenever immovable property is contributed to the partnership.¹⁹

The trial court determined that Tan Eng Kee and Tan Eng Lay had entered into a joint venture, which it said is akin to a particular partnership.²⁰ A particular partnership is distinguished from a joint adventure, to wit:

(a)A joint adventure (an American concept similar to our joint accounts) is a sort of informal partnership, with no firm name and no legal personality. In a joint account, the participating merchants can transact business under their own name, and can be individually liable therefor.

(b)Usually, but not necessarily a joint adventure is limited to a SINGLE TRANSACTION, although the business of pursuing to a successful termination may continue for a number of years; a partnership generally relates to a continuing business of various transactions of a certain kind.

A joint venture “presupposes generally a parity of standing between the joint co-ventures or partners, in which each party has an equal proprietary interest in the capital or property contributed, and where each party exercises equal rights in the conduct of the business.”²² Nonetheless, in Aurbach, et al. v. Sanitary Wares Manufacturing Corporation, et al.²³ we expressed the view that a joint venture may be likened to a particular partnership.

Undoubtedly, the best evidence would have been the contract of partnership itself, or the articles of partnership, but there is none. The alleged partnership, though, was never formally organized. In addition, petitioners point out that the New Civil Code was not yet in effect when the partnership was allegedly formed sometime in 1945, although the contrary may well be argued that nothing prevented the parties from complying with the provisions of the New Civil Code when it took effect on August 30, 1950. But all that is in the past. The net effect, however, is that we are asked to determine whether a partnership existed based purely on circumstantial evidence. A review of the record persuades us that the Court of Appeals correctly reversed the decision of the trial court. The evidence presented by petitioners falls short of the quantum of proof required to establish a partnership.

Unfortunately for petitioners, Tan Eng Kee has passed away. Only he, aside from Tan Eng Lay, could have expounded on the precise nature of the business relationship between them. In the absence of evidence, we cannot accept as an established fact that Tan Eng Kee allegedly contributed his resources to a common fund for the purpose of establishing a partnership. The testimonies to that effect of petitioners’ witnesses is directly controverted by Tan Eng Lay. It should be noted that it is not with the number of witnesses wherein preponderance lies;²⁴ the quality of their testimonies is to be considered. None of petitioners’ witnesses could suitably account for the beginnings of Benguet Lumber Company, except perhaps for Dionisio Peralta whose deceased wife was related to Matilde Abubo.²⁵ He stated that when he met Tan Eng Kee after the liberation, the latter asked the former to accompany him to get 80 pieces of G.I. sheets supposedly owned by both brothers.²⁶ Tan Eng Lay, however, denied knowledge of this meeting or of the conversation between Peralta and his brother.²⁷ Tan Eng Lay consistently testified that he had his business and his brother had his, that it was only later on that his said brother, Tan Eng Kee, came to work for him. Be that as it may, co-ownership or co-possession (specifically here, of the G.I. sheets) is not an indicium of the existence of a partnership.²⁸

The essence of a partnership is that the partners share in the profits and losses.²⁹ Each has the right to demand an accounting as long as the partnership exists.³⁰ 

A demand for periodic accounting is evidence of a partnership.³⁴ During his lifetime, Tan Eng Kee appeared never to have made any such demand for accounting from his brother, Tang Eng Lay.

We conclude that Tan Eng Kee was only an employee, not a partner. Even if the payrolls as evidence were discarded, petitioners would still be back to square one, so to speak, since they did not present and offer evidence that would show that Tan Eng Kee received amounts of money allegedly representing his share in the profits of the enterprise. Petitioners failed to show how much their father, Tan Eng Kee, received, if any, as his share in the profits of Benguet Lumber Company for any particular period. Hence, they failed to prove that Tan Eng Kee and Tan Eng Lay intended to divide the profits of the business between themselves, which is one of the essential features of a partnership.

Ruling: WHEREFORE, the petition is hereby denied, and the appealed decision of the Court of Appeals is hereby AFFIRMED in toto. No pronouncement as to costs.

SO ORDERED.

Same Same:

Partnerships; Words and Phrases; In order to constitute a partnership, it must be established that (1) two or more persons bound themselves to contribute money, property or industry to a common fund, and (2) they intended to divide the profits among themselves.—

The primordial issue here is whether Tan Eng Kee and Tan Eng Lay were partners in Benguet Lumber. A contract of partnership is defined by law as one where: x x x two or more persons bind themselves to contribute money, property, or industry to a common fund, with the intention of dividing the profits among themselves. Two or more persons may also form a partnership for the exercise of a profession. Thus, in order to constitute a partnership, it must be established that (1) two or more persons bound themselves to contribute money, property, or industry to a common fund, and (2) they intend to divide the profits among themselves. The agreement need not be formally reduced into writing, since statute allows the oral constitution of a partnership, save in two instances: (1) when immovable property or real rights are contributed, and (2) when the partnership has a capital of three thousand pesos or more. In both cases, a public instrument is required. An inventory to be signed by the parties and attached to the public instrument is also indispensable to the validity of the partnership whenever immovable property is contributed to the partnership.

Same; Same; Joint Ventures; “Partnership” and “Joint Venture,” Distinguished.—The trial court determined that Tan Eng Kee and Tan Eng Lay had entered into a joint venture, which it said is akin to a particular partnership. A particular partnership is distinguished from a joint adventure, to wit: (a) A joint adventure (an American concept similar to our joint accounts ) is a sort of informal partnership, with no firm name and no legal personality. In a joint account, the participating merchants can transact business under their own name, and can be individually liable therefor, (b) Usually, but not necessarily a joint adventure is limited to a SINGLE TRANSACTION, although the business of pursuing to a successful termination may continue for a number of years; a partnership generally relates to a continuing business of various transactions of a certain kind.

Same; Same; Same; Same; A joint venture may be likened to a particular partnership; The legal concept of a joint venture is of common law origin and has no precise legal definition, but it has been generally understood to mean an organization formed for some temporary purpose.—A joint venture “presupposes generally a parity of standing between the joint co-ventures or partners, in which each party has an equal proprietary interest in the capital or property contributed, and where each party exercises equal rights in the conduct of the business.” Nonetheless, in Aurbach, et al. v. Sanitary Wares Manufacturing Corporation, et al., we expressed the view that a joint venture may be likened to a particular partnership, thus: The legal concept of a joint venture is of common law origin. It has no precise legal definition, but it has been generally understood to mean an organization formed for some temporary purpose. (Gates v. Megargel, 266 Fed. 811 [1920]) It is hardly distinguishable from the partnership, since their elements are similar—community of interest in the business, sharing of profits and losses, and a mutual right of control. (Blackner v. McDermott, 176 F. 2d. 498 [1949]; Carboneau v. Peterson, 95 P.2d., 1043 [1939]; Buckley v. Chadwick, 45 Cal. 2d. 183, 288 P.2d. 12 289 P.2d. 242 [1955]). The main distinction cited by most opinions in common law jurisdiction is that the partnership contemplates a general business with some degree of continuity, while the joint venture is formed for the execution of a single transaction, and is thus of a temporary nature. (Tufts v. Mann, 116 Cal. App. 170, 2 P.2d. 500 [1931]; Harmon v. Martin, 395 111. 595, 71 NE 2d. 74 [1947]; Gates v. Megargel, 266 Fed. 811 [1920]). This observation is not entirely accurate in this jurisdiction, since under the Civil Code, a partnership may be particular or universal, and a particular partnership may have for its object a specific undertaking. (Art. 1783, Civil Code). It would seem therefore that under Philippine law, a joint venture is a form of partnership and should thus be governed by the law of partnerships. The Supreme Court has however recognized a distinction between these two business forms, and has held that although a corporation cannot enter into a partnership contract, it may however engage in a joint venture with others. (At p. 12, Tuazon v. Bolaños, 95 Phil. 906 [1954]) (Campos and Lopez-Campos Comments, Notes and Selected Cases, Corporation Code 1981).

Same; Co-Ownership; A co-ownership or co-possession is not an indicium of the existence of a partnership.—None of petitioners’ witnesses could suitably account for the beginnings of Benguet Lumber Company, except perhaps for Dionisio Peralta whose deceased wife was related to Matilde Abubo. He stated that when he met Tan Eng Kee after the liberation, the latter asked the former to accompany him to get 80 pieces of G.I. sheets supposedly owned by both brothers. Tan Eng Lay, however, denied knowledge of this meeting or of the conversation between Peralta and his brother. Tan Eng Lay consistently testified that he had his business and his brother had his, that it was only later on that his said brother, Tan Eng Kee, came to work for him. Be that as it may, co-ownership or copossession (specifically here, of the G.I. sheets) is not an indicium of the existence of a partnership.

Same; The essence of a partnership is that the partners share in the profits and losses; A demand for periodic accounting is evidence of a partnership.—Besides, it is indeed odd, if not unnatural, that despite the forty years the partnership was allegedly in existence, Tan Eng Kee never asked for an accounting. The essence of a partnership is that the partners share in the profits and losses. Each has the right to demand an accounting as long as the partnership exists. We have allowed a scenario wherein “[i]f excellent relations exist among the partners at the start of the business and all the partners are more interested in seeing the firm grow rather than get immediate returns, a deferment of sharing in the profits is perfectly plausible.” But in the situation in the case at bar, the deferment, if any, had gone on too long to be plausible. A person is presumed to take ordinary care of his concerns, x x x A demand for periodic accounting is evidence of a partnership. During his lifetime, Tan Eng Kee appeared never to have made any such demand for accounting from his brother, Tang Eng Lay.

Same; Where circumstances taken singly may be inadequate to prove the intent to form a partnership, nevertheless, the collective effect of these circumstances may be such as to support a finding of the existence of the parties’ intent.—In the instant case, we find private respondent’s arguments to be well-taken. Where circumstances taken singly may be inadequate to prove the intent to form a partnership, nevertheless, the collective effect of these circumstances may be such as to support a finding of the existence of the parties’ intent. Yet, in the case at bench, even the aforesaid circumstances when taken together are not persuasive indicia of a partnership. They only tend to show that Tan Eng Kee was involved in the operations of Benguet Lumber, but in what capacity is unclear. We cannot discount the likelihood that as a member of the family, he occupied a niche above the rank-and-file employees. He would have enjoyed liberties otherwise unavailable were he not kin, such as his residence in the Benguet Lumber Company compound. He would have moral, if not actual, superiority over his fellow employees, thereby entitling him to exercise powers of supervision. It may even be that among his duties is to place orders with suppliers. Again, the circumstances proffered by petitioners do not provide a logical nexus to the conclusion desired; these are not inconsistent with the powers and duties of a manager, even in a business organized and run as informally as Benguet Lumber Company.

De Guzman, Jr. vs. National Treasurer of the Republic of the Phils

De Guzman, Jr. vs. National Treasurer of the Republic of the Phils

G.R. No. 143281 | August 3, 2000

KAPUNAN, J.

Parties:

Petitioners: SPOUSES FRANCISCO and AMPARO DE GUZMAN, JR.

Respondents: THE NATIONAL TREASURER OF THE REPUBLIC OF THE PHILIPPINES and THE REGISTER OF DEEDS OF MARIKINA CITY

Nature: PETITION for review on certiorari of a decision of the Court of Appeals.

Keyword: Original duplicate of title; impostors selling property; Assurance Fund

Summary: Spouses Milambiling purchased a parcel of land in Antipolo. Due to their work as accountant and nurse in Saudi Arabia, they entrusted the deed of sale of the parcel of land they bought from Sta. Lucia Realty & the corresponding certificate of title to Belgica, a long-time friend. After some time, Belgica informed the spouses that the certificate of title of the said land had been transferred in their name. After an agreement by the couple and Belgica that she will bring the title in Saudi, she informed them that she forgot the title in their house in the Philippines. Angered by the circumstance, Urlan Malimbing asked his relatives to check with the office of the registrar what had happened to their title and was informed that the CTC had been indeed transferred to their names but was subsequently cancelled and title transferred to the spouses de Guzman. Delving in deeper, it turned out that an imposter-couple who had a copy of the owner’s duplicate copy of Malimbiling’s property in Antipolo convinced and sold the property to the spouses de Guzman. Learning upon the circumstance, Urlan Malimbiling went back to the Philippines and filed a case of declaration of nullity of sale and title with damages against spouses de Guzman and the former won. Spouses de Guzman appealed to the CA and the SC but they still lost. Subsequently, the Spouses De Guzman filed an action for damages against the Assurance Fund before the RTC impleading the National Treasuer and the Register of Deeds of Marikina.

RTC: rendered decision in favor of the spouses de Guzman

CA: Reversed the decision of the RTC stating that they do not fall under the circumstance stated in PD 1529 and thus not entitled to damages.

SC: Affirmed the decision of the CA.

Facts: On 01 July 1985, Urlan Milambiling and Asuncion Velarde purchased a parcel of land situated in Antipolo, Rizal from Sta. Lucia Realty and Development, Inc. Although they were already civilly married, Asuncion used her maiden name in the Deed of Sale because, being conservative, she did not want to use her married name until she was married in church.

After their church wedding on 05 July 1985, Urlan and Asuncion Milambiling left for Europe on their honeymoon and from there, they proceeded to Saudi Arabia where they were working as accountant and nurse, respectively.

Before leaving for abroad, the spouses Milambiling entrusted the Deed of Sale of the parcel of land they bought from Sta. Lucia Realty and the corresponding Certificate of Title still in the name of Sta. Lucia Realty to a long-time friend and one of their principal wedding sponsors, Marilyn Belgica, who volunteered to register the sale and transfer the title in their names.

Later, the spouses Milambiling learned from Belgica through an overseas telephone call that a transfer certificate of title of the said parcel of land had already been issued in their names. Belgica committed to the Milambiling spouses that she will personally deliver the title to them in Saudi Arabia. Sometime in May 1986, Belgica arrived in Saudi Arabia but the title was not with her. Belgica said that she left it in their house in the Philippines and forgot to bring it with her.

Urlan Milambiling was angry and immediately called up his relatives in the Philippines and asked them to find out from the Office of the Register of Deeds of Rizal what happened to their title. He was informed that the Certificate of Title covering the said parcel of land had indeed been transferred in their names but was subsequently cancelled and title transferred in the names of x x x the spouses De Guzman.

Milambiling was also told about the circumstances that led to the cancellation of their title. It appears that while the spouses Milambiling were in Saudi Arabia, a couple identifying themselves as the spouses Urlan and Asuncion Milambiling went to the house of a certain Natividad Javiniar, a real estate broker, inquiring if the latter could find a buyer for their lot located in Vermont Subdivision, Antipolo, Rizal. Javiniar accompanied the said couple to the house of [the] spouses De Guzman. Having somehow obtained possession of the owner’s duplicate copy of the certificate of title in the name of the spouses Milambiling, the impostor-couple were able to convince the de Guzmans to buy the property. On 20 November 1985, the impostor-couple, posing as the spouses Milambiling, executed a Deed of Absolute Sale in favor of [the] spouses de Guzman who paid the stipulated purchase price of P99,200.00. On 30 April 1986, [the De Guzmans] registered the said sale with the Register of Deeds of Marikina who cancelled the certificate of title in the name of the Milambilings and issued TCT No. N-117249 in the names of [the] De Guzman[s].

Upon learning of the above, Urlan Milambiling quickly returned to the Philippines. On 24 July 1986, the spouses Milambiling filed an action against [the spouses De Guzman] before the Regional Trial Court of Antipolo, Rizal, Branch 73, for declaration of nullity of sale and title with damages.

 [The] spouses De Guzman appealed the decision of the trial court to the Court of Appeals. On 18 July 1991, [the Court of Appeals] rendered its decision affirming the decision of the court a quo.

[The] spouses De Guzman then went to the Supreme Court on a petition for review on certiorari. On 01 July 1992, the High Tribunal issued a resolution denying the petition on the ground that no reversible error was committed by the Court of Appeals.

On 11 February 1993, [the] spouses De Guzman filed [an] action for damages against the Assurance Fund before the Regional Trial Court of Pasig, Branch 153[,] [impleading the National Treasurer of the Republic of the Philippines and the Register of Deeds of Marikina City.]¹

RTC: rendered its decision finding in favor of the De Guzman spouses adjudging the Assurance Fund liable to the amount actually paid by the plaintiffs in the amount of PHP 99,200.00, ordering the defendants treasurer and/or registrar to pay or cause the payment of the said amount to herein plaintiff.

CA: Found merit on the appeal of the National Treasurer and the Marikina Registrar of Deeds and reversed the decision of the RTC.

SC: Affirmed the decision of the CA.

Issue: Whether or not the spouses De Guzman are entitled to compensation for damages by the Assurance Fund

Held: No. They are not entitled.

Ratio: Section 95 of Presidential Decree No. 1529, otherwise known as the Property Registration Decree, provides:

SEC. 95. Action for compensation from funds.—A person who, without negligence on his part, sustains loss or damage, or is deprived of land or any estate or interest therein in consequence of the bringing of the land under the operation of the Torrens system or arising after original registration of land, through fraud or in consequence of any error, omission, mistake or misdescription in any certificate of title or in any entry or memorandum in the registration book, and who by the provisions of this Decree is barred or otherwise precluded under the provision of any law from bringing an action for the recovery of such land or the estate or interest therein, may bring an action in any court of competent jurisdiction for the recovery of damage to be paid out of the Assurance Fund.

The precursor of Section 95, Section 101 of the Land Registration Act (Act No. 496), similarly states:

SEC. 101. Any person who without negligence on his part sustains loss or damage through any omission, mistake or misfeasance of the clerk, or register of deeds, or of any examiner of titles, or of any deputy or clerk of the register of deeds in the performance of their respective duties under the provisions of this Act, and any person who is wrongfully deprived of any land or any interest therein, without negligence on his part, through the bringing of the same under the provisions of this Act or by the registration of any other persons as owner of such land, or by any mistake, omission, or misdescription in any certificate or owner’s duplicate, or in any entry or memorandum in the register or other official book, or by any cancellation, and who by the provisions of this Act is barred or in any way precluded from bringing an action for the recovery of such land or interest therein, or claim upon the same, may bring in any court of competent jurisdiction an action against the Treasurer of the Philippine Archipelago for the recovery of damages to be paid out of the Assurance Fund.

It may be discerned from the foregoing provisions that the persons who may recover from the Assurance Fund are:

1.     1)Any person who sustains loss or damage under the following conditions:

1.     a)that there was no negligence on his part; and

2.     b)that the loss or damage sustained was through any omission, mistake or malfeasance of the court personnel, or the Registrar of Deeds, his deputy, or other employees of the Registry in the performance of their respective duties under the provisions of the Land Registration Act, now, the Property Registration Decree; or

1.     2)Any person who has been deprived of any land or interest therein under the following conditions:

1.     a)that there was no negligence on his part;

2.     b)that he was deprived as a consequence of the bringing of his land or interest therein under the provisions of the Property Registration Decree; or by the registration by any other person as owner of such land; or by mistake, omission or misdescription in any certificate of owner’s duplicate, or in any entry or memorandum in the register or other official book or by any cancellation; and

3.     c)that he is barred or in any way precluded from bringing an action for the recovery of such land or interest therein, or claim upon the same.

The Court of Appeals correctly held that petitioners’ circumstances do not fall under the first case. Petitioners have not alleged that the loss or damage they sustained was “through any omission, performance of their respective duties.” Moreover, petitioners were negligent in not ascertaining whether the impostors who executed a deed of sale in their (petitioner’s) favor were really the owners of the property.

Nor does petitioners’ situation fall under the second case. They were not deprived of their land “as a consequence of the bringing of [the] land or interest therein under the provisions of the Property Registration Decree.” Neither was the deprivation due to “the registration by any other person as owner of such land,” or “by mistake, omission or misdescription in any certificate or owner’s duplicate, or in any entry or memorandum in the register or other official book or by any cancellation.”

Petitioners’ claim is not supported by the purpose for which the Assurance Fund was established. The Assurance Fund is intended to relieve innocent persons from the harshness of the doctrine that a certificate is conclusive evidence of an indefeasible title to land.⁵ Petitioners did not suffer any prejudice because of the operation of this doctrine. On the contrary, petitioners sought to avail of the benefits of the Torrens System by registering the property in their name. Unfortunately for petitioners, the original owners were able to judicially recover the property from them. That petitioners eventually lost the property to the original owners, however, does not entitle them to compensation under the Assurance Fund. While we commiserate with petitioners, who appear to be victims of unscrupulous scoundrels, we cannot sanction compensation that is not within the law’s contemplation. As we said in Treasurer of the Philippines vs. Court of Appeals, the Government is not an insurer of the unwary citizen’s property against the chicanery of scoundrels. Petitioners’ recourse is not against the Assurance Fund, as the Court of Appeals pointed out, but against the rogues who duped them.

Ruling: ACCORDINGLY, the petition is DENIED.

Same Same: Land Titles; Land Registration; Assurance Fund; The Assurance Fund is intended to relieve innocent persons from the harshness of the doctrine that a certificate is conclusive evidence of an indefeasible title to land.—Petitioners’ claim is not supported by the purpose for which the Assurance Fund was established. The Assurance Fund is intended to relieve innocent persons from the harshness of the doctrine that a certificate is conclusive evidence of an indefeasible title to land. Petitioners did not suffer any prejudice because of the operation of this doctrine. On the contrary, petitioners sought to avail of the benefits of the Torrens System by registering the property in their name. Unfortunately for petitioners, the original owners were able to judicially recover the property from them. That petitioners eventually lost the property to the original owners, however, does not entitle them to compensation under the Assurance Fund.

Same; Same; Same; The Government is not an insurer of the unwary citizen’s property against the chicanery of scoundrels.—While we commiserate with petitioners, who appear to be victims of unscrupulous scoundrels, we cannot sanction compensation that is not within the law’s contemplation. As we said in Treasurer of the Philippines vs. Court of Appeals, the Government is not an insurer of the unwary citizen’s property against the chicanery of scoundrels. Petitioners’ recourse is not against the Assurance Fund, as the Court of Appeals pointed out, but against the rogues who duped them.

Notes: The law must protect and prefer the lawful owner of registered title over the transferee of a vendor bereft of any transmissible rights. (Mathay vs. Court of Appeals, 295 SCRA 556 [1998])

ABDULA VS GUIANI CASE DIGEST

ABDULA VS GUIANI CASE DIGEST

MAYOR BAI UNGGIE D. ABDULA and ODIN ABDULA, petitioners, vs. HON. JAPAL M. GUIANI, in his capacity as Presiding Judge, of Branch 14 of the Regional Trial Court of Cotabato City, respondent.

[G.R. No. 118821. February 18, 2000]

FACTS:

A petition for certiorari and prohibition to set aside the warrant of arrest issued by herein respondent Japal guiani, then presiding judge of Branch 14 of RTC of Cotabato City, was filed before the Supreme Court. Murder complaint was filed but was dismissed by the provincial prosecutor on the ground that there was no prima facie case for murder, for  a number of accused (6). However, he recommended the filing of an information for murder against one of the respondents (accused) only before the sala of the respondent judge Guiani. Guiani returned the case to the provincial prosecutor for further investigation since there was no necessary resolution required under the Rules of Court to show how the investigating prosecutor arrived at such a conclusion (charging only one of the 8 respondent-accused). Upon the return of the records of the case, it was assigned for reinvestigation to another prosecutor who then recommended the filing of charges against 5 accused, 2 of whom are herein petitioners.

On January 2, 1995, information was filed against petitioner-spouses and 3 others. The following day, January 3, respondent Judge issued a warrant for the arrest of petitioners. On January 4, petitioners filed an urgent Ex-Parte motion for the setting aside the warrant of arrest. On January 11, a petition for review was filed with the DOJ. Despite said filing, respondent judge did not act upon petitioner’s pending Motion to Set Aside the Warrant of Arrest. Thus, the Petition for Certiorari and Prohibition praying the warrant of Arrest be set aside and declared void ab initio.

Issue:

WON the Warrant of Arrest should be set aside and declared void ab initio.

Held:

The Court reiterated the provisions of Section 2, Art. III, 1987 Constititution: “The right of the people to be secure in their persons, houses, papers, and effects against unreasonable searches and seizures of whatever nature and for any purpose shall be inviolable, and NO SEARCH WARRANT OR WARRANT OF ARREST SHALL ISSUE EXCEPT UPON PROBABLE CAUSE TO BE DETERMINED PERSONALLY BY THE JUDGE AFTER EXAMINATION UNDER OATH OR AFFIRMATION OF THE COMPLAINANT AND THE WITNESSES HE MAY PRODUCE and particularly describing the place to be searched and the persons or things to be seized.”

The Court held that the 1987 Constitution requires the judge to determine probable
cause "personally," a requirement which does not appear in the corresponding provisions of our previous constitutions. The Court said that the emphasis demonstrates the intent of the framers to place a greater degree ofresponsibility upon trial judges than that imposed under previous Constitutions. Accordingly, what the Constitution underscores is the exclusive and personal responsibility of the issuing judge to satisfy himself of the existence of probable cause. In satisfying himself of the existence of probable cause for the issuance of a warrant of arrest, the judge is not required to personally examine the complainant and his witnesses. The Court furthered, following established doctrine and procedure, he shall: 

(1)                    personally evaluate the report and the supporting documents submitted by the fiscal regarding the existence of probable cause and, on the basis thereof, issue a warrant of arrest; or

(2)                    if on the basis thereof he finds no probable cause, he may disregard the fiscal's report and require the submission of supporting affidavits of witnesses to aid him in arriving at a conclusion as to the existence of probable cause.

In Ho vs. People, it enumerated the existing jurisprudence on the matter as follows:

Lest we be too repetitive, we only wish to emphasize three vital matters once more: First, as held in Inting, the determination of probable cause by the prosecutor is for a purpose different from that which is to be made by the judge.

Whether there is reasonable ground to believe that the accused is guilty of the offense charged and should be held for trial is what the prosecutor passes upon. The judge, on the other hand, determines whether a warrant of arrest should be issued against the accused, i.e., whether there is a necessity for placing him under immediate custody in order not to frustrate the ends of justice.

Second, since their objectives are different, the judge cannot rely solely on the report of the prosecutor in finding probable cause to justify the issuance of a warrant of arrest. The judge must decide independently. Hence, he must have supporting evidence, other than the prosecutor’s bare report, upon which to legally sustain his own findings on the existence or nonexistence of probable cause to issue an arrest order. The responsibility of determining personally and independently the existence or non-existence of probable cause is lodged in him by no less than the most basic law of the land.

Lastly, the Court said that it is not required that complete or entire records of the case during the preliminary investigation be submitted to and examined by the judge. What is required, rather, is that the judge must have sufficient supporting documents (such as the complaint, affidavits, counter-affidavits, sworn statements of witnesses or transcript of stenographic notes, if any) upon which to make his independent judgment or, at the very least, upon which to verify the findings of the prosecutor as to the existence of probable cause. 

Barangay San Roque v. Heirs of Pastor, GR 138896 June 20, 2000

Barangay San Roque v.  Heirs of Pastor, GR 138896 June 20, 2000

Summary: Barangay San Roque of Talisay, Cebu filed a complaint to expropriate the property of Pator with MTC. The MTC dismissed the Complaint on the ground of lack of jurisdiction. It reasoned that “The principal cause of action is the exercise of the power of eminent domain. The fact that the action also involves real property is merely incidental. An action for eminent domain is therefore within the exclusive original jurisdiction of the Regional Trial Court.” This was then filed to RTC but was dismissed, holding that an action for eminent domain affected title to real property; hence, the value of the property to be expropriated would determine whether the case should be filed before the MTC or the RTC. The property value was less than 20k and should be filed with MTC.

FACTS OF THE CASE:

Petitioner filed before the Municipal Trial Court (MTC) of Talisay, Cebu a Complaint to expropriate a property of the respondents. In an Order dated April 8, 1997, the MTC dismissed the Complaint on the ground of lack of jurisdiction. It reasoned that an action for eminent domain is within the exclusive original jurisdiction of the RTC and not with MTC.

The RTC also dismissed the Complaint when filed before it, holding that an action for eminent domain affected title to real property; hence, the value of the property to be expropriated would determine whether the case should be filed before the MTC or the RTC.  It appears from the current Tax Declaration of the land involved that its assessed value is only P1,740.00. Pursuant to Section 3, paragraph (3), of Republic Act No. 7691, all civil actions involving title to, or possession of, real property with an assessed value of less than P20,000.00 are within the exclusive original jurisdiction of the MTCs. In the case at bar, it is within the exclusive original jurisdiction of the MTC of Talisay, Cebu, where the property involved is located.

Petitioner appealed directly to this Court, raising a pure question of law. 

ISSUE: Whether or not the action for eminent domain is within the jurisdiction of the MTC?

RULING:

The Court ruled that the action for eminent domain is within the jurisdiction of the RTC.  In the present case, an expropriation suit does not involve the recovery of a sum of money but it deals with the exercise by the government of its authority and right to take private property for public use. The subject of an expropriation suit is the government’s exercise of eminent domain, a matter that is incapable of pecuniary estimation.  The value of the property to be expropriated is estimated in monetary terms, for the court is duty-bound to determine the just compensation for it.  However, this is merely incidental to the expropriation suit.  The amount is determined only after the court is satisfied with the propriety of the expropriation.

In Republic of the Philippines v. Zurbano, the Court held that "condemnation proceedings are within the jurisdiction of Courts of First Instance," the forerunners of the RTCs. The said case was decided during the effectivity of the Judiciary Act of 1948 which, like BP 129 in respect to RTCs, provided that courts of first instance had original jurisdiction over "all civil actions in which the subject of the litigation is not capable of pecuniary estimation."  The 1997 amendments to the Rules of Court were not intended to change these jurisprudential precedents.

Also, the Court is not persuaded by respondents’ argument that the present action involves the title to or possession of a parcel of land. They cite the observation of retired Justice Jose Y. Feria, an eminent authority in remedial law, that condemnation or expropriation proceedings are examples of real actions that affect the title to or possession of a parcel of land.  Their reliance is misplaced.  Justice Feria sought merely to distinguish between real and personal actions. His discussion on this point pertained to the nature of actions, not to the jurisdiction of courts. In fact, in his pre-bar lectures, he emphasizes that jurisdiction over eminent domain cases is still within the RTCs under the 1997 Rules.

WHEREFORE, the Petition is hereby GRANTED and the assailed Orders SET ASIDE. The Regional Trial Court is directed to HEAR the case. No costs.