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SOLID HOMES VS COURT OF APPEALS

Republic of the Philippines


SUPREME COURT
Manila
THIRD DIVISION
[G.R. No. 117501. July 8, 1997]
SOLID HOMES, INC., petitioner, vs. HON. COURT OF APPEALS, STATE FINANCING CENTER, INC., and
REGISTER OF DEEDS FOR RIZAL, respondents.
DECISION
PANGANIBAN, J.:
Is the failure to annotate the vendor a retros right of repurchase in the certificates of title of the real estate
properties subject of dacion en pago conclusive evidence of the vendee a retros malice and bad faith, entitling the
former to damages? In a sale with pacto de retro, is the repurchase price limited by Article 1616 of the Civil
Code?
These are the basic questions raised in this petition for review on certiorari under Rule 45 of the Rules of Court
assailing the Court of Appeals[1] Decision[2] promulgated on April 25, 1994 and Resolution[3] of September 26,
1994 in CA-G.R. CV No. 39154, affirming the decision[4] of the Regional Trial Court of Pasig, Branch 157 in Civil
Case No. 51214. The said RTC decision sustained the validity of the subject dacion en pago agreement and
declared the same as a true sale with right of repurchase.
The Facts
The facts of the case as narrated by the trial court and reproduced in the assailed Decision of the Court of
Appeals are undisputed by the parties. These are the relevant portions:
It appears that on June 4, 1979, Solid Homes executed in favor of State Financing (Center, Inc.) a Real Estate
Mortgage (Exhibit 3) on its properties embraced in Transfer Certificate of Title No. 9633 (Exhibit 9) and
Transfer Certificate of Title No. (492194) -11938 (Exhibit 8) of the Registry of Deeds in Pasig, Metro Manila, in
order to secure the payment of a loan of P10,000,000.00 which the former obtained from the latter. A year after,
Solid Homes applied for and was granted an additional loan of P1,511,270.03 by State Financing, and to secure its
payment, Solid Homes executed the Amendment to Real Estate Mortgage dated June 4, 1980 (Exhibit 4) whereby
the credits secured by the first mortgage on the abovementioned properties were increased from P10,000,000.00
toP11,511,270.03. Sometime thereafter, Solid Homes obtained additional credits and financing facilities from
State Financing in the sum of P1,499,811,97, and to secure its payment, Solid Homes executed in favor of State
Financing the Amendment to Real Estate Mortgage dated March 5, 1982 (Exhibit 5) whereby the mortgage
executed on its properties on June 4, 1979 was again amended so that the loans or credits secured thereby were
further increased from P11,511,270.03 toP13,011,082.00.
When the loan obligations abovementioned became due and payable, State Financing made repeated demands upon
Solid Homes for the payment thereof, but the latter failed to do so. So, on December 16, 1982, State Financing
filed a petition for extrajudicial foreclosure of the mortgages abovementioned with the Provincial Sheriff of Rizal,
who, in pursuance of the petition, issued a Notice of Sheriffs Sale dated February 4, 1983 (Exhibit 6), whereby
the mortgaged properties of Solid Homes and the improvements existing thereon, including the V.V. Soliven Towers
II Building, were set for public auction sale on March 7, 1983 in order to satisfy the full amount of Solid Homes
mortgage indebtedness, the interest thereon, and the fees and expenses incidental to the foreclosure proceedings.
Before the scheduled public auction sale x x x, the mortgagor Solid Homes made representations and induced
State Financing to forego with the foreclosure of the real estate mortgages referred to above. By reason
thereof, State Financing agreed to suspend the foreclosure of the mortgaged properties, subject to the terms and
conditions they agreed upon, and in pursuance of their said agreement, they executed a document

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entitled MEMORANDUM OF AGREEMENT/DACION EN PAGO (Memorandum) dated February 28, 1983 (Exhibits
C and 7) x x x. Among the terms and conditions that said parties agreed upon were x x x:
1.

(Solid Homes) acknowledges that it has an outstanding obligation due and payable to (State Financing) and

binds and obligates to pay (State Financing) the totality of its outstanding obligation in the amount
of P14,225,178.40, within one hundred eighty (180) days from date of signing of this instrument. However, it is
understood and agreed that the principal obligation of P14,225,178.40 shall earn interest at the rate of 14% per
annum and penalty of 16% per annum counted from March 01, 1983 until fully paid.
2.

The parties agree that should (Solid Homes) be able to pay (State Financing) an amount equivalent to sixty

per centum (60%) of the principal obligation, or the amount of P8,535,107.04, within the first one hundred eighty
(180) days, (State Financing) shall allow the remaining obligation of (Solid Homes) to be restructured at a rate of
interest to be mutually agreed between the parties.
3.

It is hereby understood and agreed that in the event (Solid Homes) fails to comply with the provisions of the

preceding paragraphs, within the said period of one hundred eighty (180) days, this document shall automatically
operate to be an instrument of dacion en pago without the need of executing any document to such an effect and
(Solid Homes) hereby obligates and binds itself to transfer, convey and assign to (State Financing), by way of
dacion en pago, its heirs, successors and assigns, and (State Financing) does hereby accept the conveyance and
transfer of the above-described real properties, including all the improvements thereon, free from all liens and
encumbrances, in full payment of the outstanding indebtedness of (Solid Homes) to (State Financing) x x x.
xxx
6.

xxx

xxx

(State Financing) hereby grants (Solid Homes) the right to repurchase the aforesaid real properties,

including the condominium units and other improvements thereon, within ten (10) months counted from and after
the one hundred eighty (180) days from date of signing hereof at an agreed price of P14,225,178.40, or as reduced
pursuant to par. 5 (d), plus all cost of money equivalent to 30% per annum, registration fees, real estate and
documentary stamp taxes and other incidental expenses incurred by (State Financing) in the transfer and
registration of its ownership via dacion en pago x x x.
xxx

xxx

xxx

Subsequently, Solid Homes failed to pay State Financing an amount equivalent to 60% (or P8,535,107.04) of the
principal obligation of P14,225,178.40 within 180 days from the signing of the (Memorandum) on February 28, 1983,
as provided under paragraph 2 of the said document. Hence, and in pursuance of paragraph 3 thereof which
provided that this document shall automatically operate to be an instrument of dacion en pago without the need of
executing any document to such an effect x x x(,) State Financing registered the said (Memorandum) with the
Register of Deeds in Pasig, Metro Manila on September 15, 1983. Consequently, the said Register of Deeds
cancelled TCT No. 9633 and TCT No. (492194) 11938 in the name of Solid Homes which were the subject matter of
the (Memorandum) abovementioned, and in lieu thereof, the said office issued Transfer Certificate of Title No.
40533 (Exhibits J and 11) and Transfer Certificate of Title No. 40534 (Exhibits K and 12) in the name of State
Financing. x x x
In a letter dated October 11, 1983 (Exhibit 16), State Financing informed Solid Homes of the transfer in its
name of the titles to all the properties subject matter of the (Memorandum) and demanded among other things,
that Solid Homes turn over to State Financing the possession of the V.V. Soliven Towers II Building erected on two
of the said properties. Solid Homes replied with a letter dated October 14, 1983, (Exhibit 20) asking for a period
of ten (10) days within which to categorize its position on the matter; and in a subsequent letter dated October 24,
1983, Solid Homes made known to State Financing its position that the (Memorandum) is null and void because the
essence thereof is that State Financing, as mortgagee creditor, would be able to appropriate unto itself the
properties mortgaged by Solid Homes which is in contravention of Article 2088 of the Civil Code. State Financing
then sent to Solid Homes another letter dated November 3, 1983 (Exhibit 17), whereby it pointed out that Art.
2088 of the Civil Code is not applicable to the (Memorandum) they have executed, and also reiterated its previous

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demand that Solid Homes turn over to it the possession of the V.V. Soliven Towers II Building within five (5) days,
but Solid Homes did not comply with the said demand.
x x x and within that period of repurchase, Solid Homes wrote to State Financing a letter dated April 30, 1984
containing its proposal for repayment schemes under terms and conditions indicated therein for the repurchase of
the properties referred to. In reply to said letter, State Financing sent a letter dated May 17, 1984 (Exhibit 18)
advising Solid Homes that State Financings management was not amenable to its proposal, and that by way of
granting it some concessions, said management made a counter-proposal requiring Solid Homes to make an initial
payment of P10 million until 22 May 1984 and the balance payable within the remaining period to repurchase the
properties as provided for under the (Memorandum) x x x. Thereafter, a number of conferences were held among
the corporate officers of both companies wherein they discussed the payment arrangement of Solid Homes
outstanding obligation, x x x. In a letter dated June 7, 1984 (Exhibit 19), State Financing reiterated the counterproposal in its previous letter dated May 17, 1984 to Solid Homes as a way of making good its account, and at the
same time reminded Solid Homes that it has until 27 June 1984 to exercise its right to repurchase the properties
pursuant to the terms and conditions of the (Memorandum), otherwise, it will have to vacate and turn over the
possession of said properties to State Financing. In return, Solid Homes sent to State Financing a letter dated
June 18, 1984 (Exhibits N and 22) containing a copy of the written offer made by C.L. Alma Jose & Sons, Inc.
(Exhibits M and 22-A) to avail of Solid Homes right to repurchase the V.V. Soliven Towers II pursuant to the
terms of the Dacion En Pago. The letter also contained a request that the repurchase period under said Dacion En
Pago which will expire on June 27, 1984 be extended by sixty (60) days to enable Solid Homes to comply with the
conditions in the offer of Alma Jose & Sons, Inc. referred to, and thereafter, to avail of the one year period to
pay the balance based on the verbal commitment of State Financings President. x x x
However, on June 26, 1984, a day before the expiry date of its right to repurchase the properties involved in the
(Memorandum) on June 27, 1984, Solid Homes filed the present action against defendants State Financing and the
Register of Deeds for Metro Manila District II (Pasig), seeking the annulment of said (Memorandum) and the
consequent reinstatement of the mortgages over the same properties; x x x[5]
As earlier stated, the trial court held that the Memorandum of Agreement/Dacion En Pago executed by the
parties was valid and binding, and that the registration of said instrument in the Register of Deeds was in
accordance with law and the agreement of the parties. It disposed of the case thus:
WHEREFORE, this Court hereby renders judgment, as follows:
1.

Declaring that the Memorandum of Agreement/Dacion En Pago entered into by and between plaintiff

Solid Homes and defendant State Financing on February 28, 1983 is a valid and binding document which does not
violate the prohibition against pactum commisorium under Art. 2088 of the Civil Code;
2.

Declaring that the said Memorandum of Agreement/Dacion En Pago is a true sale with right of

repurchase, and not an equitable mortgage;


3.

Declaring that the registration of the said Memorandum of Agreement/Dacion En Pago with the

defendant Register of Deeds in Pasig, Metro Manila by defendant State Financing on September 15, 1983 is in
accordance with law and the agreement of the parties in the said document; but the annotation of the said
document by the said Register of Deeds on the certificates of title over the properties subject of the
Memorandum of Agreement/Dacion En Pago without any mention of the right of repurchase and the period thereof,
is improper, and said Register of Deeds cancellation of the certificates of title in the name of Solid Homes over
the properties referred to and issuance of new titles in lieu thereof in the name of State Financing - during the
period of repurchase and without any judicial order - is in violation of Art. 1607 of the Civil Code, which renders
said titles null and void;
4.

Ordering the defendant State Financing to surrender to the defendant Register of Deeds in Pasig,

Metro Manila for the cancellation thereof, all the certificates of title issued in its name over the properties

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subject of the Memorandum of Agreement/Dacion En Pago, including those titles covering the fully paid
condominium units and the substitute collateral submitted in exchange for said condominium units;
5.

Ordering the said defendant Register of Deeds to cancel all the titles in the name of State Financing

referred to and to reinstate the former titles over the same properties in the name of Solid Homes, with the
proper annotation thereon of the Memorandum of Agreement/Dacion En Pago together with the right of
repurchase and the period thereof - as provided in said document - and to return the said reinstated former titles
(owners copies) in the name of Solid Homes to State Financing;
6.

Ordering the defendant State Financing to release to plaintiff Solid Homes all the certificates of title

over the fully paid condominium units in the name of Solid Homes, free from all liens and encumbrances by releasing
the mortgage thereon;
7.

Granting the plaintiff Solid Homes the opportunity to exercise its right to repurchase the properties

subject of the Memorandum of Agreement/Dacion En Pago within thirty (30) days from the finality of this
Decision, by paying to defendant State Financing the agreed price of P14,225,178.40 plus all cost of money
equivalent to 30% (interest of 14% and penalty of 16% from March 1, 1983) per annum, registration fees, real
estate and documentary stamp taxes and other incidental expenses incurred by State Financing in the transfer and
registration of its ownership via the Dacion En Pago, as provided in the said document and in pursuance of Articles
1606 and 1616 of the Civil Code; and
8.

Ordering the defendant Register of Deeds in Pasig, Metro Manila - should plaintiff Solid Homes fail to

exercise the abovementioned right to repurchase within 30 days from the finality of this judgment - to record the
consolidation of ownership in State Financing over the properties subject of the Memorandum of
Agreement/Dacion En Pago in the Registry of Property, in pursuance of this Order, but excluding therefrom the
fully paid condominium units and their corresponding titles to be released by State Financing.
For lack of merit, the respective claims of both parties for damages, attorneys fees, expenses of litigation and
costs of suit are hereby denied.[6]
Both parties appealed from the trial courts decision. Solid Homes raised a lone question contesting the denial of
its claim for damages. Such damages allegedly resulted from the bad faith and malice of State Financing in
deliberately failing to annotate Solid Homes right to repurchase the subject properties in the formers
consolidated titles thereto. As a result of the non-annotation, Solid Homes claimed to have been prevented from
generating funds from prospective buyers to enable it to comply with the Agreement and to redeem the subject
properties.
State Financing, on the other hand, assigned three errors against the RTC decision: (1) granting Solid Homes a
period of thirty (30) days from finality of the judgment within which to exercise its right of repurchase; (2)
ordering Solid Homes to pay only 30% per annum as interest and penalty on the principal obligation, rather than
reasonable rental value from the time possession of the properties was illegally withheld from State Financing; and
(3) failing to order the immediate turnover of the possession of the properties to State Financing as the
purchaser a retro from whom no repurchase has been made.
As to the lone issue raised by Solid Homes, the Court of Appeals agreed with the trial court that the failure to
annotate the right of repurchase of the vendor a retro is not by itself an indication of bad faith or malice. State
Financing was not legally bound to cause its annotation, and Solid Homes could have taken steps to protect its own
interests. The evidence shows that after such registration and transfer of titles, State Financing willingly
negotiated with Solid Homes to enable the latter to exercise its right to repurchase the subject properties,[7] an
act that negates bad faith.
Anent the first error assigned by State Financing, Respondent Court likewise upheld the trial court in applying
Article 1606, paragraph 3[8] of the Civil Code. Solid Homes was not in bad faith in filing the complaint for the
declaration of nullity of the Memorandum of Agreement/Dacion En Pago. There is statutory basis for petitioners

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claim that an equitable mortgage existed since it believed that (1) the price of P14 million was grossly inadequate,
considering that the building alone was allegedly built at a cost of P60 million in 1979 and the lot was valued
at P5,000.00 per square meter and (2) it remained in possession of the subject properties.[9] Furthermore, Article
1607[10] of the Civil Code abolished automatic consolidation of ownership in the vendee a retro upon expiration of
the redemption period by requiring the vendee to institute an action for consolidation where the vendor a
retro may be duly heard. If the vendee succeeds in proving that the transaction was indeed a pacto de retro,the
vendor is still given a period of thirty days from the finality of the judgment within which to repurchase the
property.[11]
Respondent Court also affirmed the trial courts imposition of the 30% interest per annum on top of the
redemption price in accordance with paragraph 6 of the parties Memorandum of Agreement.[12]
However, Respondent Court of Appeals ruled favorably on State Financings last assigned error by ordering Solid
Homes to deliver possession of the subject properties to the private respondent, citing jurisprudence that in a sale
with pacto de retro, the vendee shall immediately acquire title over and possession of the real property sold,
subject only to the vendors right of redemption.[13] The full text of the dispositive portion of the assailed
Decision is as follows:
WHEREFORE, the judgment appealed from is affirmed with the modification that plaintiff Solid Homes is further
ordered to deliver the possession of the subject property to State Financing.[14]
The two opposing parties filed their respective motions for reconsideration of the assailed Decision. Both were
denied by said Court for lack of merit. Both parties thereafter filed separate petitions for review before this
Court. In a minute Resolution[15] dated December 5, 1994, this Court (Third Division) denied State Financing
Centers petition because of its failure to show that a reversible error was committed by the appellate court. Its
motion for reconsideration of said resolution was likewise denied for lack of merit. This case disposes only of the
petition filed by Solid Homes, Inc.
Issues
In its petition, Solid Homes repeats its arguments before the Court of Appeals. It claims damages allegedly
arising from the non-annotation of its right of repurchase in the consolidated titles issued to private
respondent. Petitioner reiterates its attack against the inclusion of 30% interest per annum as part of the
redemption price. It asserts that Article 1616 of the Civil Code authorizes only the return of the (1) price of the
sale, (2) expenses of the contract and any other legitimate payments by reason of the sale and (3) necessary and
useful expenses made on the thing sold. Considering that the transfer of titles was null and void, it was thus
erroneous to charge petitioner the registration fees, documentary stamp taxes and other incidental expenses
incurred by State Financing in the transfer and registration of the subject properties via the dacion en
pago. Lastly, petitioner argues that there is no need for the immediate turnover of the properties to State
Financing since the same was not stipulated under their Agreement, and the latters rights were amply protected
by the issuance of new certificates of title in its name.
The Courts Ruling
First Issue: Damages
To resolve the issue of damages, an examination of factual circumstances would be necessary, a task that is clearly
beyond this Courts dominion. It is elementary that in petitions for review on certiorari, only questions of law may
be brought by the parties and passed upon by this Court. Findings of fact of lower courts are deemed conclusive
and binding upon the Supreme Court except when the findings are grounded on speculation, surmises or
conjectures; when the inference made is manifestly mistaken, absurd or impossible; when there is grave abuse of
discretion in the appreciation of facts; when the factual findings of the trial and appellate courts are conflicting;
when the Court of Appeals, in making its findings, has gone beyond the issues of the case and such findings are
contrary to the admissions of both appellant and appellee;[16]when the judgment of the appellate court is premised

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on a misapprehension of facts or when it has failed to notice certain relevant facts which, if properly considered,
will justify a different conclusion; when the findings of fact are conclusions without citation of specific evidence
upon which they are based; and when findings of fact of the Court of Appeals are premised on the absence of
evidence but are contradicted by the evidence on record.[17]
The petitioner has not shown any -- and indeed the Court finds none -- of the above-mentioned exceptions to
warrant a departure from the general rule.
In fact, petitioner has not even bothered to support with evidence its claim for actual, moral and punitive/nominal
damages as well as exemplary damages and attorneys fees. It is basic that the claim for these damages must
each be independently identified and justified; such claims cannot be dealt with in the aggregate, since they are
neither kindred or analogous terms nor governed by a coincident set of rules.[18]
The trial court found, and the Court of Appeals affirmed, that petitioners claim for actual damages was
baseless. Solid Homes utterly failed to prove that respondent corporation had maliciously and in bad faith caused
the non-annotation of petitioners right of repurchase so as to prevent the latter from exercising such right. On
the contrary, it is admitted by both parties that State Financing informed petitioner of the registration with the
Register of Deeds of Pasig of their Memorandum of Agreement/Dacion en Pago and the issuance of new
certificates of title in the name of the respondent corporation. Petitioner exchanged communications and held
conferences with private respondent in order to draw a mutually acceptable payment arrangement for the formers
repurchase of the subject properties. A written offer from another corporation alleging willingness to avail itself
of petitioners right of repurchase was even attached to one of these communications. Clearly, petitioner was not
prejudiced by the non-annotation of such right in the certificates of titles issued in the name of State
Financing. Besides, as the Court of Appeals noted, it was not the function of respondent corporation to cause said
annotation. It was equally the responsibility of petitioner to protect its own rights by making sure that its right of
repurchase was indeed annotated in the consolidated titles of private respondent.
The only legal transgression of State Financing was its failure to observe the proper procedure in effecting the
consolidation of the titles in its name. But this does not automatically entitle the petitioner to damages absent
convincing proof of malice and bad faith[19] on the part of private respondent and actual damages suffered by
petitioner as a direct and probable consequence thereof. In fact, the evidence proffered by petitioner consist of
mere conjectures and speculations with no factual moorings. Furthermore, such transgression was addressed by
the lower courts when they nullified the consolidation of ownership over the subject properties in the name of
respondent corporation, because it had been effected in contravention of the provisions of Article 1607[20] of the
Civil Code. Such rulings are consistent with law and jurisprudence.
Neither can moral damages be awarded to petitioner. Time and again, we have held that a corporation -- being an
artificial person which has no feelings, emotions or senses, and which cannot experience physical suffering or
mental anguish -- is not entitled to moral damages.[21]
While the amount of exemplary damages need not be proved, petitioner must show that he is entitled to moral or
actual damages;[22] but the converse obtains in the instant case. Award of attorneys fees is likewise not
warranted when moral and exemplary damages are eliminated and entitlement thereto is not demonstrated by the
claimant.[23]
Lastly, (n)ominal damages are adjudicated in order that a right of the plaintiff, which has been violated or invaded
by the defendant, may be vindicated or recognized, and not for the purpose of indemnifying the plaintiff for any
loss suffered by him.[24] As elaborated above and in the decisions of the two lower courts, no right of petitioner
was violated or invaded by respondent corporation.
Second Issue: Redemption Price
Another fundamental principle of procedural law precludes higher courts from entertaining matters neither alleged
in the pleadings nor raised during the proceedings below, but ventilated for the first time only in a motion for

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reconsideration or on appeal.[25] On appeal, only errors specifically assigned and properly argued in the brief will
be considered, with the exception of those affecting jurisdiction over the subject matter as well as plain and
clerical errors.[26]
As stated earlier, the single issue raised by petitioner in its appeal of the RTC decision to the Court of Appeals
concerned only the denial of its claim for damages. Petitioner succinctly stated such issue in its brief as follows:
I. LONE ASSIGNMENT OF ERROR
The trial court erred in that after having found that the registration of the Memorandum of Agreement/Dacion
en Pago on September 15, 1983 [and the consequent cancellation of the titles of plaintiff-appellant Solid Homes,
Inc. and issuance in lieu thereof of titles to defendant-appellant State Financing Center, Inc. (SFCI)] was null and
void because of failure to duly annotate the right to repurchase granted to plaintiff-appellant Solid Homes, Inc.
under par. 6 thereof still then subsisting up to June 28, 1984 and the failure to comply with the provisions of Art.
1607, Civil Code x x x
I[t] nonetheless did not rule that such irregular registration unduly deprived plaintiff-appellant Solid Homes, Inc.
of its right of repurchase and that it further erred in not having declared that defendant-appellant SFCI liable in
favor of said plaintiff-appellant for damages.[27]
Petitioner is thus barred from raising a new issue in its appeal before this Court. Nevertheless, in the interest of
substantial justice, we now resolve the additional question posed with respect to the composition of the redemption
price prescribed by the trial court and affirmed by the Court of Appeals, as follows:
7.

Granting the plaintiff Solid Homes the opportunity to exercise its right to repurchase the properties x x x

by paying to defendant State Financing the agreed price of P14,225,178.40 plus all cost of money equivalent to
30% (interest of 14% and penalty of 16% from March 1, 1983) per annum, registration fees, real estate and
documentary stamp taxes and other incidental expenses incurred by State Financing in the transfer and
registration of its ownership via the Dacion En Pago, as provided in the said document and in pursuance of Articles
1606 and 1616 of the Civil Code;[28]
Petitioner argues that such total redemption price is in contravention of Art. 1616 of the Civil Code. We do not,
however, find said legal provision to be restrictive or exclusive, barring additional amounts that the parties may
agree upon. Said provision should be construed together with Art. 1601 of the same Code which provides as
follows:
Art. 1601. Conventional redemption shall take place when the vendor reserves the right to repurchase the thing
sold, with the obligation to comply with the provisions of article 1616 and other stipulations which may have been
agreed upon. (emphasis supplied)
It is clear, therefore, that the provisions of Art. 1601 require petitioner to comply with x x x the other
stipulations of the Memorandum of Agreement/Dacion en Pago it freely entered into with private respondent. The
said Memorandums provision on redemption states:
6.

The FIRST PARTY (State Financing) hereby grants the SECOND PARTY (Solid Homes) the right to

repurchase the aforesaid real properties, including the condominium units and other improvements thereon, within
ten (10) months counted from and after the one hundred eighty (180) days from date of signing hereof at an
agreed price of P14,225,178.40, or as reduced pursuant to par. 5 (d), plus all cost of money equivalent to 30% per
annum, registration fees, real estate and documentary stamp taxes and other incidental expenses incurred by the
FIRST PARTY (State Financing) in the transfer and registration of its ownership via dacion en pago x x
x[29] (underscoring supplied)
Contracts have the force of law between the contracting parties who may establish such stipulations, clauses,
terms and conditions as they may want, subject only to the limitation that their agreements are not contrary to

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law, morals, customs, public policy or public order[30] -- and the above-quoted provision of the Memorandum does
not appear to be so.
Petitioner, however, is right in its observation that the Court of Appeals inclusion of registration fees, real estate
and documentary stamp taxes and other incidental expenses incurred by State Financing in the transfer and
registration of its ownership (of the subject properties) viadacion en pago was vague, if not erroneous, considering
that such transfer and issuance of the new titles were null and void. Thus, the redemption price shall include only
those expenses relating to the registration of the dacion en pago, but not the registration and other expenses
incurred in the issuance of new certificates of title in the name of State Financing.
Possession of the Subject Properties During the Redemption Period
The Court of Appeals Decision modified that of the trial court only insofar as it ordered petitioner to deliver
possession of the subject properties to State Financing, the vendee a retro. We find no legal error in this
holding. In a contract of sale with pacto de retro, the vendee has a right to the immediate possession of the
property sold, unless otherwise agreed upon. It is basic that in a pacto de retro sale, the title and ownership of
the property sold are immediately vested in the vendee a retro, subject only to the resolutory condition of
repurchase by the vendor a retro within the stipulated period.[31]
WHEREFORE, the assailed Decision of the Court of Appeals is hereby AFFIRMED with the MODIFICATION that
the redemption price shall not include the registration and other expenses incurred by State Financing Center, Inc.
in the issuance of new certificates of title in its name, as this was done without the proper judicial order required
under Article 1607 of the Civil Code.
SO ORDERED.
Narvasa, C.J. (Chairman), Davide, Jr., and Francisco, JJ., concur.
Melo, J., on leave

[1] Sixteenth Division composed of JJ. Minerva P. Gonzaga-Reyes (Chairman and ponente), Eduardo G. Montenegro
and Conrado M. Vasquez, Jr.
[2] Rollo, pp. 43-68.
[3] Ibid., pp. 190-193.
[4] Ibid., pp. 114-137.
[5] Assailed Decision, pp. 1-11; rollo, pp. 43-52.
[6] RTC Decision, pp. 24-26; rollo, pp. 135-137.
[7] Assailed Decision, p. 22; rollo, p. 64.
[8] However, the vendor may still exercise the right to repurchase within thirty days from the time final
judgment was rendered in a civil action on the basis that the contract was a true sale with right to repurchase.
[9] Assailed Decision, p. 23; rollo, p. 65.
[10] Art. 1607. In case of real property, the consolidation of ownership in the vendee by virtue of the failure of
the vendor to comply with the provisions of Article 1616 shall not be recorded in the Registry of Property without
a judicial order, after the vendor has been duly heard.
Article 1616 provides:

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Art. 1616. The vendor cannot avail himself of the right or repurchase without returning to the vendee the
price of the sale, and in addition:
(1)

The expenses of the contract, and any other legitimate payments made by reason of the sale;

(2)

The necessary and useful expenses made on the thing sold.

[11] Assailed Decision, p. 24; rollo, p. 66.


[12] Ibid., p. 25; Rollo, p. 67.
[13] Ibid., pp. 25-26; rollo, pp. 67-68.
[14] Ibid., p. 26; rollo, p. 68.
[15] In G.R. No. 117404.
[16] Castillo vs. Court of Appeals, G.R. No. 106472, August 7, 1996 citing Chua Tiong Tay vs. Court of Appeals, 243
SCRA 183, March 31, 1995.
[17] Fuentes vs. Court of Appeals, G.R. No. 109849, February 26, 1997, citing several cases.
[18] Del Mundo vs. Court of Appeals, 240 SCRA 348, 1995.
[19] Vda. de Cruzo vs. Carriaga, Jr., 174 SCRA 330, 346, June 28, 1989.
[20] See note 10.
[21] LBC Express, Inc. vs. Court of Appeals, 236 SCRA 602, September 21, 1994.
[22] Article 2234, Civil Code.
[23] Philippine Air Lines vs. Miano, 242 SCRA 235, March 8, 1995.
[24] Article 2221, Civil Code; Lufthansa German Airlines vs. Court of Appeals, 243 SCRA 600, 616, April 21, 1995.
[25] People vs. Echegaray, G.R. No. 117472, February 7, 1997 citing Manila Bay Club Corporation vs. Court of
Appeals, 249 SCRA 303, October 13, 1995.
[26] Section 7, Rule 51 of the Rules of Court, which provides:
SEC. 7. Questions that may be decided.-- No error which does not affect the jurisdiction over the
subject matter will be considered unless stated in the assignment of errors and properly argued in the brief, save
as the court, at its option, may notice plain errors not specified, and also clerical errors.
[27] Brief for Plaintiff-Appellant Solid Homes, Inc. (before the Court of Appeals), pp. 1-2; rollo, pp. 71-72.
[28] RTC Decision, p. 25; rollo, p. 136.
[29] Rollo, p. 46.
[30] Manila Bay Club Corporation vs. Court of Appeals, 245 SCRA 713, 730, July 11, 1995.
[31] De Guzman, Jr. vs. Court of Appeals, 156 SCRA 701, 711, December 21, 1987; Flores vs. So, 162 SCRA 117, 121,
June 15, 1988; Vda. de Cruzo vs. Carriaga, Jr.,supra.
Republic of the Philippines
SUPREME COURT
Manila
THIRD DIVISION

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G.R. No. 97255 August 12, 1994


SOLID HOMES, INC., petitioner,
vs.
HON. COURT OF APPEALS, INVESTCO, INC., ANGELA PEREZ STALEY, and ANTONIO PEREZ, respondents.
Rene A. Diokno for petitioner.
RESOLUTION

VITUG, J.:
An action for collection of sums of money, damages and attorney's fees was filed with the Regional Trial Court
(Civil Case No. 40615) of Pasig by private respondents Investco, Angela Perez Staley and Antonio Perez Jr. against
petitioner Solid Homes, Inc.
Private respondents averred that, on 07 September 1976, they sold, under an agreement entitled "contract to sell
and to buy," to Solid Homes six (6) parcels of land in Quezon City and Marikina, with an area of 704,443 sq.m., for
a total selling price of P10,211,075.00 payable (in accordance with paragraph 1 thereof), as follows:
a) P100,000.00, Philippine Currency, as part down payment upon signing and execution of this contract receipt of
which in full is hereby acknowledged;
b) P2,042,215.00, Philippine Currency, as down payment payable on the following dates:
1 July 22, 1977 P400,000.00
2 October 22, 1977 711,107.50
3 January 22, 1978 711,107.50
It is hereby agreed that the above down payment included the first down payment of P199,000.00. Should the
FIRST PARTY obtain titles to the properties above-described after July 22, 1977, the due dates of the down
payment and all subsequent payments on the balance shall be adjusted accordingly.
c) The balance of P8,188,860.00 shall be payable in ten (10) semi-annual installments for a period of five (5) years
and shall earn interest at the rate of twelve (12%) per annum, the first installment to be due on July 22, 1978. The
installment due together with the Schedule of Payments attached hereto as Schedule "A" and made an integral
part of this contract (Exh. A). 1
The second paragraph of Exhibit "A" stipulated that should Solid Homes fail to pay any of the installments on their
respective due dates, an interest of one percent (1%) per month on the defaulted amount would be paid for up to
two months or pro-rata thereof; thereafter, should the installment due, as well as the interest thereon, still
remain unpaid, the entire balance of the purchase price would then become immediately due and demandable. Such
due and demandable sum would be payable within thirty (30) days, counted from the expiration of the 2-month
period, without further need for judicial action.
Private respondents asserted that Solid Homes violated the terms of the agreement by refusing to pay the balance
of P4,800,282.91 and by failing to negotiate a settlement with the tenants and squatters of the property despite
its receipt from Investco of P350,000.00 for that specific purpose.
The trial court rendered judgment on 14 February 1985; the dispositive portion read:
WHEREFORE, judgment is hereby rendered ordering the defendant to pay the plaintiffs:
1) The amount of P4,800,282.91 with interest thereof at the rate of one percent per month from February 23,
1981, until fully paid;

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2) The amount of P99,559.00 representing cost of science and transfer taxes which defendant credited to its
account with interest at the legal rate from the filing of the complaint;
3) The amount of P250,000.00 to cover attorney's fees and litigation expenses. 2
On appeal, the Court of Appeals (CA-G.R. CV No. 13400), modified the trial court's judgment and rendered its own
decision, dated 21 January 1991, resolving thusly:
PREMISES CONSIDERED, the judgment of the trial court is hereby modified by ordering defendant-appellant to
pay plaintiff the amount of P4,800,282.91 with interest thereon at the rate of one percent per month from March
22, 1982. The amount of attorney's fees is hereby reduced from P250,000.00 to P50,000.00. The decision is
AFFIRMED in all other aspects. 3
In the instant petition for review, petitioner Solid Homes argues (a) that the Court of Appeals should not have
awarded attorney's fees, there being an absence of any special finding of fact to justify such award, and (b) that
it erred in declaring due and demandable the entire unpaid balance still owing to private respondents.
The Second Division of this Court required respondents to comment on the petition in its Resolution of 22 April
1991. Meanwhile, Atty. Alejandro Barin withdrew as counsel for respondents Investco, Inc., Angela Perez Staley
and Antonio Perez, Jr. 4 We required private respondents to submit the name and address of their new counsel; to
this day, no compliance has yet been made. In our resolution, dated 01 December 1993, we required the parties to
move in the premises and to advise the Court whether "supervening events may have rendered this case moot and
academic." 5
Petitioner submitted its compliance and manifested thusly:
In the meantime, on April 15, 1985 before judgment was rendered by the RTC in Civil Case No. 40615 Investco,
Inc. (respondent herein) sold the very same parcels of land involved in said case, in favor of Armed Forces of the
Philippines Mutual Benefit Association, Inc. (AFPMBAI)
Solid Homes, Inc. (herein petitioner) filed Civil Case No. Q-46570 RTC Quezon City entitled 'Solid Homes, Inc.,
plaintiff versus AFPMBAI, Investco, Inc. and the Register of Deeds of Quezon City covering titles registered in
Quezon City and Civil Case No. 52999 Solid Homes, Inc., plaintiff versus AFPMBAI, Investco, Inc., and Register of
Deeds for Pasig covering titles registered in Pasig, Metro Manila, both for nullification of the said second deed of
sale over the same properties involved in the instant case.
Quezon City RTC Civil Case No. 46570 was decided in favor of plaintiffs, Solid Homes, Inc.; on appeal, the Court of
Appeals (CA G.R. No. 22365) reversed the decision; same was elevated to the Supreme Court where it is pending in
SC G.R. No. 100437.
Pasig RTC, Civil Case No. 52999 was decided in favor of plaintiff Solid Homes, Inc.; defendants appealed to the
Court of Appeals (CA G.R. No. 27398), which affirmed the RTC Decision; on the main cause of action Petition for
Review by this to this Honorable Court is pending under G.R. No. 104769.
Under the circumstances, herein petitioner, in compliance with the Resolution dated December 1, 1993, hereby
manifests that supervening events since the Petition herein was filed has not rendered this case as moot and
academic, considering that the issue involved is the amount to be paid in SOLID HOMES, INC. as balance on the
consideration of the original sale by Investco, Inc. to it and the concomitant transfer of titles to the latter upon
payment thereof, whereas in G.R. No. 100437 and G.R. No. 104769, the issue is whether the second buyer
AFPMBAI had actual or constructive notice of the prior sale by Investco, Inc. to herein Petitioner, Solid Homes,
Inc. 6
As of this late date, the Court has yet to hear from private respondents. Given the premises, and in order to
permit this case to be finally resolved and terminated, the required comment on the petition for review should now
be, as it is hereby, dispensed with.

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Article 2208 of the Civil Code allows attorney's fees to be awarded by a court when its claimant is compelled to
litigate with third persons or to incur expenses to protect his interest by reason of an unjustified act or omission
of the party from whom it is sought. While judicial discretion is here extant, an award thereof demands,
nevertheless, a factual, legal or equitable justification. The matter cannot and should not be left to speculation and
conjecture (Mirasol vs. De la Cruz, 84 SCRA 337; Stronghold Insurance Company Inc. vs. Court of Appeals, 173
SCRA 619).
In the case at bench, the records do not show enough basis for sustaining the award for attorney's fees and to
adjudge its payment by petitioner. On the contrary, the appellate court itself has found that petitioner's act of
withholding payment could not be said to be all that unjustified. The disagreement of the parties on the
demandability of the amount still due and the accrual date of interest has persisted largely because of supervening
circumstances and the perceived inexplicitness of the contract itself. The decision of the appellate court, has, in
fact, reversed that of the trial court on the imposition of interest from 23 February 1981, thus upholding, which
we similarly find to be in order, the position of petitioner that the accrual dated should instead start only on 28
March 1982.
Relative to the demandability of the entire unpaid balance, we agree with, and so adopt as our own that of
respondent court; viz:
The amount actually paid on account of the contract to buy and sell (Exh. A or 1) is not an area of controversy in
the first cause of action. The sum of P2,042,215.00 corresponding to the down payment, as well as P4,084,430.00
with respect to the first four semi-annual installments and a portion of the fifth installment, had been received
making a total of P6,126,645.00. It is conceded that a balance of P4,800,282.91 is left unpaid. The dispute is with
respect to the period when defendant had defaulted and, consequently, when payment of interest shall begin. The
plaintiffs claim that said period should start on February 23, 1981; while the defendant contends that the period
must be adjusted should the titles be obtained by the plaintiff corporation after July 22, 1977, as provided in Par.
1(b) of the contract to sell and to buy. Considering that titles were actually transferred to Investco, Inc. between
March 21 to March 28, 1979, the defendant avers that the original schedule of payment must not be followed and
the 5th installment shall only be due on March 22, 1982.
xxx xxx xxx
It is undisputed that appellant Solid Homes had made a total payment of P6,126,645.00 leaving a balance of
P4,800,282.91, which refers to the 6th to the 10th installments. Of the 5th installment due on July 22, 1980, the
following payments were made by appellant:
Oct. 30, 1980 to Nov. 10, 1980 P150,000.00
Nov. 18, 1980 to Dec. 10, 1980 270,000.00
Dec. 18, 1980 to Jan. 14, 1981 101,853.12
Jan. 20 to Feb. 12, 1981 95,000.00
Feb. 16 to Feb. 19, 1981 115,000.00

P731,853.12
Thereafter, no further payment was made by appellant contending that under the provisions of paragraph 1(b) of
the contract, the payment schedule should be adjusted. The said provisions states as follows:
Par. 1, sub-par. (b)
Should the FIRST PARTY (plaintiff Investco) obtain titles to the properties above-described after July 22, 1977,
the due dates of the downpayment and the subsequent payments on the balance shall be adjusted accordingly.'

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Admittedly, the subject titles were obtained during the period of March 21, to March 28, 1979, or after July 22,
1977 (Exhs. D to 1 and Exhs. 2 to 10). Thus, implementing par. 1(b) of the Contract, the due dates of payments
should have been adjusted as follows:
Due Dates
Per Contract Installment Adjusted
Schedule A Number Due Dates
Downpayment
July 22, 1977 March 28, 1979
October 22, 1977 June 08, 1979
January 22, 1978 September 28, 1979
Balance
July 22, 1978 No. 1 March 08, 1980
January 22, 1979 No. 2 September 28, 1980
July 22, 1979 No. 3 March 28, 1981
January 22, 1981 No. 4 September 28, 1981
July 22, 1980 No. 5 March 28, 1982
January 22, 1981 No. 6 September 28, 1982
July 22, 1981 No. 7 March 28, 1983
January 22, 1982 No. 8 September 28, 1983
July 22, 1982 No. 9 March 28, 1984
January 22, 1983 No. 10 September 28, 1984
In view of the adjustment of due dates in accordance with par. 1(b) of the Contract payments made should
correspond to the adjusted dates. Thus, the payment on the 4th installment which is supposed to have been made
on January 22, 1980, should be credited on September 28, 1981, and the next payment on the 5th installment
which should have been made on July 22, 1981 under the contract would have to be credited on March 28, 1981, the
adjusted due date. 7
It is but proper, therefore, to indeed declare 28 March 1982 to be the due date for the payment of the 5th
installment. The total amount of P731,853.12, representing payments for the 5th installment made by petitioner,
should rightly be credited on 28 March 1982, the adjusted due date. Since no payment appears to have been made
after 1981, petitioner should thereby be likewise held in default in the payment of the 6th to the 10th
installments. Under the terms of the contract, hereinbefore recited, petitioner's default has effectively activated
the acceleration clause of the contract, and we see no error on the part of the appellate court in ordering
petitioner to pay the entire unpaid balance of P4,800,282.91 with interest thereon at the rate of 1% per month to
be computed from 22 March 1982.
WHEREFORE, except on the award of attorney's fees which is hereby DELETED, the decision of the Court of
Appeals is AFFIRMED. No costs.
SO ORDERED.
Bidin, Romero and Melo, JJ., concur.
Feliciano, J. concurs in the result.

#Footnotes
1 Rollo, p. 38.

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2 Rollo, p. 37.
3 Rollo, p. 44.
4 Rollo, p. 50, Compliance and Manifestation.
5 Rollo, p. 56.
6 Rollo, pp. 58-59.
7 Rollo, pp. 39-41.
Republic of the Philippines
SUPREME COURT
Manila
SECOND DIVISION
[G.R. No. 108451. April 11, 1997.]
SOLID HOMES, INC., Petitioner, v. HON. COURT OF APPEALS, and EVELYN VERGEL DE DIOS,Respondents.
Rene A. Diokno for Petitioner.
Dante Cortina for Private Respondent.

SYLLABUS
1. REMEDIAL LAW; CIVIL PROCEDURE; SUPREME COURT CIRCULAR 28-91; REASON FOR ITS
PROMULGATION. To prevent the vexations of multiple petitions and the unethical practice of subverting
justice, the Supreme Court promulgated Circular 28-91 requiring that a party "shall certify under oath that a) he
has not theretofore commenced any other action or proceedings involving the same issues in the Supreme Court,
the Court of Appeals, or any other tribunal or agency . . ." As such, any violation of the Circular would result in the
dismissal of the cases and entail other sanctions. This Court, time and again, has utilized this rule to dismiss
petitions which do not comply with the mandatory requirements of the aforesaid Circular.
2. ID.; ID.; ID.; FORUM SHOPPING; DEFINITION. In the case of Chemphil Export & Import Corporation v.
Court of Appeals, this Court had the occasion to define forum-shopping when it held: "Forum-shopping . . ., or the
institution of two (2) cases or more actions or proceedings grounded on the same cause on the supposition that one
or the other court would make a favorable disposition, has been characterized as an act of malpractice that is
prohibited and condemned as trifling with Courts and abusing their processes. It constitutes improper conduct
which tends to degrade the administration of justice. It has also been aptly described as deplorable because it
adds to the congestion of the heavily burdened dockets of the Courts."
3. ID.; ID.; ID.; ID.; THE ACT OF FILING AN ACTION FOR QUIETING OF TITLE WITH THE REGIONAL
TRIAL COURT WHILE THE SAME CAUSE OF ACTION IS PENDING WITH THE OFFICE OF THE SECRETARY
OF DENR IS CLEARLY FORUM SHOPPING; CASE AT BAR. The act of petitioner in filing an action for the
"quieting of title" defined under Article 476 of the New Civil Code does not operate to differentiate the
complaint, or the reliefs sought therein, from petitioners protest pending appeal before the Office of the
Secretary of the DENR. Based on the records of this case, petitioner corporation filed two actions, the civil case
for quieting of title with the Regional Trial Court of Bulacan, and the appeal pending before the Secretary of
DENR from the denial of the Order dated March 11, 1992 of the Regional Executive Director-DENR dismissing the
protest filed by petitioner. The complaint for quieting of title was filed by petitioner to exclude private
respondent from conducting mining operations on the portion of the property belonging to it. On the other hand, in
the appeal pending before the DENR, petitioner seeks a resolution of the question on who has the better right to
be granted a mining permit on the subject property. Although worded differently, the resolution of the protest
pending before the Office of the Secretary of the DENR would necessarily cover the issues raised in the action

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for quieting of title who has the better right to the grant of a mining permit over the subject property. A
resolution of the Secretary of the DENR of this particular issue would necessarily resolve the other ancillary
issues raised by the petitioner in his complaint for quieting of title filed before the Regional Trial Court of Bulacan.
Thus, the principal relief sought by the petitioner in the two cases is the same. The act of petitioner in filing an
action for quieting of title with the Regional Trial Court of Bulacan while the same cause of action is pending with
the Office of the Secretary of DENR is clearly forum-shopping.
DECISION
ROMERO, J.:
This is a petition for review on certiorari which seeks to annul and set aside the decision of the Court of Appeals
dated September 30, 1992 in C.A.-G.R. SP No. 28383 1 affirming the Order of the Regional Trial Court-Bulacan in
Civil Case No. 382-M-92, where the trial court denied the application for a writ of preliminary injunction filed by
herein petitioner against private Respondent.
This case arose from a property located at Barangay Banaban, Angat, Bulacan (Lot No. 3863) covered by Transfer
Certificate of Title No. T-130829 and registered in the name of Santiago V. Papa. Herein petitioner, Solid Homes
Inc., acquired the said property by virtue of a Deed of Exchange dated February 28, 1980 executed by and
between Santiago Papa and petitioner corporation, Solid Homes, Inc. 2 By virtue of the said transaction, Solid
Homes acquired the proprietary rights of Santiago Papa, as well as other interests, and claims over the subject
property, including an application for quarry Permit on the property pending before the Bureau of Mines.
On March 20, 1980, the Bureau of Mines and Geo-Sciences granted Quarry Permit No. 103 to Santiago Papa over
the subject property. 3 The permit was for a period of five (5) years, renewable for one or more terms, but in no
case to exceed the total of twenty five (25) years. However, after the lapse of five years, Santiago Papa failed to
renew the said quarry Permit.
On June 16, 1989, private respondent Evelyn Vergel De Dios filed an application with the Regional Office of the
Department of Environment and Natural Resources (DENR), Mines and Geo-Sciences Sector, for a Small Scale
Mining Permit on the subject property now owned by petitioner corporation. The said application was approved on
July 19, 1989 by the Regional Office (DENR) with the issuance of Small Mining Permit No. 111-43 4 wherein the
private respondent was granted mining rights for a period of two (2) years, and renewable for another two years.
Santiago Papa then complained to the Governor of Bulacan, Roberto Pagdanganan, about the granting of the permit
to private respondent Evelyn Vergel De Dios. 5 The Office of the Governor of Bulacan, in turn, referred the
matter to the Regional Director of the DENR. On November 16, 1989, Ruben Dulay, Vice-President for
Administrative and External Affairs of Solid Homes Inc., submitted to the Director of the Bureau of Mines and
Geo-Sciences documents to prove that herein petitioner has priority rights over and above any other proprietary
rights and claims over the subject property, the latter being a private land. 6
On April 15, 1991, private respondent filed a renewal of her Small Scale Mining Permit No. 111-43. While its protest
before the DENR was still pending, Solid Homes, Inc., likewise applied for a Small Scale Mining Permit over the
subject property. However, it was not accepted due to the pending protest filed by it regarding the granting of a
quarry permit to the private Respondent.
On December 16, 1991, the Regional Executive Director of DENR resolved the case by dismissing the protest of
Solid Homes Inc. 7
Thereafter petitioner filed a motion for reconsideration from the said dismissal. On March 11, 1992, the Regional
Director issued a resolution denying the motion for reconsideration. Not contented, petitioner appealed the Order
dated December 16, 1991 to the Secretary of the Department of Environment and Natural Resources, the case
docketed as DENR Case No. 7252. 8

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On April 28, 1992, the Regional Director issued an Order granting the renewal of the quarrying permit to private
respondent over the subject property. 9
While its appeal was pending with the DENR, petitioner filed a complaint for quieting of title with the Regional
Trial Court of Bulacan, Branch 20, with the case docketed as Civil Case No. 382-M-92. 10 Petitioner alleged in the
complaint that private respondents entry and use of the property, identified as Lot No. 8363 and covered by TCT
No. 130829, by virtue of the mining permit granted by the Regional Director of DENR, have cast a cloud on the
title. Among its prayers, petitioner sought the immediate issuance of a temporary restraining order, and after due
hearing, for a writ of preliminary injunction, to restrain private respondent from entering and undertaking mining
operations on Lot No. 3863. Petitioner further prayed that the portion of Lot 3863 in the mining permit of private
respondent be declared unlawful. 11
The trial court issued a temporary restraining order but subsequently denied petitioners application for a writ of
preliminary injunction for lack of jurisdiction, citing therein as basis Section 1 of P.D. 605, which provides:
"No court of the Philippines shall have jurisdiction to issue any restraining order, preliminary injunction or
preliminary mandatory injunction in any case involving or growing out of the issuance, approval, or disapproval,
revocation or suspension of, or any action whatsoever by the proper administrative official or body on concessions,
licenses, permits, patents, or public grants of any kind in connection with the disposition, exploitation, utilization,
exploration, and/or development of the natural resources of the Philippines." 12
Petitioner then filed a petition for certiorari and mandamus with application for writ of preliminary injunction and
temporary restraining order before the Court of Appeals, alleging that the trial court acted with grave abuse of
discretion in denying its application for a writ of preliminary injunction.
The Court of Appeals in its Decision dated September 30, 1992 affirmed the Order of the trial court in denying
the application for a writ of preliminary injunction filed by herein petitioner. Moreover, respondent Court of
Appeals ruled that petitioner was forum-shopping. Petitioner then held a Motion for Reconsideration, which was
again subsequently denied by the Court of Appeals in its Resolution dated 24 December 1992.
Hence this petition.
The issue raised by petitioner before this Court is whether or not the respondent Court of Appeals acted with
grave abuse of discretion in affirming the Order of the trial court denying the application for a writ of preliminary
injunction. Furthermore, it alleged that respondent court abused its discretion when it held that herein petitioner
was guilty of forum-shopping.
Private respondent, in her Reply, avers that petitioner was clearly forum-shopping since the issues raised in the
complaint for quieting of title before the Regional Trial Court of Bulacan are the same as that of the case pending
before the Office of the Secretary, Department of Environment and Natural Resources.
On the other hand, petitioner stated that there is no forum-shopping since the issue brought before the Regional
Trial Court, Bulacan was for quieting of title under article 476 of the New Civil Code of the Philippines, while the
issue pending before the Secretary of DENR, is the determination of who is entitled to the mining rights over the
property (Lot No. 3863) covered by TCT No. T-130829.
This Court affirms the ruling of the respondent Court of Appeals in dismissing the petition on the ground of
forum-shopping.
To prevent the vexations of multiple petitions and the unethical practice of subverting justice, the Supreme Court
promulgated Circular 28-91 requiring that a party "shall certify under oath that a) he has not theretofore

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commenced any other action or proceedings involving the same issues in the Supreme Court, the Court of Appeals,
or any other tribunal or agency . . ." 13 As such, any violation of the Circular would result in the dismissal of the
cases and entail other sanctions. This Court, time and again, has utilized this rule to dismiss petitions which do not
comply with the mandatory requirements of the aforesaid Circular.
In the case of Chemphil Export & Import Corporation v. Court of Appeals, 14 this Court had the occasion to define
forum-shopping when it held:
"Forum-shopping . . ., or the institution of two (2) cases or more actions or proceedings grounded on the same cause
on the supposition that one or the other court would make a favorable disposition, has been characterized as an act
of malpractice that is prohibited and condemned as trifling with Courts and abusing their processes. It constitutes
improper conduct which tends to degrade the administration of justice. It has also been aptly described as
deplorable because it adds to the congestion of the heavily burdened dockets of the courts." (Emphasis supplied)
In the case at bar, when petitioner filed a complaint for quieting of title with the Regional Trial Court of Bulacan,
it still had a pending appeal with the Office of the Secretary DENR regarding the denial of its protest over the
grant of a mining permit to private respondent over the subject property.
A perusal of the complaint for quieting of title shows that the reliefs sought by petitioner are the same as that of
its protest pending appeal before the Office of the Secretary of DENR.
In the Complaint for quieting of title, petitioner essentially alleges that private respondents entry and use of the
subject property has cast a cloud upon the title. As such, petitioner sought the following reliefs with the trial
court:
1. That forthwith and ex-parte this Honorable Court issue an Order temporarily restraining defendant from
entering upon and undertaking mining operations within the property of plaintiff identified as Lot 3863 (TCT
130829) shown in Annex M and N, and after due hearing, issuing a writ of preliminary injunction to same effect as
posting the requisite bond.
2. That after due hearing, judgment be rendered as follows:chanrob1es virtual 1aw library
a) Declaring that portion of said Lot 3863 which is owned by plaintiff, was unlawfully and improperly included in the
Small Scale Mining Permit issued in favor of defendant Evelyn Vergel de Dios.
b) Finding the entry upon and conduction of mining operation within the said Lot 3863 owned by plaintiff
constituted deliberate and unlawful invasion upon the property rights of plaintiff by defendant.
c) Declaring plaintiffs title, TCT No. 130829 (Bulacan) as freed from the cloud thereon caused by permit issued to
defendant by Bureau of Mines." 15
In sum, the complaint alleges that the grant of a mining permit to the private respondent was erroneous, and that
it is petitioner which should have been granted the permit. As such, petitioner prays for the cancellation of the
mining permit granted to the private respondent over the subject property and to exclude her from exploiting the
same.
In its protest pending appeal before the Secretary of the DENR, petitioner seeks the cancellation of the Small
Scale Mining Permit granted to private respondent on the ground that the area covered by said permit belonged to
it as owner of the subject property. Petitioner alleges that it has a priority right for the exploitation of the
subject property. In effect, petitioner seeks that private respondent be excluded from exploiting minerals on the
land allegedly owned by it. Petitioner, in its appeal before the Secretary of DENR, also sought a temporary

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restraining order and/or a writ of preliminary injunction against private respondent to prevent her from entering
the property in question and from conducting any mining/quarrying operations thereon.
Well- settled is the rule that it is not the caption of the pleading but the allegations therein that determine the
nature of the action and the Court shall grant relief warranted by the allegations and the proof even if no such
relief is prayed for. 16
In Danville Maritime Corporation Inc. v. Commission on Audit, 17 this Court ruled that when a party files two
different actions, but with same reliefs or objectives sought, this constitutes forum-shopping:
"In an attempt to make the two actions appear different, petitioner impleaded different respondents thereinPNOC in the case before the lower court and COA in the case before this Court and sought what seems to be
different reliefs. Petitioner asks this Court to set aside the questioned letter- directive of the COA dated
October 10, 1988 and to direct said body to approve the Memorandum of Agreement entered into by and between
the PNOC and petitioner, while in the complaint before the lower court petitioner seeks to enjoin the PNOC from
conducting a rebidding and from selling to other parties the vessel "T/T Andres Bonifacio," and for an extension of
time for it to comply with paragraph 1 of the memorandum of agreement and damages. One can see that although
the relief prayed for in the two (2) actions are ostensibly different, the ultimate objective in both actions is the
same, that is, the approval of the sale of vessel in favor of petitioner, and to overturn the letter-directive of the
COA of October 10, 1988 disapproving the sale.
The act of petitioner in filing an action for the "quieting of title" defined under article 476 of the New Civil Code
does not operate to differentiate the complaint, or the reliefs sought therein, from petitioners protest pending
appeal before the Office of the Secretary of the DENR.
Based on the records of this case petitioner corporation filed two actions, the civil case for quieting of title with
the Regional Trial Court of Bulacan, and the appeal pending before the Secretary of DENR from the denial of the
Order dated March 11, 1992 of the Regional Executive Director-DENR dismissing the protest filed by petitioner.
The complaint for quieting of title was filed by petitioner to exclude private respondent from conducting mining
operations on the portion of the property belonging to it. On the other hand, in the appeal pending before the
DENR, petitioner seeks a resolution of the question on who has the better right to be granted a mining permit on
the subject property. Although worded differently, the resolution of the protest pending before the Office of the
Secretary of the DENR would necessarily cover the issues raised in the action for quieting of title who has the
better right to the grant of a mining permit over the subject property. A resolution of the Secretary of the DENR
of this particular issue would necessarily resolve the other ancillary issues raised by the petitioner in his complaint
for quieting of title filed before the Regional Trial Court of Bulacan. Thus, the principal relief sought by the
petitioner in the two cases is the same.
The act of petitioner in filing an action for quieting of title with the Regional Trial Court of Bulacan while the same
cause of action is pending with Office of the Secretary of DENR is clearly forum-shopping.
The respondent Court of Appeals correctly ruled on the issue of forum-shopping citing Villanueva v. Adre when it
held:
". . . We believe that petitioner cannot be allowed to circumvent the provisions of P.D. 1281 by allowing it, after it
had already sought redress before the Mines and Geo-Sciences Bureau, and was thereafter rebuffed, to seek
again the same redress before the respondent court under Article 476 of the New Civil Code. This would amount to
forum-shopping.
As held in Villanueva v. Adre, 172 SCRA 876:

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"There is forum-shopping whenever, as a result of an adverse opinion in one forum, a party seeks a favorable
opinion (other than by appeal or certiorari) in another. The principle applies not only with respect to suits filed in
courts but also in connection with litigations commenced in the courts while an administrative processes and in
anticipation of an unfavorable administrative ruling and a favorable court ruling. This is specially so, as in this case,
where the court in which the second suit was brought, has no jurisdiction." 18
Moreover, in the case of First Philippine International Bank v. Court of Appeals, 19 this Court reiterated the test
to determine whether a party violated the rule against forum-shopping,
"The test for determining whether a party violated the rule against forum-shopping has been laid down in the 1986
case of Buan v. Lopez, also by Chief Justice Narvasa, and that is, forum-shopping exists where the elements of litis
pendentia are present or where a final judgment in one case will amount to res judicata in the other.
Consequently, where a litigant (or one representing the same interest or person) sues the same party against whom
another action or actions for the alleged violation of the same right and the enforcement of the same relief is/are
still pending, the defense of litis pedentia in one case is a bar to the others; and, a final judgment in one would
constitute res judicata and thus would cause the dismissal of the rest.
In either case, forum-shopping could be cited by the other party as a ground to ask for summary dismissal of the
two (or more) complaints or petitions, and for the imposition of the other sanctions, which are direct contempt of
court, criminal prosecution, and disciplinary action against the erring lawyer." (Emphasis supplied)
The above-cited cases find application in the instant petition since the relief sought by petitioner in the action for
quieting of title is the same as that of the protest filed by it and pending appeal before the Secretary of DENR.
Based on the foregoing, the Court of Appeals correctly dismissed the petition on ground of forum-shopping.
Ultimately, what is truly important to consider in determining whether forum-shopping exists or not is the vexation
caused the courts and parties-litigant by a party who asks different courts and/or administrative agencies to rule
on the same or related causes and/or to grant the same or substantially the same reliefs, in the process creating
the possibility of conflicting decisions being rendered by the different for a upon the same issue . . . 20
WHEREFORE, premises considered, this Court AFFIRMS the Decision of the respondent Court of Appeals in C.A.G.R. SP. No. 28383 in denying the petition for certiorari and mandamus on ground of forum shopping.
SO ORDERED.
Regalado, Puno, Mendoza and Torres, Jr., JJ., concur.

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