Pedro Viernes, vs. Pines Commercial Corp.

Manila

SECOND DIVISION

[ G.R. No. 260361, October 25, 2023 ]

PEDRO VIERNES, SUBSTITUTED BY HIS SURVIVING WIDOW AND CO-PETITIONER JOSEPHINE B. VIERNES, AND HIS SURVIVING CHILDREN, NAMELY, DARLINA V. PANGAN, DIVINA V. BUENO, AND DONALD B. VIERNES, PETITIONERS, VS. PINES COMMERCIAL CORPORATION, REPRESENTED BY ITS ADMINISTRATOR ATTY. MARISSA MADRID-DACAYANAN, RESPONDENT.

DECISION

LOPEZ, M., J.:

A final and executory judgment granting ownership necessarily includes the delivery of possession of the subject property. However, this rule applies only if there is an adjudication of ownership in the legal sense and the defeated party has no other basis for claiming the possession of the property apart from the rejected claim of ownership.1

We reiterate this dictum in the resolution of this Petition2'assailing the Decision3'dated November 15, 2021 and the Resolution4'dated March 18, 2022 of the Court of Appeals (CA) in CA-G.R. CV No. 114188, which affirmed the orders of Baguio City Regional Trial Court, Branch 5 (RTC), dissolving the Writ of Execution issued in favor of petitioners Pedro Viernes, substituted by petitioner Josephine B. Viernes and Darlina V. Pangan, Divina V. Bueno, and Donald B. Viernes (the Vierneses).

ANTECEDENTS

The controversy stemmed from an Amended Complaint for declaration of nullity of documents, cancellation of titles and real estate mortgage, and damages filed by respondent Pines Commercial Corporation (Pines), through its representative Atty. Marissa Madrid-Dacayanan (Atty. Dacayanan), against Atty. Benedicto R. Carpio, Atty. Noel P. Aperoch, and spouses Pedro and Josephine B. Viernes (spouses Viernes) before Baguio City RTC, Branch 60. Pines alleged that it is the registered owner of four parcels of land in Baguio City covered by Transfer Certificate of Title (TCT) Nos. T-28861, T-28862, T-28863, and T-28864 (subject properties).5'But when spouses Viernes allegedly bought the subject properties, Pines claimed that spouses Viernes used falsified and fraudulent documents. Consequently, TCT Nos. 018-2012000738, 018-2012000739, 018-2012000740, and 018-20120007416'were issued in favor of the spouses even if Pines never sold the properties to them. Despite the alleged sale, Pines remained in possession of the subject properties.

For their part, spouses Viernes raised lack of capacity to sue as an affirmative defense and prayed for the dismissal of the complaint. They claimed that Atty. Dacayanan had no authority to represent Pines and institute the case because Pines no longer existed.7

On September 10, 2014, the trial court denied spouses Viernes's Motion to Dismiss for lack of merit. It found there was insufficient evidence to support spouses Viernes's claim that Pines had been dissolved.8'Spouses Viernes moved for reconsideration but was denied on February 4, 2015. Mediation followed but failed. In the meantime, spouses Viernes filed a Petition for'Certiorari'with the CA, questioning the RTC orders that denied their Motion to Dismiss.9

Acting on the Petition, the CA ruled that Atty. Dacayanan's authority as a representative of Pines and the Board of Directors who authorized her is doubtful because the General Information Sheets showing that certain persons are officers and stockholders are insufficient to prove her authority.10'Further, when the Complaint was filed, there was an intra-corporate dispute between two groups claiming they were Pines's legitimate Board of Directors.11'The CA annulled the September 10, 2014 and February 4, 2015 Orders of the RTC and ordered the dismissal of Pines's Amended Complaint in an October 10, 2016 Decision (2016 CA Decision), thus:

WHEREFORE, in view of the foregoing premises, the Petition for Certiorari is hereby GRANTED. Accordingly, the assailed Orders dated September 10, 2014 and February 4, 2015 of the Regional Trial Court (RTC) of Baguio City, Branch 60 in'Civil Case No. 7664-R. are hereby'ANNULLED and SET ASIDE. The Amended Complaint filed against petitioners in Civil'Case No. 7664-R'is ordered DISMISSED.

SO ORDERED.12

Pines filed a Motion for Reconsideration, but the CA denied it in a March 23, 2017 Resolution.13'Pines elevated the matter to this Court. On April 18, 2018, we upheld the CA's order directing the dismissal of Pines's Amended Complaint, to wit:

Considering the allegations, issues, and arguments adduced in the petition for review on certiorari of the Decision and Resolution dated October 10, 2016 and March 23, 2017, respectively, of the Court of Appeals in CA-G.R. SP No. 140145, the Court resolves to DENY the petition for failure of petitioner to sufficiently show that the Court of Appeals committed any reversible error in the challenged decision and resolution as to warrant the exercise of this Court's discretionary appellate jurisdiction.14

The April 18, 2018 Resolution became final and executory on October 15, 2018. Consequently, the Vierneses moved for the issuance of a writ of execution. They argued that they were entitled to the possession of the property because the dismissal of Pines's Amended Complaint sustained their ownership over it.15'Pines opposed the motion and stressed that the 2016 CA Decision did not direct them to do any act.16

On May 8, 2019, the trial court granted the Vierneses' Motion and ordered the issuance of the writs of execution and possession.17'The RTC agreed with spouses Viernes that even if the CA did not declare their entitlement to the possession of the subject properties, it is necessarily included in the 2016 CA Decision because they are the registered owners. Subsequently, a Writ of Execution18'and Writ of Possession19'were issued on May 9, 2019.

The Assailed Orders

However, upon Pines's Motion, the trial court set aside its May 8, 2019 Order and dissolved the Writ of Execution on'May 28, 2019,'thus:

WHEREFORE, premises considered, the Order dated May 8, 2019 is reconsidered and SET ASIDE. Accordingly, the'Writ of Execution issued on May 9, 2019 is dissolved and declared to be of no force and effect.

SO ORDERED.20'(Emphasis supplied)

The RTC opined that it could not place spouses Viernes in possession of the subject properties because Josephine stated in her Judicial Affidavit that they leased the properties to Conrado Romero, Pines's alleged predecessor-in-interest. The court also agreed with Pines that the 2016 CA Decision merely dismissed the Amended Complaint, nothing more.21

Spouses Viernes moved to reconsider, but the trial court denied it in an'August 14, 2019'Order.22'It explained that the issue of possession must be threshed out in a different proceeding.

The Vierneses appealed to the CA.

In the assailed Decision, the CA upheld the May 28, 2019 and August 14, 2019 Orders of the RTC. It ratiocinated that an order placing spouses Viernes in possession of the subject properties is not necessarily included in the judgment of dismissal of the case on the ground of lack of authority because the 2016 CA Decision did not delve into the issue of ownership. The 2016 CA Decision was confined to the dismissal of the Complaint. The CA observed:

As can be gleaned therefrom, the judgment sought to be implemented is the Decision dated October 10, 2016 of the Court of Appeals.'A reading of the dispositive portion of the 10 October 2016 Decision shows that it only commands the dismissal of the complaint.'Further, it may be observed in the said decision that the'Court of Appeals did not act on other matters except to dismiss the amended complaint.(awÞhi('In the 10 October 2016 Decision, the Court of Appeals ordered the dismissal of plaintiffs-appellants' complaint after finding that the authority of Atty. Madrid-Dacayanan as representative of Pines and the Board of Directors who authorized her to institute the complaint is of doubtful origin. On the other hand, in the 18 April 2018 Resolution, the Supreme Court denied Pines' appeal for failure to sufficiently show that the Court of Appeals committed any reversible error in issuing the 10 October 2016 Decision.'The issues with regard to the validity of defendants-appellants' title and ownership over the disputed property were not touched upon in the 10 October 2016 Decision of the Court of Appeals and the 18 April 2018 Resolution of the Supreme Court.'Thus,'it cannot be said that an order placing defendants-appellants in possession of the disputed property is necessarily included in the judgment of dismissal of the case on the ground of lack of authority.'Accordingly, We agree with the lower court that the enforcement of the 10 October 2016 Decision is confined to the dismissal of the complaint.23'(Emphasis supplied)

The CA upheld the trial court's ruling that even if the 2016 CA Decision ruled that Pines lacked the capacity to file the case, it does not preclude Pines from filing pleadings at the final stages of the proceedings on the ground of equity and for purposes of protecting whatever rights it may have.24'Thus:

WHEREFORE,'premises considered, the instant appeal is'DENIED.'The Orders dated May 28, 2019 and August 14, 2019 of the Regional Trial Court of Baguio City, Branch 5 in Civil Case No. 7664-R are'AFFIRMED.

IT IS SO ORDERED.25'(Emphasis in the original)

Failing at reconsideration, the Vierneses filed a Petition for Review on'Certiorari'before us. They insist that the RTC and the CA erred in considering the pleadings filed by Pines when it was already declared dissolved and non-'existent. They further argue that the dismissal of the Amended Complaint had the effect of affirming their ownership over the subject properties.26'Therefore, they are entitled to possession pursuant to this Court's ruling in'Baluyut v. Guiao27'and'Pascual v. Daquioag.28

For its part, Pines maintains that the 2016 CA Decision only ordered the dismissal of its Amended Complaint.29'Baluyut'and'Pascual'are supposedly inapplicable because ownership was decreed in those cases.30'Besides, spouses Viernes only prayed for the dismissal of the case in their answer. They did not even pray for the delivery of the possession of the subject property in their pleadings.31

RULING OF THE COURT

We deny the Petition.

Preliminarily, the Vierneses' argument that the RTC and the CA should not have considered the pleadings filed by Pines because Pines was declared dissolved and non-existent has no basis. The CA did not rule on Pines's existence in its 2016 CA Decision. To be sure, it did not consider Pines's existence as the issue. Rather, the CA regarded the source of the rights of the group of individuals who claimed to be the legitimate Board of Directors of Pines, under whose authority Atty. Dacayanan's right to institute the Complaint originated as the ultimate issue, to wit:32

In the case at bar,'put to fervid challenge is the source of the rights of the group of individuals who claimed to be the legitimate Board of Directors of Pines under whose authority Atty. Dacayanan's right to institute the action originated.

Having ruled this as the ultimate issue to be resolved, we now tackle the same. An examination of the assailed order showed that the RTC did not look deeper on the argument raised by petitioners regarding the legal standing of Pines to institute the complaint as well as the legal capacity of the person acting for or representing it in its complaint. In fine,'the authority of Atty. Dacayanan as the representative of Pines and the Board who authorized her to institute the complaint is of doubtful origin.

Atty. Dacayanan cannot rely solely on the General Information Sheets (GIS) of Pines'(Exhibits D, D-1, D-2 and D-3 of Atty. Dacayanan's Judicial Affidavit) to prove that she is empowered to institute the case.'It has been ruled that GISs showing that certain persons are officers or stockholders are not enough proof of such facts...

We also note that'Pines did not offer any counter-argument on petitioner's allegations that from the years 1978 to 2005 there were no elections of the members of the Board of Directors of Pines.'Even the GIS submitted on February 9, 2006, Conrado Romero was named president despite having died on January 17, 2006.'Without any deed of conveyance of shares of stocks, or the corresponding entries in the Stock and Transfer Book and the corresponding certificates of stocks issued pursuant to such deeds and entries, no reliance can be placed on the GIS's to establish even prima facie the legal basis for the Gallardo group to authorize Atty. Dacayanan to use the identity of Pines in filing the suit.'These are telling indicators that could have alerted the RTC to be heedful in addressing this very substantial issue. At this juncture,'we cannot help but observed too that even in the Position Paper of Pines, this affirmative defense of lack of capacity of Atty. Dacayanan and the Board of Directors to bring this suit, they took a very evasive stance on the matter.'Indeed, both Pines and the RTC shunned this ground and focus instead on the closure of Pines as the sole issue for reconsideration, to which we stamp our disapproval.33

....

All told, the'RTC gravely abused its discretion in not dismissing the case upon the petitioners' affirmative defense of lack of capacity to sue on the part of Pines.34'(Emphasis supplied)

Notably, the CA rejected Pines's argument in its Motion for Reconsideration that the real issue is its existence and not Atty. Dacayanan's authority to file the Amended Complaint.35

At this point, we stress that the RTC did not necessarily recognize Atty. Dacayanan's authority to sue as Pines's representative when it issued the May 28, 2019 and August 14, 2019 Orders. These orders were issued within the trial court's inherent power to correct errors and control its processes, which carries with it the right to determine every question of fact and law that may be involved in the execution process. In'Sunfire Trading, Inc. v. Guy,36'the Court, citing'Vda. de Paman v. Se'eris,37'explained:

It is axiomatic that after a judgment has been fully satisfied, the case is deemed terminated once and for all. It is when the judgment has been satisfied that the same passes beyond review, for satisfaction thereof is the last act and end of the proceedings. In Vda. de Paman v. Judge Se'eris, the Court held that'a case in which an execution has been issued is regarded as still pending so that all proceedings on the execution are proceedings in the suit.'There is no question that'the court which rendered the judgment has a general supervisory control over its process of execution, and this power carries with it the right to determine every question of fact and law which may be involved in the execution.'(Emphasis supplied)38

Verily, the court issuing the writ of execution retains a certain amount of control even after the writ of execution leaves its hands, but such control is limited and regulated by fairly definite rules of law and is not unrestricted. Thus, the court may quash the writ of execution when it appears that it is defective in substance, among others.39'Such is the case here. The RTC only exercised its supervisory control over the execution of the judgment dismissing Pines's complaint. In exercising its supervisory control, the RTC can determine whether the writ of execution goes beyond or varies the judgment it is enforcing. If it does, as it did in this case, the trial court's revocation of the writs of execution and possession is proper and within its supervisory control.40

The RTC correctly dissolved the Writ of Execution previously issued in favor of Pines

The general rule is that the writ of execution must strictly conform to the dispositive portion of the promulgated judgment that it implements. The writ can neither vary the terms of the judgment nor go beyond it.41'"An execution which is not warranted by the judgment and exceeds it has no validity. It may not vary the terms of the judgment it seeks to enforce. Where the execution is not in harmony with the judgment which gives it life and exceeds it, it has pro tanto no validity."42'Nevertheless, the writ can extend to those necessarily included or necessary in the judgment. This is provided in Rule 39, Section 47(c) of the Rules of Court, to wit:

The'effect of a judgment or final order rendered by a court'of the Philippines, having jurisdiction to pronounce the judgment or final order, may be as follows:

(c) In any other litigation between the same parties or their successors in interest,'that only is deemed to have been adjudged in a former judgment or final order which appears upon its face to have been so adjudged,'or'which was actually'and'necessarily included therein or necessary thereto.'(Emphasis supplied)

Particularly, the adjudication of ownership necessarily includes the delivery of possession. Possession is an essential attribute or incident of ownership.43'The owner has every right to possess the property, more so if the defeated party has not shown any right to possess the land independently of his or her rejected claim of ownership.44'Thus, on several occasions, the Court sustained the validity of the writ of execution granting possession of the property despite the absence of any order directing the delivery of the possession to the prevailing party.

In'Perez v. Evite,45'the writ of execution directed the Sheriff "to deliver the ownership of the portion of the land in litigation to the defendant Vicente Evite, of Rosario, Batangas . . ." The plaintiffs moved to quash the writ because the decision only declared the defendant as the owner of the property. In upholding the validity of the writ, the Court explained that a judgment is not confined to what appears on the face of the decision, but also those necessarily included. With this, when ownership is adjudged, and the defeated party has no other claim to the possession of the property, apart from the rejected claim of ownership, the delivery of possession of the subject property should be considered as included in the decision.

Similarly, in'Baluyut v. Guiao,46'this Court sustained the issuance of the writ of possession even if the judgment only dismissed the complaint and affirmed the validity of the donation, as well as the subsequent sale of the subject property, after trial on the merits. The party who bought the property from the donee was adjudged to be the owner. Absent any allegation or proof that the donor has any other right to possess the property, the prevailing party is entitled to a writ of possession.

In'Pascual v. Daquioag,47'the Court likewise ruled that a writ of execution issued upon a final judgment adjudicating the ownership of the land can place the prevailing party in possession even if the judgment only prohibited the defeated party from entering the property. The Court reasoned that the delivery of possession of the property is deemed included in the decision upon the final adjudication of ownership to the prevailing party.

It can be gleaned from these cases that'the exception in Rule 39, Section 47(c) of the Rules of Court relevant to ownership and possession only applies when: (a) the prevailing party is adjudged to be the owner of the property; and (b) the defeated party has no other basis in claiming the possession of the property, apart from the rejected claim of ownership.'"Adjudged" or "adjudicate" ordinarily means settling the merits of the issues raised. In the legal sense, it means to pass on judicially, to decide, settle, or decree. It implies a judicial determination of a fact and the entry of a judgment.48'Meanwhile, other claims to the possession of the property refer to the possibility that the actual possessor has some rights, e.g., as tenants and lessees, which must be respected and enforceable even against the owner.49

These circumstances are not present in this case.'First, a perusal of the 2016 CA Decision shows that the CA did not rule on the issue of ownership. The Decision is only limited to the dismissal of the Amended Complaint based on Atty. Dacayanan's lack of authority to sue. It bears stressing that in a case dismissed for lack of capacity to sue,'res judicata'does not set in because there has been no determination on the merits.50'The parties even agreed that there was no trial on the merits because the 2016 CA Decision ordered the dismissal of the case. In other words, there was no judicial determination of Pines's or the Vierneses' claim of ownership. Therefore, the Court cannot consider the Vierneses as the adjudged owner of the subject property.'Second, since there was no trial on the merits, there is no determination of whether Pines has any other basis for claiming the possession of the property other than its claim of ownership. Notably, this is one of the trial court's considerations in dissolving the writ of execution. There is a possibility that Pines has the right to possess the property based on its predecessor-in-interest's right as spouses Viernes's alleged lessee.

Accordingly, the exception under Rule 39, Section 47(c) of the Rules of Court, as applied in'Perez,'Baluyut, and'Pascual, is not applicable. The CA correctly observed:

Defendants-appellants' reliance in Baluyut is misplaced. The Baluyut case does not fall squarely with the present case. There, the case was tried on the merits and there was an adjudication on the issue of ownership over the property. In the instant case, RTC, Branch 60 and the lower court did not try the case on its merits. The case was dismissed not on the merits but based on the affirmative defense raised by defendants-appellants. To reiterate,'the issue addressed in the 10 October 2016 Decision pertains to the authority of Atty. Madrid-Dacayanan to represent Pines and institute an action in its behalf. There was no judicial determination with regard to ownership or possessory rights over the disputed property in the present case.51'(Emphasis supplied)

All told, the dissolution of the writ of execution placing the Vierneses' in possession of the subject properties is proper. The Court cannot rely on the strength of the 2016 CA Decision to sustain the Vierneses' entitlement to the possession of the subject properties because it is only an adjudication of Atty. Dacayanan's authority to file the Complaint on Pines's behalf'not of the Vierneses' ownership of the subject property. Ergo, the RTC and the CA correctly annulled the Writ of Execution that goes beyond the 2016 CA Decision.

ACCORDINGLY,'the Petition for Review on'Certiorari'is'DENIED.'The Decision dated November 15, 2021 and the Resolution dated March 18, 2022 of the Court of Appeals in CA-G.R. CV No. 114188 are'AFFIRMED.

SO ORDERED.

Leonen, SAJ. (Chairperson), J. Lopez,'and'Kho, Jr., JJ., concur.Lazaro-Javier,*'J.,'on official business.

Footnotes

*'On official business.

1'See'Perez v. Evite, 111 Phil. 564-568 (1961) [Per J. Barrera,'En Banc],'citing'Jabon v. Alo, 91 Phil. 750, 753 (1952) [Per J. Bautista Angelo,'En Banc];'Baluyut v. Guiao, 373 Phil. 1013, 1022-1023 (1999) [Per J. Kapunan, First Division]; and'Pascual v. Daquioag, 731 Phil. 1, 14 (2014) [Per J. Bersamin, First Division].

2'Rollo, pp. 9-32.

3'Id. at 34-44. Penned by Associate Justice Germano Francisco D. Legaspi, with the concurrence of Associate Justices Apolonario D. Bruselas, Jr., and Angelene Mary W. Quimpo-Sale.

4'Id. at 53-54. Penned by Associate Justice Germano Francisco D. Legaspi, with the concurrence of Associate Justices Apolonario D. Bruselas, Jr., and Angelene Mary W. Quimpo-Sale.

5'Id. at 115.

6'Id.

7'Id. at 11-12, 35.

8'Id. at 102.

9'Id. at 12, 36.

10'Id. at 104.

11'Id. at 106.

12'Id. at 107.

13'Id. at 110-112.

14'Id. at 113.

15'Id. at 36-37.

16'Id. at 115.

17'Id. at 115-120. The dispositive portion of the Order states:

WHEREFORE,'let a Writ of Execution for the implementation of the Decision rendered in this case be issued. Likewise, in the implementation thereof, issue a Writ of Possession directing the Ex-Officio Sheriff of this Court to place the Defendants in possession of the subject properties and to evict therefrom all persons claiming rights under Pines Commercial Corporation.

18'Id. at 121.

19'Id at 122.

20'Id. at 152.

21'Id. at 151-152.

22'Id. at 171-172.

23'Id. at 41-42.

24'Id. at 42-43.

25'Id. at 43.

26'Id. at 16.

27'373 Phil. 1013 (1999) [Per J. Kapunan, First Division].

28'731 Phil. 1 (2014) [Per J. Bersamin, First Division].

29'Rollo, p. 246.

30'Id. at 249, 253.

31'Id. at 247-248.

32'Id. at 104.

33'Id. at 103-104.

34'Id. at 107.

35'Id. at 111.

36'872 Phil. 142 (2020) [Per J. Delos Santos, Second Division].

37'201 Phil. 290 (1982) [Per J. Guerrero, Second Division].

38'Sunfire Trading, Inc. v. Guy, 872 Phil. 142, 144 (2020) [Per J. Delos Santos, Second Division]. Citations omitted.

39'People v. Veluz, 96 Phil. 794, 796 (1955) [Per J. Bengzon,'En Banc],'citing'Dimayuga v. Raymundo, 76 Phil. 143 (1946) [Per J. Bengzon,'En Banc]; and I MORAN COMMENTS ON THE RULES OF COURT, 811-812 (1952).

40'See'Pamantasan ng Lungsod ng Maynila v. Fernandez, Jr., 227 Phil. 289, 293 (1986) [Per J. Gutierrez, Jr., Second Division];'Balais v. Velasco, 322 Phil. 790 (1996) [Per J. Hermosisima, Jr., First Division];'Montealegre v. Spouses De Vera, 856 Phil. 305, 313-314 (2019) [Per J. Jardeleza, First Division];'Pascual v. Daquioag, 731 Phil. 1, 12 (2014) [Per J. Bersamin, First Division]; and'Tumibay v. Spouses Soro, 632 Phil. 179, 186 (2010) [Per J. Brion, Second Division].

41'Montealegre v. Spouses De Vera, 856 Phil. 305, 314 (2019) [Per J. Jardeleza, First Division];'Tumibay v. Spouses Soro, 632 Phil. 179, 186 (2010) [Per J. Brion, Second Division].

42'Pamantasan ng Lungsod ng Maynila v. Fernandez, Jr., 227 Phil. 289, 292-293 (1986) [Per J. Gutierrez, Jr., Second Division].

43'Castro v. Mendoza, 809 Phil. 789, 821 (2017) [Per J. Jardeleza, Third Division].

44'Pascual v. Daquioag, 731 Phil. 1, 14 (2014) [Per J. Bersamin, First Division].

45'111 Phil. 564, 567 (1961) [Per J. Barrera,'En Banc],'citing'Jabon v. Alo, 91 Phil. 750, 752 (1952) [Per J. Bautista Angelo,'En Banc].

46'373 Phil. 1013, 1022-1023 (1999) [Per J. Kapunan, First Division].

47'731 Phil. 1, 14 (2014) [Per J. Bersamin, First Division].

48'Cari'o v. Commission on Human Rights, 281 Phil. 547, 560-561 (1991) [Per C.J. Narvasa,'En Banc].

49'Perez v. Evite, 111 Phil. 564, 567 (1961) [Per J. Barrera,'En Banc].

50'Eriks Pte. Ltd. v. CA, 335 Phil. 229, 240 (1997) [Per J. Panganiban, Third Division].

51'Rollo, p. 42.