RULE 70

Spouses Lacap Vs. Ong Lee

G.R. No. 142131. December 11, 2002
(Mark Manuel)

FACTS:
Before 1981, a certain Victor Facundo mortgaged two parcels of land and the
improvements thereon to Monte de Piedad Savings Bank (the bank, for brevity). In
1981, herein petitioner spouses Dario and Matilde Lacap assumed to pay Facundos
mortgage obligation to the bank. Due to their failure to pay their obligation to the
bank, however, the latter foreclosed on the mortgage. During the auction sale, the
bank emerged as the highest bidder and title passed on to it.
The bank allowed the petitioner spouses to stay in the premises as lessees paying a
monthly rental of P800. The petitioner spouses introduced improvements thereon
allegedly amounting to some P500,000 after relying on the banks assurance that the
property would be sold back to them. On May 1, 1996, the petitioner spouses
representative went to the bank to pay the monthly rental.
However, the bank refused to accept the rentals inasmuch as, according to the bank,
the property had already been sold to another person. When the petitioner spouses
called the banks head office, the Vice-President of the Assets Division of the bank
advised them to submit a written offer to the bank for P1,100,000. The petitioner
spouses complied that same day. But, on May 22, 1996, the bank turned down the
petitioner spouses offer. On June 20, 1996, the petitioner spouses received a letter
demanding that they vacate the premises because it was already owned by herein
respondent, Jouvet Ong Lee.
The petitioner spouses instituted a civil case against the respondent for cancellation
of sale and damages with an application for preliminary injunction. This case is now
pending before Branch 13 of the Regional Trial Court (RTC, for brevity) of Davao
City.
Meanwhile, the respondent filed a complaint for unlawful detainer against the
petitioners. After trial, the Municipal Trial Court of Davao City rendered in favor of
the plaintiff and against the defendants ordering the latter vacate the premises and
pay reasonable expense for the use of the said premises.
On appeal, the RTC of Davao City, Branch 11, affirmed the assailed decision of
the municipal trial court, with the modification that respondent should reimburse
the petitioner spouses for the improvements the latter introduced to the premises.

Abandoning their previous position of lack of jurisdiction on the part of MTC, the
petitioner spouses now claim that the courts a quo erred in oversimplifying the
issue in the case at bar. Since they were questioning the title of the respondent over
the subject property, the case for unlawful detainer was no longer limited to the
question of possession but also involved the question of ownership. Thus, the
courts a quo should not have evaded ruling on the issue of ownership as a pre-
requisite to the determination and resolution of the issue of physical possession.

ISSUE:
When can the issue of ownership be raised?

RULING:

Section 16 of the 1997 Rules of Civil Procedure provides that:

Sec. 16. Resolving defense of ownership.- When the defendant raises the defense
of ownership in his pleadings and the question of possession cannot be resolved
without deciding the issue of ownership, the issue of ownership shall be resolved
only to determine the issue of possession.

The petitioner spouses are questioning the respondent’s ownership by raising as an

issue the alleged failure of the bank to first offer to them the subject property,
thereby making respondent’s title defective. This, according to the petitioner
spouses, is a defense of ownership that should have been resolved by the courts a
quo.

This Court takes exception to this argument. The defense of ownership

contemplated by the said rule refers to a situation where the defendants either
claim ownership of the subject property or attributes said ownership to another
person other than the plaintiff. It does not apply where the defendants merely
question the validity of the title of the plaintiff. Thus, the petitioner spouses must
anchor the legality of their material possession of the property on a claim of title in
order for the court to be able to touch, at least provisionally and only for purposes
of determining possession, on the legality of the issue of ownership.

In their Reply13, they do not claim ownership over the subject premises to support
their right to possess the property. They do not claim having a better right to the
said property by way of transfer of title through one of the modes of transferring
ownership. The alleged violation of their right of priority or first option to buy the
premises is not the defense of ownership contemplated in Sec. 16 because said
violation, even if true, would only give a cause of action for damages on the
ground of breach of contract but not an action for recovery of title.

The cases cited by petitioners cannot support their position as said cases refer to
different factual situations. In Oronce v. Court of Appeals,14 the defendants
maintained ownership over the property by claiming that the contract of sale with
assumption of mortgage was actually an equitable mortgage. We ruled therein that
the defendant as mortgagor, and not as vendor, of the property can raise as a
defense his claim of ownership over the subject property. In Refugia v. Court of
Appeals,15 the defendants claimed title over the subject property by contending that
they, and not the plaintiffs, paid for the purchase of the said property.

In the instant case, however, the petitioners admit that they do not own the subject
parcels of land. As third persons to the contract of sale between the bank and the
respondent, they are only questioning the validity of the transfer of title to
respondent. The same cannot qualify as a defense of ownership as they will not
derive title as a consequence but will, at best, only be given their disputed priority
option to buy the subject premises.

Another reason why the supposed issue of ownership cannot be ruled upon by the
courts a quo is due to the fact that the same issue is also the subject of a separate
pending case for cancellation of sale filed by the petitioners themselves against the
respondent before the Regional Trial Court Davao City. In effect, by questioning
the ownership of respondent, the petitioners are raising a defense that serves as the
main cause of action in the complaint for the cancellation of sale pending before
another court. This legal strategy is prohibited by the rule on the alleged litis
pendencia. To ask the courts a quo to rule on the alleged defense of ownership is to
pre-empt the ruling of the RTC, Branch 13, hearing the case for cancellation of
sale. A party is prohibited from splitting his cause of action for the reason that it
will unnecessarily clog the court dockets, waste the time and money of the parties,
and perpetrate an abuse of the legal system by filing cases of the same nature in the
hope of insuring a favorable judgment.
Thus, the ruling of the MTCC that petitioner spouses’ defense does not qualify as a
defense of ownership is correct.

RULE 70

Leonidas Vs. Judge Supnet

A.M. No. MTJ-02-1433. June 18, 2003
(Mark Manuel)

FACTS:

On April 13, 1998, Union Bank of the Philippines ("Union Bank" for brevity), with petitioner Atty.
Tomas R. Leonidas ("petitioner" for brevity) as counsel, filed a complaint against the spouses Eddie
Tamondong and Eliza Tamondong ("Tamondong Spouses" for brevity) to collect the latter’s unpaid
loan secured from Union Bank to buy a motor vehicle. Union Bank prayed for the issuance of a writ
of replevin. The case was docketed as Civil Case No. 98-0717 before Branch 109 of the Regional
Trial Court of Pasay City ("Pasay RTC" for brevity).

On June 29, 1998, for lack of interest to prosecute, the Pasay RTC dismissed the complaint without
prejudice.

On March 15, 2000, Union Bank, with petitioner again as counsel, filed against the Tamondong
Spouses another complaint to collect the same unpaid loan with a prayer for a writ of replevin. On
March 29, 2000, the Pasay MTC issued a writ of replevin.

On April 12, 2000, the Tamondong Spouses, in response to Union Bank’s action, filed a pleading
captioned "Urgent Motions" wherein they prayed for the following reliefs: (1) to dismiss the case
docketed as Civil Case No. 342-00; (2) to set aside the writ of replevin; (3) to order the immediate
return of the replevied vehicle and (4) to cite Union Bank and its counsel for contempt of court for
forum shopping and for misleading the court.

The Pasay MTC promptly acted on the Tamondong Spouses’ Urgent Motions. The Pasay MTC
dismissed Civil Case No. 342-00, recalled the order of the writ of replevin, and ordered Union Bank
to return immediately the motor vehicle to the Tamondong Spouses. Moreover, for violating the rule
against forum shopping and for making a false certification against forum shopping,2 the Pasay MTC
cited Union Bank, its collection officer Desi Tomas and petitioner in contempt of court

Union Bank filed a notice of dismissal under Section 1, Rule 17 of the 1997 Rules of Civil Procedure.
In its Order of June 6, 2000, the Pasay MTC denied the motion for reconsideration but made no
mention of Union Bank’s notice of dismissal. Moreover,the Pasay MTC ordered Union Bank to show
cause why it should not be held in contempt for failing to return the vehicle of the Tamondong
Spouses as earlier directed by the court.

However, Union Bank questioned the manner in which the Tamondong Spouses commenced the
contempt charge for it supposedly did not conform to the proper procedure. Admitting that it ignored
the Order of May 9, 2000, Union Bank explained that a provision in the chattel mortgage contract
granted Union Bank the right to take possession of the motor vehicle upon breach of the
obligation.3 Union Bank prayed that the Tamondong Spouses’ motion dated May 17, 2000 to cite the
bank in contempt be denied due course and dismissed.

The Pasay MTC issued a writ of execution to enforce payment of the original contempt fine imposed
upon Union Bank’s collection officer Tomas and petitioner. The Pasay MTC also ordered Union
Bank again to immediately return the replevied motor vehicle. For Union Bank’s failure to comply
with its Order of May 9, 2000, the Pasay MTC again cited collection officer Tomas and petitioner in
contempt and ordered them to pay another fine of ₱5,000.00 each. This is the second contempt
order issued by respondent judge.

Petitioner filed a Motion for Reconsideration of the Order of July 20, 2000 which included the second
contempt order. Petitioner also prayed that the notice of dismissal Union Bank earlier filed on June
6, 2000 be confirmed and all orders issued in the case be set aside.4

The Pasay MTC denied the plaintiff’s motion for reconsideration of the Order of July 20, 2000. The
Pasay MTC stated that the motion was without merit because there was deliberate and willful failure
by collection officer Tomas and petitioner to comply with the May 9, 2000 Order which ordered the
return of the replevied vehicle.

Petitioner states that respondent judge cited him in contempt for refusing to return the replevied
motor vehicle to the Tamondong Spouses. Petitioner, however, claims that it was erroneous for
respondent judge to have done so since the Order of May 9, 2000 was addressed to Union Bank
alone. The May 9, 2000 Order did not direct petitioner, but rather Union Bank alone, to return the
replevied vehicle.

Petitioner also accuses respondent judge of ignoring the procedure that must first be observed
before citing one in indirect contempt, invoking Section 4, Rule 71 of the 1997 Rules of Civil
Procedure.7 Petitioner contends that the contempt charge initiated by the Tamondong Spouses did
not comply with the requirements prescribed in Section 4. Therefore, by giving due course to these
motions, respondent judge improperly issued his contempt order. For respondent judge’s error,
petitioner prays for nothing less than his dismissal from the service and the forfeiture of all privileges
appurtenant to his office.8

In his Comment filed on January 10, 2001,9 respondent judge insists that he duly observed the
procedural requirements for declaring petitioner in indirect contempt. Respondent judge even gave a
chronological account of the proceedings that took place prior to the issuance of the contempt order.
He points out that judges are not infallible and cites that the Court has ruled that to hold a judge
accountable for every erroneous ruling or decision would be nothing short of harassment and would
make his job unbearable.10 Averring that he faithfully conformed to the procedure laid down by the
law, respondent judge implores the Court to dismiss the administrative case filed against him.

The Office of the Court Administrator opined that respondent judge was correct in stating that the
petitioner should have appealed the Pasay RTC’s orders of dismissal instead of filing the case
before the Pasay MTC. On the first order which declared petitioner in direct contempt of court, the
OCA found no reason to hold respondent judge administratively liable. The OCA opined that
petitioner’s act constitutes direct contempt which respondent judge may punish summarily pursuant
to Section 1, Rule 71 of the 1997 Rules of Civil Procedure. However, it is on the second order
declaring petitioner guilty of indirect contempt that the OCA found respondent judge remiss in his
duties.
Unlike the first contempt, the second contempt is governed by Section 4, Rule 71 of the 1997 Rules
of Civil Procedure, which provides that proceedings for indirect contempt must be initiated either
motu proprio by the court, or by verified petition.12 Here, petitioner clearly committed an act
constituting indirect contempt. However, the OCA found that the Tamondong Spouses initiated the
contempt proceedings by mere motion, and not by a verified petition as required by the Rules.13 The
OCA stated that respondent judge took cognizance of the contempt action through the Tamondong
Spouses’ Urgent Motions14 and Motion to Cite Plaintiff For Contempt of Court,15 neither of which were
verified petitions.

ISSUE:
Did the respondent Judge erred in issuing the second order which declared petitioner in
indirect contempt of court?

RULING:
NO.