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    J.M. Tuason & Co., Inc. v. Estrella Vda. de Lumanlan and The Court of Appeals

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    Ann Marie
    The Court of Appeals ruled that Lumanlan, who purchased land from the Deudors, had the right to compel Tuason & Co. to sell her the land based on a compromise agreement. However, the Supreme Court reversed, finding: 1) The compromise agreement only gave the Deudor buyers preferential right to purchase lands from Tuason & Co. at current prices if they recognized Tuason's title, but Lumanlan did not do so. 2) Lumanlan cannot claim to be a buyer in good faith as she ignored Tuason's Torrens title, which had been registered since 1914, instead relying on the Deudors' claim. 3) While Lumanlan

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    J.M. Tuason & Co., Inc. v. Estrella Vda. de Lumanlan and The Court of Appeals

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    Ann Marie
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    The Court of Appeals ruled that Lumanlan, who purchased land from the Deudors, had the right to compel Tuason & Co. to sell her the land based on a compromise agreement. However, the Supreme Court reversed, finding: 1) The compromise agreement only gave the Deudor buyers preferential right to purchase lands from Tuason & Co. at current prices if they recognized Tuason's title, but Lumanlan did not do so. 2) Lumanlan cannot claim to be a buyer in good faith as she ignored Tuason's Torrens title, which had been registered since 1914, instead relying on the Deudors' claim. 3) While Lumanlan

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    J.M. Tuason & Co., Inc. v. Estrella vda. De Lumanlan and The Court of Appeals

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    The Court of Appeals ruled that Lumanlan, who purchased land from the Deudors, had the right to compel Tuason & Co. to sell her the land based on a compromise agreement. However, the Supreme Court reversed, finding: 1) The compromise agreement only gave the Deudor buyers preferential right to purchase lands from Tuason & Co. at current prices if they recognized Tuason's title, but Lumanlan did not do so. 2) Lumanlan cannot claim to be a buyer in good faith as she ignored Tuason's Torrens title, which had been registered since 1914, instead relying on the Deudors' claim. 3) While Lumanlan

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    Download as docx, pdf, or txt
    259 views3 pages

    J.M. Tuason & Co., Inc. v. Estrella Vda. de Lumanlan and The Court of Appeals

    Uploaded by

    Ann Marie
    The Court of Appeals ruled that Lumanlan, who purchased land from the Deudors, had the right to compel Tuason & Co. to sell her the land based on a compromise agreement. However, the Supreme Court reversed, finding: 1) The compromise agreement only gave the Deudor buyers preferential right to purchase lands from Tuason & Co. at current prices if they recognized Tuason's title, but Lumanlan did not do so. 2) Lumanlan cannot claim to be a buyer in good faith as she ignored Tuason's Torrens title, which had been registered since 1914, instead relying on the Deudors' claim. 3) While Lumanlan

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    of 3

    J.M. Tuason & Co., Inc. v. Estrella vda.

    De Lumanlan and The Court of Appeals


    G.R. No. L-23497. April 26, 1968.
    (MAG)

    FACTS:
    A complaint was filed by plaintiff, J.M. Tuason & Co., Inc., hereinafter called Tuason, on 30 April, 1959,
    with the basis that it being the registered owner of the property known as Santa Mesa Heights
    Subdivision, situated at barrio North Tatalon, Quezon City.

    The defendant, sometime in April, 1949 unlawfully entered into possession of 800 square meters, and
    constructed his house. Later on, the plaintiff prayed for ejectment and damages for the occupancy.

    However, defendant in her answer, set forth affirmative defense that on 12 March, 1949, she had bought
    the property she was occupying from one Pedro Deudor, and that in a compromise agreement between
    Pedro and Tuason, she was one of the buyers therein recognized. So now, she is asking that her rights
    be recognized and the complaint dismissed.

    But on the basis of the evidence presented by both parties in the trial, Lower Court sustained plaintiff,
    holding that Tuason being the registered owner, and the question being purely one of possession,
    therefore, defendant's said evidence was 'completely immaterial' .

    Upon appeal, the CA held that, pursuant to this Supreme Court's ruling in Evangelista vs. Deudor, the
    Compromise Agreement between the petitioner Tuason & Co. and the Deudors constituted a valid
    defense against the possessory action filed by Tuason & Co.; that under paragraph 7 of said Compromise
    Agreement, petitioner bound and committed itself to sell to respondent Lumanlan the lot occupied by her
    at a reasonable price; that said respondent had a right to compel petitioner to accept payment for the lot
    in question; and that the compromise agreement legalized the possession of respondent.

    However, these pronouncements are assailed by the petitioner in this appeal as legally incorrect and
    contrary to the decisions of this Court.

    The terms of the compromise agreement between the heirs of Telesforo Deudor and J.M. Tuason & Co.
    have been taken cognizance of in many decisions of this Court. The Deudors had therein recognized the
    registered site of Tuason & Co. over the lands claimed by them, and received payment of certain sums of
    money; but as the Deudors had, prior to the compromise, sold their possessory rights to various persons.

    The compromise agreement will show that while the same created "a sort of contractual relation" between
    the J.M. Tuason & Co., Inc., and the Deudor vendees, the same in no way obligated Tuason & Co. to sell
    to those buyers the lots occupied by them at the price stipulated with the Deudors, but at "the current
    prices and terms specified by the OWNERS (Tuason) in their sales of lots in their subdivision
    known as 'Sta. Mesa Heights
    Subdivision'."

    Further, it imports that these buyers of the Deudors must "recognize the title of the OWNERS (Tuason)
    over the property purportedly bought by them" from the Deudors, and "sign, whenever possible, new
    contracts of purchase for said property"; and, if and when they do so, "the sums paid by them to the
    Deudors . . . shall be credited to the buyers."
    All that Tuason & Co. agreed to was to grant the Deudor buyers preferential right to purchase "at current
    prices and terms" the lots occupied by them, upon their recognizing the title of Tuason & Co., Inc., and
    signing new contracts to credit them for the amounts they had paid to the Deudors.

    Nowhere in her answer did the respondent Estrella Vda. de Lumanlan claim that she had signed a new
    contract with J. M. Tuason & Co., Inc. for the purchase of the lot occupied. And instead of recognizing the
    title of the owners (Tuason & Co.), respondent Lumanlan in her answer, repudiated and assailed the
    compromise between the Deudors J.M. Tuason & Co.

    It is thus apparent that no legal basis exists for the pronouncement in the appealed decision that Tuason
    & Co. had committed itself to sell to Lumanlan the lot occupied by her at a reasonable price, or that the
    compromise agreement legalized the possession of the respondent, since the latter does not rely on the
    compromise but, on the contrary, she assails it.

    The Court of Appeals ruled that the price to be paid by Lumanlan to Tuason & Co., Inc., is governed by
    Article 1474 of the new Civil Code of the Philippines, which provides that:

    "Where the price cannot be determined in accordance with the preceding articles, or in any other manner,
    the contract is inefficacious. However, if the thing or any part thereof has been delivered to and
    appropriated by the buyer, he must pay a reasonable price therefor. What is a reasonable price is a
    question of fact dependent on the circumstances of each particular case."

    Since there has been no contract between petitioner Tuason & Co., and respondent Lumanlan for the
    sale of the lot occupied by the latter, Tuason & Co. did not consider itself bound by the sales made by the
    Deudors, but demanded that the Deudor buyers should sign new contracts with it at current prices
    specified for the sales of lots in "Sta. Mesa Heights Subdivision" (ante) the aforequoted Article 1474 can
    have no bearing on the case, Lumanlan not being a buyer from Tuason & Co.

    ISSUE:
    W/N Lumanlan is a builder in good faith.

    RULING:
    NO. A similar contention has been rejected in Tuason & Co. vs. Macalindong, L-15398, December 29,
    1962, where We ruled that there being a presumptive knowledge of the Torrens titles issued to Tuason &
    Co. and its predecessors in interest since 1914, the buyer from Deudors (or from their transferees)
    cannot, in good conscience, say now that she believed her vendor had rights of ownership over the lot
    purchased.

    Had he investigated before buying and before building his house on the questioned lot, he would have
    been informed that the land is registered under the Torrens system in the name of J.M. Tuason & Co.,
    Inc. If he failed to make the necessary inquiry, appellant is now bound conclusively by appellee's Torrens
    title

    However, Lumanlan had chosen to ignore the Torrens title of Tuason & Co., Inc. and relied instead upon
    the Deudors' claim of ownership perhaps because such course appeared her as more advantageous;
    hence, she has only herself to blame for the consequences now that the Deudors' claim has been
    abandoned by the Deudors themselves, and cannot pretend good faith. The Court of First Instance,
    therefore, did not err in holding that she was not a rightful possessor and sentencing her to vacate.

    Respondent could have asked that she recover or be credited with the amounts paid by her to the
    Deudors, but as no claim to such credit was ever advanced by her in the trial Court, no pronouncement
    can be made thereon in this appeal. Equity demands, however, that her right to claim such return, or to
    have the amount offset against the sums she was sentenced to pay, should be, as it is, reserved.

    WHEREFORE, the decision of the Court of Appeals is reversed and that of the Court of First Instance
    reinstated. Costs against respondent, Estrella Vda. de Lumanlan.

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