G.R. No. 146972 - B & I REALTY CO., INC., vs. TEODORO CASPE and PURIFICACION AGUILAR CASPE.D E C I S I O N - Supreme Court E-Library

Ruling

WHEREFORE, judgment is hereby rendered in favor of the defendants spouses Teodoro Caspe and Purificacion A. Caspe on their counterclaims and ordering the complaint of plaintiffs [spouses Venegas] as well as the counterclaims of B & I Realty Co, Inc. dismissed. Arturo G. Datuin is ordered to pay the damages suffered by the defendants-Caspe[s] PhP10,000.00 as compensatory and consequential damages; PhP5,000.00 moral damages and PhP5,000.00 attorney's fees and to pay the costs. The sale between Consorcia Venegas and Arturo G. Datuin is declared void from the beginning. Consequently, the transfer of title no. 247434 from Venegas to Datuin is hereby ordered non-existent and Transfer Certificate of Title No. 377734 in the name of Arturo G. Datuin is hereby cancelled. The Conditional Deed of Sale between the Venegas and the Caspes is declared valid and approved. All payments of Caspes to Venegas or agents, to Datuin and to B & I Realty Co. Inc. are considered part of the PhP160,000.00 consideration or purchase price. The mortgage between Datuin and the B & I Realty Co., Inc. is hereby declared cancelled and B & I Realty Co., Inc. is hereby ordered to deliver the title to the Caspes upon the latter paying said financing company the remaining balance of PhP15,132.00. The Register of Deeds of Rizal is hereby ordered to cancel Transfer Certificate of Title No. 377734 in the name of Arturo G. Datuin and in lieu to issue a new title in the name of Teodoro Caspe and Purificacion A. Caspe. Petitioner interposed an appeal to the CA. On October 31, 1989, the CA held that all pronouncements in the aforesaid CFI decision pertaining to petitioner had no binding effect on it. It reasoned that the appealed decision adversely affected petitioner on the basis of evidence presented ex-parte by respondents without according the former the opportunity to controvert the same, in violation of the due process clause. However, the CA affirmed the rest of the judgment. [5] Respondents filed a motion for reconsideration [6] which was denied on January 25, 1990. [7] It became final and executory as respondents did not appeal the denial thereof. On May 12, 1993, petitioner sent a demand letter to respondents for the payment of their loan. The latter refused to pay. On August 27, 1993, petitioner filed an action for judicial foreclosure of mortgage, the subject of the instant petition for review, against respondents before the Regional Trial Court (RTC), Branch 166, Pasig City. It was docketed as SCA 447. In their answer , respondents argued that the action had already prescribed. On August 26, 1997, the RTC ruled in favor of petitioner. The trial court held that the defense of prescription could not prosper as it was not pleaded by respondents in their motion to dismiss . Respondents appealed to the CA which reversed the RTC decision and dismissed petitioner's action for judicial foreclosure. It stated that, although the defense of prescription was not pleaded in the motion to dis