746 PHIL. 971
SECOND DIVISION
[ G.R. No. 205487, November 12, 2014 ]
ORION SAVINGS BANK, PETITIONER, VS. SHIGEKANE SUZUKI,
RESPONDENT.
D E C I S I O N
BRION, J.:
Before us is the Petition for Review on Certiorari
[1]
filed by petitioner Orion Savings
Bank (Orion) under Rule 45 of the Rules of Court, assailing the decision
[2]
dated
August 23, 2012 and the resolution
[3]
dated January 25, 2013 of the Court of
Appeals (CA) in CA-G.R. CV No. 94104.
The Factual Antecedents
In the first week of August 2003, respondent Shigekane Suzuki (Suzuki), a
Japanese national, met with Ms. Helen Soneja (Soneja) to inquire about a
condominium unit and a parking slot at Cityland Pioneer, Mandaluyong City,
allegedly owned by Yung Sam Kang (Kang), a Korean national and a Special
Resident Retiree’s Visa (SRRV) holder.
At the meeting, Soneja informed Suzuki that Unit No. 536 [covered by
Condominium Certificate of Title (CCT) No. 18186]
[4]
and Parking Slot No. 42
[covered by CCT No. 9118]
[5]
were for sale for P3,000,000.00. Soneja likewise
assured Suzuki that the titles to the unit and the parking slot were clean. After a
brief negotiation, the parties agreed to reduce the price to P2,800,000.00.
On August 5, 2003, Suzuki issued Kang a Bank of the Philippine Island (BPI) Check
No. 83349
[6]
for One Hundred Thousand Pesos (P100,000.00) as reservation fee.
[7]
On August 21, 2003, Suzuki issued Kang another check, BPI Check No. 83350,
[8]
this time for P2,700,000.00 representing the remaining balance of the purchase
price. Suzuki and Kang then executed a Deed of Absolute Sale dated August 26,
2003
[9]
covering Unit No. 536 and Parking Slot No. 42. Soon after, Suzuki took
possession of the condominium unit and parking lot, and commenced the renovation
of the interior of the condominium unit.
Kang thereafter made several representations with Suzuki to deliver the titles to the
properties, which were then allegedly in possession of Alexander Perez (Perez,
Orion’s Loans Officer) for safekeeping. Despite several verbal demands, Kang failed
to deliver the documents. Suzuki later on learned that Kang had left the country,
prompting Suzuki to verify the status of the properties with the Mandaluyong City
Registry of Deeds.
Before long, Suzuki learned that CCT No. 9118 representing the title to the Parking
Slot No. 42 contained no annotations although it remained under the name of
Cityland Pioneer. This notwithstanding, Cityland Pioneer, through Assistant Vice
President Rosario D. Perez, certified that Kang had fully paid the purchase price of
Unit. No. 536
[10]
and Parking Slot No. 42.
[11]
CCT No. 18186 representing the title to the condominium unit had no existing
encumbrance, except for an annotation under Entry No. 73321/C-10186 which
provided that any conveyance or encumbrance of CCT No. 18186 shall be subject to
approval by the Philippine Retirement Authority (PRA). Although CCT No. 18186
contained Entry No. 66432/C-10186 dated February 2, 1999 representing a
mortgage in favor of Orion for a P1,000,000.00 loan, that annotation was
subsequently cancelled on June 16, 2000 by Entry No. 73232/T. No. 10186. Despite
the cancellation of the mortgage to Orion, the titles to the properties remained
in possession of Perez.
To protect his interests, Suzuki then executed an Affidavit of Adverse Claim
[12]
dated September 8, 2003, with the Registry of Deeds of Mandaluyong City,
annotated as Entry No. 3292/C-No. 18186 in CCT No. 18186. Suzuki then
demanded the delivery of the titles.
[13]
Orion, (through Perez), however, refused to
surrender the titles, and cited the need to consult Orion’s legal counsel as its
reason.
On October 14, 2003, Suzuki received a letter from Orion’s counsel dated October 9,
2003, stating that Kang obtained another loan in the amount of P1,800,000.00.
When Kang failed to pay, he executed a Dacion en Pago dated February 2, 2003, in
favor of Orion covering Unit No. 536. Orion, however, did not register the Dacion en
Pago, until October 15, 2003.
On October 28, 2003, Suzuki executed an Affidavit of Adverse Claim over Parking
Slot No. 42 (covered by CCT No. 9118) and this was annotated as Entry No.
4712/C-No. 9118 in the parking lot’s title.
On January 27, 2004, Suzuki filed a complaint for specific performance and
damages against Kang and Orion. At the pre-trial, the parties made the following
admissions and stipulations:
1. That as of August 26, 2003, Kang was the registered owner of Unit
No. 536 and Parking Slot No. 42;
2. That the mortgage in favor of Orion supposedly executed by Kang,
with Entry No. 66432/C-10186 dated February 2, 1999, was
subsequently cancelled by Entry No. 73232/T No. 10186 dated June
16, 2000;
3. That the alleged Dacion en Pago was never annotated in CCT Nos.
18186 and 9118;
4. That Orion only paid the appropriate capital gains tax and the
documentary stamp tax for the alleged Dacion en Pago on October
15, 2003;
5. That Parking Slot No. 42, covered by CCT No. 9118, was never
mortgaged to Orion; and
6. That when Suzuki bought the properties, he went to Orion to obtain
possession of the titles.
The RTC Ruling
In its decision
[14]
dated June 29, 2009, the Regional Trial Court (RTC), Branch 213,
Mandaluyong City ruled in favor of Suzuki and ordered Orion to deliver the CCT Nos.
18186 and 9118 to Suzuki.
The court found that Suzuki was an innocent purchaser for value whose rights over
the properties prevailed over Orion’s. The RTC further noted that Suzuki exerted
efforts to verify the status of the properties but he did not find any existing
encumbrance in the titles. Although Orion claims to have purchased the property by
way of a Dacion en Pago, Suzuki only learned about it two (2) months after he
bought the properties because Orion never bothered to register or annotate the
Dacion en Pago in CCT Nos. 18186 and 9116.
The RTC further ordered Orion and Kang to jointly and severally pay Suzuki moral
damages, exemplary damages, attorney’s fees, appearance fees, expenses for
litigation and cost of suit. Orion timely appealed the RTC decision with the CA.
The CA Ruling
On August 23, 2012, the CA partially granted Orion’s appeal and sustained the RTC
insofar as it upheld Suzuki’s right over the properties. The CA further noted that
Entry No. 73321/C-10186 pertaining to the withdrawal of investment of an SRRV
only serves as a warning to an SRRV holder about the implications of a conveyance
of a property investment. It deviated from the RTC ruling, however, by deleting the
award for moral damages, exemplary damages, attorney’s fees, expenses for
litigation and cost of suit.
Orion sought a reconsideration of the CA decision but the CA denied the motion in
its January 25, 2013 resolution. Orion then filed a petition for review on certiorari
under Rule 45 with this Court.
The Petition and Comment
Orion’s petition is based on the following grounds/arguments:
[15]
1. The Deed of Sale executed by Kang in favor of Suzuki is null and void. Under
Korean law, any conveyance of a conjugal property should be made with the
consent of both spouses;
2. Suzuki is not a buyer in good faith for he failed to check the owner’s duplicate
copies of the CCTs;
3. Knowledge of the PRA restriction under Entry No. 73321/C-10186, which
prohibits any conveyance or encumbrance of the property investment, defeats
the alleged claim of good faith by Suzuki; and
4. Orion should not be faulted for exercising due diligence.
In his Comment,
[16]
Suzuki asserts that the issue on spousal consent was belatedly
raised on appeal. Moreover, proof of acquisition during the marital coverture is a
condition sine qua non for the operation of the presumption of conjugal ownership.
[17]
Suzuki additionally maintains that he is a purchaser in good faith, and is thus
entitled to the protection of the law.
The Court’s Ruling
We deny the petition for lack of merit.
The Court may inquire into
conclusions of fact when the
inference made is manifestly
mistaken
In a Rule 45 petition, the latitude of judicial review generally excludes a factual and
evidentiary re-evaluation, and the Court ordinarily abides by the uniform factual
conclusions of the trial court and the appellate court.
[18]
In the present case, while
the courts below both arrived at the same conclusion, there appears to be an
incongruence in their factual findings and the legal principle they applied to the
attendant factual circumstances. Thus, we are compelled to examine certain factual
issues in the exercise of our sound discretion to correct any mistaken inference that
may have been made.
[19]
Philippine Law governs the
transfer of real property
Orion believes that the CA erred in not ruling on the issue of spousal consent. We
cannot uphold this position, however, because the issue of spousal consent was only
raised on appeal to the CA. It is a well-settled principle that points of law, theories,
issues, and arguments not brought to the attention of the trial court cannot be
raised for the first time on appeal and considered by a reviewing court.
[20]
To
consider these belated arguments would violate basic principles of fair play, justice,
and due process.
Having said these, we shall nonetheless discuss the issues Orion belatedly raised,
if only to put an end to lingering doubts on the correctness of the denial of
the present petition.
It is a universal principle that real or immovable property is exclusively subject to
the laws of the country or state where it is located.
[21]
The reason is found in the
very nature of immovable property — its immobility. Immovables are part of the
country and so closely connected to it that all rights over them have their natural
center of gravity there.
[22]
Thus, all matters concerning the title and disposition of real property are determined
by what is known as the lex loci rei sitae, which can alone prescribe the mode by
which a title can pass from one person to another, or by which an interest therein
can be gained or lost.
[23]
This general principle includes all rules governing the
descent, alienation and transfer of immovable property and the validity, effect and
construction of wills and other conveyances.
[24]
This principle even governs the capacity of the person making a deed relating to
immovable property, no matter what its nature may be. Thus, an instrument will be
ineffective to transfer title to land if the person making it is incapacitated by the lex
loci rei sitae, even though under the law of his domicile and by the law of the place
where the instrument is actually made, his capacity is undoubted.
[25]
On the other hand, property relations between spouses are governed principally by
the national law of the spouses.
[26]
However, the party invoking the application of a
foreign law has the burden of proving the foreign law. The foreign law is a question
of fact to be properly pleaded and proved as the judge cannot take judicial notice of
a foreign law.
[27]
He is presumed to know only domestic or the law of the forum.
[28]
To prove a foreign law, the party invoking it must present a copy thereof and comply
with Sections 24 and 25 of Rule 132 of the Revised Rules of Court which reads:
SEC. 24. Proof of official record. — The record of public documents
referred to in paragraph (a) of Section 19, when admissible for any
purpose, may be evidenced by an official publication thereof or by a copy
attested by the officer having the legal custody of the record, or by his
deputy, and accompanied, if the record is not kept in the Philippines, with
a certificate that such officer has the custody. If the office in which the
record is kept is in a foreign country, the certificate may be made by a
secretary of the embassy or legation, consul general, consul, vice consul,
or consular agent or by any officer in the foreign service of the
Philippines stationed in the foreign country in which the record is kept,
and authenticated by the seal of his office. (Emphasis supplied)
SEC. 25. What attestation of copy must state. — Whenever a copy of a
document or record is attested for the purpose of the evidence, the
attestation must state, in substance, that the copy is a correct copy of
the original, or a specific part thereof, as the case may be. The
attestation must be under the official seal of the attesting officer, if there
be any, or if he be the clerk of a court having a seal, under the seal of
such court.
Accordingly, matters concerning the title and disposition of real property shall be
governed by Philippine law while issues pertaining to the conjugal nature of the
property shall be governed by South Korean law, provided it is proven as a fact.
