G.R. No.

L-18128

December 26, 1961

J. M. TUASON & CO., INC., HON. HERMOGENES CALAUAG, Judge of the Court of First Instance of Rizal (Quezon City, Branch IV) and HON. NICASIO YATCO, Judge of the Court of First Instance of Rizal (Quezon City Branch V), petitioners, vs. COURT OF APPEALS (Second Division), THE CHAIRMAN-ADMINISTRATOR OF THE LAND TENURE ADMINISTRATION, BRUNA ROSETE and BUENAVENTURA DIZON, respondents. --------------------------------G.R. No. L-18672 December 26, 1961

REPUBLIC OF THE PHILIPPINES, (Represented by the Land Tenure Administration), petitioner, vs. J. M. TUAZON & CO., ET AL., respondents. REYES, J.B.L., J.: The record shows that the judgments rendered in 1955 by the Court of First Instance of Rizal, in its ejectment cases Q-1401 and Q-1402, were, upon regular appeal, sequently affirmed in toto by the Court of Appeals in its cases CA-G.R. Nos. 16265-66-R, "Tuason & Company, Inc. vs. Bruna Rosete and Buenaventura Dizon". The Court of First Instance, after the appellate court's decision became final and upon return of the records in due course, issued writ of execution of the judgment against Rosete and Dizon, as prayed for by the landowner Tuason & Company. Subsequently, on November 19, 1960, the Court of First Instance issued orders of demolition of the houses of the evictees or judgment debtors. A few days previously, on November 16, 1960, the land-owner J. M. Tuason & Company had also applied for a writ of prohibition in the Court of First Instance of Quezon City (Case No. Q5527) against the Land Tenure administration, the Auditor General, and the Solicitor General, to restrain them from instituting expropriation proceedings of the petitioner Company's land in Quezon City, generally known as the "Tatalon Estate", as expressly and specifically authorized by Republic Act No. 2616, that became law, without executive approval, on August 3, 1959; the Company claiming mainly that the Republic Act was unconstitutional, null and void, as legislation aimed at depriving it of its property for the benefit of squatters and occupants, even if the property had been actually subdivided, and its lots were being sold to the public; and that respondent officers threatened to enforce said law by initiating expropriation proceedings. At petitioner's request, Judge Hermogenes Caluag of the Quezon City Court of First Instance (to whom the prohibition case was assigned) issued an ex parte writ of preliminary injunction on November 18, 1960, upon the filing of a bond of P20,000. After injunction was issued, the evictees in Quezon City cases Q-1401 and 1402, Bruna Rosete and Tranquilino Dizon, petitioned the Court of First Instance to suspend the order of demolition of their houses, on the ground that they were tenants of the Tatalon Estate; that Republic Act No. 2616, after specifically authorizing the expropriation of the Tatalon Estate, in its section 4, prescribes as follows:

Section 4. After the expropriation proceedings mentioned in section two of this Act shall have been initiated and during the pendency of the same, no ejectment proceedings shall be instituted or prosecuted against the present occupant of any lot in said Tatalon Estate, and no ejectment proceedings already commenced shall be continued and such lot or any portion thereof shall not be sold by the owners of said estate to any person other than the present occupant without the consent of the latter given in a public document. However, Judge Nicasio Yatco of the Court of First Instance of Quezon City denied the suspension because no expropriation proceedings had been actually filed. Thereupon, the evictees Rosete and Dizon recoursed to the Court of Appeals, and there instituted, on February 4, 1961, certiorari proceedings (C.A.-G.R. No. 28842-R) against Judge Yatco and Caluag, J. M. Tuason & Co. Inc., and the Land Tenure Administration. They averred, after recital of the facts, that Judge Caluag, gravely abused his discretion in issuing the preliminary injunction in the prohibition case No. Q-5527 to restrain the initiation of condemnation proceedings over the Tatalon Estate; that as beneficiaries under section 4 of Republic Act No. 2616, they were entitled to a stay of the demolition proceedings against them; and that Judge Yatco abused his discretion in refusing to suspend the same until the expropriation case was terminated. The petitioners prayed that (1) Judge Yatco be enjoined from issuing orders of demolition in Cases Nos. Q-1401 and 1402; (2) Judge Caluag be enjoined from enforcing the preliminary injunction he had issued in Case No. Q-5527; and (3) That the Land Tenure Administrator be commanded to institute the expropriation proceedings authorized by Republic Act No. 2616. The Court of Appeals gave due course to the certiorari petition, and on February 9, 1961 ordered the issuance ex parte of the preliminary injunction prayed for, upon the filing of a P1,000 bond, which was done. Respondent Tuason & Company, Inc., moved to dissolve the preliminary injunction of the Court of Appeals, pointing out that said Court's jurisdiction to take cognizance of certiorari proceedings and to issue injunction was only in aid of its appellate jurisdiction; that the orders of execution issued by the Quezon City Court are not appealable; that the prohibition proceedings in case No. Q-5527, involving (as they did) a question of constitutionality of a statute, were likewise not appealable to the Court of Appeals; and that said Court, therefore, was without jurisdiction to pass over the questioned orders and that its injunction was improperly issued, not being in aid of the appellate jurisdiction the Court of Appeals. These points were reiterated in the Company's answer to the petition for certiorari. The Court of Appeals (Second Division) refused to lift the preliminary injunction; on the contrary, on February 26, upon motion of one of the respondents, the Land Tenure Administration, it clarified the previous writ of preliminary injunction. in the sense that said Writ lifts, quashes or dissolves writ of preliminary injunction issued by the Hon. Judge Hermogenes Caluag, in Civil Case No. 5527, CFI, Rizal, so that respondent Land Tenure Administration may thus properly file the complaint for expropriation as authorized by Republic Act No. 2616.

Thereupon, Tuason & Company instituted in this Supreme Court certiorari proceedings (G.R. No. L-18128). We gave it due course and enjoined enforcement of orders of the Court of Appeals in C.A.-G.R. No. 28842, and order the Land Tenure Administration to the defer the filing of the expropriation proceedings until further orders. The sequel to the events narrated can be gleaned from the record of case G.R. No. L-18672, a certiorari proceeding filed by the Land Tenure Administration against Judge Hermogenes Caluag and Tuason & Company, Inc. The motion of the Land Tenure Administration and its correspondents to dismiss the prohibition case in the Quezon City Court (Case No. Q-5527), as well as their motion to dissolve the preliminary injunction issued by Judge Caluag, was denied by him; and when the Second Division of the Court of Appeals issued its resolution of February 26, 1961, quashing Judge Caluag's preliminary injunction, the Land Tenure Administration attorneys attempted to file the complaint for the expropriation of 93 hectares of the Tatalon Estate in the Quezon City court, but said complaint could not be docketed because the Judge had forbidden the Court Clerk to do so. Despite entreaties, Judge Caluag refused to allow the expropriation complaint to be docketed, claiming that he had no official knowledge of the resolution of the Court of Appeals, even after he was served with a certified copy thereof. The Land Tenure Administration avers that the issuance of the injunction in the prohibition case (Q-5527), the denial of the motion to dismiss the case, the refusal to dissolve the injunction, and the refusal to have the complaint for expropriation docketed were all in abuse of discretion and excess of jurisdiction; that furthermore, venue was improperly laid, because an action for prohibition is personal in character, and neither petitioner nor any of the respondents in said prohibition case were domiciled in Quezon City. Petitioner Land Tenure Administration, therefore, prayed that Judge Caluag be ordered by this Court to refrain from proceeding with the prohibition case, from enforcing the writ of preliminary injunction issued therein, from issuing orders of demolition of the tenant's houses, and to allow the expropriation case to be docketed and regularly proceeded with. As we view it, two main questions are involved in these cases: (1) In G.R. L-18128: Did the Court of Appeals have jurisdiction to lift, quash, and dissolve the preliminary writ of injunction issued by Judge Caluag in the prohibition case No. Q-5527 pending in his court? (2) In G.R. L-18672: Did Judge Caluag act without or in excess of jurisdiction in issuing the preliminary injunction in the prohibition case? As to the first issue, we are satisfied that the writ of injunction issued by the Court of Appeals in CA-G.R. No. 28842-R is null and void for want of jurisdiction. The authority of said Court to issue writs of mandamus, prohibition, injunction, certiorari and habeas corpus is expressly limited by statute to their issuance in aid of its appellate jurisdiction (Judiciary Act, sec. 30), and it has been repeatedly ruled by us that the jurisdiction of the Court of Appeals to issue such writs must be based on the existence of a right to appeal to it from the judgment on the merits in the main case. Without such right of appeal, the Court of Appeals is without jurisdiction to interfere, for that Court is purely a creature of statute.1 Since the issuance of orders for execution after the judgment of ejectment had become final are not appealable, as the Court of Appeals itself has ruled,2 otherwise litigations would never end, and since the prohibition case No. Q-5527 involved the constitutionality of Republic Act No. 2616, an issue of which the Court of Appeals could not take cognizance, said Court clearly had no authority to interfere by prerogative writ in

either litigation, for lack of appellate jurisdiction Judge Caluag of Quezon City was, therefore, not bound by the writs so issued by the Court of Appeals. On the second question, the preliminary injunction issued by Judge Caluag was merely an incident to the main (prohibition) case, and evidently had for its object to prevent that the principal case and any remedy to be granted therein should be rendered moot and nugatory by the filing of the condemnation proceedings sought to be prohibited. Issuance of the injunction was authorized by section 7 of Rule 67 of the Rules of Court, dealing with writs, certiorari, prohibition, and mandamus. SEC. 7. Expediting proceedings. Preliminary injunction. The court in which the petition is filed, or a judge thereof, may make orders expediting the proceedings, and may also grant a preliminary injunction for the preservation of the rights of the parties pending such proceedings. Authority is likewise derived from section 6 of Rule 124, concerning the powers and duties of courts. When by law jurisdiction is conferred on a court or judicial officer, all auxiliary writs, processes and other means necessary to carry into effect may be employed by such court or officer. That the alleged unconstitutionality of Republic Act No. 2616 could be invoked as a defense in the expropriation proceedings does not alter the right of respondent Tuason & Company to invoke it in the prohibition case, without awaiting the initiation of the condemnation case. In any event, the issue of constitutionality would be like a prejudicial question to the expropriation, as it would be a waste of time and effort to appoint evaluation commissioners and debate the market value of the property sought to be condemned if it turned out that the condemnation was illegal. It is urged by amicus curiae that Courts of First Instance have no jurisdiction to entertain actions assailing the constitutionality of statutes or treaties, because section 10 of Article VIII of the Constitution prescribes that No treaty or law may be declared unconstitutional without the concurrence of two-thirds of all the members of the (Supreme) Court. This contention is, however, destroyed by the terms of section 2 of Article VIII, wherein the Constitution itself inhibits Congress from depriving the Supreme Court of its jurisdiction to review, revise, reverse, modify, or affirm on appeal, certiorari or writ of error, as the law or the rules of court may provide, final judgments and decrees of inferior courts in (1) All cases in which the constitutionality or validity of any treaty, law, ordinance or executive orders or regulations is in question (Emphasis supplied). Plainly the Constitution contemplates that the inferior courts should have jurisdiction in cases involving constitutionality of any treaty or law, for it speaks of appellate review of final judgments of inferior courts in cases where such constitutionality happens to be in issue.

Construing both provisions together, it is readily discerned that the two-third vote of the Supreme Court, required by section 10 of Article VIII, conditions only the decisions of the Supreme Court in the exercise of its appellate jurisdiction. It is true that, as argued by the petitioner Land Tenure Administration, the mere fact that a statute is alleged to be unconstitutional or invalid will not entitle a party to have its enforcement enjoined. But the rule is not without exceptions. In Cochiong vs. Dinglasan, 79 Phil. 125, this Court quoted with approval from 28 Am. Jur. 369-371 the rule that It is recognized, however, that an injunction will lie to restrain the threatened enforcement of an invalid law where the lawful use and enjoyment of private property will be injuriously affected by its enforcement ..., and the petition for a writ of prohibition in Q-5527 Court of First Instance of Quezon City pleads precisely this threatened injury to the proprietary rights of Tuason & Company, Inc., as owners of the Tatalon Estates. Whether this injury is real or not must be decided on the evidence submitted in that case, and we are in no position to resolve it in the certiorari proceedings now before us. Our task here is merely to determine absence or excess of jurisdiction: and on the facts and applicable law we cannot say that in the issuance of the preliminary injunction by the Court of First Instance of Quezon City there was such grave abuse of discretion as would constitute excess of jurisdiction. It may be added that the maintenance of the injunction issued by Judge Caluag works no real prejudice at present, not only because we cannot anticipate the final decision of Judge Caluag on the issue of constitutionality, but also because the Land Tenure Administration confesses that it has only two million pesos available to pay for property that, according to the proposed complaint for expropriation, has an area of 1,096,849.50 square meters with a reasonable assessed value of P6,034,865.95. Plainly, the government is not now in a position to take over the possession of the land since it does not have the money that it must deposit as a prerequisite to its entry (section 3 of Rule 69 on Eminent Domain). In moving for the lifting of the preliminary injunction and for a stay of the ejectment proceedings, the Land Tenure Administration and the other movants assume that, upon filing of the condemnation petition, the land owner will be barred from enforcing its final judgments of ejectment against the possessors of the land, even if the Government should not take over the possession of the property involved. This view, in our opinion, is not warranted. We see nothing in the terms of Republic Act No. 2616 to justify the belief that the Legislature intended a departure from the normal course prescribed for eminent domain cases, where the rights of the owner of the land may not be disturbed without previous deposit of the provisional value of the property bought to be condemned. The effectivity of section 4 of Republic Act 2616, discontinuing ejectment proceedings against the present occupants, and restraining any act of disposition of the property, is justifiable only if the Government takes possession of the land in question by depositing its value. It needs no argument to show that by restraining the land owner from enforcing even final judgments in his favor to recover possession of his property, as well as from disposing of it to persons of his choice, he is deprived of the substance of ownership, and his title is left as an empty shell. The land owner would then be deprived of those attributes of ownership that give it value, and his property is virtually taken from him without compensation and in violation of the Constitution, particularly in view of the fact that R.A. 2616 (unlike previous Acts of similar character) does not even provide for a deposit of the current rentals by the tenants during the pendency of the proceedings (Cf. R.A. No. 1126, section 5). The Bill of

Rights, in requiring that "private property shall not be taken for public use without just compensation," and Article XIII, section 4 in prescribing that "Congress may authorize, upon payment of just compensation, the expropriation of lands to be subdivided into small lots and conveyed at cost to individuals," prohibit any disturbance of proprietary rights without coetaneous payment of just indemnity. Hence, the mere filing of the condemnation proceedings for the benefit of tenants cannot, by itself alone, lawfully suspend the condemnee's dominical rights, whether of possession, enjoyment, or disposition. And this is especially the case where final and executory judgments of ejectment have been obtained against the occupants of the property. Whether or not venue was correctly laid in the prohibition case now pending in the Court of First Instance of Quezon City is a question of law that does not affect jurisdiction, and any resolution of the trial Court thereon is reviewable by appeal and not by certiorari. In view of the foregoing, judgment is hereby rendered: (a) In Case G.R. No. L-18128, J. M. Tuason & Co., Inc. vs. Court of Appeals et al., setting aside the writ of preliminary injunction issued by the Court of Appeals in its case CA-G.R. No. 28842R, the same being null and void for lack of jurisdiction on the part of the Court to take cognizance of said case; (b) In Case G.R. No. L-18672, Republic of the Philippines vs. J. M. Tuason & Co., Inc. et al., dismissing the petition for certiorari, and denying the writs of certiorari and injunction applied for.lawphil.net The Court of First Instance of Quezon City is directed to hear and resolve the prohibition case No. Q-5527 with all practicable dispatch. Without costs. So ordered. Bengzon, C.J., Padilla, Bautista Angelo, Labrador, Concepcion, Barrera, Dizon and De Leon, JJ., concur. Paredes, J., took no part. Footnotes 1 Roldan vs. Villaroman, 69 Phil. 12; Breslin vs. Luzon Stevedoring, 47 O.G. 1171; Borja vs. Siminiano, 71 Phil. 227. 2 Aquino vs. Judge Froilan Bayona, 56 O.G. (No. 25), pp. 4232, 4233.

G.R. No. L-42636 August 1, 1985 MARIA LUISA DE LEON ESCALER and ERNESTO ESCALER, CECILIA J. ROXAS and PEDRO ROXAS, petitioners, vs. COURT OF APPEALS, JOSE L. REYNOSO, now deceased, to be substituted by his heirs or legal representatives and AFRICA V. REYNOSO, respondents. CUEVAS, J.: This is a Petition for Review on certiorari of the Decision of the then Court of Appeals (now the Intermediate Appellate Court) and of its Resolution denying petitioners' Motion for Reconsideration, in CA G.R. No. 41953-R, which was an appeal from the judgment of the Court of First Instance of Rizal in Civil Case No. 9014 entitled "Maria Luisa de Leon Escaler, et al vs. Jose L. Reynoso and Africa Reynoso." The following are the pertinent background facts: On March 7, 1958, the spouses Africa V. Reynoso and Jose L, Reynoso sold to petitioners several others, a parcel of land, situated in Antipolo, Rizal with an area of 239,479 square meters and covered by TCT No. 57400 of the Register of Deeds of the Province of Rizal. The Deed of Sale 1 contained the following covenant against eviction, to wit:

That the VENDOR is the absolute owner of a parcel of land ... the ownership thereof being evidenced by an absolute deed of sale executed in her favor by registered owner ANGELINA C. REYNOSO, ...; That the VENDOR warrants valid title to and ownership of said parcel of land and further, warrant to defend the property herein sold and conveyed, unto the VENDEES, their heirs, and assignees, from any and all claims of any persons whatsoever. On April 21, 1961, the Register of Deeds of Rizal and A. Doronilla Resources Development, Inc. filed Case No. 4252 before the Court of First Instance of Rizal for the cancellation of OCT No. 1526 issued in the name of Angelina C. Reynoso (predecessor-in-interest of private respondentsvendors) on February 26, 1958 under Decree No. 62373, LRC Record No. N-13783, on the ground that the property covered by said title is already previously registered under Transfer Certificate of Title No. 42999 issued in the name of A. Doronilla Development, Inc. Petitioners as vendees filed their opposition to the said petition. On June 10, 1964, an Order 2 was issued in the said case, the dispositive portion of which reads: IN VIEW OF THE ABOVE CONSIDERATIONS, this Court is constrained to set aside Decree No. 62373 issued in LRC. Rec. No. N-13783 and the Register of Deeds of Rizal is directed to cancel OCT No. 1526 of his office and all Transfer Certificates of Title issued subsequently thereafter to purchaser of said property or portions thereof, the same being null and void, the expenses for such cancellation to be charged to spouses Angelina Reynoso and Floro Reynoso. The owner's duplicates in the possession of the transferees of the property covered by OCT No. 1526 are declared null and void and said transferees are directed to surrender to the Register of Deeds of Rizal, said owner's duplicates for cancellation. The other reliefs sought for by the party oppositors are denied the same not falling within the jurisdiction of this Court under this proceeding. SO ORDERED. On August 31, 1965, herein petitioners, spouses Maria de Leon Escaler and Ernesto Escaler and spouses Cecilia J. Roxas and Pedro Roxas, filed Civil Case No. 9014 before the Court of First Instance of Rizal against their vendors, herein private respondents, spouses Jose L. Reynoso and Africa Reynoso for the recovery of the value of the property sold to them plus damages on the ground that the latter have violated the vendors' "warranty against eviction." The complaint among others, alleged that the Order issued in Case No. 4252 which cancelled the title of Angelina C. Reynoso and all subsequent Transfer Certificates of Title derived and/or emanating therefrom and which includes the titles of petitioners, is now final, and by reason thereof petitioners lost their right over the property sold; and that in said Case No. 4252, the respondents were summoned and/or given their day in court at the instance of the petitioners. 3 The respondents, as defendants, filed their answer alleging, among others, by way of affirmative defenses that "the cause of action, if any, of plaintiffs against defendants have been fully adjudicated in Case No. 4252 when plaintiffs failed to file a third-party complaint against defendants." 4

On August 18, 1967, petitioners, as plaintiffs, filed a Motion for Summary Judgment, alleging the facts already averred in the complaint, and further alleging that the defendants were summoned and were given their day in court at the instance of plaintiffs in Case No. 4252. In support of their said motion, the plaintiffs attached the affidavit of Atty. Alberto R. Avancea who had represented the plaintiffs in Case No. 4252 and had filed a joint opposition in behalf of all the vendees. The pertinent portion of that affidavit, states 4. That he has furnished a copy of said joint opposition to Africa Reynoso, wife of Jose L. Reynoso, at her given address at c/o Antipolo Enterprises, Antipolo, Rizal and the latter had received the same, as evidenced by the photostatic copy of the Registry Return Receipt thereto affixed as Annex "C-l"; xxx xxx xxx 6. That he hereby executed this Affidavit to prove that said defendants Africa Reynoso and Jose L. Reynoso were given their day in Court and/or were afforded their opportunity to be heard in Case No. 4252 aforecited. On September 27, 1967, judgment was rendered by the trial court, the pertinent portion of which reads Considering the foregoing motion for summary judgment and it appearing that the defendants under a Deed of Absolute Sale (Annex "C") have expressly warranted their valid title and ownership of the said parcel of land and further warranted to defend said property from any and all claims of any persons whomever in favor of plaintiffs; that the said warranties were violated when on June 10, 1964, an Order was promulgated by the Court of First Instance of Rizal in Case No. 4252 (Related to LRC Case No. 1559, LRC Record No. N13293). In Re: Petition for Cancellation of Original Registration, etc., covering the parcel of land in question; that said order of June 10, 1964 has become final and executory there being no appeal interposed thereto and defendants were summoned and were given a day in court at the instance of the plaintiffs in Case No. 4252, the Court hereby grants the motion for summary judgment, and hereby orders the defendants to jointly and severally return to the plaintiffs Maria Luisa de Leon Escaler and Ernesto Escaler, Cecilia J. Roxas and Pedro Roxas, the value of the property sold to them at the time of eviction which is not to be less than P5,500.00 to reimburse to each one of the plaintiffs the expenses of contract and litigation and the amount of P2,250.00 to pay the attorney's fees of P1,000.00 plus the costs of suit. SO ORDERED. Private respondents appealed the aforesaid decision to the then Court of Appeals 5 assigning as sole errorthat the lower court erred in finding that they were summoned and were given their day in court at the instance of petitioners-plaintiffs in Case No. 4252. In reversing the decision of the trial court and dismissing the case, the then Court of Appeals found and so ruled that petitioners as vendees had not given private respondents-vendors, formal notice of the eviction case as mandated by Arts. 1558 and 1559 of the New Civil Code. Hence, the instant recourse, petitioners contending

1) that the Court of Appeals erred in applying strictly to the instant case the provisions of Articles 1558 and 1559 of the new Civil Code; and 2) that the decision of the Court of First Instance of Rizal should have been affirmed by the Court of Appeals or at least, the, Court of Appeals should have remanded the case to the trial court, for hearing on the merits. The petition is devoid of merit. Consequently, it must be dismissed. Article 1548, in relation to Articles 1558. and 1559 of the New Civil Code reads as follows: Art. 1548, Eviction shall take place whenever by a final judgment based on a right prior to the sale or an act imputable to the vendor, the vendee is deprived of the whole or of a part of the thing purchased. The vendor shall answer for the eviction even though nothing has been said in the contract on the subject. The contracting parties, however, may increase, diminish, or suppress this legal obligation of the vendor. Art. 1558. The vendor shall not be obliged to make good the proper warranty, unless he is summoned in the suit for eviction at the instance of the vendee. (emphasis supplied) Art. 1559. The defendant vendee shall ask, within the time fixed in the Rules of Court for answering the complaint that the vendor be made as co-defendant. In order that a vendor's liability for eviction may be enforced, the following requisites must concura) there must be a final judgment; b) the purchaser has been deprived of the whole or part of the thing sold; c) said deprivation was by virtue of a right prior to the sale made by the vendor; and d) the vendor has been summoned and made co-defendant in the suit for eviction at the instance of the vendee. 6 In the case at bar, the fourth requisitethat of being summoned in the suit for eviction (Case No. 4252) at the instance of the vendeeis not present. All that the petitioners did, per their very admission, was to furnish respondents, by registered mail, with a copy of the opposition they (petitioners filed in the eviction suit. Decidedly, this is not the kind of notice prescribed by the aforequoted Articles 1558 and 1559 of the New Civil Code. The term "unless he is summoned in the suit for eviction at the instance of the vendee" means that the respondents as vendor/s should be made parties to the suit at the instance of petitioners-vendees, either by way of asking that the former be made a co-defendant or by the filing of a third-party complaint against said vendors. Nothing of that sort appeared to have been done by the petitioners in the instant case. IN VIEW OF THE FOREGOING CONSIDERATIONS, the petition is DISMISSED and the appealed decision of the then Court of Appeals is AFFIRMED. No pronouncement as to costs. SO ORDERED.

Concepcion, Jr., Abad Santos, Plana, Escolin, Relova, Gutierrez, Jr. and De la Fuente, JJ., concur.

Separate Opinions AQUINO, J., dissenting: In 1958 Cecilia Roxas and Maria Luisa de Leon Escaler and ten other persons bought for P12,000 from Africa V Reynoso, 23.9 hectares of land located at Barrio San Isidro, Antipolo, Rizal covered by OCT No. 1526 in the name of Angelina C. Reynoso. Africa had purchased the land from Angelina (9-12, Record on Appeal). Escaler and Roxas obtained TCT Nos. 58389 and 58393, respectively. On April 21, 1961 the register of deeds of Rizal in Civil Case No. 4252, LRC Case No. 1559, Rec. No. 13793, filed a petition for the cancellation of Decree No. N-62373 and OCT No. 1526 issued in the name of Angelina C. Reynoso because the 23.9 hectare land covered by said decree and title had been previously registered in the name of A. Doronilla Resources Development, Inc. since February 20, 1956. Angelina was furnished a copy of the petition by registered mail, Registry Receipt No. 6883. The petition was set for hearing on May 20, 1961. It was alleged in paragraph 5 of the petition that Angelina transferred to Africa V. Reynoso the said land. Among the 20 persons furnished copies of the petition for cancellation were Escaler and Roxas. Escaler and Roxas filed a joint opposition to the petition for cancellation. Their lawyer, Alberto P. Avancea, furnished Africa Reynoso and A Angelina C. Reynoso by registered mail with copies of said opposition sent at their common Postal address, care of Antipolo Enterprises, Antipolo, Rizal, as shown in Registry Receipts Nos. 58558 and 58559 dated June 24, 1961 (p. 85, Record of Civil Case No. 4252). In said joint opposition, it was alleged that Escaler and Roxas were innocent purchasers for value, that the court, as a land registration court, had no jurisdiction over the controversy and that should the titles of Escaler and Roxas be nullified, they are entitled to relief from the Assurance Fund. After hearing, which lasted for three years, Judge Muoz Palma in her order of June 10, 1964 found that the land covered by Angelina Reynoso's title, OCT No. 1526, had been previously registered in 1907 under OCT No. 301, which was cancelled by subsequent transfer certificates of title, the latest of which is TCT No. 42999 in the name of A. Doronilla Resources Development, Inc. She declared void Decree No. 62373 and Angelina Reynoso's title and those derived therefrom, like the titles of Escaler and Roxas, in accordance with the rule that the prior registration prevails over the later registration (Legarda and Prieto vs. Saleeby, 31 Phil. 590). The titles of Angelina and Africa (maybe relatives by affinity) were void because they were issued for lands already registered. The titles of Angelina and Africa may be regarded as a form of land-grabbing. The purchasers were speculators in Antipolo lots.

More than a year later, or on August 31, 1965, Escaler and Roxas in Civil Case No. 9014 sued Africa Reynoso to enforce the warranty against eviction contained in the deed of sale executed by Africa in 1958 in their favor. They prayed for the return to each of the plaintiffs of P5,500 as the value of the land and P4,750 as reimbursement of "expenses of contract", attorney's fees and litigation expenses. Africa Reynoso in her answer alleged that Escaler and Roxas failed to file a third- party complaint against her when the latter were sued in Civil Case No. 4252, that their action had prescribed, that they should claim from Angelina C. Reynoso reimbursement for the expenses of cancellation of title and that their claim is against the Assurance Fund. Africa Reynoso filed a third-party complaint against Angelina C. Reynoso. No summons was issued. Escaler and Roxas filed a motion for summary judgment. On September 27, 1967, Judge Navarro ordered the spouses Africa Reynoso and Jose Reynoso to return solidarity to the Escalers and the Roxases the value of the land amounting to P5,500, to reimburse to each one of the plaintiffs the "expenses of contract" and litigation in the sum of P2,250 and attorney's fees of P1,000 (61, Record on Appeal). The Reynoso spouses appealed to the Court of Appeals which reversed the trial court's decision. The Appellate Court held that because Escaler and Roxas did not make Africa Reynoso a codefendant in the eviction case, as required in articles 1558 and 1559 of the Civil Code, they could not later on enforce the warranty against Africa. Escaler and Roxas appealed to this Court. In my opinion, it was not possible for Escaler and Roxas to comply strictly with articles 1558 and 1559. The eviction took place, not in an ordinary suit wherein the vendor can be made a codefendant, but as an incident in the cancellation of title in a land registration proceeding. In such a case, the furnishing of the vendor with a copy of the opposition was a substantial compliance with articles 1558 and 1559. It was a notice to the vendor. Africa's vendor, Angelina, was first notified of the cancellation proceeding. At least, Escaler and Roxas complied with article 1481 of the old Civil Code which requires notice to the vendor. It was not the fault of the petitioners that the eviction case assumed the shape of a mere incident in the land registration proceeding and not that of an ordinary contentious civil action. Africa Reynoso could not be made a co- defendant in that incident for cancellation of title, a summary proceeding. A contrary view would enable Africa Reynoso to enrich herself unjustly at the expense of the petitioners.

G.R. No. 152219

October 25, 2004

NUTRIMIX FEEDS CORPORATION, petitioner, vs. COURT OF APPEALS and SPOUSES EFREN AND MAURA EVANGELISTA, respondents. DECISION CALLEJO, SR., J.: For review on certiorari is the Decision1 of the Court of Appeals in CA-G.R. CV No. 59615 modifying, on appeal, the Joint Decision2 of the Regional Trial Court of Malolos, Bulacan, Branch 9, in Civil Case No. 1026-M-933 for sum of money and damages with prayer for issuance of writ of preliminary attachment, and Civil Case No. 49-M-944 for damages. The trial court dismissed the complaint of the respondents, ordering them to pay the petitioner the unpaid value of the assorted animal feeds delivered to the former by the latter, with legal interest thereon from the filing of the complaint, including attorneys fees. The Factual Antecedents On April 5, 1993, the Spouses Efren and Maura Evangelista, the respondents herein, started to directly procure various kinds of animal feeds from petitioner Nutrimix Feeds Corporation. The petitioner gave the respondents a credit period of thirty to forty-five days to postdate checks to be issued in payment for the delivery of the feeds. The accommodation was made apparently because of the company presidents close friendship with Eugenio Evangelista, the brother of respondent Efren Evangelista. The various animal feeds were paid and covered by checks with due dates from July 1993 to September 1993. Initially, the respondents were good paying customers. In some instances, however, they failed to issue checks despite the deliveries of animal feeds which were appropriately covered by sales invoices. Consequently, the Sales Invoice Date Number 21334 21420 21437 21722 22048 22054 22186 June 23, 1993 June 26, 1993 June 28, 1993 July 12, 1993 July 26, 1993 July 27, 1993 Amount P 7,260.00 6,990.00 41,510.00 45,185.00 44,540.00 45,246.00

August 2, 1993 84,900.00 Total: P275,631.00 ===========

respondents incurred an aggregate unsettled account with the petitioner in the amount of P766,151.00. The breakdown of the unpaid obligation is as follows: Bank Check Number Due Date July 30, 1993 July 30, 1993 July 30, 1993 August 4, 1993 August 5, 1993 August 6, 1993 Amount P 47,760.00 131,340.00 59,700.00 47,860.00 43,780.00 15,000.00

United Coconut Planters Bank BTS052084 -do-do-do-do-do-do-do-doTotal: BTS052087 BTS052091 BTS062721 BTS062720 BTS062774 BTS062748 BTS062763 BTS062766

September 11, 1993 47,180.00 September 11, 1993 48,440.00 September 18, 1993 49,460.00 P490,520.00 ==========

When the above-mentioned checks were deposited at the petitioners depository bank, the same were, consequently, dishonored because respondent Maura Evangelista had already closed her account. The petitioner made several demands for the respondents to settle their unpaid obligation, but the latter failed and refused to pay their remaining balance with the petitioner. On December 15, 1993, the petitioner filed with the Regional Trial Court of Malolos, Bulacan, a complaint, docketed as Civil Case No. 1026-M-93, against the respondents for sum of money and damages with a prayer for issuance of writ of preliminary attachment. In their answer with counterclaim, the respondents admitted their unpaid obligation but impugned their liability to the petitioner. They asserted that the nine checks issued by respondent Maura Evangelista were made to guarantee the payment of the purchases, which was previously determined to be procured from the expected proceeds in the sale of their broilers and hogs. They contended that inasmuch as the sudden and massive death of their animals was caused by the contaminated products of the petitioner, the nonpayment of their obligation was based on a just and legal ground. On January 19, 1994, the respondents also lodged a complaint for damages against the petitioner, docketed as Civil Case No. 49-M-94, for the untimely and unforeseen death of their animals supposedly effected by the adulterated animal feeds the petitioner sold to them. Within the period to file an answer, the petitioner moved to dismiss the respondents complaint on the ground of litis pendentia. The trial court denied the same in a Resolution5 dated April 26, 1994, and ordered the consolidation of the case with Civil Case No. 1026-M-93. On May 13, 1994, the petitioner filed its Answer with Counterclaim, alleging that the death of the respondents animals was due to the widespread pestilence in their farm. The petitioner, likewise, maintained that it received information that the respondents were in an unstable financial condition and even sold their animals to settle their obligations from other enraged and insistent creditors. It, moreover,

theorized that it was the respondents who mixed poison to its feeds to make it appear that the feeds were contaminated. A joint trial thereafter ensued. During the hearing, the petitioner presented Rufino Arenas, Nutrimix Assistant Manager, as its lone witness. He testified that on the first week of August 1993, Nutrimix President Efren Bartolome met the respondents to discuss the possible settlement of their unpaid account. The said respondents still pleaded to the petitioner to continue to supply them with animal feeds because their livestock were supposedly suffering from a disease.6 For her part, respondent Maura Evangelista testified that as direct buyers of animal feeds from the petitioner, Mr. Bartolome, the company president, gave them a discount of P12.00 per bag and a credit term of forty-five to seventy-five days.7 For the operation of the respondents poultry and piggery farm, the assorted animal feeds sold by the petitioner were delivered in their residence and stored in an adjacent bodega made of concrete wall and galvanized iron sheet roofing with monolithic flooring.8 It appears that in the morning of July 26, 1993, three various kinds of animal feeds, numbering 130 bags, were delivered to the residence of the respondents in Sta. Rosa, Marilao, Bulacan. The deliveries came at about 10:00 a.m. and were fed to the animals at approximately 1:30 p.m. at the respondents farm in Balasing, Sta. Maria, Bulacan. At about 8:30 p.m., respondent Maura Evangelista received a radio message from a worker in her farm, warning her that the chickens were dying at rapid intervals. When the respondents arrived at their farm, they witnessed the death of 18,000 broilers, averaging 1.7 kilos in weight, approximately forty-one to forty-five days old. The broilers then had a prevailing market price of P46.00 per kilo.9 On July 27, 1993, the respondents received another delivery of 160 bags of animal feeds from the petitioner, some of which were distributed to the contract growers of the respondents. At that time, respondent Maura Evangelista requested the representative of the petitioner to notify Mr. Bartolome of the fact that their broilers died after having been fed with the animal feeds delivered by the petitioner the previous day. She, likewise, asked that a technician or veterinarian be sent to oversee the untoward occurrence. Nevertheless, the various feeds delivered on that day were still fed to the animals. On July 27, 1993, the witness recounted that all of the chickens and hogs died.10 Efren Evangelista suffered from a heart attack and was hospitalized as a consequence of the massive death of their animals in the farm. On August 2, 1993, another set of animal feeds were delivered to the respondents, but the same were not returned as the latter were not yet cognizant of the fact that the cause of the death of their animals was the polluted feeds of the petitioner.11 When respondent Maura Evangelista eventually met with Mr. Bartolome on an undisclosed date, she attributed the improbable incident to the animal feeds supplied by the petitioner, and asked Mr. Bartolome for indemnity for the massive death of her livestock. Mr. Bartolome disavowed liability thereon and, thereafter, filed a case against the respondents.12 After the meeting with Mr. Bartolome, respondent Maura Evangelista requested Dr. Rolando Sanchez, a veterinarian, to conduct an inspection in the respondents poultry. On October 20, 1993, the respondents took ample amounts remaining from the feeds sold by the petitioner and furnished the same to various government agencies for laboratory examination.

Dr. Juliana G. Garcia, a doctor of veterinary medicine and the Supervising Agriculturist of the Bureau of Animal Industry, testified that on October 20, 1993, sample feeds for chickens contained in a pail were presented to her for examination by respondent Efren Evangelista and a certain veterinarian.13 The Clinical Laboratory Report revealed that the feeds were negative of salmonella14 and that the very high aflatoxin level15 found therein would not cause instantaneous death if taken orally by birds. Dr. Rodrigo Diaz, the veterinarian who accompanied Efren at the Bureau of Animal Industry, testified that sometime in October 1993, Efren sought for his advice regarding the death of the respondents chickens. He suggested that the remaining feeds from their warehouse be brought to a laboratory for examination. The witness claimed that the feeds brought to the laboratory came from one bag of sealed Nutrimix feeds which was covered with a sack. Dr. Florencio Isagani S. Medina III, Chief Scientist Research Specialist of the Philippine Nuclear Research Institute, informed the trial court that respondent Maura Evangelista and Dr. Garcia brought sample feeds and four live and healthy chickens to him for laboratory examination. In his Cytogenetic Analysis,16 Dr. Medina reported that he divided the chickens into two categories, which he separately fed at 6:00 a.m. with the animal feeds of a different commercial brand and with the sample feeds supposedly supplied by the petitioner. At noon of the same day, one of the chickens which had been fed with the Nutrimix feeds died, and a second chicken died at 5:45 p.m. of the same day. Samples of blood and bone marrow were taken for chromosome analysis, which showed pulverized chromosomes both from bone marrow and blood chromosomes. On cross-examination, the witness admitted that the feeds brought to him were merely placed in a small unmarked plastic bag and that he had no way of ascertaining whether the feeds were indeed manufactured by the petitioner. Another witness for the respondents, Aida Viloria Magsipoc, Forensic Chemist III of the Forensic Chemist Division of the National Bureau of Investigation, affirmed that she performed a chemical analysis17 of the animal feeds, submitted to her by respondent Maura Evangelista and Dr. Garcia in a sealed plastic bag, to determine the presence of poison in the said specimen. The witness verified that the sample feeds yielded positive results to the tests for COUMATETRALYL Compound,18 the active component of RACUMIN, a brand name for a commercially known rat poison.19 According to the witness, the presence of the compound in the chicken feeds would be fatal to internal organs of the chickens, as it would give a delayed blood clotting effect and eventually lead to internal hemorrhage, culminating in their inevitable death. Paz Austria, the Chief of the Pesticide Analytical Section of the Bureau of Plants Industry, conducted a laboratory examination to determine the presence of pesticide residue in the animal feeds submitted by respondent Maura Evangelista and Dr. Garcia. The tests disclosed that no pesticide residue was detected in the samples received20 but it was discovered that the animal feeds were positive for Warfarin, a rodenticide (anticoagulant), which is the chemical family of Coumarin.21 After due consideration of the evidence presented, the trial court ruled in favor of the petitioner. The dispositive portion of the decision reads: WHEREFORE, in light of the evidence on record and the laws/jurisprudence applicable thereon, judgment is hereby rendered:

1) in Civil Case No. 1026-M-93, ordering defendant spouses Efren and Maura Evangelista to pay unto plaintiff Nutrimix Feeds Corporation the amount of P766,151.00 representing the unpaid value of assorted animal feeds delivered by the latter to and received by the former, with legal interest thereon from the filing of the complaint on December 15, 1993 until the same shall have been paid in full, and the amount of P50,000.00 as attorneys fees. Costs against the aforenamed defendants; and 2) dismissing the complaint as well as counterclaims in Civil Case No. 49-M-94 for inadequacy of evidence to sustain the same. No pronouncement as to costs. SO ORDERED.22 In finding for the petitioner, the trial court ratiocinated as follows: On the strength of the foregoing disquisition, the Court cannot sustain the Evangelistas contention that Nutrimix is liable under Articles 1561 and 1566 of the Civil Code governing "hidden defects" of commodities sold. As already explained, the Court is predisposed to believe that the subject feeds were contaminated sometime between their storage at the bodega of the Evangelistas and their consumption by the poultry and hogs fed therewith, and that the contamination was perpetrated by unidentified or unidentifiable ill-meaning mischief-maker(s) over whom Nutrimix had no control in whichever way. All told, the Court finds and so holds that for inadequacy of proof to the contrary, Nutrimix was not responsible at all for the contamination or poisoning of the feeds supplied by it to the Evangelistas which precipitated the mass death of the latters chickens and hogs. By no means and under no circumstance, therefore, may Nutrimix be held liable for the sundry damages prayed for by the Evangelistas in their complaint in Civil Case No. 49-M-94 and answer in Civil Case No. 1026-M-93. In fine, Civil Case No. 49-M-94 deserves dismissal. Parenthetically, vis--vis the fulminations of the Evangelistas in this specific regard, the Court does not perceive any act or omission on the part of Nutrimix constitutive of "abuse of rights" as would render said corporation liable for damages under Arts. 19 and 21 of the Civil Code. The alleged "callous attitude and lack of concern of Nutrimix" have not been established with more definitiveness. As regards Civil Case No. 1026-M-93, on the other hand, the Court is perfectly convinced that the deliveries of animal feeds by Nutrimix to the Evangelistas constituted a simple contract of sale, albeit on a continuing basis and on terms or installment payments.23 Undaunted, the respondents sought a review of the trial courts decision to the Court of Appeals (CA), principally arguing that the trial court erred in holding that they failed to prove that their broilers and hogs died as a result of consuming the petitioners feeds. On February 12, 2002, the CA modified the decision of the trial court. The fallo of the decision reads:

WHEREFORE, premises considered, the appealed decision is hereby MODIFIED such that the complaint in Civil Case No. 1026-M-93 is dismissed for lack of merit. So ordered.24 In dismissing the complaint in Civil Case No. 1026-M-93, the CA ruled that the respondents were not obligated to pay their outstanding obligation to the petitioner in view of its breach of warranty against hidden defects. The CA gave much credence to the testimony of Dr. Rodrigo Diaz, who attested that the sample feeds distributed to the various governmental agencies for laboratory examination were taken from a sealed sack bearing the brand name Nutrimix. The CA further argued that the declarations of Dr. Diaz were not effectively impugned during crossexamination, nor was there any contrary evidence adduced to destroy his damning allegations. On March 7, 2002, the petitioner filed with this Court the instant petition for review on the sole ground that THE HONORABLE COURT OF APPEALS ERRED IN CONCLUDING THAT THE CLAIMS OF HEREIN PETITIONER FOR COLLECTION OF SUM OF MONEY AGAINST PRIVATE RESPONDENTS MUST BE DENIED BECAUSE OF HIDDEN DEFECTS. The Present Petition The petitioner resolutely avers that the testimony of Dr. Diaz can hardly be considered as conclusive evidence of hidden defects that can be attributed to the petitioner. Parenthetically, the petitioner asserts, assuming that the sample feeds were taken from a sealed sack bearing the brand name Nutrimix, it cannot decisively be presumed that these were the same feeds brought to the respondents farm and given to their chickens and hogs for consumption. It is the contention of the respondents that the appellate court correctly ordered the dismissal of the complaint in Civil Case No. 1026-M-93. They further add that there was sufficient basis for the CA to hold the petitioner guilty of breach of warranty thereby releasing the respondents from paying their outstanding obligation. The Ruling of the Court Oft repeated is the rule that the Supreme Court reviews only errors of law in petitions for review on certiorari under Rule 45. However, this rule is not absolute. The Court may review the factual findings of the CA should they be contrary to those of the trial court. Conformably, this Court may review findings of facts when the judgment of the CA is premised on a misapprehension of facts.25 The threshold issue is whether or not there is sufficient evidence to hold the petitioner guilty of breach of warranty due to hidden defects. The petition is meritorious. The provisions on warranty against hidden defects are found in Articles 1561 and 1566 of the New Civil Code of the Philippines, which read as follows:

Art. 1561. The vendor shall be responsible for warranty against hidden defects which the thing sold may have, should they render it unfit for the use for which it is intended, or should they diminish its fitness for such use to such an extent that, had the vendee been aware thereof, he would not have acquired it or would have given a lower price for it; but said vendor shall not be answerable for patent defects or those which may be visible, or for those which are not visible if the vendee is an expert who, by reason of his trade or profession, should have known them. Art. 1566. The vendor is responsible to the vendee for any hidden faults or defects in the thing sold, even though he was not aware thereof. This provision shall not apply if the contrary has been stipulated, and the vendor was not aware of the hidden faults or defects in the thing sold. A hidden defect is one which is unknown or could not have been known to the vendee.26 Under the law, the requisites to recover on account of hidden defects are as follows: (a) the defect must be hidden; (b) the defect must exist at the time the sale was made; (c) the defect must ordinarily have been excluded from the contract; (d) the defect, must be important (renders thing UNFIT or considerably decreases FITNESS); (e) the action must be instituted within the statute of limitations.27 In the sale of animal feeds, there is an implied warranty that it is reasonably fit and suitable to be used for the purpose which both parties contemplated.28 To be able to prove liability on the basis of breach of implied warranty, three things must be established by the respondents. The first is that they sustained injury because of the product; the second is that the injury occurred because the product was defective or unreasonably unsafe; and finally, the defect existed when the product left the hands of the petitioner.29 A manufacturer or seller of a product cannot be held liable for any damage allegedly caused by the product in the absence of any proof that the product in question was defective.30 The defect must be present upon the delivery or manufacture of the product;31 or when the product left the sellers or manufacturers control;32 or when the product was sold to the purchaser;33 or the product must have reached the user or consumer without substantial change in the condition it was sold. Tracing the defect to the petitioner requires some evidence that there was no tampering with, or changing of the animal feeds. The nature of the animal feeds makes it necessarily difficult for the respondents to prove that the defect was existing when the product left the premises of the petitioner. A review of the facts of the case would reveal that the petitioner delivered the animal feeds, allegedly containing rat poison, on July 26, 1993; but it is astonishing that the respondents had the animal feeds examined only on October 20, 1993, or barely three months after their broilers and hogs had died. On cross-examination, respondent Maura Evangelista testified in this manner: Atty. Cruz:

Q Madam Witness, you said in the last hearing that believing that the 250 bags of feeds delivered to (sic) the Nutrimix Feeds Corporation on August 2, 1993 were poison (sic), allegedly your husband Efren Evangelista burned the same with the chicken[s], is that right? A Yes, Sir. Some, Sir. Q And is it not a fact, Madam Witness, that you did not, as according to you, used (sic) any of these deliveries made on August 2, 1993? A We were able to feed (sic) some of those deliveries because we did not know yet during that time that it is the cause of the death of our chicks (sic), Sir. Q But according to you, the previous deliveries were not used by you because you believe (sic) that they were poison (sic)? A Which previous deliveries, Sir[?] Q Those delivered on July 26 and 22 (sic), 1993? A Those were fed to the chickens, Sir. This is the cause of the death of the chickens. Q And you stated that this last delivery on August 2 were poison (sic) also and you did not use them, is that right? Atty. Roxas: That is misleading. Atty. Cruz: She stated that. Atty. Roxas: She said some were fed because they did not know yet of the poisoning. Court: And when the chickens died, they stopped naturally feeding it to the chickens. Atty. Cruz: Q You mean to say, Madam Witness, that although you believe (sic) that the chickens were allegedly poisoned, you used the same for feeding your animals? A We did not know yet during that time that the feeds contained poison, only during that time when we learned about the same after the analysis.

Q Therefore you have known only of the alleged poison in the Nutrimix Feeds only after you have caused the analysis of the same? A Yes, Sir. Q When was that, Madam Witness? A I cannot be sure about the exact time but it is within the months of October to November, Sir. Q So, before this analysis of about October and November, you were not aware that the feeds of Nutrimix Feeds Corporation were, according to you, with poison? A We did not know yet that it contained poison but we were sure that the feeds were the cause of the death of our animals.34 We find it difficult to believe that the feeds delivered on July 26 and 27, 1993 and fed to the broilers and hogs contained poison at the time they reached the respondents. A difference of approximately three months enfeebles the respondents theory that the petitioner is guilty of breach of warranty by virtue of hidden defects. In a span of three months, the feeds could have already been contaminated by outside factors and subjected to many conditions unquestionably beyond the control of the petitioner. In fact, Dr. Garcia, one of the witnesses for the respondents, testified that the animal feeds submitted to her for laboratory examination contained very high level of aflatoxin, possibly caused by mold (aspergillus flavus).35 We agree with the contention of the petitioner that there is no evidence on record to prove that the animal feeds taken to the various governmental agencies for laboratory examination were the same animal feeds given to the respondents broilers and hogs for their consumption. Moreover, Dr. Diaz even admitted that the feeds that were submitted for analysis came from a sealed bag. There is simply no evidence to show that the feeds given to the animals on July 26 and 27, 1993 were identical to those submitted to the expert witnesses in October 1993. It bears stressing, too, that the chickens brought to the Philippine Nuclear Research Institute for laboratory tests were healthy animals, and were not the ones that were ostensibly poisoned. There was even no attempt to have the dead fowls examined. Neither was there any analysis of the stomach of the dead chickens to determine whether the petitioners feeds really caused their sudden death. Mere sickness and death of the chickens is not satisfactory evidence in itself to establish a prima facie case of breach of warranty.36 Likewise, there was evidence tending to show that the respondents combined different kinds of animal feeds and that the mixture was given to the animals. Respondent Maura Evangelista testified that it was common practice among chicken and hog raisers to mix animal feeds. The testimonies of respondent Maura Evangelista may be thus summarized: Cross-Examination Atty. Cruz: Q Because, Madam Witness, you ordered chicken booster mash from Nutrimix Feeds Corporation because in July 1993 you were taking care of many chickens, as a matter of

fact, majority of the chickens you were taking care [of] were chicks and not chickens which are marketable? A What I can remember was that I ordered chicken booster mash on that month of July 1993 because we have some chicks which have to be fed with chicken booster mash and I now remember that on the particular month of July 1993 we ordered several bags of chicken booster mash for the consumption also of our chicken in our other poultry and at the same time they were also used to be mixed with the feeds that were given to the hogs. Q You mean to say [that], as a practice, you are mixing chicken booster mash which is specifically made for chick feeds you are feeding the same to the hogs, is that what you want the Court to believe? A Yes, Sir, because when you mix chicken booster mash in the feeds of hogs there is a better result, Sir, in raising hogs.37 Re-Direct Examination Atty. Roxas: Q Now, you mentioned that shortly before July 26 and 27, 1993, various types of Nutrimix feeds were delivered to you like chicks booster mash, broiler starter mash and hog finisher or hog grower mash. What is the reason for simultaneous deliveries of various types of feeds? A Because we used to mix all those together in one feeding, Sir. Q And what is the reason for mixing the chick booster mash with broiler starter mash? A So that the chickens will get fat, Sir. Re-Cross Examination Atty. Cruz: Q Madam Witness, is it not a fact that the mixing of these feeds by you is your own concuction (sic) and without the advice of a veterinarian expert to do so? A That is common practice among raisers to mix two feeds, Sir. Q By yourself, Madam Witness, who advised you to do the mixing of these two types of feeds for feeding your chickens? A That is common practice of chicken raisers, Sir.38

Even more surprising is the fact that during the meeting with Nutrimix President Mr. Bartolome, the respondents claimed that their animals were plagued by disease, and that they needed more time to settle their obligations with the petitioner. It was only after a few months that the respondents changed their justification for not paying their unsettled accounts, claiming anew that their animals were poisoned with the animal feeds supplied by the petitioner. The volte-face of the respondents deserves scant consideration for having been conjured as a mere afterthought. In essence, we hold that the respondents failed to prove that the petitioner is guilty of breach of warranty due to hidden defects. It is, likewise, rudimentary that common law places upon the buyer of the product the burden of proving that the seller of the product breached its warranty. 39 The bevy of expert evidence adduced by the respondents is too shaky and utterly insufficient to prove that the Nutrimix feeds caused the death of their animals. For these reasons, the expert testimonies lack probative weight. The respondents case of breach of implied warranty was fundamentally based upon the circumstantial evidence that the chickens and hogs sickened, stunted, and died after eating Nutrimix feeds; but this was not enough to raise a reasonable supposition that the unwholesome feeds were the proximate cause of the death with that degree of certainty and probability required.40 The rule is well-settled that if there be no evidence, or if evidence be so slight as not reasonably to warrant inference of the fact in issue or furnish more than materials for a mere conjecture, the court will not hesitate to strike down the evidence and rule in favor of the other party.41 This rule is both fair and sound. Any other interpretation of the law would unloose the courts to meander aimlessly in the arena of speculation.42 It must be stressed, however, that the remedy against violations of warranty against hidden defects is either to withdraw from the contract (accion redhibitoria) or to demand a proportionate reduction of the price (accion quanti minoris), with damages in either case.43 In any case, the respondents have already admitted, both in their testimonies and pleadings submitted, that they are indeed indebted to the petitioner for the unpaid animal feeds delivered to them. For this reason alone, they should be held liable for their unsettled obligations to the petitioner. WHEREFORE, in light of all the foregoing, the petition is GRANTED. The assailed Decision of the Court of Appeals, dated February 12, 2002, is REVERSED and SET ASIDE. The Decision of the Regional Trial Court of Malolos, Bulacan, Branch 9, dated January 12, 1998, is REINSTATED. No costs. SO ORDERED. Puno, Austria-Martinez, Tinga, and Chico-Nazario, JJ., concur.

G.R. No. 93640 January 7, 1994 TAY CHUN SUY, petitioner, vs. COURT OF APPEALS AND DEVELOPMENT BANK OF THE PHILIPPINES, respondents. BELLOSILLO, J.: As between the buyer of a vessel at a prior extrajudicial foreclosure and the buyer at a subsequent auction sale, both buyers failing to register their transactions, who has a better right of dominion over the vessel? On 9 May 1978, Sta. Clara Lumber Co., Inc. (SCLC), obtained a loan of P18,514,357.56 from private respondent Development Bank of the Philippines (DBP). As security for the loan, SCLC mortgaged some of its properties, among which was a vessel, MV Sta. Clara I . Upon SCLC's failure to pay the loan, the mortgage was foreclosed. On 18 August 1982, the Clerk of Court and Provincial Sheriff Ex-Officio of Sultan Kudarat, Aurelio M. Rendon, conducted an auction sale and sold the vessel to DBP for P3,600,000.00. He thereafter issued a certificate of sale dated 18 August 1982 in favor of DBP. 1 However, DBP did not register with the Philippine Coast Guard the mortgage; neither the foreclosure nor the auction sale. In December 1983, DBP and Sta. Clara Housing Industries, Inc. (SCHI), entered into a Lease/Purchase Agreement 2 which provided that DBP should lease some of the former properties of SCLC, including MV Sta. Clara I, to the latter and transfer actual ownership over these properties upon completion by the lessee of the stipulated lease/purchase payment. On 10 July 1986, petitioner caused the levy and attachment of the same vessel, MV Sta. Clara I, in order to satisfy a judgment rendered by the Regional Trial Court, Br. XII, Davao City, in Civil Case No. 15970, "Tay Chun Suy v. Sta. Clara Lumber Co., Inc." At the time of the levy, the coastwise license of the vessel was in the name of Sta. Clara Lumber Co., Inc. On the scheduled date of the execution sale, Atty. Necitas Kintanar, counsel for SCHI, verbally informed Deputy Sheriff Manases M. Reyes, Jr., who was to conduct the sale, that MV Sta. Clara I was no longer owned by SCLC but by DBP pursuant to a prior extrajudicial foreclosure sale. Despite such information, Sheriff Reyes, Jr., proceeded with the sale and awarded the vessel to petitioner for P317,000.00. 3 Meanwhile, on 23 July 1986, MV Sta. Clara I was again levied upon and attached by Deputy Sheriff Alfonso M. Zamora by virtue of a writ of attachment issued by the Regional Trial Court, Br. XI, Cebu City, in Civil Case No. CEB-5162, "Philippine Trigon Shipyard Shipping Corp. v. Sta. Clara Housing Industries, Inc., et al." 4 On 24 July 1986, the same court issued an order appointing Philippine Trigon Shipyard Shipping Corporation as depository of the attached vessel with authority to operate the vessel temporarily. MV Sta. Clara I was then taken from the port of Davao City to Cebu City. Upon being informed of the execution sale to petitioner, DBP filed a complaint before the Regional Trial Court, Br. XVII, Davao City, for annulment of the execution sale, recovery of possession, damages and attorney's fees with prayer for restraining order and preliminary

injunction. 5 Petitioner moved to dismiss the complaint for alleged lack of jurisdiction, cause of action and/or legal personality to sue on the part of DBP. 6 On 28 October 1986, the court denied the motion to dismiss but granted DBP's prayer for a writ of preliminary injunction. 7 Petitioner moved for reconsideration of the denial but on 19 November 1986, the motion was likewise denied. 8 Forthwith, petitioner filed with the Court of Appeals a petition for certiorari and mandamus with prohibition assailing the Orders of 28 October and 19 November 1986 of the trial court. On 11 March 1987, the Court of Appeals dismissed the petition. 9 Petitioner appealed to this Court by way of a petition for review on certiorari, docketed as G.R. No. 78383, "Tay Chun Suy vs. Development Bank of the Philippines, et al." In the resolution of 28 September 1987 (not 30 September 1987), the Third Division of this Court denied the petition for lack of merit. 10 On 4 December 1987, the trial court issued a decision which, among other matters, declared that DBP was the lawful owner of MV Sta. Clara I and that the public auction sale conducted by Deputy Sheriff Manases Reyes, Jr., on 16 July 1986 and the resultant certificate of sale were null and void. 11 On 16 December 1987, petitioner sought recourse to the Court of Appeals. On 28 February 1990, the appellate court dismissed his appeal. 12 On 23 May 1990, the motion to reconsider the dismissal was denied. 13 Hence, this petition for review on certiorari. Petitioner contends that the Court of Appeals erred (1) in finding that the sheriff's auction sale of the vessel did not enjoy the presumption of regularity; and (2) in affirming the decision 14 of the trial court declaring DBP as the true and exclusive owner of MV Sta. Clara I. Well-entrenched is the rule that factual findings of the trial court, as well as those of the Court of Appeals, are entitled to great weight and respect. 15 This rule once more finds application in the case at bar. The records show that SCHI, lessee of the vessel, is an entity separate from SCLC, and was not a party to the case filed by petitioner against the latter. 16 Yet, SCHI was furnished, on a Saturday, copy of the auction sale of MV Sta. Clara I . Sta. Clara Lumber Co., Inc., which was the proper party, does not appear to have been notified. Upon being informed of the auction sale, counsel for SCHI immediately went to the auction site and requested that the sale be reset that day on the ground that SCLC was no longer the owner of the vessel. To support this claim, the Manager of SCHI hurriedly left for her office to secure a copy of the certificate of sale in favor of DBP as this was demanded by the sheriff. 17 Given the circumstances obtaining in this case, a delay of a few hours could not have prejudiced petitioner. A sheriff's ministerial duty to conduct an auction sale is not without any limitation. In the performance of this duty, he is deemed to know what is inherently right and inherently wrong. Nonetheless, Sheriff Reyes, Jr., upon the persistent proddings of petitioner, proceeded with the auction sale. His poor judgment alone would not have caused any suspicion of bias. However, his precipitate action taken together with the anomalous proceedings that ensued, and the haste with which he delivered the certificate of sale to petitioner in the afternoon of the day

of the auction sale lead to the inevitable conclusion that the whole operation was contrived to benefit petitioner. 18 The handwritten Minutes (Exh. "D") of the auction sale clearly indicate the haste with which they were prepared, a telltale evidence of the anomalous conduct of the proceedings. On its face, one cannot determine the name of the successful bidder of the vessel. The 16 July 1986 minutes 19 read: MINUTES Time: 10:15 Conducting Present: o'clock Officer: in the Sheriff morning. Reyes

Plaintiff (Bidder) 140,000 270,000 Atty. Positos 220,000 300,000

100,000

250,000

180,000

290,000

Atty. Kintanar 240,000 310,000 Mr. Ang (Bidder) 245,000 315,000 Mr. Arceo (Bidder) 317,000 Winner Mr. Ang (Davao Metal Enterprises) Al 120,000 160,000 200,000 225,000 242,000 310,000 xxx xxx xxx Sold to Plaintiff P317,000 The minutes became even more vague when Sheriff Reyes, Jr., testified that there were only three bidders. From the minutes, however, we find that all those present offered bids as there were amounts placed opposite their names Atty. Fabro, counsel for DBP: Q: Atty. Positos, counsel for the defendant also bidded, it seems to me? Sheriff Reyes, Jr.: A: That is, Atty. Positos was present. 246,000 251,000 311,000 315,000 272,000 291,000

Q: After the word Present: is the word Plaintiff (Bidder), are we to understand or are we made to believe that these people here bidded because there are amounts corresponding to their names? A: No, actually Mr. Ang, Mr. Arceo and the plaintiff bidded actually during the auction sale. Q: Why is it that corresponding to the name of Atty. Positos here there are amounts here 140,000 270,000 180,000 290,000 220,000 300,000 and Atty. Kintanar, 240,000 310,000? A: Atty. Kintanar never gave his bid, he just observed the proceedings of the auction sale. Q: How come you stated in the minutes that there are amounts opposite their names there? A: They were present at that time. Q: Why was it that opposite their names appear some amounts here if they did not actually bid during the auction sale, what is the use of this (sic) amounts here? A: We put that only in the paper that they are (sic) present. Atty. Positos and Atty. Kintanar were really present at that time and only Mr. Ang, Mr. Arceo and the plaintiff were the regular bidders of the auction sale. Q: So you believe that should be the only thing that should appear there in the minutes as what you have placed there? A: That is our procedure in the making of minutes, we have placed there those present, the bidders, we have different style in making minutes. Q: We have seen other minutes prepared by others. . . COURT: Do not argue, he said that is how he prepares minutes. Ask him only insofar as what is relevant in this case. ATTY. FABRO:

Q: When you stated here Mr. Ang, are you referring to the Chairman who bought the vessel? ATTY. APORTADERA: The question is misleading, counsel is referring to Mr. Ang who bought the vessel? That is misleading. ATTY. FABRO: I am asking him your Honor. Q: Who is this Mr. Ang? A: A bidder. Q: He also bidded? A: Yes. Q: His bid was 245,000 315,000? A: Yes, sir. Q: There is also this Mr. Arceo, Mr. Arceo bidded also? A: Yes, sir. Q: Will you please explain to the Honorable Court why is it that the name of Mr. Arceo (Bidder) here there appears the amount of P317,000 and there is the word Winner? Would you please try to explain to the Honorable Court what are those entries there ? A: Mr. Ang's bid starts here from the amount P100,00 and plaintiff starts from AL P120,000. ATTY. FABRO: May we pray that these entries here found under the word Present: be marked as Exhibit "D-2". COURT: Mark it. ATTY. FABRO: And we would also like to have this (sic) words: "Sold to Plaintiff P317,000" encircled and marked Exhibit "D-3".

COURT: Mark it. ATTY. FABRO: We would like to manifest your Honor that on the basis of this (sic) minutes submitted by Deputy Sheriff Manases Reyes, there appears here no name of Buyer, although it stated here that it was sold to plaintiff for P317,000.00. This counsel is wondering where is the name of the buyer who bought the vessel, your Honor 20 (Emphasis supplied) Significantly, the above testimony of Sheriff Reyes, Jr., to the effect that Atty. Positos did not participate in the bidding was rebutted by the latter. 21 In view of the ambiguity of the minutes, the trial court was constrained to ask clarificatory questions from Sheriff Reyes, Jr. COURT: Q: The highest bidder, who is the plaintiff here as the highest bidder? A: AL. Q: Who is this AL? A: AL is the plaintiff. Q: What is the name of AL, you stated there AL, what does that mean? Q: Actually there is some significance of the word AL as far as you are concerned? A: Yes, sir. Q: What is that AL? A: Initial (sic) of plaintiff. Q: Why did you not record the full name of the plaintiff there as the name of the highest bidder? A: I only put there the initial (sic) during the proceedings. xxx xxx xxx Q: On the face of your minutes I can say that this is not the proper minutes that should be done by any Sheriff. You should even type

your minutes after the auction sale in order to inform any person later on what actually happened during the proceedings. Even in stating merely the name of the plaintiff, you just place here AL, what is the significance of this AL, when you know that he is supposed to be the plaintiff . He is the plaintiff-bidder but you placed there only AL. Now, in your certificate of sale what did you state there as the highest bidder? A: The name of the plaintiff. Q: Do you have a certificate of sale? A: Yes, sir. (Witness hands to the Court carbon original of a copy of the certificate of sale). Q: Do you have in the records copy of this certificate of sale? A: Yes, Your Honor. Q: You stated here that you awarded the vessel to Tay Chun Suy, as he is the highest bidder. You stated in your certificate of sale the Plaintiff herein was the successful bidder who offered his oral bid in the amount of P317,000.00 you are basing this statement of yours from the minutes of July 16, 1986, is that correct? A: Yes, Your Honor. Q: Why did you not state in your certificate of sale that this AL is actually the one you referred her as Tay Chun Suy, are you not aware that that is the very material where you based your certificate of sale and that the certificate of sale will tally with the minutes of your proceedings of the auction sale? (No answer). COURT: You are not only to explain that, you have to explain why your certificate of sale does not tally with your minutes, you awarded the vessel to one Tay Chun Suy while what appears in your minutes is that a certain AL . . . (emphasis supplied) 22 The procedure followed by Sheriff Reyes, Jr., was patently irregular. The unexplained inconsistencies in the minutes and the certificate of sale are so material as to affect the integrity of the whole proceedings. Noteworthy, too, is the fact that the Minutes (Exh. "D") do not mention the request of counsel for SCHI for deferment of the auction sale. While the request was made prior to the auction sale, the trial court was correct in its observation that the same should have been entered in the minutes because of its importance and relevance to the sale. 23 Under

these circumstances, the ruling of the appellate court sustaining the trial court on the nullity of the auction sale cannot be faulted. Petitioner vigorously maintains that the failure of DBP to register its title to MV Sta. Clara I with the Philippine Coast Guard is fatal to its claim of ownership. Likewise, he raises doubts as to whether the trial court has jurisdiction to issue the writ of preliminary injunction. 24 In G.R. No. 78383, 28 September 1987 we rejected these arguments in our resolution of

The respondent appellate court correctly held that the Regional Trial Court of Davao City, Branch 17, had jurisdiction over the action brought in Civil Case No. 18188 concerning the vessel herein involved which was allegedly purchased by petitioner in an execution sale, and which execution sale was the result of the judgment rendered by Branch 12 of the same Regional Trial Court in Civil Case No. 15970. Branch 17, Regional Trial Court of Davao City, did not undertake to annul the judgment of the Regional Trial Court of Davao City, Branch 12, jurisdiction to annul belonging to the Court of Appeals. Respondent appellate court also correctly held that a certificate of registration of ownership of a vessel is only presumptive evidence that the registered owner has a legal title to the vessel, and that DBP's failure to register with the Philippine Coast Guard its prior acquisition of the vessel is not fatal to its ownership of said vessel, vis-a-vis petitioner herein, who similarly failed to register the alleged subsequent sale of the vessel to itself (sic) in an execution sale. 25 This resolution is now final and executory. The question of whether the non-registration by DBP is fatal to its claim to the vessel or whether the trial court has jurisdiction over the action should no longer be raised anew. Once a case has been decided one way, then another case involving exactly the same point at issue should be decided in the same manner. 26 At any rate, our ruling in Santos v. Bayhon 27 should put to rest petitioner's doubt as to the jurisdiction of the trial court The general rule that no court has the power to interfere by injunction with the judgments or decrees of another court with concurrent or coordinate jurisdiction possessing equal power to grant injunctive relief, applies only when no third-party claimant is involved (Traders Royal Bank v. Intermediate Appellate Court, 133 SCRA 142). When a third-party, or a stranger to the action, asserts a claim over the property levied upon, the claimant may vindicate his claim by an independent action in the proper civil court which may stop the execution of the judgment on property not belonging to the judgment debtor. (emphasis supplied) Further, petitioner contends that he is a bona fide purchaser for value at the auction sale and that he came to know about the acquisition by DBP only upon its filing of complaint for annulment of the execution sale. 28 The evidence on record belies such contention. Before the auction sale started, counsel for petitioner was already aware of the cloud on the title of SCLC to the vessel as shown hereunder Atty. Fabros, counsel for DBP:

Q: But you know for a fact that Atty. Kintanar requested for the postponement of the auction sale in the afternoon because they were filing a third party claim or that they will still inform DBP of that pending sale, you know that? Atty. Positos, counsel for petitioner: A: No, because it was Atty. Kintanar and the sheriff who were talking and I only interfered to proceed with the sale considering there was no formal third party claim. Q: You want to tell the Honorable Court that during all the time you were ignorant of the proceedings that they were making? A: No, sir, the conversation is only between the sheriff and Atty. Kintanar and the sheriff informed me afterwards but I did not personally talk to Atty. Kintanar. xxx xxx xxx Court: Q: You are sure that during that proceedings of the auction sale, Atty. Kintanar made it known to the sheriff that the vessel is already owned by DBP? A: That is the allegation. Q: The question can be answered with yes or no? A: Yes, sir. Q: And you also heard Atty. Kintanar requesting the sheriff to postpone the proceedings in the afternoon? A: I was informed by the sheriff only. Q: By the way, how far were you from Atty. Kintanar and the sheriff during the actual proceedings? A: Before the actual auction sale there was a conversation between Atty. Kintanar and the sheriff, but I was already around 4 or 5 meters away. (emphasis supplied). 29 Notwithstanding his knowledge of the prior claim of DBP, petitioner insisted that the sheriff proceeded with the auction sale. Under the caveat emptor rule, he assumed the risk of losing the vessel because his right to it cannot be considered superior to that of DBP. As we held in one case, 30 an execution creditor generally acquires no higher or better right than what the execution debtor has in the property levied upon.

It follows then that if the judgment debtor had no interest in the property, the execution creditor acquires no interest therein. Moreover, petitioner is now estopped from denying knowledge of the prior claim of DBP to the vessel in the light of his judicial admission. Thus, the trial court ruled By way of factual background, defendant Tay Chun Suy through counsel, admitted all prior proceedings pertinent to the testimony of plaintiff witness, Aurelio Rendon, in order to dispense with his testimony, Exh. "A" to "F" and submarkings for plaintiff, were admitted referring to the foreclosure sale of the subject vessel by the sheriff of Sultan Kudarat province; the certificate of sale and/or corresponding notices required by law, all matters were contained in the Order of this Court dated August 6, 1986. In effect, defendant Tay Chun Suy, admitted the ownership of plaintiff over said vessel way back on August 18, 1982. 31 Petitioner takes exception to the aforequoted ruling. He asserts that he never admitted that he knew of DBP's prior acquisition at the time of the execution sale on 16 July 1986. Petitioner never challenged this particular ruling in his appeal to the Court of Appeals. Hence, he cannot be allowed to ventilate it now in this proceeding. Points of law, theories, issues and arguments not adequately brought to the attention of the trial court need not be, and ordinarily will not be, considered by a reviewing Court as they cannot be raised for the first time on appeal.
32

The evidence on record fully supports the findings of the lower courts. We therefore find no need to discuss the other arguments raised by the petitioner to support his cause. WHEREFORE, finding no reversible error in the decision of the a quo, the petition for review on certiorari is DISMISSED, with costs against petitioner. SO ORDERED. Cruz, Davide, Jr. and Quiason, JJ., concur. court