SOUTHWESTERN UNIVERSITY, PETITIONER, VS. THE HON. CELEDONIO SALVADOR AND JOSE BALIGUAT, RESPONDENTS.

This is a petition for review by certiorari, but treated by this
Court as a special civil action in a resolution dated February 14, 1977 (p.
157, Rollo), instituted by petitioner, Southwestern
University, herein referred to as SU, to review the decision of the City Court
of Cebu in Civil Case No. 9965 as affirmed by the Court of First Instance of Cebu
City on a petition for certiorari.

On December 6, 1963,
SU an educational institution located in Cebu City
filed separate actions for ejectment against Jose Baliguat (Civil Case No. R-9965) and
Julia Ilaya (Civil Case No. 9981) with the City Court
of Cebu. 
SU alleged that it had acquired by purchase (conditional sale) three
parcels of land located at Jones Avenue,
Cebu City,
from the Development Bank of the Philip­pines
and more particularly described in TCT Nos. 16951,
16952, 16953 sometime in July 1963.  It sought to eject the defendant Baliguat from the 84 square meters lot which forms part of
the three parcels of land on which the defendant built a house, when the latter
failed to pay the P20.00 monthly rental despite repeated demands.  Defendant alleged, on the other hand, that
the monthly rental of P20.00 is violative of the
agreement between the Philip­pine Railway Company which is the original owner
of the land in question, the original agreed rental having been only P5.00.

The respondent judge rendered judgment on June 18, 1969, the dispositive
portion of which insofar as Baliguat is concerned is
as follows:

“Wherefore in view of the foregoing, the court hereby renders
judgment:

x        x          x          x

3.     
That defendant, Jose Baliguat
is entitled to recover from the plaintiff an indemnity in the total sum of P3,000.00 respecting the reasonable value of the house built
by him in good faith on the land in question.

4.     
That defendants Baliguat and Ilaya are entitled
to remain in possession of the premises in question until the full amount of
indemnity are paid to them.

5.     
That in case the plaintiff should fail to pay to
the defendant the indemnity above-stated, within ninety (90) days from the
finality of this judgment, then each of the herein defendants shall have the
right to buy the land occupied by their houses at price to be agreed upon by
both parties, with the approval of the court.” (pp. 60-61, Rollo).

From the City Court’s decision, SU filed an appeal with the Court
of First Instance of Cebu City on July 14, 1969.  On August
21, 1971, petitioner made an alleged consignation of the P3,000.00 in court. 
Later, after the appeal was pending for more than three (3) years, it
withdrew the appeal on February 1, 1973
on the ground that it is no longer interested in pursuing the appeal, having
been convinced of the fairness and reasonable­ness of the judgment.

On October 9, 1973,
petitioner filed a motion for the execution of the judgment dated June 18, 1969 with the City Court.  The court denied said motion in an order made
on December 20, 1973
disposing as follows:

“Wherefore in view of the foregoing, the Court believes and so
holds that the decision of this Court dated June 18, 1969 as against defendant,
Jose Baliguat has already become final and executory on July 24, 1969 and since plaintiff has failed
to comply with the decision of this Court, particularly paragraph 5 thereof,
plaintiff’s Motion for Execution of Judgment is hereby denied.  However in the interest of justice and
equity, the defendant in the exercise of the right granted him in the decision
of this Court is hereby ordered to pay to the plaintiff the value of 84 square
meters which is occupied by him
in the amount of P8,400.00 from the Office of the City
Treasurer at the rate of P100.00 per square meter which according to the City
Assessor was the prevailing assessed value of the land in 1969.” (p. 70, Rollo).

SU filed a Motion for Reconsideration.  The City Court denied it in an order dated
February 28, 1974 for lack of merit and ordered the plaintiff to withdraw the
amount of P8,400.00 from the office of the City
Treasurer and further required him to execute a Deed of Sale in favor of the
defendant for the 84 square meters of land located at Pelaez
Street, Cebu City. 
(p. 88, Rollo).

From the above orders of the City Court, SU filed a petition for
certiorari with the Court of First Instance of Cebu,
Branch XIV whereby the actuations of the respondent judge were assailed for
lack, or being in excess, of jurisdiction and tainted with grave abuse of
discretion in issuing the above orders.

In its decision dated November
25, 1975, the CFI of Cebu dismissed the
petition.  (p. 87, Rollo). 
Motion for Reconsideration was filed by petitioner-plaintiff but was
denied.  Thus petitioner filed the instant
petition for review on certiorari with this Court, but treated as a special
civil action.  (p. 157,
Rollo).

In its Memorandum petitioner raised the following issues,
corresponding to the errors assigned:

1.      
WHETHER OR NOT BALIGUAT
IS A BUILDER IN GOOD FAITH TO JUSTIFY THE APPLICATION OF ARTICLE 448 OF THE
CIVIL CODE, AND WHETHER THIS PROVISION GRANTS THE BUILDER IN GOOD FAITH THE
RIGHT TO BUY THE LAND.

2.      
WHETHER OR NOT THE PAYMENT OF INDEMNITY OF P3,000.00 WAS WELL WITHIN THE 90 DAY PERIOD FROM THE TIME THE
JUDGMENT HAS BECOME FINAL AND EXECUTORY.

3.      
WHETHER OR NOT IT IS WITHIN THE JURIS­DICTION OF
THE TRIAL COURT TO GO OUTSIDE THE TENOR OF THE JUDGMENT THAT ORDERED THE
PURCHASE PRICE TO BE AS AGREED UPON BY BOTH PARTIES, AND DECREE THAT PETI­TIONER
ACCEPT RESPONDENT’S P8,400.00 AS THE PRICE OF THE LAND
AT THE RATE OF P100.00 PER SQUARE METERS AS FIXED BY THE OFFICE OF THE CITY
ASSESSOR BASED ON THE PREVAILING ASSESSED VALUE OF THE LAND IN QUESTION.  (Petitioner’s Memorandum, pp. 172-173, Rollo).

The petitioner questions the finding of the City Court and the
Court of First Instance that respondent was a builder in good faith, by relying
on the fact that as a lessee, he cannot be considered a builder in good faith
and therefore Article 448 of the Civil Code does not apply.  Such finding of the lower courts can no
longer be disturbed at this stage because the petitioner’s act of withdrawing
his appeal is tantamount to his acquiescense and
acceptance of the decision, as petitioner him­self said in his motion to
dismiss that “he is no longer interested in pursuing the appeal x x x having been convinced of the fairness and
reasonableness of the judgment of the lower court.” (p.
137, Rollo). 
Where an appellant withdraws his appeal, he must face the consequence of
his withdrawal, such as the deci­sion of the court a quo becoming
final and executory. 
(Director of Lands vs. Alberto, L-28516, July 31,
1973, 52 SCRA 186).  Therefore, the withdrawal of the appeal from
the decision of the City Court holding that the defendant was a builder in good
faith and should be indemnified for P3,000 for the
improvements made, and that failure to pay such indemnity shall give the
defendant the right to buy the land at a price agreed upon by both parties and
with the approval of the court, renders said decision final and executory as well as conclusive and estops
the petitioner from questioning anew said decision.

The next issue to be resolved is when the judgment of the City
Court became final.  The City Court in
its order dated December 20, 1973 relying strongly upon the cases of Singh vs.
Liberty Insurance Corporation (L-16860, July 31, 1963, 8 SCRA
517) and Firestone Tire and Rubber Co. vs. Tempongko
(L-24399, March 28, 1969, 27 SCRA 418) held that
since Baliguat did not interpose any appeal from the
decision of this Court, dated June 18, 1969, said decision has long become
final and executory as to Baliguat
after the lapse of 15 days from June 18, 1969 and more specifically on July 24,
1969.  Petitioner contends that the
judgment of this Court has become final only upon the withdrawal of the appeal.

After a careful study of this issue, this Court is of the belief
that it would be absurd to accept the view that the judg­ment pending appeal
has become final and executory as to res­pondent, Baliguat, and not final and executory
as to the petitio­ner, because the result of the appeal proceedings is
determina­tive of the respective rights of the litigants.  The ruling relied upon by the City Court in
the cases of Singh vs. Liberty Insu­rance Corporation and Firestone Tire and
Rubber Co. of the Phil. vs. Tempongko which states
that “xxx as against other parties adversely affected by the decision who
did not appeal, the decision must be deemed to have become final and executory as to him”, finds no application in the case
at bar.  The cited cases dealt with
collection actions to recover certain sum of money where the plaintiffs
obtained judgment in the municipal court
against defendants who in turn obtained judgment for reimbursement against the
3rd party defendants, but only the latter appealed to the CFI.  The defendants did not appeal.  It is true that in the case at bar the
defendant also did not appeal from the questioned decision.  However, in the Singh and Firestone
cases, notwithstanding the appeal of
the 3rd party defendants the decision insofar as the plaintiff and defendant
were concerned, there was no hindrance to the execution of the judg­ment which
could stand despite the appeal made by the 3rd party defendant from whom the
defendant can seek contribution, indemnity or subrogation or any other relief
(Rule 6, Sec. 12 Rules of Court).  The
rights and claim of the plaintiff against defendant remain unaffected.  In the present case however, it is the
plaintiff who appealed from the City Court’s decision.  Pending the appeal, with trial de novo, the
decision was vacated.  But as to the plaintiffs and defendants in the Singh
and Fire­stone cases, the judgment is final since neither is disputing the said
judgment notwithstanding the appeal instituted by the 3rd party defendant.

Our ruling on the matter
is in accordance with Rule 40 Section 9 of the Rules of Court which is
applicable in the case at bar since the appeal was made on July 14, 1969, that is,
before the passage of RA 6031 on August 1969 (New Japan Motors Inc. vs. Perucho, L-44387, November 5, 1976, 74 SCRA
14).  The aforecited
Rule which reads:

“xxx If the appeal is withdrawn or dis­missed for failure to
prosecute, the judgment shall be deemed revived and shall forthwith be remanded
to the municipal or City Court for execution.”

clearly shows
that what makes the decision executory, when same is
appealed, is its withdrawal.

In the case at bar, the
appeal filed by the petitioner before the CFI was withdrawn on February
1, 1973.  The CFI gave due course to the withdrawal on March
30, 1973.  The records of the remanded
case was received by the City Court on August 14, 1973. 
Since the appeal was withdrawn by the petitioner, the case has been revived
and shall be remanded to the municipal court for execution.  In many cases (Saulog
vs. Custombuilt Manu­facturing Corporation, et al.,
L-29612, Nov. 15, 1968, 26 SCRA 1; International
Harvester Macleod Inc. vs. Co Ban Ling and Sons Co., et al., L-26863, October
26, 1968, 25 SCRA 612 and the early cases of Tomas
Fortuna vs. Rufina Villoria,
No. 4526, October 24, 1909, 14 Phil. 232; Mateo Capunu
vs. Julio Llorente
No. 9990, February 1, 1915, 29 Phil. 3921; Smith vs. Icasiano,
et al., 57 OG 757) this Court has consistently
enunciated the uniform ruling that in cases of withdrawn or dismissed appeal,
the judg­ment shall be revived and shall be remanded to the municipal court for
execution.  It is only after the remand
of the judgment that execution will lie. 
It follows, then, that the judgment is revived as of the time of the
withdrawal of the appeal, and is to be executed upon its remand.  This view is the most logical interpretation
of Rule 40, Sec. 9 because where the appeal is not withdrawn,
the appeal must have to be decided upon sometime.  And it is only from the time of the rendition
of the judgment of the appellate court that the time for the judgment’s finality
shall be reckoned with.

Furthermore, the appeal filed by the petitioner gave the
respondent the time to remain in the premises. 
In a way, this incident worked to his benefit for his having stayed in
the pre­mises longer.  Equity dictates
that petitioner be not punished for the appeal he had taken but later
withdrawn.

The consignation cannot be attacked on ground of lack of notice
to the defendant because, if execution has to be made from the time the case is
remanded to the court of origin, notice of the consignation must have come to
the knowledge of private respondent when SU moved for execution on Oct. 9,
1973, fol­lowing the receipt of the remanded case by said court on Aug. 14,
1973.  Less than 90 days expired from the
date of receipt of the remanded case by the court of origin to the date of the
motion for execution filed by petitioner. 
Moreover, the require­ment of notice to make the consignation effective
as provided in Art. 1257 of the Civil Code applies only in consignation as
contemplated by Art. 1256 of said Code which presupposes a
refused tender of payment.  The
deposit of the sum of P3,000 with the Court was not
actually preceded by a tender of pay­ment that was refused, for the obligation
to pay the amount to the defendant Baliguat was
imposed by the Court not by contract, and Baliguat
could not have refused the tender of payment made in compliance with the order
of the Court.

With the timely payment of the indemnity of P3,000.00,
the defendant Baliguat has lost the right to buy the
land.  The respondent judge, therefore,
committed a grave error when he gave the defendant the right to buy the land
for P8,400.00, the price as assessed by the Assessor’s Office, not only because
its judgment provides that “should the payment of the indemnity be not
made within the 90 day period, the buyer shall have the right to buy the land
for a price agreed upon by the parties and approved by the court”, but
also because the price was fixed by the Assessor’s Office, and not “for a
price agreed upon by the parties and approved by the court”, as so
directed in the judgment.

The allegations made by the respondent, Baliguat,
in a memorandum submitted to this court, that at the time the action for ejectment was filed, petitioner SU is not yet the owner of
the parcels of land in question, having purchased the same only in 1971; that
the 84 square meters of the land occupied by him is located at Pelaez Street and not Jones Avenue; that there is no
definite showing as to which portion of the land is 84 square meters located –
all these contemplate questions of fact which can not be resolved by this
Court.  Said allegations touch on the
very core of the lower court’s finding that petitioner is the owner of the
land, a finding which will not be disturbed by this Court.  (Reyes, et al. vs. Court of
Appeals, L-28466, March 27, 1971, 38 SCRA 138).

WHEREFORE, the decision of the respondent court is hereby
reversed.  Accordingly, the private
respondent, Jose Baliguat, is hereby ordered to
vacate the land in question and to accept from the Clerk of Court the P3,000.00 deposited with the latter as valid payment for the value
of the house built by him in good faith on the premises.

SO ORDERED.

Makasiar, Fernandez, and Guerrero, JJ., concur.

Teehankee, (Chairman), J., concurs in a separate opinion.

Melencio-Herrera, J., concurs in the result, in a separate opinion.