PEOPLE’S HOMESITE & HOUSING CORPORATION, PETITIONER, VS. MARCIANO BAYLON, ET AL, RESPONDENTS.

People's Homesite and Housing Corporation versus Baylon

The Case

This is a special civil action for certiorari brought by the People's Homesite and Housing Corporation, commonly called the PHHC, against Marciano Baylon and about fifty-six other occupants of the former Gonzales estate in Caloocan, Rizal. The PHHC asks the Supreme Court to annul the order of the Court of First Instance of Rizal directing execution of its judgment in a case that compelled the corporation to sell to the occupants the portions they respectively occupied. The case matters because it teaches when a party may still raise an objection it failed to appeal, and how a compromise agreement binds the parties to its terms.

Procedural History

The occupants sued the PHHC in the Court of First Instance of Rizal to compel it to sell to them the lots they occupied. The Araneta Institute of Agriculture was allowed to intervene over the PHHC's objection. After hearing, the parties entered into a compromise agreement, and in December 1961 Judge Andres Reyes rendered judgment in accordance with that agreement. In February 1962 the plaintiffs moved for execution. The PHHC opposed the motion, but the trial court issued the order of execution. The PHHC then filed this petition for certiorari in the Supreme Court, alleging grave abuse of discretion. The Supreme Court issued a preliminary injunction in December 1962. After the case was argued and submitted, the Court required the PHHC to explain why the injunction should not be lifted, and the PHHC submitted its compliance. The Court then resolved the petition.

Facts

The Government had expropriated the Gonzales estate in Caloocan, Rizal, for resale to tenants or occupants. About fifty-seven occupants, among them Marciano Baylon, sued the PHHC to compel it to sell to them the portions they respectively occupied. The PHHC denied any obligation, contending that its duty was to sell lots to bona fide tenants or to private individuals who would work the lots themselves, and that some of the plaintiffs had already disposed of their rights to the Araneta Institute of Agriculture and thereby lost their preferential rights.

Over the PHHC's objection, the Araneta Institute of Agriculture was permitted to intervene to protect its rights. It alleged that, to expand its agricultural school, it had acquired the lots of some of the plaintiffs and had even helped them make the required deposits. The litigation was heard, and the parties reached a compromise agreement. Under that agreement the PHHC recognized the priority rights of the plaintiffs as tenants-occupants to purchase their respective lots pursuant to Commonwealth Act Number 539, subject to reservations for the North Superhighway and for public use such as streets, market site, playground and school site, to be determined in the survey. The PHHC also agreed to sell the lots at three pesos and eighty centavos per square meter.

In December 1961 judgment was rendered in accordance with the agreement. In February 1962 the plaintiffs asked for execution. The PHHC objected, alleging that some plaintiffs had not made the required down payment, that the deeds of sale had not been approved by the Auditor-General, and principally that the PHHC was still surveying the lots and the reservations for public use had not yet been determined. The plaintiffs replied that a survey plan had already been completed and submitted to the Land Registration Commission. The trial court issued the order of execution, and the PHHC brought this petition.

Issues

• Whether or not the trial court abused its discretion in allowing the Araneta Institute of Agriculture to intervene.
• Whether or not the trial court abused its discretion in issuing the order of execution before the reservations for streets, market sites, playgrounds and school sites had been properly marked on the survey plans.
• Whether or not the PHHC may still raise, in this proceeding, the claim that the tenants who had sold their lots to the Araneta Institute had forfeited their rights.

Applicable Provisions

Commonwealth Act Number 539 is the law the compromise agreement invokes as the source of the occupants' priority rights, and the Court treats it as the basis of the plaintiffs' preferential right to purchase:

Defendants recognize the priority rights of plaintiffs herein as tenants-occupants of the former Gonzales Estate (Baesa Property), to purchase their respective lots, as set forth in their complaint, pursuant to Com. Act No. 539 but subject to appropriate reservations to be used for the North Superhighway consisting of an area of also (9) hectares more or less and such reservations for public use, such as streets, market site, playground and school site, to be determined in the survey to be made under this agreement.

This clause is the very undertaking the PHHC later sought to escape, and it fixes both the priority right and the reservations that condition it.

Ruling

On the first issue, the Court found no abuse of discretion in allowing the intervention of the Araneta Institute. The PHHC had objected, but its objection was overruled, and no appeal was taken from that ruling.

On the second issue, the Court was initially impressed by the objection that the reservations for streets, markets and the like had not been marked on the survey plans, and it issued a preliminary injunction in December 1962. But upon taking up the case, the Court believed that by that time the objection must have disappeared, and it required the PHHC to state why the injunction should not be lifted. The PHHC submitted its compliance and no longer alleged the non-designation of streets, parks and markets, probably because after those years the delay could not be excused. The objection therefore did not stand.

On the third issue, the Court held that it was too late for the PHHC to insist on the forfeiture of the rights of the tenants who had sold to the Araneta Institute. The PHHC had objected to the intervention, contending that those who sold had lost their preferential rights, yet in the compromise agreement it undertook to convey to the plaintiffs their respective holdings as soon as the survey was completed, without excluding those who had sold to the Araneta Institute. The same point had been raised through a motion to dismiss the intervention, which was overruled, and no appeal was interposed from that ruling. The Court thus found no excess of jurisdiction or abuse of discretion.

Doctrine

A party who enters into a compromise agreement is bound by its terms, and it cannot later repudiate an undertaking it freely made. Where the agreement recognizes the priority rights of tenants-occupants to purchase their lots pursuant to Commonwealth Act Number 539, and undertakes to convey those lots without excluding those who had assigned their interests, the corporation cannot afterwards claim that those assignors had forfeited their rights.

An objection overruled by the trial court, from which no appeal is taken, becomes final as to that party and cannot be revived in a subsequent special civil action. Certiorari lies only for excess of jurisdiction or grave abuse of discretion, and where the trial court acted within its authority and on a valid compromise judgment, the petition must fail.

Disposition

The Supreme Court dismissed the petition, dissolved the preliminary injunction, and ordered that no costs be assessed against the PHHC.

Remember This

The single line worth memorizing is that a party cannot raise on certiorari an objection it failed to appeal, especially when its own compromise agreement contradicts that objection. Examiners like to use this case on the binding force of compromise agreements and on the finality of interlocutory orders that are not appealed.