VIRGINIA D. PAGCO AND GAUDENCIO PAGCO, PETITIONERS, VS. THE HONORABLE COURT OF APPEALS AND PETER NG QUIMSON, RESPONDENTS.

Petitioners seek to review the decision of the Court of Appeals
dismissing their petition to reverse the decision^[1] of
the Regional Trial Court of Manila, the dispositive portion of which reads:

“WHEREFORE, judgment is rendered:

“(a) Vacating and setting aside the appealed
judgment of the lower court;

“(b)  Ordering the defendants to vacate the premises
under their respective occupation and surrender possession thereof to the
plaintiff;

“(c)  Ordering said defendants to pay to the
plaintiff their rental in arrears computed from March 1987 and their current
rentals until they vacate the premises leased to them at the following month
rates:

“(d)  Ordering the defendants to pay their
proportionate shares in the costs.

“(e)  Remand the records of this case to the court
of origin for immediate execution.

“SO ORDERED.”^[2]

Private respondent Peter Quimson is the owner of a parcel of land
situated at San Isidro Street, Singalong, Manila, with an area of 1,000 square
meters and covered by TCT No. 173114.

When private respondent acquired the property on March 17, 1987
through sale at public auction, eleven (11) occupants were in possession of the
property with their respective residential houses built thereon, among whom are
herein petitioners.

Private respondent had earlier negotiated with petitioners for
the latter to buy the portions they occupy but petitioners backed off. Private respondent subsequently informed the
lessees to pay their back rentals and to remove their houses because he needed
the property for his own use and that of the immediate members of his family.

For failure of petitioners to heed private respondent’s demand, a
complaint for ejectment was filed against petitioners and the other occupants
of the property in the Metropolitan Trial Court of Manila, Branch 6, docketed
as Civil Case No. 125830.^[3]

Petitioners and the other defendants filed their answer denying that there were negotiations
for them to buy the property and alleging
as affirmative defense that private respondent has no cause of action as the
property is within the area for priority development,
hence, eviction of the occupant families is prohibited under P.D. 2016.

During the trial of the case, only petitioners adduced their
evidence. The other defendants waived
their right to present evidence
for failure to appear at the trial.

After trial, the Metropolitan Trial Court rendered judgment^[4]
dismissing the complaint for ejectment on the ground that there was a perfected
sale over the property between private respondent and its occupants and,
consequently, said court had no
jurisdiction over the case because the
rights of the parties should be governed not by the law on lease but by the law on sales, more
specifically Article 1475 of the Civil Code.

Private respondent appealed the MTC’s decision to the Regional
Trial Court, Branch 35, where the case was docketed as Civil Case No.
91-58880. Thereafter, the RTC rendered its decision, reversing that
of the Metropolitan Trial Court.

Not satisfied with the RTC’s decision, petitioners filed a
petition for review with the Court of Appeals on the following grounds:

“I

“THE LOWER COURT ERRED WHEN IT DISREGARDED THE PERFECTED SALE
BETWEEN THE PARTIES AND ORDERED THE EJECTMENT OF DEFENDANTS.

“II

“THE DECISION IS IN ERROR WHEN THE FATAL DEFECT OF MISJOINDER OF
PARTIES WAS IGNORED.”

The Court of Appeals in dismissing the petition ratiocinated:

“A contract of sale is perfected from the time there exists an
agreement upon the thing which is the object of the contract and upon the price
(Article 1475, Civil Code).

“Here, the price fixed by respondent Quimson as alleged in
paragraph 8 of the complaint is P970.000 per square meter, although respondent
testified that the exact price is P980.00 per square meter (page 6, RTC
decision). According to petitioners,
however, all the defendants agreed to pay the price of P850.00 only per square
meter (page 5, RTC decision). Clearly,
therefore, there was no agreement reached between the parties as to the price
of the lot in question. Consequently,
as no price was agreed upon, there can be no perfected contract of sale within
the contemplation of Article 1475 of the Civil Code. That there indeed was no perfected contract of sale is further
bolstered by the letter of petitioners’ lawyer to respondent Quimson dated June
24, 1988 (Exhibit ‘C’, also Exhibit ‘1’, page 19, MRT record), the relevant
portions of which state:

‘Our clients revealed to us that they have not consented much less
entered into any agreement on a direct purchase from you of their respective
occupied lots especially on the price you mentioned.’

“There is yet another factor that militates against petitioners’
pretended perfected sale of the property. In their answer to the complaint, (page 45, MTC record), defendants
(including the petitioners herein) never alleged that there was a perfected
contract of sale of the portion they were occupying. Paragraphs 4 & 5 of defendants’ answer aver:

‘4.   The allegations contained in paragraphs 6, 7
and 8 are vehemently denied, the truth of the matter being, that plaintiff on
several occasions demands exhorbitant rentals or payments for the property and
harrassed them with threats to eject them for their occupied spaces if they
refuse to accept and oblige with his terms.

‘5.  Paragraphs 9 and 10 of the complaint, are
likewise denied on the ground that defendants never recognized plaintiff as the
owner of the property in issue and most of all advised the latter that the same
was covered by a proclamation placing it under Area priority development
pursuant to the Urban Reform Law.’

“All these established facts debunk petitioners’ claim or a
perfected contract of sale between them and respondent Peter Quimson.

“On the second ground, petitioners vehemently assail the RTC
decision which allegedly ignored the misjoinder of parties. Citing the case of Flores vs.
Mallare-Philipps, 144 SCRA 377, petitioners contend that there is misjoinder of
parties because the claim against the defendants are separate and distinct.

“The Flores decision, supra, finds no application in this
case. The Supreme Court dismissed the
complaint because the claim against Ignacio Binongcal for P11,643.00 on the
first cause of action and the claim against Fernando Calion for P10,212.00 on
the second cause of action, are separate and distinct and neither of which
falls within the original exclusive jurisdiction of the Regional Trial Court
under Section 19(8) of B.P. 129 where the amount of the demand is more than
P20,000.00.

“In the case at bar, the cause of action for the ejectment against
all the defendants, including the petitioners, is for non-payment of rentals
from 1987 to the present.

“The relief sought against all the defendants is the same, i.e., to
vacate the premises and to pay the rentals in arrears.

“We thus agree with the trial court that –

‘Arrears in payment of rentals for a total of three months is a
ground for judicial ejectment (Sec. 5-b, Batas Pambansa Blg. 877, as amended
and extended by Rep. Act. No. 6828). In
this case, the defendants admitted among others, during the pre-trial, the
respective rates of rental they have been paying to the previous owners; that
the title to the land in question has been transferred to the plaintiff in
March 1987; that they have not been paying their rentals since June 1985; and
that they received the letters of demand of the plaintiff (Record, p.
178). However, the plaintiff is
entitled to recover the unpaid rentals only from March 1987 when he became the
owner-lessor of the land in question.’

“This is a good example of how persons who
have failed to adduce any legal grounds for their continued stay on property
belonging to another have nonetheless managed to stave off eviction for more
than four years although with respect to the other defendants in the case,
writs of execution had already been issued against them.”^[5]

In the instant recourse, petitioners assail the Court of Appeals’
decision alleging as their lone assigned error that –

“I

“THE LOWER COURT ERRED WHEN IT DID NOT CONSIDER AGAINST PLAINTIFF
FATAL ALLEGATIONS IN THE COMPLAINT WHICH CLEARLY INDICATES LACK OF CAUSE OF
ACTION BUT RATHER CURED THE SAME THROUGH DEFENDANTS ANSWER.”

The petition is devoid of merit.

As correctly found by both the Court of Appeals and the Regional
Trial Court on the basis of the evidence, there was no meeting of the minds
between the parties regarding the offer by private respondent to sell his
property to the occupants. Private
respondent wanted P980.00 per square meter, but the occupants were willing to
pay only P850.00.

In arguing that there was a perfected contract of sale, petitioners
wrongly capitalize on the allegations in the complaint, to wit:

“8.    That this time, upon receipt of Annex ‘D’,
defendants negotiated with the plaintiff and agreed to accept plaintiff’s offer
to buy the area actually occupied by their houses at P970.00 a square meter on
easy monthly installment for five (5) years.

“9.    To consumate the agreement, plaintiff
engaged the services of a Geodetic Engineer who prepared a subdivision plan
delineating the boundaries of the areas to be assigned to each of the defendants.

“10.  That however, after approving the proposed
subdivision plan, the defendants suddenly and abruptly changed their minds and
repudiated the agreement which is already a perfected contract, and
deliberately and maliciously refused to continue negotiating with the plaintiff
as expressed in the attached letter of their counsel marked as ANNEX ‘E’ and
made an integral part hereof.”^[6]

However, as the Court of Appeals had pointed out in its decision,
petitioners categorically denied in paragraphs 4 and 5 of their answer whatever
imputations there are in paragraphs 8 to 10
of the Complaint of the alleged existence of a perfected contract. In other words, petitioners in their answer
never claimed ownership of the lot; they only put up the defense that the
property is within one of the areas proclaimed for priority development and,
therefore, their eviction is prohibited pursuant to P.D. 2016.

The phrase “perfected contract” in paragraph 10 of the complaint
is used in its loose sense and does not connote that there was a meeting of the
minds between the parties. Observe that
after the statement in said paragraph that “after approving the proposed
subdivision plan, the defendants suddenly and abruptly changed their minds and
repudiated the agreement which
is already a perfected contract,” there immediately follows the qualifying
allegation that “[defendants] deliberately and maliciously refused to continue
negotiating with the plaintiff as expressed in the attached letter of their
counsel marked as Annex ‘E’ and made an integral part thereof.”

The words “refused to continue negotiating with the plaintiff”
have no other meaning except that there was a negotiation regarding the offer
to sell, but the negotiation fell through because of the refusal of petitioners
and the other occupants to talk further as evidenced by the letter of their
counsel, which is Annex “C” of
the complaint.

The letter referred to, which is dated June 24, 1988, states in
part:

“Our client revealed to us that they have not consented much less
entered into by agreement on a direct purchase from you of their respective
occupied lots especially on the price you mentioned.”^[7]

Finally, even granting that there was a perfected contract of
sale, it can be implied that there was subsequently a mutual withdrawal or
“mutual backing out” from the contract.^[8] This
conclusion may be drawn from the fact of the filing by private respondent of
the complaint for ejectment, in which he alleged ownership of the property in
question and from the averments in petitioners’ answer wherein they never
claimed ownership of the property by purchase from private respondent.

In Aquino vs. Tañedo,^[9]
involving a sale of land mutually cancelled by both contracting parties, this
Court emphasized that the rescission of the contract between the plaintiff and
the defendant was not originated by any of the causes specified in Arts. 1291
and 1292 (now Arts. 1381 and 1832 of the New Civil Code), nor is it a relief
for the purposes sought by these articles; it is simply another contract for
the dissolution of the previous one, and its effects, in relation to the
contract so dissolved, should be determined by the agreement of the parties, or
by the application of other legal provisions, not by Article 1295 (now Art.
1385 of the New Civil Code).

WHEREFORE, the petition is DENIED for lack of merit. No pronouncement as to costs.

SO ORDERED.

Cruz, (Chairman),
Davide, Jr., Bellosillo, and Quiason,
JJ., concur.

^[1]
Original Records, pp. 388-396

^[2]
Ibid., pp. 395-396

^[3]
id., pp. 1-6

^[4]
id., pp. 279-283

^[5]
Rollo, pp. 23-25

^[6]
Records, p. 4

^[7]
Exhibit “C”, Records, p. 19

^[8]
Paras, Civil Code, Vol IV, p. 659, 1989 Ed.

^[9]
39 Phil. 517