DR. AND MRS. MERLIN CONSING, PETITIONERS, VS. THE COURT OF APPEALS AND CARIDAD SANTOS, RESPONDENTS.

Petitioner Merlin Consing is the
registered owner of a 9,643 sq. m. parcel of land covered by Transfer
Certificate of Title (TCT) No. 312970 located in barrio Bayanbayanan,
Marikina,
Rizal. 
Sometime in 1971, Consing caused the
subdivision of said parcel of land into thirty-eight (38) lots and submitted a
subdivision plan to the Land Registration Commission (LRC) which was approved
on January 25, 1971 as a
simple subdivision plan.  Subsequently, Consing filed a petition for segregation of title and the
issuance of separate certificates of title for the 38 lots.  In the same petition, Consing
likewise informed the Register of Deeds that he voluntarily grants the right of
way in lots 2, 7, 8, 13, 14, 19, 20, 25, 26, 31, 32, 35, 36, and 37 [Exh. “3”.] The petition for segregation was
granted and thereafter, doing business under the name Mearle
Homes, the spouses Consing engaged in the sale of
these 38 lots.

On October 4, 1971
private respondent Caridad Santos and the Consings entered into an agreement denominated as a “Contract of Sale”
whereby the latter agreed to sell, transfer and convey
to the former a house and lot more particularly described as follows:

A newly constructed 4 bedrooms, two
bathrooms, complete with light and water connections bungalow, fenced on two
parcels of land (Lot No. 26 of subdivision plan (LRC) Psd
134075 and Lot No. 25 of subdivision plan (LRC) Psd
134075, all being a portion of Lot B (LRC) Psd
133634, LRC Rec No. 7672 containing an area of TWO
HUNDRED NINETY FOUR (294) SQUARE METERS
& TWO HUNDRED NINETY FIVE (295) SQUARE METERS, respectively more or less
including the voluntary right of way, covered by TCT No. 313386 and TCT 313385,
respectively; located at Barrio Bayanbayanan,
Municipality of Marikina, Rizal
[Exh. “11”.]

It is stipulated in said “Contract of Sale” that in
consideration of the agreement to sell the buyer will pay the seller
P110,000.00 with interest at 12% per annum, payable as follows:  P25,000.00
upon the signing of the contract and a monthly installment of P1,020.14 payable
on or before the fifth day of each month beginning December 1971 without
necessity of demand until the amount of the purchase price and interest shall
have been fully paid after which ownership would be transferred to the buyer.

Santos paid her
monthly installments to the Consings.  Starting May 1972, however, she defaulted in
her payments.  Consing
sent her several letters of demand to which she did not reply.  On June
28, 1974, counsel for the Consings sent a
final demand letter to Santos
asking her to settle her obligations which by then have accrued to P12,818.61, otherwise, they shall be constrained to resort to
court litigation [Record, p. 12.]

Santos, represented
by a lawyer, manifested her willingness to settle her obligations on the
condition that the Consings comply with all the laws
and regulations on subdivisions and after payment to her of damages as a
consequence of the use of a portion of her lot, more or less 168 sq.m., as
a subdivision road [Record, p. 13.]

Subsequently, on July
26, 1974, the Consings filed an ejectment case against Santos.  After trial, on November 4, 1974, judgment was rendered by Judge Gregorio
de la Paz of the Municipal Court of Marikina in favor
of the Consings.

It appears, however, that on August 22, 1974, with the ejectment case still pending, Santos filed with the then
Court of First Instance (CFI) a complaint for specific performance with damages
against the Consings. 
On March 17, 1975,
the CFI issued a restraining order enjoining the Municipal Court of Marikina from resolving the motion for execution filed by
the Consings in the ejectment
case and from taking further action in said case until further orders from the
CFI [Record, p. 69.]

Also borne out by the record is the criminal complaint filed by Santos
against Merlin Consing charging him with the crime of
Violation of Municipal Ordinance No. 7, Series
of 1964 of Marikina
for contracting to sell to her the two lots in question without first securing
the approval of the Municipal Council of Marikina for
his subdivision plan [Exh. “1”.] On May
21, 1975 this complaint was dismissed by the fiscal on the grounds
of lack of a
prima facie case and
prescription [Exh. “1-b”.]

At about the same time, Consing
submitted his subdivision plan to the Municipal Council of Marikina
for approval.  The council, in turn,
referred the same to the Department of Local Government and Community
Development (DLGCD) in compliance with its Memorandum Circular No. 73-41 of September 7, 1973.  The DLGCD, in its second indorsement
dated March 13, 1975, noted that the “subdivision plan meets in general the
requirements in the subdivision regulations of this Office with respect to lot
areas and lot frontages except the street widths which are not indicated as road lots and which are below the 10 m.
minimum requirement.  It is therefore
recommended that the existing roads should be indicated on the plan as road
lots and the corresponding areas along the sides of the said roads as
corrected, be reserved for future road widening and annotated in the title as
such and should be excluded from the sale of the corresponding affected lots. .
. .” [Exh.
“D”.]

On August 28, 1981,
the CFI rendered judgment finding that although the Consings
may have “corrected the irregularities and/or [have] complied with the
legal requirements for the operation of their subdivision, they cannot escape
their liability to [Santos] for
having sold to her portions of the roads or streets denominated as
right-of-way.  On this ground alone, this
Court believes that [Santos] was
fully justified in refusing to pay further her monthly amortizations.  In the interest of justice, fair play and
equity, this Court believes that there shall be a proportionate reduction of
the purchase price of the two lots corresponding to the area of 168 square
meters, more or less, used as a [right] of way.” [Record, p. 485.] The dispositive portion of the CFI decision reads as follows:

WHEREFORE, judgment is hereby rendered in favor of the plaintiff
(Santos), ordering the defendants (Consings) to allow the plaintiff to continue paying her
monthly amortizations of the two lots in question of the reduced purchase price
of P78,375.68, after deducting whatever amounts were
already paid by her.

Defendants are further ordered to pay the plaintiff the amount of
P10,000.00 as and for attorney’s fees.

The restraining order issued against Municipal Judge Gregorio C. de
la Paz is made permanent.

Plaintiff’s other prayers for relief, as well as
defendants’ counterclaim, are dismissed,
for lack of merit.

With costs against the defendants.

SO ORDERED [Record, p. 486.]

The Consings interposed an appeal to
the Court of Appeals which affirmed the decision of the CFI with modification as to the
computation of the amount to be deducted from the purchase price.  The decretal
portion of the CA decision^[1]
is as follows:

WHEREFORE, the appealed decision is hereby affirmed with the
modification that the reduced purchase price of the property in question should
be, as it is hereby fixed, at P94,312.16 instead of P78,375.68.  Costs against appellants.

SO ORDERED [CA Decision, pp. 12-13.]

From the decision of the Court of Appeals, petitioner-spouses
filed this petition for review citing the following reasons why the decision of
respondent court should be reviewed and their petition allowed:

1. The decision rendered by the respondent Court of Appeals in this
case does not comply with the requirements of Article VIII, section 13, of the
New Constitution;

2. It is arbitrary and there is no law to support Judge Pineda and
the respondent Court of Appeals in holding that when the Consings
constituted a voluntary right of way on Lots 25 and 26, the portions subject to
the right of way ceased to be owned by the Consings
and became streets or road lots which
the Consings have no right to sell;

3. It is arbitrary and contrary to the documented facts for the
respondent Court of Appeals to say that the portions of lots 25 and 26 subject
to a voluntary right of way are actually used as streets or roads even though
it is clearly stated in the lot titles, in the location plans, and in the
contract of sale, that said portions are not streets or roads, but are portions
subject to voluntary right of way, and
in spite of the fact that the subdivision was approved by the Land Registration
Commissioner as a simple
subdivision plan which clearly shows that there are no streets or road lots in
the subdivision.

  It is arbitrary for Judge
Pineda and the respondent Court of Appeals to suppose that the portions of Lots
25 and 26 subject to right of way are streets or road lots and then compute the
value of the said portions in a careless and erroneous manner, deducting
afterwards the value so computed from the P110,000 purchase price; and

 5. There is no legal or
factual basis in ordering the Consings to pay P10,000 attorney’s
fee to Caridad [Rollo, pp.
24-25.]

Thereafter, private respondent, as
required by the Court, filed her Answer/Comment to which petitioners filed
their Reply.  On May 2, 1988 the Court,
after considering the allegations contained, the issues raised and the arguments
adduced in the pleadings submitted by the parties, gave due course to the
petition [Rollo, p. 84.]

Petitioners first raise the issue of the Court of Appeals’
non-compliance with the certification requirement under Art. VIII Sec. 13 of
the 1987 Constitution.

Art. VIII Sec. 13 of the 1987 Constitution provides that:

Sec. 13. 
The conclusions of the Supreme Court in any case submitted to it for decision en banc or in division shall be reached in consultation before the case
is assigned to a Member for the writing of the opinion of the Court.  A
certification to this effect signed by the Chief Justice shall
be issued and a copy thereof attached to the record of the case and served upon
the parties.  Any Member who took no part, or dissented, or abstained from a decision
or resolution must state the reason therefor.  The
same requirements shall be observed by all lower collegiate courts.  [Underscoring supplied.]

The first sentence of this provision outlining the
decision-making process of the Supreme Court is adopted from both the 1935^[2]
and 1973^[3]
Constitutions.  The latter Constitution
further broadened the application of the requirement on the decision-making
process by mandating that this “shall be observed by all inferior
collegiate courts”.

The certification^[4]
requirement, however, is a new provision introduced by the framers of the 1987
Constitution.  Its purpose is to ensure
the implementation of the constitutional requirement that decisions of the
Supreme Court and lower collegiate courts, such as the Court of Appeals, Sandiganbayan and Court of Tax Appeals, are reached after
consultation with the members of the court sitting en banc or in a division before the case is assigned to a member
thereof for decision-writing.  The
decision is thus rendered by the court as a body and not merely by a member
thereof [I Record of the Constitutional Commission 498-500.] This is in keeping
with the very nature of a collegial body which arrives at its decisions only
after deliberation, the exchange of views and ideas, and the concurrence of the
required majority vote.

The absence, however, of the certification would not necessarily
mean that the case submitted for decision had not been reached in consultation
before being assigned to one member for the writing of the opinion of the Court
since the regular performance of official duty is presumed [Sec. 5 (m) of Rule
131, Rules of Court.] The lack of certification at the end of the decision
would only serve as evidence of failure to observe the certification
requirement and may be basis for holding the official responsible for the
omission to account therefore [See I Record of the Constitutional
Commission 460.] Such absence of certification would not have the effect of
invalidating the decision.

The second and third assigned errors of petitioners assail the
decision of the Court of Appeals finding that a portion of Lots 25 and 26, although called a voluntary right
of way, is a subdivision road which they have no right to sell.  The Consings argue
that it is a voluntary easement which they have a right to constitute by virtue
of Art. 619 of the New Civil Code and “[b]y constituting and establishing
a voluntary right of way in said two lots, the portions subject to the
voluntary right of way did not become streets or roads as held by Judge Pineda
and the respondent Court of Appeals; they continue to be the property of the Consings but subject to an encumbrance, i.e. subject to an
easement of right of way.” [Petition, p. 22; Rollo, p. 27.] Further, the Consings contend that “the portions of Lots 25 and 26
subject to voluntary right of way can never be used as streets or road lots
because [their] subdivision plan was approved by the Land Registration
Commissioner as a simple subdivision plan which means that there are no streets
or road lots in the subdivision, otherwise it would not have been approved as
[such].” [Petition, p. 24; Rollo, p. 29.] In
fine, the Consings are alleging that there is no
basis for the reduction in the purchase price of the two lots.

Private respondent Santos
on the other hand, avers that the alleged right of way is actually a
subdivision road.  This road is included in the two lots sold to
her and she is deprived of the use and enjoyment thereof, hence, a reduction in the purchase price of
said lots is in order.

Petitioners’ contentions are devoid of merit.  The evidence on record negates the Consings‘ assertion that the portions subject to the
voluntary easement of right of way are not roads.  It is undisputed that the Consings‘
subdivision plan was approved by the LRC as a simple subdivision which
indicated no streets or roads.  However,
this does not preclude the need for them within the subdivision.  An examination of the Consings‘
subdivision plan reveals that the land is subdivided into 38 lots with the
so-called voluntary right of way cutting across lots 2 and 3, 7 and 6, 8 and 9,
13 and 12, 14 and 15, 19 and 18, 20 and 21, 25 and 24, 26 and 27, 31 and 30, 32
and 33.  The relative position of this
“right of way” vis-a-vis the lots shows
that it is in fact a road without which the subdivision lot buyers would have
no means of access to and from the subdivision.

Moreover, as heretofore stated, when the Municipal Council referred the Consings subdivision plan to the DLGCD, the latter
recommended that the existing roads within the subdivision should be indicated
on the plan as road lots.  In turn, the
Municipal Council of Marikina passed Resolution No.
70 approving the subdivision plan of Mearle Homes,
Inc. subject, however, to several conditions one of which is the subdivision
owner’s compliance with the recommendation of the DLGCD.  On May 19, 1975, Merlin Consing
wrote a letter addressed to the Municipal Mayor and Municipal Council of Marikina wherein he admitted that “the road lots as
shown in the plan originally approved by the Land Registration Commission are
the Right-of-way which are annotated in the corresponding transfer Certificate
of Titles, copies of which were supplied or forwarded to your office.  These are the road lots mentioned. . .” [Exh. “24”.]

In this same letter, Merlin Consing
stated that “the road lots annotated in their corresponding titles ARE NOT
INCLUDED in the sale of the property.” However, the transfer certificates
of title covering lot 25 and lot 26 clearly state the boundaries thereof and
when compared to the Consings‘ subdivision plan would
reveal that the seller sold that portion covered by the right of way to the
buyer.  Further, the “Contract of
Sale” between the parties is specific that the property sold to Santos
includes the voluntary right of way [See
Exh. “11” pertinent portion quoted
in p. 2 of this decision.]

In Lim v. De los Santos [G.R. No. L-18137, August
31, 1963, 8 SCRA 798] the Court had occasion to state one duty of a subdivision lot seller.  In said case the subdivision lot buyers
instituted an action for specific performance with damages to compel the sellers to construct the necessary roads in the subdivision that
would serve as outlets.  The sellers’
motion to dismiss on the ground of lack of cause of action was sustained by the
trial court because the contract to sell between the parties mentioned no
obligation on the part of the defendants to construct roads.  The case reached this Tribunal and in
resolving the issue of whether or not the complaint stated a cause of action,
the Court, speaking through Mr. Justice JBL Reyes, declared that “[t]he
allegations in the complaint that defendant-vendor made representations that ‘she would have constructed (i.e.,
would cause to be built) adequate outlets’ for the lots sold do not strike us
to be so improbable as to justify their being disbelieved de plano.  After
all, a seller’s duty
is to deliver the thing sold in
a condition suitable for its enjoyment
by the buyer for the purposes contemplated
(Sent. Trib. Supremo
of Spain,
17 Nov. 1930),
and proper access to a residence is
essential to its enjoyment. . . . ” [at 802; Underscoring
supplied.]

In the case at bar,
in including as part of Santos’ purchase price the value of the subdivision road,
petitioners have shifted to her the burden of providing for an access to and
from the subdivision.  The Consings have thus failed in their duty as subdivision lot
sellers and for such failure and consequent unfairness and injustice to Santos,
the latter should be entitled to a proportionate reduction in her purchase
price of the two lots.

Petitioner-spouses also allege that the CA erred in its
computation of the amount to be deducted from the purchase price of the
lots.  They contend that respondent court
had no basis when it made its computation and it merely assumed the price to be deducted.

The CFI’s computation deducted from the total purchase price of
P110,000.00 the price per square meter of the lots
multiplied by the total area covered by the right of way which is 168 sq.
m.  In arriving at the price per square
meter of the two lots, the trial court divided the total purchase price by the
total area of the two lots, which is 589 sq.m.

On appeal to the Court of Appeals, the Consings
took exception to this method of computation alleging that the trial court
failed to take into account the value of the bungalow constructed on the lots
and which is part of the contract.  The
Court of Appeals found merit in this allegation and re-computed the price per
square meter of the two lots in the following manner:

. . . There is, however, no evidence
showing the price of the land sold, separately from that of the house erected
thereon.  Be that as it may, it may be
reasonably assumed under the circumstances of the case, that one-half (1/2) of
the price of the property corresponds to the house and the other half to the
lot.  Upon this assumption, the price per
square meter of the land (with a total area of 589 square meters) may be placed at P93.38, and the price of
168 square meters of right of way at P15,687.84 (instead of P31,375.68 stated in the appealed
decision) which is logically and reasonably deductible from the total purchase
price due from the appellee.  In consequence, the total reduced purchase
price of the subject property may be fixed at P94,312.16
(or P110,000.00 minus P15,687.84).  [CA
Decision, p. 11.]

Indeed, the record is bereft of any evidence as regards the price
of the two lots sold to Santos
separately from the price of the bungalow constructed thereon.  The exhibits presented by the parties and
their testimonies do not reveal separate valuations of the bungalow and the two
lots.  Evident therefore is the fact that
the purchase price of P110,000.00 is for both the
bungalow and the two lots sold as one property.  Further, to require the parties to adduce
their respective evidence as to the separate valuations of the properties in
question would only serve to unduly delay the disposition of the case.  Under these circumstances, the Court of
Appeals’ computation that one-half of the purchase price of P110,000.00 corresponds to the value of the bungalow and the
other half to the two lots is both just and fair.  Accordingly, the Court will not disturb the
same.

Finally, petitioners allege that “there is no basis for
awarding attorney’s fees to [private respondent] in this case because the Consings have
not ‘acted in gross and evident bad faith in refusing to satisfy [Santos’]
plainly valid, just and demandable claim’ (Art. 2208, para. 5 of the Civil Code of the Philippines”
[Petition, p. 26; Rollo, p. 31.] The evidence on
record, however, proves otherwise.  While
the Consings have secured the necessary licenses to
operate a subdivision from the Municipal Council of Marikina
and the National Housing Authority they, however, exerted the effort to obtain
them only after private respondent filed a complaint for specific performance against
them.  Moreover, as heretofore mentioned,
petitioner-spouses constituted an alleged “right of way” over the two
lots sold to private respondent which as the evidence on record reveals was
intended to be a subdivision road occupying 168 sq.m. of the total 589 sq.m. of the lots sold.  This conduct on the part of the petitioners
clearly shows gross and evident bad faith, not to mention lack of fairness, for
which reason affirmance of the award of P10,000.00 attorney’s fees in favor of private respondent is in
order.

WHEREFORE, in view of the foregoing, the decision of the
Court of Appeals is AFFIRMED.

SO ORDERED.

Fernan, C.J., Gutierrez, Jr.,
Feliciano, and Bidin,
JJ., concur.

^[1] Penned by Justice Cecilio L. Pe with Justices Desiderio P. Jurado and Antonio M. Martinez concurring.

^[2]
Article VIII Sec. 11.  The conclusions of
the Supreme Court in any case submitted to it for decision shall be reached in
consultation before the case is assigned to a Justice for the writing of the
opinion of the Court.  Any Justice
dissenting from a decision shall state the reasons for his dissent.

^[3] Article X Sec. 8.  The
conclusions of the Supreme Court in any case submitted to it for decision en
banc or in division shall be reached in consultation before the case is
assigned to a Member for the writing of the opinion of the Court.  Any Member dissenting from a decision shall
state the reasons for his dissent.  The
same requirements shall be observed by all inferior collegiate courts.

^[4] In a letter-query dated June 22,
1987 addressed to the then Chief Justice
of the Supreme Court Claudio Teehankee the then
Presiding Justice of the Court of Appeals Carolina Griño-Aquino
manifested that “[i]n a meeting last week of the
chairmen of the present 16 divisions of the Court of Appeals . . . the majority
were for adopting, with slight modification, the forms now used by the Supreme
Court for the “attestation” of the division chairmen, and for the
“certification” of the Chief Justice on the decisions of that
Court.” The Minutes of the CA en banc session on June 26, 1987 reveals that it was only during this time
that the members of the CA agreed that each division can adopt its own
certification as long as the Constitutional requirement is satisfied.  In the same meeting the Presiding Justice
made known her intention to comply with the requirement immediately after her
letter-query is acted upon by the SC.  In
an en banc resolution dated June 23, 1987 (promulgated on June 29, 1987) the SC approved the CA’s proposed
certification.  It is evident therefore
that not until after June 1987 did the Court of Appeals begin to make the
certification required under the 1987 Constitution.  The CA decision in this case was rendered on April 30, 1987.