[ G.R. No. 55744. February 28, 1985 ] 219 Phil 641
FIRST DIVISION
[ G.R. No. 55744. February 28, 1985 ]
JOSE V. HERRERA, PETITIONER, VS. L.P. LEVISTE & CO., INC., JOSE T. MARCELO, GOVERNMENT SERVICE INSURANCE SYSTEM, PROVINCIAL SHERIFF OF RIZAL, REGISTER OF DEEDS OF RIZAL AND THE HON. COURT OF APPEALS, RESPONDENTS. R E S O L U T I O N
MELENCIO-HERRERA, J.:
Before the Court is petitioner’s Motion, dated July 3, 1981, for the reconsideration of the Resolution of this Court, dated April 1, 1981, denying due course to this Petition for Review on Certiorari for lack of merit. The Motion for Reconsideration was set for oral argument on June 13, 1984, after which, the Court required the parties to submit simultaneously concise memoranda in amplification of their oral arguments. All parties have complied with the Courts directive. Briefly, the antecedent facts may be summarized as follows: On June 10, 1969, L.P. Leviste & Co. (Leviste, for short) had obtained a loan from the Government Service Insurance System (GSIS) in the amount of P1,854,311.50. As security therefor, Leviste mortgaged two (2) lots, one located at Parañaque (the Parañaque Property), and the other located at Buendia Avenue, Makati, with an area of approximately 2,775 square meters, together with the 3-story building thereon (the Buendia Property). On November 3, 1971, Leviste sold to Petitioner, Jose V. Herrera, the Buendia Property for the amount of P3,750,000.00. The conditions were that petitioner would: (1) pay Leviste P1,895,688.50; (2) assume Leviste’s indebtedness of P1,854,311.50 to the GSIS; and (3) substitute the Parañaque property with his own within a period of six (6) months. For his part, Leviste undertook to arrange for the conformity of the GSIS to petitioner’s assumption of the obligation. It was further stipulated in the Contract to Sell that “failure to comply with any of the conditions contained therein, particularly the payment of the scheduled amortizations on the dates herein specified shall render this contract automatically cancelled and any and all payments made shall be forfeited in favor of the vendor and deemed as rental and/or liquidated damages”. Petitioner took possession of the Buendia property, received rentals of P21,000.00 monthly, and collected approximately P800,000.00 from December, 1971, up to March, 1975. However, petitioner remitted a total of only P300,000.00 to the GSIS. On April 15, 1973, petitioner requested the GSIS for the restructuring of the mortgage obligation because of his own arrearages in the payment of the amortizations. GSIS replied that as a matter of policy, it could not act on his request unless he first made proper substitution of property, updated the account, and paid 20% thereof to the GSIS. There was no requirement by the GSIS for the execution of a final deed of sale by Leviste in favor of petitioner. On June 2, 1974, GSIS sent notice to Leviste of its intention to foreclose the mortgaged properties by reason of default in the payment of amortizations. An application for foreclosure was thereafter filed by the GSIS with the Provincial Sheriff of Rizal, and on February 15, 1975, the foreclosed properties were sold at public auction and a Certificate of Sale in favor of the GSIS, as the highest bidder, was issued. On March 3, 1975, Leviste assigned its right to redeem both foreclosed properties to respondent Jose Marcelo, Jr. (Marcelo for brevity). Later, on November 20, 1975, Marcelo redeemed the properties from the GSIS by paying it the sum of P3,232,766.94 for which he was issued a certificate of redemption. The Parañaque property was turned over by Marcelo to Leviste upon payment by the latter of approximately P250,000.00 as disclosed at the hearing. Leviste needed the Parañaque Property as it had sold the same and suit had been filed against it for its recovery. On May 6, 1975, petitioner wrote the GSIS (Exhibit “V”) informing the latter of his right to redeem the foreclosed properties and asking that he be allowed to do so in installments. Apparently, the GSIS had not favorably acted thereon. On May 13, 1975, petitioner instituted suit against Leviste before the Court of First Instance of Rizal for “Injunction, Damages, and Cancellation of Annotation.” On December 20, 1977, the Trial Court rendered its Decision dismissing petitioner’s Complaint for lack of basis in fact and in law, and ordering all payments made by petitioner to Leviste forfeited in favor of the latter pursuant to their contract providing for automatic forfeiture “in the event of failure to comply with any of the conditions contained therein, particularly the payment of the scheduled amortizations.” On appeal, the Appellate Court affirmed the judgment in toto, stating in part:
“It is to be noted that appellee L. P. Leviste and Co., Inc. was not in a financial position to redeem the foreclosed property and there was no assurance that appellant would redeem the property within the period. In this situation, appellee has no other alternative, but to assign the right of redemption to a person willing and capable to assume the same, if only to protect his interest in the said property. Likewise, when the equity to redeem was assigned, appellant could have preserved and protected whatever right he may have to the property by tendering the redemption price to Marcelo. He had up to February 24, 1976, to do so, but he did not. The record established further that appellant did not redeem the property. x x x”[1]
Reconsideration sought by petitioner was met with denial by respondent Appellate Court. Hence, the instant Petition seeking review by Certiorari before this instance. As hereinbefore stated, we denied the Petition for lack of merit. Petitioner seeks reconsideration essentially on the contention that affirmance of the Appellate Court’s Decision would result in patent injustice as he would not only forfeit the Buendia Property to Marcelo, but would also lose the amount of P1,895,688.50 and P300,000.00, which he paid to Leviste and the GSIS, respectively; that it would result in the unjust enrichment of Leviste; and that Leviste as well as the GSIS and Marcelo would be benefiting at petitioner’s expense. Considering the grounds of petitioner’s Motion for Reconsideration, the arguments adduced during the oral argument and in the parties’ respective Memoranda, we resolve to deny reconsideration upon the following considerations:
1. (a) The GSIS has not benefited in any way at the expense of petitioner. What it received, by way of redemption from respondent Marcelo, was the mortgage loan it had extended plus interest and sundry charges. (b) Neither has Marcelo benefited at the expense of petitioner. Said respondent had paid to GSIS the amount P3,232,766.94, which is not far below the sum of P3,750,000.00, which was the consideration petitioner would have paid to Leviste had his contract been consummated. (c) Leviste had neither profited at the expense of petitioner. For losing his Buendia Property, all he had received was P1,854,311.50 from GSIS less amounts he had paid, plus P1,895,688.00 paid to him by petitioner the total of which is substantially a reasonable value of the Buendia Property. 2. It is quite true that petitioner had lost the P1,895,688.00 he had paid to Leviste, plus P300,000.00 he had paid to GSIS, less the rentals he had received when in possession of the Buendia Property. That loss is attributable to his fault in: (a) Not having been able to submit collateral to GSIS in substitution of the Parañaque Property; (b) Not paying off the mortgage debt when GSIS decided to foreclose; and (c) Not making an earnest effort to redeem the property as a possible redemptioner. 3. It cannot be validly said that petitioner had fully complied with all the conditions of his contract with Leviste. For one thing, he was not able to substitute the Parañaque Property with another collateral for the GSIS loan. Moreover, as stated by the Court of Appeals, “nowhere in the letter (of the GSIS) was mentioned that a final deed of sale must first be executed and presented before the assumption may be considered. For if it was really the intention of GSIS, the requirement of Deed of Sale should have been stated in its letter.”
ACCORDINGLY, petitioner’s Motion for Reconsideration is hereby denied. SO ORDERED. Plana, Relova, De la Fuente, and Cuevas*, JJ., concur. Teehankee, J., (Chairman), separate opinion. Gutierrez, Jr., and Alampay, JJ., no part.