Republic of the Philippines



G.R. No. 120107 January 20, 1998

DANILO P. AGUAS, petitioner,


The petition at bar assails the decision of the Court of Appeals in its CA-G.R. SP No. 33283, for being violative of petitioner's right to due process of law, in that said court dismissed his petition for review by resorting to facts not alleged in the petition and worse, for being contrary to those phypothetically admitted by private respondents.

The present controversy arose from the complaint filed by petitioner Danilo P. Aguas before the Regional Trial Court of the Third Judicial Region (Branch 1, Balanga, Bataan) for injunction, annulment of title, and/or conveyance of property, with damages and with prayer for preliminary injunction and restraining order, which was therein docketed as Civil Case No. 6215. Impleaded as defendants were herein private respondents, the spouses Buenaventura and Constancia Gregorio, and the numerous co-owners of the subject parcel of land, namely, the spouses Eduardo and Elenita Anacleto, Violeta, Vic, Lila, Alejandro, Felicitas, Rolando, Daniel, and Efren, all surnamed Anacleto, and the spouses Antonio and Illuminada Gabaya. Likewise included as defendants were the Balanga Rural Bank, Inc., the spouses Rufino J. Reyes and Elsie Rodill, Jose P. Gapas in his capacity as Revenue District Officer No. 17 of the Bureau of Internal Revenue, and the Register of Deeds of Bataan.

In that complaint, the following relevant allegations (which we paraphrase) were made:

Petitioner is the lessee, since 1957, of one of the stalls of a building owned by the Gregorio spouses and their co-owners located at J.P. Rizal Street, Balanga, Bataan. The rented stall houses Dan's Studio, a photo developing center owned by petitioner. On June 25, 1993, petitioner received from private respondent Constancia Gregorio, acting as attorney-in-fact for her other co-owners, a letter informing him that the lot and the building are for sale for P7 million, and that he is being given the preferential right to purchase the property within one month from receipt of the letter, or until July 25, 1993 (pp. 57-58, Rollo).

Before said date, petitioner went to see the Gregorio spouses with an offer of P5 million. The latter told petitioner that they will be going to the USA to discuss the final price with the other co-owners, although they themselves are willing to settle for P6.5 million. Petitioner was thus told to wait for their final decision. On August 19, 1993, petitioner, upon learning that the Gregorio spouses had arrived from the USA, went to them and made another offer of P5.5 million. Petitioner was told that the other co-owners would be in town on the 24th, and so petitioner should just wait and return on said date to know the final price of the property (pp. 58-59, Ibid.).

The following day, however, petitioner learned from private respondent Felicitas Anacleto that the spouses Antonio and Iluminada Gabaya had paid the Gregorio spouses P1 million as earnest money for the purchase of said lot and building. Petitioner and his mother thus went to see Iluminada Gabaya, who in turn showed mother and son an agreement dated June 29, 1993, a mere four days after petitioner received the letter giving him preference in the purchase of the property, stating that the Gregorio spouses had agreed to sell the property for P5 million to the Gabaya spouses, with P1 million as earnest money. The agreement, however, did not state how the balance of P4 million was to be paid (pp. 59-60, Ibid.).

On September 28, 1993, petitioner received a letter from the Balanga Rural Bank informing him that the bank had purchased the property from the Gabaya spouses and will start the construction of new building on said lot on January 1994. Hence, petitioner was asked to vacate the premises by December 31, 1993. Petitioner, upon learning of these transactions went to the Bataan District Revenue Office of the Bureau of Internal Revenue and to the Office of the Registrar of Deeds of Bataan to inquire about said transactions. His informal and formal requests were granted only after several repeated attempts to get a copy of the pertinent documents. From these, he found that the consideration in the two transactions were similarly P800,000.00. As a result of the foregoing, TCT No. T-48239 in the name of private respondents Anacletos was canceled in lieu of TCT No. T-158979 in the name of the Gabaya spouses, which later was also canceled and new ones issued, TCT No. T-159406 and 159407, to private respondent Reyes (pp. 62-65, Ibid.).

Petitioner further alleged that there was a conspiracy among the co-owners, as evidence by the fictitious deeds of sale and as further reflected by the gross undervaluation of the lot, to deprive him of his right to buy the property. The Revenue District Officer and the Register of Deeds were named defendants for processing the fictitious and unauthorized documents which facilitated the transactions over the scandalously undervalued properties (pp. 66-67, ibid.).

The trial court issued a temporary restraining order but held back regarding the preliminary injunction. On January 4, 1994, petitioner's motion to effect extrajudicial service on the non-resident defendants was granted. However, it appears that no such service has been effected. On January 6, 1994, petitioner filed an ex-parte motion to declare all duly summoned but non-answering defendants in default, as only the Revenue District Officer filed an answer. However, that same day, the Bank, the Reyes spouses, and the Gabaya spouses filed a motion to dismiss the complaint on the ground that, hypothetically admitting petitioner's material allegations, it states no cause of action. The motion was set to be heard on January 21, 1994 (pp. 19-21, Ibid.).

On January 10, 1994, upon information that Presiding Judge Benjamin Vianzon is an acquaintance of the Bank's president and the Register of Deeds, petitioner filed a motion to inhibit the trial court judge. However, an order dated January 7, 1994 was forthwith released, denying petitioner's prayer for the issuance of a preliminary injunction, of which he later sought reconsideration. On January 17, 1994, petitioner filed a motion for the early resolution of the motion to inhibit as it was prejudicial to all other matters before the court. On January 21, 1994, petitioner received a copy of the complaint for ejectment filed by the Bank with the Municipal Trial Court of Balanga, Bataan. On January 25, 1994, petitioner received a copy of the motion to dismiss filed by the Gregorio spouses, stating that petitioner's complaint states no cause of action and that his claim is unenforceable for being violative of the statute of frauds. On January 25, 1994, petitioner's motion for inhibition was denied for lack of merit (pp. 22-25, Ibid.).

Worried about such developments, particularly the ominous resolution of the motion to dismiss despite protestations regarding the judge's impartiality, and mindful that he has yet to file a motion for reconsideration of the orders denying preliminary injunction and inhibition, petitioner nonetheless filed before respondent Court of Appeals a petition for certiorari, prohibition, and mandamus alleging that the trial court judge's actuations constitute grave abuse of discretion (p. 26, Ibid.).

The Court of Appeals, in dismissing the petition, delved extensively on the issue of petitioner's right to enforce what he believes to be his preferential right to buy the subject property. It ruled that the June 25, 1993 letter created no binding agreement because of the absence of any consideration separate and distinct from the price of the property, contrary to what is required by Article 1479 of the Civil Code, which states:

Art. 1479. A promise to buy and sell a determinate thing for a price certain is reciprocally demandable.

An accepted unilateral promise to buy or to sell a determinate thing for a price certain is binding upon the promissor if the promise is supported by a consideration distinct from the price.

Furthermore, the Court of Appeals continued, as admitted by petitioner, there was no absolute acceptance of the offer because he made a counter-offer of P5 million, and eventually P5.5 million. Thus, there was no meeting of the minds in the first place. Hence, having no right to the subject property, petitioner cannot speak of private respondents having committed fraud and abuse of confidence, trust and right. The Court of Appeals, therefore, denied petitioner's prayer for the issuance of a temporary restraining order, along with his prayer that the non-answering defendants be declared in default. Regarding respondent judge's inhibition, the same was pronounced moot and academic in view of respondent judge's order inhibiting himself from the case (pp. 234-238, Ibid.).

His motion for reconsideration having been thereafter denied, petitioner is now before us seeking reversal of the Court of Appeals' decision for being violative of his right to due process of law and for not being in accord with applicable law and jurisprudence. It is petitioner's stand that it was error for the appellate court to rule on the issue of whether or not he had a cause of action against respondent co-owners of the subject property. Precisely, private respondents filed a motion to dismiss on the ground that the complaint states no cause of action, wherein they hypothetically admitted the material allegations of the complaint, which said facts are now controlling in the case at bar. Resorting to facts beyond those which have been admitted, without the benefit of a trial on the merits, constitutes denial of due process of law (pp. 42-45, Ibid.).

Also, petitioner contends that his prayer for the trial judge's inhibition was not rendered moot and academic because respondent Court of Appeals was referring to an entirely different case (Civil Case No. 6140) when it said that respondent judge had already inhibited himself. He then reiterates the ground for the judge's inhibition (p. 36, Ibid.).

Lastly, petitioner observes, respondent Court of Appeals was silent regarding respondent judge's failure to declare in default, upon proper motion, those who failed to file their answer (p. 50, Ibid.).

After the petition was given due course, petitioner received an order issued by respondent judge setting Civil Case No. 6215 for hearing on July 4, 1997. Petitioner immediately filed a motion before us seeking a stop to the proceedings. This was granted by the Court in a resolution dated July 2, 1997 restraining respondent judge from proceeding with the hearing as scheduled (pp. 220-228, Ibid.)

It should be obvious that the petition for certiorari, prohibition and mandamus filed before respondent appellate court was premature, insofar as it relates to the motion to dismiss which has yet to be resolved. There was no order denying or granting the motion. Thus, there was really nothing to review insofar as the presence or absence of petitioner's cause of action is concerned. Petitioner's apprehension that it will be granted does not alone make it ripe for review by the Court of Appeals. There was no justiciable issue yet. Thus, it was error for the Court of Appeals to rule that the complaint, from the facts alleged by petitioner and hypothetically admitted by private respondents, does not state a cause of action.

The only order that was issued and thus reviewable was the order issued by respondent Judge Vianzon denying petitioner's motion for inhibition. The Court of Appeals, quoting an order issued by Judge Vianzon dated November 19, 1993, held that petitioner's motion to inhibit the judge had been rendered moot and academic in view of the said order granting the motion and ordering that the case be raffled to another sala. Petitioner, in his motion for reconsideration, called respondent appellate court's attention to the fact that the order referred to another case (Civil Case No. 6140) and not to the case in dispute (Civil Case No. 6215). Even so, petitioner was ignored, and that his error.

The quoted order is dated November 19, 1993. The complaint is dated December 6, 1993. The motion for inhibition itself was dated January 6, 1994. It is clear, therefore, that the Court of Appeals had overlooked this matter.

That settled, the only remaining issue to be resolved is whether respondent judge should continue presiding over the proceedings in Civil Case No. 6215. Without necessarily lending full merit to petitioner's allegations, in order to expedite matters, it is best that Civil Case No. 6215 be tried by another judge. Petitioner, in his motion, alleged that respondent judge is acquainted with or a friend of the Register of Deeds of Balanga, Bataan, one of the private respondents, and certain officers of respondent Balanga Rural Bank. Also, petitioner feels that the denial of his application for a writ of preliminary injunction, despite the absence of any opposition thereto, and the finding that he is not entitled to any relief prayed for in his complaint, is indicative of bias. In the order denying his inhibition, respondent judge admitted being acquainted with the Register of Deeds, who incidentally is merely a nominal party, because they have been officials of Bataan, in different capacities, for 15 years, and to inhibit himself on such ground alone would leave him perhaps with no cases at all to try, knowing practically all elective and appointive officials of Bataan, not to mention his townmates who also have pending cases before him. In his memorandum, petitioner further alleges that respondent judge also conducts private business with the Register of Deeds in connection with the titling of real estate. Lastly, petitioner is of the opinion that respondent judge's order setting the case for hearing, despite his petition having been given due course, shows respondent judge's partiality (pp. 148-149, 232-237, Ibid.)

If only to forestall any more unwarranted delays in the resolution of this case, Judge Vianzon's inhibition is called for. Aside from being in fact impartial, dispassionate, objective, and unbiased, a judge also ought to appear to be so, not only to litigants but to the public as well. Impropriety, including the appearance of it, should at all times be avoided.

The judge's decision to continue hearing a case, in which he is not legally prohibited from trying notwithstanding the challenge to his objectivity, may not constitute reversible error, except where the case has generated strained personal relationship, animosity and hostility between a party or his counsel and the judge that the former has lost confidence in the judge's impartiality or the latter is unable to display the cold neutrality of an impartial judge.

(Agpalo, Ruben E. Legal Ethics, 4th ed. 1989, p. 459 citing Villapando v. Quitain, 75 SCRA 24 and Tuazon v. Cruz, 66 SCRA 235).

Furthermore, while we agree with respondent judge that mere acquaintance with a nominal party such as the Register of Deeds is innocuous and should not automatically warrant inhibition, it is quite a different matter when, as petitioner has alleged, he has private dealings, with supposedly economic benefits, with a party to a case pending before him. To facilitate the administration of justice, especially so in this case, which in four years has yet to reach the pre-trial stage, the Court orders that upon being demanded, Civil Case No. 6215 should be reraffled and heard by another judge.

Regarding the issue of the failure to declare in default of the non-answering defendants, that matter should be resolved, and with dispatch, in the proceedings hereby ordered in the trial court.

WHEREFORE, premises considered, the assailed decision is hereby reversed and set aside, and a new one is entered making permanent this Court's order of July 2, 1997 restraining Judge Benjamin Vianzon from further proceeding with Civil Case No. 6215. Civil Case No. 6215 is remanded to the trial court for further proceedings, including the holding of another raffle.


Narvasa, C.J., Romero, Francisco and Panganiban, JJ., concur.

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