GR 130562; (October, 2001) (Digest)
G.R. No. 130562 ; October 11, 2001
BRIGIDA CONCULADA, ET AL., petitioners, vs. HON. COURT OF APPEALS, and SPOUSES KIMTOY JAMAANI-WEE and TIAN SU WEE, respondents.
FACTS
Petitioner Paciano Garcia, Jr., along with his siblings, were co-owners of parcels of land leased to tenants, including respondent spouses Wee. In 1986, Garcia, Jr. and his lawyer, petitioner Atty. Ulka Ulama, announced the sale of the lots, offering the tenants a preferential right to buy. Wee signified interest in purchasing the lot he occupied but requested proof of Garcia, Jr.’s authority to represent the other co-owners. Despite this request, Ulama advised Wee to tender a deposit. Later, Ulama accepted Wee’s P20,000.00 deposit unconditionally. However, in August 1987, Garcia, Jr. and co-owner Henrietta Borja sold the lot (Lot 4) to petitioner Brigida Conculada. Wee refused a refund of his deposit and instead consigned the full purchase price with the court, demanding specific performance.
ISSUE
Whether the Court of Appeals erred in affirming the Regional Trial Court’s decision which upheld the respondents’ preferential right to purchase Lot 4 and ordered the annulment of the subsequent sale to Conculada.
RULING
The Supreme Court affirmed the appellate court’s decision. The legal logic rests on the finality of a prior judicial determination and the enforcement of a co-owner’s contractual obligation. In a previous case (G.R. No. 96450), the Court had already denied a petition challenging the Court of Appeals’ order remanding the case for trial on the merits, which became final and executory. This prior resolution constituted the “law of the case,” binding the parties and precluding re-litigation of the issue of whether Wee’s complaint stated a cause of action. On the substantive merits, the Court upheld the finding that Garcia, Jr. and Ulama, by offering the lot for sale and unconditionally accepting Wee’s deposit, created a binding obligation to honor Wee’s exercise of his preferential right. The subsequent sale to Conculada, made in bad faith as she was aware of the pending litigation and Wee’s claim, was correctly annulled. While the sale to Conculada was rescinded, she was entitled to restitution of the purchase price from the consigned funds upon the execution of the deed of conveyance in favor of Wee. The awards for damages against the petitioners were maintained due to their fraudulent conduct.