G.R. No. 76759 March 22, 1990
RAMON A. GONZALES, petitioner, vs. LAND BANK OF THE PHILIPPINES and COURT OF APPEALS, respondents.

FACTS

Ramon A. Gonzales filed an action to compel the Land Bank of the Philippines (LBP) to issue Land Bank bonds directly in his name. He based his claim on a Deed of Assignment executed by Ramos Plantation Company, Inc., through its president, assigning its rights under a specific Land Transfer Claim to Gonzales. The land owned by Ramos Plantation had been brought under the government’s land reform program. The LBP resisted, arguing no privity of contract existed between it and Gonzales, as its policy was to deal solely with the registered landowner to avoid complications in identifying claimants. The parties submitted a partial Stipulation of Facts, which included admissions about the Deed of Assignment and LBP’s approval of the claim, subject to the landowner fulfilling several outstanding requirements.
The Regional Trial Court ruled in favor of Gonzales, ordering LBP to issue the bonds in his name and directing Ramos Plantation to comply with the remaining requirements. The Court of Appeals reversed this decision, dismissing Gonzales’s complaint. It held that even upon compliance with the requirements, the bonds must first be issued in the name of the assignor corporation, which could then endorse them to the assignee. Gonzales elevated the case to the Supreme Court, also questioning the appellate court’s jurisdiction to entertain the appeal.

ISSUE

The primary issues were: (1) whether the Court of Appeals had jurisdiction over the appeal, and (2) whether the LBP could be compelled to issue the bonds directly in the name of the assignee, Gonzales, by virtue of the Deed of Assignment.

RULING

The Supreme Court affirmed the Court of Appeals’ jurisdiction. It ruled that the existence of a stipulation of facts does not automatically confine an appeal to pure questions of law if the stipulation is only partial. The stipulations in this case did not present a complete factual picture, leaving out material details such as LBP’s specific policies on bond issuance. Therefore, the appeal involved mixed questions of fact and law, properly within the appellate court’s jurisdiction.
On the substantive issue, the Court upheld the appellate court’s ruling that the LBP could not be compelled to issue the bonds directly to Gonzales. The Deed of Assignment was a contract between Ramos Plantation and Gonzales; it did not automatically bind the LBP, which was not a party thereto. The principle of relativity of contracts under Article 1311 of the Civil Code dictates that contracts only take effect between the parties, their assigns, and heirs. The LBP’s consistent policy of issuing bonds solely to the registered landowner, a practice designed to ensure orderly processing under the land reform program, was recognized as valid. The Court modified the appellate decision, however, by reinstating the trial court’s directive ordering Ramos Plantation to comply with the bank’s requirements. Upon compliance and release of the bonds in its name, Ramos Plantation was ordered to immediately endorse the bonds to Gonzales as assignee.