Gentlemen:

Quoted hereunder, for your information, is a resolution of this Court dated JUN 30 2003.

G.R. No. 123672 (Fernando Carrascoso, Jr. vs. Court of Appeals, Lauro Leviste and El Dorado Plantation, Inc.)

Being assailed in the present petition for review on certiorari is the January 31, 1996 Decision[1] of the Court of Appeals in CA-G.R. CV No. 32121 which reversed the January 28, 1991 Decision[2] of the Regional Trial Court of San Jose, Occidental Mindoro.

On March 15, 1977, private respondents El Dorado Plantation, Inc. (El Dorado) and Lauro Leviste, now deceased, filed a complaint[3] for the rescission of a contract of sale executed on March 23, 1972 between private respondent El Dorado as vendor and petitioner Fernando Carrascoso, Jr. as vendee covering a 1,825-hectare parcel of land (subject property) before the RTC of San Jose, Occidental Mindoro, docketed as Civil Case No. R-226, praying that Transfer Certificate of Title No. T-6055 in the name of petitioner over the subject property be cancelled and Transfer Certificate of Title No. T-93 be revived in the name of El Dorado. Private respondents likewise prayed that petitioner be ordered to reconvey the ownership of the subject property to El Dorado upon return of the amount he paid by either of the private respondents or their representatives and that he be ordered to render an accounting of the fruits of the property from the time of the execution of the contract of sale up to the return of possession, and to turn over the fruits or the equivalent thereof, to El Dorado.

On July 1, 1975, petitioner and the Philippine Long Distance Telephone Company (PLDT) entered into a contract to sell 1,000 hectares of the subject property.

On April 6, 1977, petitioner sold to PLDT the 1,000 hectare-portion of the subject property which in turn sold the same on May 30, 1977 to its subsidiary, the Philippine Long Distance Telephone Agricultural Corporation (PLDTAC).

On March 16, 1977, El Dorado had a Notice of Lis Pendens registered on petitioner’s title to the subject property.

On July 25, 1978, PLDT and PLDTAC filed a Motion for Intervention[4] in the complaint of private respondents which was granted by the trial court, following which they filed an Answer in Intervention[5] dated October 20, 1978.

In their answer in Intervention, PLDT and PLDTAC alleged that they were purchasers in good faith and for value and thus acquired full ownership, possession and absolute control of the 1,000 hectare-portion of the subject property; and that private respondents knew of the contract to buy and sell executed by them and petitioner on July 1, 1975, following which they (PLDT and PLDTAC) had taken possession and exercised exclusive rights of ownership over that portion through agricultural development or prior registration of the notice of lis pendens on the title to the subject property.

The trial court, by Decision of January 28, 1991, dismissed the complaint on the ground that it was prematurely filed holding, however, that PLDT and PLDTAC’s acquisition of the 1,000 hectares of the property was subject to the notice of lis pendens. Not satisfied therewith, PLDT, PLDTAC and private respondents filed separate appeals with the Court of Appeals.

By the assailed Decision of January 31, 1996, the appellate court reversed the decision of the trial court and disposed of the case as follows:

WHEREFORE, not being meritorious, PLDT’s/PLDTAC’s appeal is hereby DISMISSED and finding El Dorado’s appeal to be impressed with merit, we REVERSE the appealed Decision and render the following judgment:

1. The Deed of Sale of Real Property (between El Dorado and Fernando Carrascoso, Jr.) is hereby rescinded and TCT No. T-12480 is cancelled while TCT No. T-93 is reactivated.

2. Fernando Carrascoso, Jr. is commanded to:

2.1. return possession of the 825 (hectare) remaining portion of the land to El Dorado Plantation, Inc. without prejudice to the landholdings of legitimate tenants thereon;

2.2. return the net fruits of the land to El Dorado Plantation, Inc. from March 23, 1972 to July 11, 1975, and of the 825-hectare-remaining “portion minus the tenants’ landholdings, from July 11, 1975 up to its delivery to El Dorado Plantation, Inc. including whatever he may have received from the tenants if any by way of compensation under the Operation Land Transfer or under any other pertinent agrarian law;

2.3. Pay El Dorado Plantation, Inc. an attorney’s fee of P20,000.00 and litigation expenses of P30,000.00;

2.4. Return to Philippine Long Distance Telephone Company/PLDT Agricultural Corporation P3,000,000.00 plus legal interest from April 6, 1977 until fully paid;

3. PLDT Agricultural Corporation is ordered to surrender the, possession of the 1,000-hectare Farm to El Dorado Plantation, Inc.;

4. El Dorado Plantation, Inc. is directed to return the P500,000.00 to Fernando Carrascoso, Jr. plus legal interest from March 23, 1972 until fully paid. The performance of this obligation will however await the full compliance by Fernando Carrascoso, Jr. of his obligation to account for and deliver the net fruits of the land mentioned above to El Dorado Plantation, Inc.

5. To comply with paragraph 2.2 herein, Carrascoso is directed to submit in the court a quo a full accounting of the fruits of the land during the period mentioned above for the latter’s approval, after which the net fruits shall be delivered to El Dorado Plantation, Inc.

SO ORDERED.[6]

Hence, this petition, petitioner praying that the Decision of the Court of Appeals dated January 31, 1996 be reversed and set aside and that the Decision of the Regional Trial Court be affirmed except with respect to its finding that the acquisition by PLDT and PLDTAC of 1,000 hectares of the subject property is subject to the notice of lis pendens.

On May 31, 1996, PLDT and PLDTAC filed their Comment[7] on this Petition and prayed that the Court render judgment finding them to be purchasers in good faith of the 1,000 hectare-portion of the subject property, thus entitling them to its possession and ownership, together with all the improvements they built thereon. Reiterating ‘that they were not purchasers pendente lite, they aver that private respondents had actual knowledge of their interests in the portion of the property they bought prior to the registration of the notice of lis pendens to thereby render the notice ineffective.

On August 26, 1996, private respondents El Dorado and the ‘Heirs of Lauro Leviste; both represented by Conrad C. Leviste, filed their Comment[8] praying that this petition be dismissed for lack of merit and that the Decision of respondent appellate court be modified so that paragraph 6 of the dispositive portion should read as follows:

6. El Dorado Plantation, Inc. should inform Philippine Long Distance Telephone Co. and PLDT Agricultural Corporation in writing within ten (10) days after finality of this decision regarding the exercise of its option under Arts. 449 and 450 of the civil Code, without right to indemnity on the part of the latter should the former decide to keep improvements under Article 442. (Underscoring supplied)[9]

On January 28, 1999, PLDT and PLDTAC filed a Manifestation[10] stating that they had earlier filed a Motion for Reconsideration[11] dated February 22, 1996 of the Decision of the appellate court and that they did not intend to abandon it unless so directed by this Court.

PLDT and PLDTAC explained that they filed their Comment to the present petition in compliance with the Resolution[12] of this Court dated April 24, 1996 directing the respondents to comment on the petition and that they did not therein indicate the pendency of their Motion for Reconsideration before the appellate court as the “focus of [their] attention was solely directed towards complying with the said Resolution.[13]

In his Comment[14] on PLDT and PLDTAC’s Manifestation dated July 26, 1999, petitioner suggests that the parties await the resolution of the appellate court on the Motion for Reconsideration to avoid multiplicity of suits.

On July 26, 1999, private respondents filed their Comment[15] on the abovesaid Manifestation, stating that they “are not aware of the Motion for Reconsideration filed in the Court of Appeals by PLDT and PLDTAC as no copy thereof was served upon it, unless it was served upon their former counsel, who has been dead for over three of four years.[16]

As the issues raised in this petition and those raised by PLDT and PLDTAC in their Motion for Reconsideration before the appellate court are inextricably interwoven, a decision on the petition would necessarily delve on issues duly raised in the motion. Hence, the need for the Court of Appeals to resolve PLDT & PLDTAC’s motion before this Court proceeds to decide this petition. Decision on this petition is thus held in abeyance.

WHEREFORE, the Court of Appeals is hereby ordered to resolve PLDT & PLDTAC’s Motion for Reconsideration dated February 22, 1996 in CA-G.R. No. CV 32121 within thirty (30) days from receipt of this Resolution.

In the meantime, decision on the present petition is held in abeyance.

SO ORDERED.

Very truly yours,

(Sgd.) JULIETA Y. CARREON

Clerk of Court