20 SUPREME COURT REPORTS ANNOTATED
Gonzales vs. Land Bank of the Philippines
*
G.R. No. 76759. March 22, 1990.
RAMON A. GONZALES, petitioner, vs. LAND BANK OF THE PHILIPPINES and COURT
OF APPEALS, respondents.
Remedial Law; Appeal; The appeal to the Court of Appeals resorted to by respondent bank and
assailed by petitioner is proper because it involved not only pure questions of law but mixed questions of
law and fact.—A perusal of the aforementioned Stipulation and Supplemental Stipulation of Facts dated
July 29, 1985 and September 10, 1985, respectively, readily reveals that the same do not contain a
complete or sufficient picture of the circumstances among the parties and that certain vital matters are
left out in said stipulations, i.e., the significant policy of the Land Bank to issue its bonds directly and
only in the name of the landowners; and the fact that there are different stages in the release of
payments under the operation land transfer program with each stage having different requirements that
have to be complied with by the landowner in order to be entitled to payment under a land transfer
claim. In view of these omissions in the Stipulations, the remedy of appeal before the appellate court
resorted to by respondent bank and assailed by petitioner is proper because it involved not only pure
questions of law but mixed questions of law and fact.
Civil Law; Assignment; An assignee cannot acquire a greater right than that pertaining to the
assignor.—There is indeed no question that petitioner stepped into the shoes of his assignor, the
defendant corporation. But petitioner overlooked the fact that when the corporation assigned its rights to
him under Land Transfer Claim No. 82-757, the same was subject to the rules and restrictions imposed
by respondent Land Bank on the matter of assignment of rights. In the promulgation of said rules and
regulations, the Land Bank relied on the provisions of Section 76, R.A. 3844 as amended by P.D. 251,
which specifically provides: x x x “Sec. 76. Issuance of Bonds. x x x. The Board of Directors shall have the
power to prescribe rules and regulations for the issuance, reissuance, servicing, placement and
redemption of the bonds herein authorized to be issued as well as the registration of such bonds at the
request of the holders thereof.” The act of assignment could not operate to erase liens or restrictions
burdening the right assigned. The assignee cannot, after all, acquire a greater right than that pertaining
to the assignor.
________________
* THIRD DIVISION.
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VOL. 183, MARCH 22, 1990 521
Gonzales vs. Land Bank of the Philippines
Administrative Law; Rule that administrative regulations and policies enacted by administrative
bodies to interpret the law which they are entrusted to enforce have the force of law and are entitled to
great respect.—It is an elementary rule in administrative law that administrative regulations and
policies enacted by administrative bodies to interpret the law which they are entrusted to enforce have
the force of law and are entitled to great respect. They have in their favor a presumption of legality.
PETITION for certiorari to review the decision of the Court of Appeals.
The facts are stated in the opinion of the Court.
Ramon A. Gonzales for and in his own behalf.
Manuel P. Tiaoqui and Florencio S. Jimenez for respondent Land Bank of the
Philippines.
FERNAN, C.J.:
This petition for review on certiorari seeks to reverse and set aside the December 2, 1986
decision of the Court of Appeals, reversing the decision of the trial court and in effect denying
the direct issuance of Land Bank bonds in the name of herein petitioner as assignee thereof.
On the strength of a Deed of Assignment executed on August 8, 1981 by Ramos Plantation
Company, Inc. (hereafter referred to as the corporation) through its president, Antonio Vic
Zulueta, assigning its rights under Land Transfer Claim No. 82-757 unto petitioner Ramon A.
Gonzales, the latter filed an action before the Regional Trial Court of Manila, Branch LI
entitled “Ramon A. Gonzales, plaintiff, vs. Land Bank of the Philippines and Ramos
Plantation Company, Inc., defendants” docketed as Civil Case No. 84-24461 to compel public
respondent Land Bank of the Philippines to issue Land Bank Bonds for the amount of
P400,000.00 in the name of petitioner instead of in the name of the aforesaid corporation as
the original and registered owner of the property covered by Transfer Certificate of Title No.
T-28755 situated in La Suerte, Malang, North Cotabato with a total area of 251.4300 hectares,
which had been brought under the land transfer program of the government.
Defendant corporation was declared in default for failure to file its answer within the
reglementary period while defendant
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522 SUPREME COURT REPORTS ANNOTATED
Gonzales vs. Land Bank of the Philippines
Land Bank filed an answer alleging that the complaint states no cause of action since there is
no privity of contract between plaintiff and itself and that it deals only with the landowner
whose land was subjected to operation land transfer of the government under Presidential
Decree No. 27 in order to save time and effort in ascertaining the identities of additional
claimants.
At the pre-trial, the parties submitted a Stipulation of Facts dated July 29, 1985
(subsequently supplemented on September 10, 1985) praying that judgment be rendered on
the basis thereof. In the aforesaid stipulation dated July 29, 1985, the following admissions
and submissions were made: the execution of the Deed of Assignment; the fact that the
corporation’s president, Antonio Vic Zulueta, wrote defendant bank requesting the latter to
issue the payment for the real property covered by TCT No. T-28755 through Land Bank
Bonds amounting to P400,000.00 in the name of petitioner by virtue of the Deed of
Assignment with the Board Resolution attached to said letter; that on June 30, 1982,
defendant bank through its manager, Mr. Ceferino A. Pacio of the Land Transfer Operation
Department, wrote back informing the Ramos Plantation, Inc. that it has approved its Land
Transfer Claim No. 82-757 in the aggregate amount of P565,717.50 payment of which is
subject to the submission and/or accomplishment of the requirements of defendant bank; that
said corporation failed to comply with 1
nine (9) of the requirements of defendant bank as
contained in Annexes “C-1” and “C-2”.
On the other hand, the aforesaid Supplemental Stipulation of Facts dated September 10,
1985 provided that out of the 9 requirements for the first release in Annex “C-1” of2 the
stipulation of facts dated July 29, 1984, only
3
6 requirements have not been complied with.
In a decision dated October 15, 1985, the lower court found the plaintiff entitled to the
issuance of the Land Bank bonds, stating thus:
________________
1 Rollo, pp. 70-71.
2 Rollo, pp. 72-73.
3 Rollo, pp. 32-35.
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VOL. 183, MARCH 22, 1990 523
Gonzales vs. Land Bank of the Philippines
“WHEREFORE, defendant Land Bank of the Philippines is hereby ordered to issue in the name of
Ramon A. Gonzales P400,000.00 worth of land bank bonds deducted from the P509,000.00 Land Bank
bonds payable to Ramos Plantation Company, Inc. under claim No. 82-757 with the directive to the
defendant land-owner Ramos Plantation Company, Inc. to comply with the six (6) requirements listed in
paragraph 4
1 of the Supplemental Stipulation of Facts dated September 10, 1985. No pronouncement as
to costs.”
Defendant-appellant Land Bank of the Philippines filed an appeal before respondent Court of
Appeals resulting in the reversal of the trial court’s decision and the dismissal of the
complaint filed therein on the ground that even if there was compliance with the remaining six
(6) requirements by defendant Ramos Plantation, Inc. still, the Land Bank bonds will have to
be issued in the name of the said corporation and not to plaintiff-appellee.
5
It is only thereafter
that Ramos Plantation Co., Inc. may indorse the same to plaintiff.
Petitioner now comes to Us on appeal by certiorari to set aside the decision of respondent
appellate court with these arguments: that respondent Court of Appeals acted without
jurisdiction in resolving the appeal inspite of the motion to certify this case to the Supreme
Court; that respondent Court of Appeals palpably erred in finding that the Deed of
Assignment is not effective to authorize LBP to issue the Land Bank Bonds in the name of
petitioner; that respondent Court of Appeals palpably erred in holding that petitioner is not
entitled to P400,000.00 worth of Land Bank Bonds upon compliance with the remaining six (6)
requirements for the first release thereof.
We reduce the issues to two: whether the appellate court had jurisdiction to entertain the
appeal of respondent Land Bank; and whether respondent Land Bank can be compelled to
issue Land Bank bonds in the name of petitioner by virtue of the Deed of Assignment executed
by the landowner-assignor Ramos Plantation Company, Inc. in favor of petitioner.
On the issue of lack of jurisdiction, petitioner vigorously asserts that since the trial court
rendered judgment on the
________________
4 Rollo, pp. 34-35.
5 Rollo, p. 30.
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524 SUPREME COURT REPORTS ANNOTATED
Gonzales vs. Land Bank of the Philippines
basis of the stipulation of facts submitted by the parties, the appeal from such a decision can
only raise questions of law and therefore, respondent Land Bank should have gone directly to
the Supreme Court on a petition for certiorari.
We do not fully subscribe to petitioner’s contention, for as correctly observed by the Solicitor
General, the existence of a stipulation of facts between the parties does not automatically
mean that
6
the parties agreed on all the facts considering that stipulations may be total or
partial. In this instance, it was merely partial.
A perusal of the aforementioned Stipulation and Supplemental Stipulation of Facts dated
July 29, 1985 and September 10, 1985, respectively, readily reveals that the same do not
contain a complete or sufficient picture of the circumstances among the parties and that
certain vital matters are left out in said stipulations, i.e., the significant policy of the Land
Bank to issue its bonds directly and only in the name of the landowners; and the fact that
there are different stages in the release of payments under the operation land transfer
program with each stage having different requirements that have to be complied with by the
landowner in order to be entitled to payment under a land transfer claim. In view of these
omissions in the Stipulations, the remedy of appeal before the appellate court resorted to by
respondent bank and assailed by petitioner is proper because it involved not only pure
questions of law but mixed questions of law and fact.
On the more substantive issue of whether public respondent Land Bank may be compelled
to honor the subject deed of assignment, it will be noted that respondent bank in denying the
issuance of the bond in the name of the petitioner-assignee was guided by Resolution No. 75-
68 entitled “PROPER PARTIES TO RECEIVE LAND TRANSFER PAYMENT” promulgated
purposely to govern, among others, the issuance of Land Bank Bonds to assignees by virtue of
Deeds of Assignment.
Thereunder the Land Bank can only issue bonds in the name of the assignor-landowner. It
is only after the issuance of bonds in the landowner’s name that he shall be required to make
the necessary indorsement of the bonds to his assignee. This is in
________________
6 Rollo, p. 104.
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VOL. 183, MARCH 22, 1990 525
Gonzales vs. Land Bank of the Philippines
consonance with the Land Bank’s policy to deal primarily 7with the landowners in order to save
time and effort in ascertaining the identities of claimants. 8
However, petitioner relying on the provisions of Article 1311 of the Civil Code, maintains
that by virtue of said deed, he stepped into the shoes of his assignor and acquired all the rights
of the latter and it was error on the part of the appellate court to find that the aforesaid Deed
of Assignment is not effective to authorize the Land Bank of the Philippines to issue the Land
Bank Bonds in the name of petitioner upon compliance with the remaining six (6)
requirements for the first release thereof.
There is indeed no question that petitioner stepped into the shoes of his assignor, the
defendant corporation. But petitioner overlooked the fact that when the corporation assigned
its rights to him under Land Transfer Claim No. 82-757, the same was subject to the rules and
restrictions imposed by respondent Land Bank on the matter of assignment of rights.
In the promulgation of said rules and regulations, the Land Bank relied on the provisions of
Section 76, R.A. 3844 as amended by P.D. 251, which specifically provides:
“Sec. 76. Issuance of Bonds. x x x. The Board of Directors shall have the power to prescribe rules and
regulations for the issuance, reissuance, servicing, placement and redemption of the bonds herein
authorized to be issued as well as the registration of such bonds at the request of the holders thereof.”
The act of assignment could not operate to erase liens or restrictions burdening the right
assigned.9 The assignee cannot, after all, acquire a greater right than that pertaining to the
assignor.
Thus, when Ramos Plantation Company, Inc. assigned its rights, title and interest in Land
Transfer Claim No. 82-757 for
________________
7 Rollo, pp. 107-108.
8 Article 1311 reads: “Contracts take effect only between the parties, their assigns and heirs, except in cases where
the rights and obligations arising from the contract are not transmissible by their nature, or by stipulation or by
provision of law. x x x”
9 PNB v. General Acceptance and Finance Corporation, et al., G.R. No. 30751, May 24, 1988, 161 SCRA 449.
526
526 SUPREME COURT REPORTS ANNOTATED
Gonzales vs. Land Bank of the Philippines
the amount of P400,000.00 in favor of petitioner Ramon A. Gonzales, the latter acquired the
same subject to the restrictions
10
on assignment of rights embodied in Resolution No. 75-68
dated February 25, 1975 passed by the Board of respondent Land Bank of the Philippines,
the pertinent provision of which reads:
“4. In Assignment of Rights entered into by landowners vesting upon the Assignee the right to receive
full or partial payment from the Land Bank pursuant to land transfer, the same, if found valid in form
and substance, shall be recognized by the Land Bank. Whenever practicable, Land Bank bonds issued
therefor must be made payable to the Assignor-Landowner who shall be required to make the necessary
indorsement of said bonds to the Assignee. In case the cash portion is the one assigned, the check in
payment thereof shall be issued to the original landowner who shall be required to make the
indorsement to the Assignee. Thus, for record purposes, it will appear that payment was directly to the
landowner concerned and who, by reason of the Assignment, has caused the necessary indorsement of
the bonds and/or check, as the case may be, to the Assignee.”
It is an elementary rule in administrative law that administrative regulations and policies
enacted by administrative bodies to interpret the law which they are entrusted to enforce have
the force11 of law and entitled to great respect. They have in their favor a presumption of
legality.
This Court is in total agreement with respondent appellate court’s finding that it must be
the Ramos Plantation Company, Inc. which should comply with all the requirements imposed
by respondent bank to effect the release of payments under land transfer claims because of the
restriction that the bonds will only be released in the name of the landowner-assignor
corporation which may thereafter indorse the same to petitioner. In fact, in the decision of the
trial court, Ramos
12
Plantation Company, Inc. was directed to comply with the six (6)
requirements listed in paragraph 1 of the Supplemental Stipulation
________________
10 Rollo,pp. 86-87.
11 Español v. Chairman, PVA, 137 SCRA 315 (1986).
12 The six (6) requirements listed in paragraph 1 of the Supplemental Stipulation of Facts dated September 10,
1985 are:
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VOL. 183, MARCH 22, 1990 527
Gonzales vs. Land Bank of the Philippines
of Facts dated September 10, 1985. Since no appeal was taken by Ramos Plantation Company,
Inc. from said decision, said directive has become final and executory.
However, the decision of the appellate court dismissing the complaint of petitioner had the
effect of reversing said directive, thereby leaving petitioner without legal authority to compel
Ramos Plantation Company, Inc. to comply with the requirements of the Land Bank for the
release of the bonds and thereafter to endorse the same to petitioner as assignee thereof. The
decision of the appellate court should therefore be, as it is hereby, modified accordingly.
WHEREFORE, the decision of the appellate court is hereby MODIFIED. The directive to
Ramos Plantation Company, Inc. contained in the lower court’s decision is reinstated. Ramos
Plantation Company, Inc. is ordered to comply within thirty (30) days from notice with the six
(6) requirements listed in paragraph 1 of the Supplemental Stipulation of Facts dated
September 10, 1985, and as soon as the bonds are released in its name, to immediately
endorse the same to petitioner as assignee thereof.
SO ORDERED.
Gutierrez, Jr., Feliciano, Bidin and Cortés, JJ., concur.
Decision modified.
________________
1) Due Execution of Deed of Assignment, Warranties and Undertaking;
2) Current Residence Certificates A & B of the authorized representative and C & C-1 of the corporation;
3) Submission of copy of OCT P-28755 duly certified by the Register of Deeds concerned as the exact copy on file
with complete encumbrance page;
4) Presentation to the Bank of the owner’s duplicate copy of OCT P-28755;
5) Certified copies of Articles of Incorporation with certification of registration from the Securities and Exchange
Commission;
6) Certified copies of By-Laws of the corporation with certification of registration from the Securities and
Exchange Commission.
528
528 SUPREME COURT REPORTS ANNOTATED
Municipality of Talisay vs. Ramirez
Note.—Where one party appeals directly to the Supreme Court and the other to the Court
of Appeals, the Court of Appeals has jurisdiction over the case. (Hoey vs. Aurelio & Company,
Inc., 39 SCRA 658.)
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